Sol Strategies Inc.

Good day, everyone. Welcome to the sole strategies fiscal year end 2025 earnings conference call. At this time, all participants are in a listen only mode. After the speaker prepared remarks, we will conduct a question and answer session. In order to ask a question or make a comment, please press the star key followed by the number one on your telephone. On the call with us today is Mr. Michael Hubbard, Chief Executive Officer, Mr. Doug Harris, Chief Financial Officer, Mr. Max Kaplan, Chief Technology Officer, and Mr. John Ragazzino from ICR. At this time, I will turn the conference over to Mr. John Ragazzino with ICR. Please go ahead, sir.

Good afternoon, and thank you for joining Soul Strategy's fiscal fourth quarter and full year 2025 earnings conference call. Before we begin, I want to remind everyone that certain statements on this call contain forward-looking statements, subject risks, and uncertainties. Actual results may differ materially from these statements. We refer you to our latest press release, MD&A, and C2 Plus filings for detailed risks, factors, and assumptions. All dollar amounts are in Canadian dollars unless otherwise noted. The company assumes no significant events occur outside our normal course of business and that current trends in the digital assets markets continue. However, listeners should note that crypto markets are volatile and our business metrics can fluctuate significantly. With that, let me turn it over to Michael Hubbard, Sol Strategies Interim CEO.

Thanks, John. Good afternoon, everyone. Let me start with what matters. The last calendar quarter of 2025 was the quarter institutional Solana infrastructure went from theory to reality, and Sol Strategies is winning. I'm not talking about incremental progress. I'm talking about a fundamental market shift that happens maybe once or twice in a technology cycle. The regulated capital that's been sitting on the sidelines for years is now moving on-chain. trading settlement property rights cash movement and so much more the entire existing financial system is moving on chain soil strategies is at the epicenter of the growing solana economy already today you can trade real securities on chain via super states platform a large complement of wrapped and synthetic securities via backed and securitized and an ever-growing cohort of stable coins promised to make global payments seamless and instant There has been a fundamental shift in government policy in the United States that is driving a significant shift by major financial institutions globally as blockchain technology is recognized and accepted more broadly. We're in the engine room of this system. Through the founding of the Lane Validator and before joining Sol Strategies, I've spent years in the trenches building Solana infrastructure. I've lived through the network outages, economic exploits, and multiple bear markets. I know this ecosystem at the code level, not the PowerPoint level. And I can tell you with absolute certainty, this technology and the blockchain are operating at performance levels not previously seen, with unprecedented adoption and capabilities. We are at the beginning of a multi-year institutional build-out, and Sol Strategies is perfectly positioned to capture a significant share of it. Here's the thesis. 1. Solana validators secure the core network. while staking is increasingly attractive to institutions seeking competitive yields while maintaining sole exposure. Through our fleet of enterprise-grade validators, we not only secure the network, but are literally processing millions of Solana transactions every day, providing a critical foundation from which we believe we can build and unlock more value going forward. 2. We're one of the very few companies globally with a compliance stack, being SOC 2 Type 2, SOC 1 Type 2, ISO 27001, being publicly traded and highly regulated, as well as the technical infrastructure and institutional relationships and standing to be the gateway for traditional finance to the new global financial system on Solana. Three. Solana is already proving that distributed systems can rival existing centralized systems such as the NASDAQ or centralized cryptocurrency exchanges by offering the best price execution, growing adoption of real world assets such as tokenized equities or money market funds, as well as a vibrant and open builder ecosystem that encourages financial innovation and borderless global finance. Let me show you what that looks like in practice. Institutional adoption isn't coming, it's here. In the past six months, we've become the Solana staking provider for the ARK Invest Digital Asset Revolutions Fund, VanEck Solana ETF, Neptune Digital Assets, Solana Mobile, and Netcoins, just to name a few. These aren't pilot programs. These are partnerships deploying real capital with real fiduciary obligations, and they've all picked us for the same reason. We're the operator who meets their performance and compliance requirements, delivering institutional-grade performance, and with the technical depth to handle complex custody integrations. But here's what gets me excited. The adoption isn't just coming on the asset management products, but the announcements of major companies like Western Union, J.P. Morgan, and Galaxy building products for financial markets on Solana. Why this matters? Again, we are an important part of the fabric of the Solana economy, and each time more products and transactions occur on Solana, we benefit. Here's the math on the capital efficient model. While everyone has been talking about DATs, which are just various financial engineering plays on holding sole, it's our operating model plus the holding of the Solana Treasury that sets us apart from the competition. Let me explain why our operational business model creates more value per dollar than any pure DAT. Traditional digital asset treasury companies, and there are now almost 300 of them, have one playbook. Raise capital, buy tokens, hold, hopeful price appreciations. When the token goes up 50%, they're heroes. When it goes down 50%, they're underwater. There's no operational leverage with recurring revenue within the crypto or Solana ecosystem, and no compounding beyond the price. We built something different. Our operational model combines two value drivers that compound on each other. Stream one, owned validator revenue. Staking yield on our own sole treasury through our validators, currently generating over 6% APY, with no fee direct to third-party staking providers or custodians, plus all the transaction fees that validators earn that aren't usually paid to stakers since we operate our own validators. Stream two, delegated third-party stake revenue. Commission fees from over 27,000 third-party institutions and users who delegate to our validators, as well as the transaction revenue generated thanks to that stake. Here's how the unit economics work. Every million dollars we deploy into SOL generates staking yield at current rates. That's recurring, that's predictable, and that's entirely independent of token price. Every institution or individual that delegates to our validators generates commission revenues as a percent of their staked amount. We now have over 450 million US dollars in third-party assets under delegation. That's annual recurring revenue from assets we don't own and didn't have to capitalize or raise debt or equity to obtain. This is the flywheel. We raise capital at favorable terms. We deploy it into stakeable sole. We generate yield from our treasury. We win institutional mandates. We earn commissions on delegated assets. We reinvest the cash flow into more sole and validate infrastructure. Our improved performance attracts more delegation and our flywheel accelerates. And unlike pure treasury models, we generate meaningful cash flow even in sideways markets. Our validator business did $5.4 million in revenue in fiscal 2025. That's not price appreciation. That's operational income from running infrastructure. That revenue stream is only a year old, and we are just getting started. Looking forward to the next 12 months, this is our plan to extend the lead. Let me be very clear about our strategy for 2026. We're not hoping the market grows into us. We're going to aggressively capture market share while the window is open. Priority one, validator scale and performance. We operate six institutional-grade validators today, four of which are proprietary and two white-label validators operated on behalf of customers. we continue to grow the total assets under delegation to these validators we capture retail staking flows through our competitive yields and industry leading uptime for example our lane validator has now had 22 months of uninterrupted uptime not even a single minute since february 2024 where it didn't operate to secure this london network we capture institutional staking flows through our compliance platform standing as a well-known and trusted public company with competitive yields, institutional-grade compliance certifications, and unparalleled uptime reliability. We're also investing heavily in validated performance optimization, MEV capture, and automated failover systems, as well as latency reduction. We have published several open-source software tools to support the Solana ecosystem and other validators to achieve similarly high levels of redundancy, as we have through our internal automated failover detection and mitigation systems, as a more resilient and performant network overall is critical to continued institutional confidence and adoption. We are also actively working on new staking products that will provide better utility and optionality to staking users across the Solana universe, enhancing our positioning as a premier staking provider and generating additional revenue. Why does all this matter? Validators produce blocks on the Solana blockchain. A block is a batch of transactions. There is a finite number of blocks per day, and the more stake you have, the more blocks you get to produce. Blocks have a finite capacity for transactions. Block space is a limited commodity in a blockchain. Solana has the most abundant block space of all blockchains, which is why it is a given that it will become the base layer for new globally distributed financial system. But our clear focus is on capturing as much of that commodity as possible, as the future value of block space is only going to go up. Now moving on to priority two, institutional partnership pipeline. We're actively engaged with ETF issuers, asset managers, and institutional allocators across the world. Our goal is to secure new institutional mandates in fiscal 2026, each representing a significant potential increase in delegations. Our pipeline continues to grow, and we're also expanding custody integrations. We validated partnerships with BitGo, Crypto.com, and TetraClust. In 2026, we're targeting integrations with additional global custodians to enable seamless staking for their client base. Priority three, strategic ecosystem investments. Beyond running validators, we're planning on making strategic investments in high-growth Solana ecosystem companies and protocols. These investments serve dual purposes, financial returns and strategic positioning that drives delegation back to our validators. We look for opportunities where our validator and ecosystem expertise gives us investment edge and where portfolio companies can become long-term delegators, customers, or beneficiaries. We're also leveraging strategic partnerships like Solana Mobile to integrate our validators into high-growth distribution channels. These aren't separate from delegated stake. They're smart ways to drive low acquisition cost delegation at scale. 44, treasury growth with capital discipline. We ended Q4 with over 435,000 sold on our balance sheet, up over 430% from 2024. Our target is to efficiently grow the treasury through fiscal 2026 with a combination of strategic capital raises, cash flow reinvestment, and opportunistic locked token acquisitions. We will only raise capital when terms are accretive to shareholders. That means favorable pricing, strategic investor alignment, and deployment into high conviction opportunities like discounted locked sole or strategic M&A or tactical debt reduction. Every dollar we raise goes to work immediately generating yield. So what does winning look like? Let's look at the three-year vision. Let me paint the picture of what success looks like for sole strategies. It's fiscal year 2028. An institutional asset manager decides to allocate to Solana staking. They don't run an RFP. They don't evaluate 20 providers. They call sole strategies first. In that scenario, we are generating millions in annual recurring revenue from validator operations. We have built proprietary technology that makes institutional staking operationally simple. We have established sole strategies as the definitive brand for institutional Solana infrastructure. But that's just the validation business. The bigger vision, we're the infrastructure partner of choice for any serious institution pursuing the inevitable adoption of Solana to tap into the new global financial system. We power tokenized securities on Solana and capital markets infrastructure that's being built on-chain. We're processing tens of millions of transactions a day and maximizing our revenue. When traditional finance wants exposure to Solana's DeFi ecosystem, They come to us first because we have the compliance, the expertise, and the track record. That's not a hope. That's not a stretch goal. That's the logical outcome as we execute on everything I've outlined today. The window is open, but it won't stay open forever, and we will take advantage of it. Before I turn it over to Max, Andrew, and Doug, I want to say something about the team we've built. This isn't a group of crypto tourists who showed up in 2024 because tokens were pumping. Max Kaplan, our CTO, was at Kraken in 2017 as one of the first engineers, scaling infrastructure to handle institutional volume. He founded Orangefin Ventures, which consistently ranks top three network-wide for validated performance. He knows Solana infrastructure at a depth that maybe 50 people on the board understand. Andrew McDonald, our COO, scaled bid access from a startup to a company doing international expansion across regulated markets. He's navigated Canadian securities regulation, built institutional partnerships, and knows how to execute complex operations under compliance constraints. He is responsible for much of the immense work to bring us to the NASDAQ and for closing most of our large M&A and financing deals. Doug Harris, our CFO, has done over $2 billion in M&A transactions. He's a CPA, CBV, has an MBA from Rotman. He's taken companies public, navigated complex financing, and has a wealth of capital market experience. The strategic initiatives I've outlined today, the M&A pipeline, the institutional partnerships, the white labor expansion, the treasury growth, all of that is actively happening right now with full board alignment and organizational executions. We're not in a holding pattern. We're executing at full speed. This team has the technical depth, the operational experience, and the institutional credibility to win. And we're hungry. Now let me turn it over to Doug to talk about our financials.