Forum Markets, Incorporated

Hello, and welcome to Forum Markets' first quarter 2026 earnings conference call. During today's discussion, all callers will be placed in a listen-only mode. Following management's prepared remarks, the call will be open for questions. This call is being recorded on May 14th, 2026, and a replay will be made available on Forum's Investor Relations website later today. I will now turn the call over to John Kristof, Senior Vice President, Corporate Communications and Investor Relations.

Thank you, Megan. Hello, and thank you all for joining Forum's first quarter 2026 financial results conference call. Joining me on the call today are McAndrew Rudisill, Chairman and Chief Executive Officer, and John Saunders, Chief Financial Officer. We hope you've had an opportunity to review our first quarter financial results issued earlier this morning. We've also posted an earnings presentation to our investor relations website. As a reminder, some of the matters we'll be discussing on this morning's call are forward-looking in nature. Please keep in mind that actual results could differ materially from what is expressed in these forward-looking statements. Forum assumes no obligation to update the information, and we encourage you to refer to our most recent filings with the SEC for a discussion of factors that could cause actual results to differ materially from these statements. During our call, we will also reference certain non-GAAP financial measures, which we believe provide useful information for investors. A reconciliation of these non-GAAP measures to the corresponding GAAP measure can be found in our press release and presentation on our Investor Relations website. And with that, I'll turn the call over to McAndrew.

Thank you, John, and good morning, everyone. Since our last call, our team has remained focused on executing our strategy of originating, structuring, and tokenizing institutional-grade cash flow generating assets to modernize capital markets. We've made meaningful progress across the platform, expanding our asset origination pipelines by entering the AI infrastructure financing space and making significant progress on establishing strategic co-investment partnerships with major financial investment firms. At the same time, we recognize there is a meaningful disconnect between the market's current valuation of the company and the progress we are making and the intrinsic value of the platform that we are building. We've taken deliberate steps to directly address that gap, including activity through our share repurchase program and initiating a formal strategic review aimed at preserving the long-term opportunity in front of us. On the share repurchase program, since our announcement in April, we repurchased approximately 5.8 million shares for an aggregate purchase price of approximately $24.9 million, representing approximately 28% of our shares outstanding. All shares under the program have been retired and canceled. Following these repurchases, we had approximately 14.5 million shares outstanding as of April 30th, 2026. We view repurchasing shares at current levels as a highly accreted use of capital and a direct demonstration of our conviction in the Intrinsic Value Forum. Our board authorized the program with the flexibility to act programmatically and opportunistically as market conditions permit. In parallel, the board has established a special committee comprised of independent directors to formally evaluate a full range of strategic alternatives with the objective of maximizing shareholder value. This includes engaging with parties that have already approached the company and proactively evaluating all available value creation pathways. These actions reinforce rather than alter our view of the business. We remain highly competent in our operating model, the long-term opportunity in tokenized real-world assets, and in our ability to generate revenue and cash flow as a standalone company. This process reflects our disciplined commitment to ensuring the full value of the business is recognized. While that review is underway, we remain focused on executing on our core strategy and continuing to build and scale the platform. Turning to the platform, we have continued to expand our asset base and deploy capital into high yield institutional grade assets that generate income today and create future tokenization pipelines. Most recently, we announced our entry into AI infrastructure financing, specifically short-term bridge loans, supporting the acquisition and deployment of NVIDIA GPUs. These loans finance the period between hardware purchase and long-term financing once the GPUs are operational. sourced through established partners with a clear path to repayment. We are targeting annualized returns in the mid-teens on these short-duration loans. Critically, these are income-producing assets that generate yield from day one, independent of tokenization. While we intend to tokenize a portion of each deal, this structure allows us to put capital to work immediately while building out the pipeline of assets we can ultimately bring on-chain. Given the rapid expansion of demand for AI infrastructure, we view this as a repeatable, scalable opportunity set where we can deploy capital, earn yield, tokenize, and recycle into new transactions. We've made significant progress in establishing relationships with established well-known institutional investment firms to deploy capital into our asset origination pipelines, particularly our AI infrastructure financing and commercial aircraft engine leasing verticals. We are confident in our ability to generate meaningful capital deployment opportunities into our asset pipelines, enabling Forum to earn revenue through origination and asset management fees as we source, structure, and manage assets on behalf of our institutional counterparts, with more details to be announced once capital has been actively deployed into our pipelines. We view the progress we have made establishing these relationships as validation of our sourcing and structuring capabilities, and as an early demonstration of how form can scale beyond our own balance sheet in access-constrained, double-digit yielding asset classes. More broadly, it illustrates the two distinct but complementary distribution paths we are building. Retail access through tokenized products and institutional access through co-investment agreements and distribution agreements where we can white-label our products on existing institutional platforms. We continue to believe this is the right strategy and these opportunities are well aligned with our model and position us to grow meaningfully as we bring more assets onto the platform. As we look ahead, our focus is on scaling the platform by expanding asset pipelines, increasing capital deployment and broadening distribution. Liquidity.io remains a core part of that strategy, enabling a broader set of investors to access institutional grade opportunities and serving as our proof point for bringing real world assets on chain. Importantly, Liquidity.io is currently undergoing a major platform upgrade that will significantly expand its capabilities. In addition to digital tokens, the enhanced platform will offer trading in stocks, bonds, cryptocurrency, and private credit securities, a meaningfully broader product set that we expect to drive substantial growth in their user base. We anticipate the updated platform will launch late second quarter or early third quarter. Perforum, a larger and more diverse liquidity.io user base, directly expands the buyer pool for our tokens on their exchange, which we view as an important catalyst for driving token distribution at scale. Combined with the institutional co-investment channels we are building, we are creating a multi-channel distribution model designed to serve both retail and institutional investors and to scale alongside our growing asset base. And as we noted previously, we will continue to evaluate potential capital raising opportunities with a focus on long-term value creation, balance sheet flexibility, and shareholder alignment. Overall, these steps position forward to build a durable income-generating platform that we can expand across asset classes and distribution channels as we continue to grow. The actions we have taken since our last call, aggressive share repurchases, a formal strategic review, developing institutional co-investment partnerships, and continued expansion into high-yielding asset verticals reflect both our conviction in this platform and our commitment to ensuring shareholders benefit from the value we are building. As capital markets continue to evolve, we believe platforms with the ability to uniquely identify, originate, and scale high-quality art assets will emerge as leaders. We believe Forum is well-positioned to be among them. With that, I'll turn the call over to John Saunders.

Thank you, McAndrew. Good morning, everyone, and thank you for joining us. Before I walk through the quarter, I want to briefly note how our financial framework is evolving as the platform matures. As Mikanju described, we have been active on multiple fronts since our last call, deploying capital into income-producing real-world assets, entering new high-yield verticals including AI infrastructure financing, executing a significant share repurchase program, and initiating a formal strategic review process. Each of these reflects deliberate capital allocation decisions made with a view towards growing the underlying value of the platform. The metrics we continue to focus on are assets under management, yield generated from the asset base, origination and structuring activity, and token issuance volume, and over time, the fee revenue associated with managing and distributing those assets at scale. Turning to the first quarter, Forum generated revenue of approximately $2.9 million compared with $2.4 million in the fourth quarter of 2025. Revenue in the quarter was driven primarily by staking revenue of $1.8 million and aircraft engine revenue of $1.1 million. Results for the quarter reflect the timing of capital deployment and when assets begin contributing yield. As we noted last quarter, our revenue mix is continuing to shift away from legacy digital asset activity and increasingly toward income generated from real-world asset portfolios, financing activities, and over time, origination, structuring, and asset management fees. Selling general administrative expenses were approximately $7.5 million in the first quarter. We continue to invest in the infrastructure, systems, and partnerships required to support platform growth. while maintaining a disciplined approach to operating expenses. Net loss for the quarter totaled approximately $77.5 million, which was primarily attributable to realized losses on disposition of digital assets. Adjusted EBITDA loss was $76 million as a result in price changes from digital assets. We anticipate this is the last quarter we will experience large mark-to-market adjustments associated with digital assets. Turning to the balance sheet, during the quarter and subsequent period, we continue to allocate capital toward platform growth while also executing the share repurchase program McAndrew described, both reflecting our disciplined approach to deploying capital where we see the greatest value and addressing the gap between our market value and our view of intrinsic value. Given the significant share repurchases that have occurred since quarter end, I want to walk through where we stand as of April 30, 2026. We believe this provides the most current and relevant picture of the platform's asset base. As of April 30th, Forum reported total assets of approximately $170.5 million, exclusive of prepaid assets, accrued expenses, and accounts payable. And cash and cash equivalents totaled approximately $62.5 million. The asset base consisted of the following. We held $17.6 million in aircraft engine assets, net of depreciation, which continue to generate contracted lease income from major commercial carriers. We held approximately $1.8 million in auto loans and warehouse facilities, $14.8 million in manufactured home loans, and approximately $28 million in ETH collateral, offset by our collateralized loan of approximately $26 million. We also held equity positions in our strategic partners, Satchel Inc., Keras, and Zippy, valued at $13.7 million, $9.8 million, and $22.3 million, respectively. In aggregate, these assets support a net asset value of approximately $144.5 million, or approximately $9.93 per share, based on approximately 14.5 million shares outstanding as of April 30, 2026. We view NAV per share as a useful reference point in evaluating the underlying value of the business, particularly given the strength and quality of the asset base we continue to build. Looking ahead, our capital allocation priorities remain focused on three areas, deploying capital into high-quality, cash-generating real-world assets, expanding origination and distribution capabilities across the platform, and preserving balance sheet flexibility as we scale. With respects to guidance, we are adjusting our expectations for full year 2026 to reflect the capital allocated to share repurchases subsequent to our last call. We now expect to exit 2026 with between $100 million and $175 million in assets under management across our tokenized and pre-tokenization credit portfolios, compared with our prior expectation of $125 million to $200 million. We also now expect full year 2026 revenue to be in the range of 18 to 22 million compared with our prior expectation of 18 million to 26 million. The updated range reflects the slower pace of near-term deployment resulting from capital use for share repurchases while still capturing yield income from the existing asset base, financing activities, and early stage origination and structuring economics. We believe the business is building momentum across the drivers that matter most. Yield generation today, growing origination and structuring economics as the platform scales, and reoccurring asset management and distribution economics over time. The actions we took this quarter, expanding the asset base, repurchasing shares, and developing new institutional co-investment opportunities reflect our conviction in the platform and our focus on compounding its underlying value. We look forward to providing further updates as the quarter progresses. And with that, I'll turn the call back over to the operator for questions.

We will now move to our question and answer session. If you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. When you are called on, please unmute your line and ask your question. We will wait a moment for the queue to assemble. Our first question will come from Brian Dobson with ClearStreet. Your line is open. Please ask your question.

Thanks so much for taking the question. So now that you've had tokens live, how are you seeing, call it, feedback from your products? And as you're looking through, call it, the next two years, which segments would you expect to see the most material growth?

Hey Brian, this is McAndrew. Thank you for your question. I think that tokens based on feedback that we've gotten from communicating with a lot of institutional investors are going to received the most focus primarily from the retail side at this point. From our conversations with institutions, they're a lot more interested in investing directly via sort of traditional structures in the assets that we're creating via like a large scale structured product format, which ultimately could be tokenized. But I think where a lot of real world asset tokenization is leading is is being able to fractionalize these assets kind of into smaller increments that allow retail investors to access them. And that is why we commented on liquidity.io and the platform build that they're undergoing right now. And to increase the aperture of that distribution, having stocks, bonds, options all in one place alongside tokens is, should create a much larger marketplace for individual investors to come buy these tokens. Where we've seen the most interest on the tokenization side, starting number one, aircraft engines, because there's going to be a pretty nice tax benefit to investing in those directly that we figured out. Number two, the AI infrastructure finance. We've seen a lot of institutional interest in investing directly in that. I think that will translate into token interest at the retail level. I'd say mortgages and auto loans, I would say equal interest, very durable yields and kind of interestingly short duration on the auto loan warehouse product, which we think ultimately can slot into both stable coin and money market products because of the really low capital duration and high yield that it generates. So that's a longer answer to your question, but I think you kind of have to bifurcate the market between institutional and retail from the work that we've done.

Yeah, thanks. That's good color, I guess. And then as a follow-up to tokenization, right? How do you think about the trade-off between, you know, continuing to make buybacks below NAV versus deploying that capital into something that can generate a yield? I guess, how are you approaching that question?

I mean, we look at it from a mathematical perspective every day and to, you know, Is it better to buy back shares or deploy capital into generating revenue? And I think we have to strike the right balance between both. I mean, we just gave you this new revised revenue guidance because of the share buybacks. And there's a direct correlation between the more shares we buy back, the less revenue that we generate. So we just have to take a balanced approach to it. And as I'll reiterate again, the buyback remains open.

Yeah, very good. And then just one last one, if I may. Do you think you could walk us through your thought process on the credit underwriting for the GPU bridge and what gives you confidence in the takeout commitment? Sure.

Number one, most of the counterparties we are working with are very well capitalized, whether from a private equity or venture capital perspective, or they are publicly traded entities that are pretty well capitalized in their own right. So step number one, we have to execute credit underwriting on the counterparty that we're working with on the data center build out. Two, most of them have really large offtake contracts with hyperscalers on the other side to provide compute. And those contracts are included in the collateral package for the GPUs that we're providing. And then number three, the way we've set up the takeout on the first couple is going to be in partnership with USDAI so that immediately – After the bridge is complete, the long-term financing for the facility is taken out by a long-term loan that's put up by USDA's facility. And I think you're starting to see other players step into the marketplace for the long-term financing as well. And it's going to be interesting to see what happens just from a yield perspective on long-term versus short-term financing in GPU finance, because the space we're playing is from point of purchase to completion of data center installation. And that's where there's a gap in the financing market right now.

Thanks very much.

Your next question will come from Brendan McCarthy with Sedoti. Your line is open. Please ask your question.

Great. Good morning, everyone. Thanks for taking my questions here. Again, you touched on the upgrade that the Liquidity.io platform is currently undergoing. Can you provide additional color on those upgrades and maybe how it will impact your business? Yeah, of course.

So they have partnered with a new company. algorithmic trading system that's backed by some of the largest market makers in the United States. It's also backed by some very large VC firms that has an online marketplace for equities, options, and fixed income that tie into all the exchanges in the U.S. and many exchanges internationally. And then by doing this, it creates a hyper liquid equity option and bond marketplace that people can trade all those securities on while simultaneously allowing co-listing of tokenized products right alongside the stocks. And they've got a whole team of programmers that they've brought in actually from one of the U.S. exchanges. And they have been working to integrate that exchange platform directly into liquidity. And the ultimate user interface on it, I think, is going to look a lot like what you see with some of the largest online brokerages today. And. We're simultaneously working with those market makers to then drive traffic to the site once we take it live.

That makes sense. I appreciate the color there. How do you kind of expect the impact to... be reflected in the secondary market liquidity do you see that as as you know maybe a gradual you know increase over time or do you see this upgrade as you know driving more substantial you know secondary market trading in the tokens i guess i'm just curious as to you know maybe how this will impact you know the liquidity in the in the tokens yeah it's great question and

I think we have to look at history as a guide on online exchanges as to how their user bases grew. And I would expect it to be gradual at first. I mean, I think we have to break it into user growth, absolute user growth, and then token growth. And so I think user growth is a function of advertising and marketing, which is going to be on liquidity's shoulders. And then I do think you'll see a gradual growth in users and then it should start to quickly inflect as it compounds, which you've seen with a lot of the other online marketplaces. And then as that user growth starts to accelerate, having the tokens front and center right next to stocks, We think it'll be a slow ramp. And then at some point, there should be a breakthrough in people buying tokens in the same way that they buy stocks or they buy bonds. I just think the reality is in the token marketplace today in the United States, there are really not a lot of tokens that are available for people to buy that are outside of effectively money market slash treasury bill oriented tokens. And they have to be bought in really... large increments, oftentimes in multimillion dollar increments. And the marketplace has just not yet developed for growth equity tokens or capital oriented tokens. And I think it's, We're right at the precipice right now where there's a lot of different token exchanges that are trying to increase their product load. And one of the things that we're working on with liquidity is to cross-list across those other token exchanges so that you create more liquidity in the marketplace the same way that the equity marketplace has built up liquidity by cross-listing assets across multiple regional exchanges. And I think that's the way you get the most eyeballs on it. So there's going to have to be a lot of kind of participation agreements with the other token exchanges, which we're actively working on. We're literally creating the marketplace for these real-world asset tokens.

I really appreciate the detail there. I think it'll be interesting to see how that develops over time. And then switching gears to the institutional side, you mentioned you're working on co-investment channels with larger institutions. Can you provide any detail on the timing of a potential rollout there? Yeah.

Well, I think what we need to do is deploy the balance sheet capital in conjunction with some of these institutional partners to demonstrate the scalability. And then once we do that, we're going to be able to talk about it. But to give you a little more color, we're talking to people both on the bank side. side of the equation with U.S. investment banks as well as U.S. asset managers that can deploy large amounts of capital, whether it be out of their funds balance sheets, off their own balance sheets, or through their retail distribution networks, so that these products that are multi-billion dollar TAM products that we've created can just be rapidly scaled up. So I think we've created the structure and the wrapper. Now we're executing on the distribution. And I'd say that's coming in the near term.

Understood. And which is a more attractive distribution channel in your view? Is it more retail or institutional over time?

Well, high net worth retail is equivalently attractive to co-investment with institutional investors from a just pure revenue perspective. Retail tokenization is a higher fee structure than the institutional structure, so you can't put as much scale into it today. Okay.

Does that make sense? That makes sense. That makes sense. Last question for me, just while the distribution is in development, well, I guess let me back up. How much is left on the buyback authorization at this point?

I believe the original buyback authorization was $200 million. So, I mean, we're working on that original authorization. We, in theory, could use all the capital on the balance sheet to buy back stock.

Yeah. Yeah. And is it fair to assume that you'll just continue to buy back stock? I mean, 50% discount to NAV. Fair to assume you'll just buy back stock in the near term as these distribution channels ultimately develop?

Yeah, I mean, we're going to stay active on the buyback. That's what I've said. I mean, we just have to balance revenue generation versus buyback. They go hand in hand, and we're going to have to be running both in parallel.

That makes sense. I appreciate your time. That's all for me. Thanks. Okay. Thanks.

Your next question will come from Mark Palmer with Benchmark Stone X. Your line is open. Please ask your question.

Yes. Good morning. Thanks for taking my question. A little bit of a bigger picture question. The company has been leaning into the AI infrastructure financing space of late. At the same time, the other verticals in aircraft, auto, manufactured housing, if we were to look out into end of 26, end of 27, how should investors think about what the company's mix will look like in terms of activity, revenue, EBITDA contribution and the like? How do you see all of those proportions working out over time? Thank you.

Good question, Mark. Right now, you can see we're equally balanced between the modular mortgages and the aircraft assets. I think you'll see our investment in AI infrastructure rapidly scale up in the next weeks, if not months. The opportunity is enormous. the demand pipeline that we're looking at is really big, and I think the absolute yield opportunity is high. So we're working with the data centers, the neoclouds, and we're working with all the new edge compute companies on what their data centers are going to look like, and that opportunity set is large. So I think that's going to become a huge percentage of the balance sheet. And then we mentioned earlier, The aircraft engine opportunity is quite large because of the relationships we now have with two of the largest commercial airlines in the United States. And we have master services agreements with them. They have a lot more appetite to continue leasing with us. And so we can scale that up pretty quickly, too. So I think those two places are going to be a focus for us now to ramp our activity up.

Thank you. And just one quick question with regard to the strategic review. Anything that you can share with us with regard to the timing, you know, when that could proceed through and when it might conclude. Thank you.

Yes. All right. Good question. The special committee is meeting on a regular basis, being advised by Clear Street Investment Bank. there's been a lot of interesting opportunities presented. They're being actively evaluated. New opportunities keep arising from the work we're doing and the work that Clear Street is doing. And I think that we, just to be prudent, need to give it at a minimum until the end of the year. And I think the process will probably conclude for that. But that's the focus of the committee is to evaluate all the opportunities and give everything sort of a fair look.

Very good. Thank you. Yep.

There are no more questions at this time. I'd now like to turn the call over to John Kristof for closing remarks.

Yes, thank you, everyone, for joining us this morning. And as always, if you have follow-up questions, please feel free to reach out to me directly. Thanks again.