FWDI

End March 31st, 2026. By now everyone should have access to the second quarter of fiscal 2026 earnings press release, which was issued today at approximately 4:05 P.M. Eastern Time. The release will be available on the investor relations section of Forward Industries website. This call will also be available for webcast replay on the company's website. Following management's remarks, we'll open up the call for Q&A. I'll now hand the call over to Forward Industries General Counsel, Georgia Quinn, for introductory comments. Georgia, please go ahead.

Thank you, operator. Before we begin, I'd like to remind everyone that today's call may include forward-looking statements within the meaning of the federal securities laws. All forward-looking statements made by the board or management on this call are based on their assumptions and beliefs as of today. You should not rely on forward-looking statements as predictions of future events, as these statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For more information about these risks, uncertainties, and other factors can be found in Forward Industries filings with the Securities and Exchange Commission. During today's discussion, we will reference certain metrics related to our Solana digital asset treasury, including SOL holdings, SOL per share, staking performance, validator operations, and deployments. These metrics are core to evaluating the execution and progress of our strategy.

With that, I will turn the call over to Forward Industries Chairman of the Board, Kyle Samani. Kyle, please go ahead.

Thank you, Georgia, good afternoon, everyone. Our second fiscal quarter was defined by disciplined execution. Against the backdrop of continued market volatility, we took decisive steps to strengthen Forward's capital foundation, improve our cost structure, and deepen our engagement across the Solana ecosystem. In March, we completed a strategic share repurchase that reduced our common shares outstanding by 7.4%, accessing $40 million of institutional debt from Galaxy Digital on highly advantageous terms and implemented a cost reduction initiative that has yielded material operating expense savings through disciplined cost management. Together, these actions reflect the long-term mindset that we bring to managing Forward. Disciplined capital allocation, compounding SOL per share, which is currently above 44% on an annualized basis on an annualized in-the-money basis, and positioning the business to grow and diversify alongside the Solana ecosystem.

These two themes are continued conviction in the Solana ecosystem, particularly its accelerating momentum across stablecoins, payments, and real-world assets, and the opportunities we see to deepen Forward's engagement with the Solana ecosystem to grow and diversify our revenue are where I want to focus our time today. Starting with the network. Solana's transition from promising technology to real financial infrastructure has accelerated meaningfully in recent months. For stablecoins and payments, Solana is emerging as the default settlement layer for dollar-denominated value on-chain. According to Messari report published in early March, total payment volume on Solana grew more than 8x year-over-year, which is nearly 3 times the median growth rate of comparable fintech and blockchain platforms.

The Solana Foundation's launch of payments.org in late February, and the Solana developer platform in March, which brings together Mastercard, Worldpay, Western Union, and other global payments partners, has consolidated what had been a fragmented set of partnerships into a single institutional-grade payment stack. Western Union is expected to go live with its U.S. dollar payment token, USDPT, on Solana in the first half of this year, connecting on-chain dollar transfers to Western Union's network of more than 360,000 physical cash locations worldwide. On real-world assets, in January, Ondo Finance launched over 200 tokenized U.S. stocks and ETFs on Solana, joining an ecosystem where tokenized equities had already processed over $3 billion in transaction volume.

Forward was among the first pilot companies to put its SEC-registered shares on-chain through Superstate, and we view the rapid expansion of tokenized equities on Solana as further validation of the thesis that Solana is becoming the settlement layer for capital markets. In March, the SEC approved Nasdaq's proposal to trade tokenized securities alongside their traditional counterparts on the same order book, covering Russell 1000 stocks and major ETFs. As a Nasdaq-listed company that already has its shares tokenized on Solana, we view this as a powerful convergence. The infrastructure that Forward helped pioneer is now being adopted by the exchanges themselves. On the infrastructure side, the rollout of Firedancer, Jump Crypto's independent validator client for Solana, represents a landmark moment for the network's decentralization and resilience.

Firedancer's testnet results showed throughput exceeding 1 million transactions per second. The client is now phased, and now phase mainnet deployment. This is exactly the kind of foundational infrastructure maturation that institutional participants need to see before committing capital at scale. At the network level, Solana continues to lead across the metrics that matter: decentralized exchange volume, real economic value generated, active users, and developer engagement. These fundamentals reinforce our view that it is not just another blockchain. It is the execution layer for what we've often called the internet capital markets. Before we move on to Forward's strategic initiatives, I want to address a topic that's gotten a lot of attention lately: the security incident involving Drift Protocol on Solana and more broadly, the other exploits we've seen as a crypto industry across a number of other networks.

The key point here is that the incident involving Drift was a social engineering attack, not an explicit exploit of the Solana protocol or contract code itself. Bad actors targeted with privileged access through deception, not through any underlying vulnerability in the network. To be clear, Solana's core layer one network has not experienced a consensus-level breach. The base protocol has continued to operate with full uptime, strong validator decentralization, and no cryptographic vulnerabilities. Think of it this way, a breach at a company running on AWS does not mean AWS is broken. The same logic applies here. If anything, these incidents reinforce how seriously we take operational security in managing our own holdings. As the Solana ecosystem continues to accelerate, so do the opportunities for Forward to leverage protocols in the network to drive revenue growth.

As such, priorities for 2026 are focused on two initiatives. First, deepening our engagement with the Solana ecosystem in ways that grow and diversify revenue. Second, using our strength and balance sheet to lower cost structure and accelerate SOL per share growth. On the ecosystem engagement front, we've made meaningful progress on initiatives we've discussed previously. First, tokenized FWDI. Forward remains one of the only public companies with SEC-registered shares that live on a public blockchain through Superstate's Opening Bell platform. There are currently more than 6.9 million shares of FWDI tokenized on Solana, and the Kamino pool where FWDI can be utilized as collateral for on-chain loans is approximately at 91% utilization. Next initiative I'd like to talk about is our Forward Validator and fwdSOL.

Today, over 6.9 million SOL is staked to Forward Industries validator, and it is the 8th-largest validator in the Solana network by stake weight. Our proprietary liquid staking token, fwdSOL, has become a cornerstone of our capital market strategy. It is collateral supporting our $40 million institutional debt facility with Galaxy Digital, which Ryan Navi will discuss more in detail. On the revenue front, I wanna highlight Forward Industries minority investment in deployment of capital in OnRe, a Solana-native reinsurance protocol that is building infrastructure to bring the traditional risk transfer markets on-chain. Since launch, OnRe has attracted meaningful liquidity, onboarded its first reinsurance counterparties, and built a real reputation as one of the more interesting DeFi-native risk protocols on Solana.

What's compelling here is that Forward participates in OnRe both as an investor and as a participant in the OnRe protocol by purchasing ONyc tokens. We have direct upside as the protocol grows and generates fee revenue. That also adds USD-denominated, non-correlated revenue for Forward, which helps diversify our revenue base beyond SOL. Each of these initiatives is designed to accomplish the same thing, turn Forward from a passive treasury holder into an active participant in the Solana economy, generating yield above the native staking rate, expanding our surface area on-chain, and creating durable sources of revenue beyond staking alone. With that, I'd like to turn the call over to Ryan Navi, Forward's Chief Investment Officer, to further discuss our strategic initiatives and treasury performance during the quarter. Ryan?

Thank you, Kyle, and good afternoon, everyone. Since stepping into the CIO role in December, I focused on building out a comprehensive plan to drive meaningful SOL per share growth, lower our cost of capital, and position Forward as the Berkshire Hathaway of Solana in the long term. Today, I'd like to walk through our progress on all three, starting with treasury performance, moving through our capital structure actions during the quarter, and closing with how we're positioning Forward for the future. As of March 31st, 2026, Forward held a little over 7 million Solana, with nearly all of our holdings generating native staking yields between 6.5% and 7.2%. Cumulative staking rewards since our inception in September 2025 have now exceeded 200,000 Solana.

25.1% of our Solana is now represented as fwdSOL, our proprietary liquid staking token developed with Sanctum. fwdSOL is what allows us to continue earning native staking yield while simultaneously using our holdings productively as collateral, and it is the foundation of the institutional debt facility I'll discuss in more detail later. Turning to SOL per share, we've continued to compound our fully diluted SOL per share from 0.0604 in September 2025 to 0.0624 as of December 31st, 2025, and to 0.0669 as of March 31st, 2026. That reflects annualized SOL per share growth of 29.1% on a fully diluted basis since the launch of our treasury strategy. On an in the money share basis, our annualized SOL per share growth exceeds 44%.

Our fully diluted share count as of March 31, 2026, was 105,231,015 shares, comprised of 76,314,617 common shares net of treasury, 25,759,600 warrants, 1,599,066 options, and 1,557,732 unvested, restricted, and performance stock units. The reduction in common shares outstanding from 84.9 million-76.3 million reflects our March repurchase of 6.2 million shares in our ongoing share repurchase program, which reduced our basic shares outstanding by 10.1%. As of March 31, 2026, Forward's NAV was $0.827.

Calculated using the closing price of Solana on March 31st of $83.12, total SOL holdings of 7,044,079, plus our cash balance less debt Forward's closing price of $4.43, and a fully diluted share count of 105,231,015 shares. The most consequential actions during the quarter were in our capital structure. In March, we completed two highly strategic transactions that, taken together, represent the disciplined capital allocation we believe is required to deliver long-term value to our shareholders. This, in turn, gave us the balance sheet strength to capitalize on opportunities like our investment and deployment into OnRe, which provides Forward with upside as the tokenized RWA ecosystem on Solana grows and adds a USD-denominated revenue stream for the company.

First, we entered into a master digital currency loan agreement with our long-standing partner, Galaxy Digital, and drew on an initial $40 million facility collateralized by fwdSOL with a weighted average interest rate of 3.4% and a weighted average maturity of five months. I really wanna underscore how compelling these terms are. At a 3.4% weighted average interest rate, this facility represents access to capital at a cost that is, in our view, not only highly advantageous relative to what is available to most companies in our sector, but also most publicly traded small to medium-sized market cap companies. Our extremely attractive cost of capital is the direct product of the strength of both our balance sheet and our team's approach to risk management.

Given the recent drawdown in Solana, in conjunction with our shares trading at a discount to NAV, we made the conscious decision to lower our cost of capital via non-dilutive financing, meaning that we're able to access liquidity without issuing equity or selling our SOL holdings. It's also important to note that approximately 40% of this facility is evergreen in nature, which means it automatically renews and does not require active refinancing. This provides us with a stable, recurring capital base and means the effective refinancing burden on the remaining portfolio is both manageable and well within our liquidity planning horizon. Second, on March 19th, we announced a deployment of $27.4 million of that $40 million credit facility to repurchase 6.2 million shares of our common stock at $4.44 per share.

This transaction reduced our basic shares outstanding by 7.4% and our fully diluted shares outstanding by 5.5%, which drove an immediately compelling SOL per share accretion of 8.0% on a common share basis and 5.8% on a fully diluted basis. Third, on May 5th, we announced our investment and deployment into OnRe. Alongside RockawayX, the global multi-strat digital asset investment firm, Forward co-led OnRe's $5 million Series A at a $25 million post-money valuation and has begun deploying capital into ONyc, OnRe's yield-bearing token on Solana. ONyc provides Forward with real-world cash flows that are both complementary and uncorrelated to Solana. By gaining exposure to reinsurance through a tokenized on-chain structure, we're unlocking a new layer of durable dollar-denominated income while remaining fully aligned with the Solana ecosystem.

Together, this series of transactions gives us three things: dramatic SOL per share growth, a robust balance sheet to continue operating and investing in the business, and most importantly, an enhanced capital structure that lowers our cost of capital, which unlocks a wider opportunity set to pursue strategic transactions, beginning with OnRe, that will deliver greater SOL per share growth and value to shareholders over the course of 2026. Looking ahead, we will continue to focus on driving efficiencies across the business while executing on three strategic priorities. First, continuing to leverage our advantageous access to capital through the Galaxy facility and new potential relationships to further optimize our capital structure and lower our cost of capital, which will further accelerate our ability to compound SOL per share.

Second, identifying and executing on select opportunities that accelerate our SOL per share growth above the baseline native Solana staking rate, while also pushing the Solana ecosystem forward as a whole. This includes evaluating M&A, strategic investments, structured transactions, and scaling our on-chain operating initiatives. OnRe is a good example of this. It's a Solana-native reinsurance protocol that's growing quickly and already showing real traction. Forward is in as both an investor and a liquidity provider, we have direct upside as OnRe scales, and we're generating USD-denominated revenue in the process. Third, positioning Forward to not only provide sustainable best-in-class SOL per share growth, but also to continue to grow the absolute scale of our treasury.

We believe the foundation we've built, coupled with our leading scale, robust balance sheet, improved cost structure, and deep partnerships with Galaxy, Jump, and others, will enable us to execute on our 2026 growth and profitability objectives on our way to building the Berkshire Hathaway of Solana. I'll now welcome and pass the call over to our newly appointed Chief Financial Officer, Mark Brazier, to walk you through our GAAP financial results and the cost reduction plan. Mark?

Thank you, Ryan, and good afternoon, everyone. I'm very pleased to address you all for the first time as Forward's new Chief Financial Officer. As many of you may be aware, I joined Forward approximately a month ago on April 13th, succeeding Kathy Weisberg, who continues to serve the company as Director of Financial Reporting. I would like to take a moment to thank Kathy for her leadership during a truly transformational period for Forward, and for the strong expertise and partnership she continues to offer. By way of introduction, I bring with me more than 25 years of experience across both digital assets and traditional finance. Most recently as Chief Financial Officer and Head of Regulatory at XBTO Global, and previously as Chief Financial Officer at Stablehouse.

I'm excited to join the team at such a pivotal moment in the company's history, and in particular to help execute against the cost discipline and capital structure priorities Ryan just outlined. I'd like to turn to our financial results for the second quarter of fiscal year 2026. As a reminder, all comparisons and variance commentary refers to the second quarter of fiscal year 2025, unless otherwise specified. Revenue in the second quarter of fiscal year 2026 increased more than 4x to $13.0 million, compared to $3.1 million in the prior year period. Gross margin expanded materially to 70.0% in the second quarter of fiscal year 2026, compared to -5.7% in the second quarter of fiscal year 2025.

These increases were primarily driven by staking revenue generated through Forward's Solana treasury strategy. Selling general administrative expenses during the second quarter of fiscal year 2026 was $6.6 million, compared to $7.2 million in the first quarter of fiscal year 2026. An early but meaningful indication that the cost reduction plan we announced in March is beginning to take effect. Year-over-year increase of $5.0 million was primarily driven by higher operational costs associated with Forward's transition to its Solana treasury strategy. As of March 31st, 2026, our cash position was $16.6 million, compared to $25.4 million as of December 31st, 2025. The sequential decrease primarily reflects the use of $47.1 million to repurchase 9,214,655 shares during the quarter.

Institutional debt outstanding as of March 31st, 2026 was $40.0 million at a weighted average interest rate of 3.4% and a weighted average maturity of five months. With regards to the cost reduction plan, we are continuing to implement measures to reduce our SG&A spend. Our targeted quarterly SG&A run rate, excluding stock-based compensation, is approximately $4.8 million, down from $7.2 million in Q1 and $5.8 million in Q2. The primary drivers of that reduction are renegotiated fees under our services agreements with Galaxy Digital, lower outside legal and marketing spend, reduced third-party vendor costs, and broader operational efficiencies, all part of the SG&A reduction initiative that we commenced at the end of 2025.

That said, our SG&A will still remain subject to certain variable costs, most notably the asset management fee we pay Galaxy, which is tied to a percentage of our AUM. We remain committed to evaluating our cost structure on an ongoing basis and identifying additional efficiencies throughout the year. I'd also like to reiterate the current GAAP accounting treatment for our SOL holdings. Current accounting standards for digital assets require changes in the fair value of SOL and fwdSOL to be recorded as components of operating income or loss. These fluctuations do not impact our cash balance, yield generation, or our ability to continue compounding SOL per share. This accounting distinction is essential in evaluating our financial performance, which is driven by strategy execution, not short-term market volatility.

As a result of this treatment, in the second quarter of fiscal year 2026, Forward recognized a loss on digital assets of approximately $201.7 million and an impairment charge of approximately $85.1 million related to our Forward SOL holdings, leading to a net loss of $283.1 million, compared to a net loss of $585.7 million in the prior quarter and $1.5 million in the second quarter of fiscal year 2025. Again, this loss was primarily driven by the decline in the price of SOL and therefore the fair value of our SOL holdings. I will now pass the call back to our General Counsel, Georgia Quinn, to cover regulatory updates.

Thank you, and welcome, Mark. I'd like to briefly address several regulatory developments that occurred during the quarter because they are directly relevant to how investors should evaluate Forward and our strategy. The first calendar quarter of 2026 was one of the most consequential quarters for U.S. digital asset regulation ever. I'll touch on three developments in particular. First, on March 11, the SEC and CFTC executed a memorandum of understanding, establishing a formal framework for coordination on matters of shared regulatory concern. The MOU committed both agencies to streamline regulatory reporting, coordinated examinations, and harmonized oversight. It laid the procedural groundwork for the joint guidance that followed and creates the necessary foundation from which to begin joint rulemaking once the Clarity Act or its progeny legislation is passed.

Second, on March 17th, the SEC issued a commission-level interpretive release titled Application of the federal securities laws to Certain types of crypto assets. With the CFTC joining and confirming it will administer the Commodity Exchange Act consistent with the SEC's interpretation. The release establishes a five-category taxonomy for digital assets and clarifies the application of federal securities laws to airdrop, protocol mining, protocol staking, among other activities. We believe two elements of this guidance are particularly important for Forward and our shareholders. First, the interpretive release is consistent with our view that Solana, the digital asset at the core of our treasury, is a digital commodity rather than a security. It is also consistent with the view that protocol staking activities of the type conducted through our validator infrastructure are not, in and among themselves, securities transactions.

We want to be clear that this guidance is interpretive in nature and does not carry the weight of statutory law, but it represents a meaningful step toward the regulatory clarity that has long been needed in our industry. Third, the Digital Asset Market Clarity Act, which passed the House in July 2025, remains under consideration in the Senate. The Clarity Act would, if enacted, codify a comprehensive market structure framework allocating jurisdiction between the SEC and the CFTC for digital asset markets. While the legislative process is ongoing and we cannot predict the timing or final form of any legislation, we are encouraged by continued bipartisan engagement on this bill, the MOU previously noted, and we believe that the statutory clarity will further reinforce the foundation on which our strategy is built.

Although not during our reporting period, on April 13th, the SEC staff also issued guidance that pursuant to certain guidelines, the providers of user interfaces to crypto services, both centralized and decentralized, may receive transaction-related compensation without being subject to broker-dealer registration. This provides comfort to developers trying to bridge traditional finance and digital assets by creating user-friendly and educational experiences enabling users to access on-chain finance. I'll add one final note. None of what I've just described changes our underlying strategy, our compliance posture, or our disclosure obligations. While we are pleased to see the continued progress toward regulatory clarity and the motivation of lawmakers and regulators to engage with the industry, we have built Forward to operate a public company standard of governance and transparency regardless of the regulatory environment, and we will continue to do so. This concludes our prepared remarks.

Before I pass it back to the operator to open up the call for live Q&A, we'd first like to address a few of the questions that have come in via email over the past few weeks. Ryan, to start, can you please share more about the OnRe transaction? Specifically, how was the transaction financed? Can you explain the deployment into the ONyc token, and how much was deployed? Can you share any color on the yield Forward is earning relative to the cost of capital for the deployment?

Yeah, sure. The OnRe deal has two parts. First, Forward completed a minority investment into OnRe's $5 million Series A, which we co-led with RockawayX. Second, we deployed $16 million into OnRe's yield-bearing token, on Solana. For reference, OnRe provides us non-correlated U.S. dollar-denominated revenue tied to reinsurance. The cash for both investments was funded from $40 million in new evergreen loans with an interest rate of 2%. If OnRe yields, let's say, 12%, we pick up 10 points of net spread with assets and liabilities well-matched. With respect to the expected yield on OnRe, the trailing yield has been roughly 10%, and we think the upper bound is probably in the mid-teens. For modeling purposes, something around 12% ±, we believe would be appropriate.

In terms of the overall deal rationale, importantly, we have equity upside in OnRe as it scales, while we are also simultaneously diversifying our revenue and an attractive net yield, which should make both our business and capital structure more durable over time. For those who are interested, you can refer to our Q4 for further detail.

Okay. Thanks for that, Ryan. Next question is also for you. You mentioned strategic transactions that accelerate SOL per share growth. Can you share your framework for evaluating those opportunities, including potential M&A? How do you think about balancing accretion versus flexibility?

Yeah, this is a great question. We evaluate each investment opportunity on a relative value risk-adjusted basis. Depending on the market environment, we may prioritize buying more SOL, buying our stock, minority investments, or M&A. On the SOL side, if our NAV remains dislocated, we will likely continue buying our stock. If our NAV is closer to one, we'll be more focused on scaling SOL and potential debt M&A. For non-debt M&A and minority investments, we are looking for opportunities to deploy our balance sheet in high-quality real-world assets on Solana that are above the native SOL staking yield, as Kyle mentioned in the prepared remarks. Additionally, we wanna ensure we get equity upside as we use our balance sheet to create our own catalyst, and looking to produce win-win outcomes for Forward.

OnRe and ONyc are great examples of this. On the accretion versus flexibility part of the question, we've done a great job preserving flexibility to play offense. And now in this dislocated environment, we can take full advantage, which is evidenced by our annualized 44% SOL for in the money share accretion this quarter. Even though we are now starting to take on some debt, we are still lowly levered, roughly in the low teens on a percentage basis and retain significant financial flexibility. Spot and mNAV remain extremely dislocated. We will continue to be on the offensive while mitigating left tail risk.

Okay. Thank you. This question is for the team. Could the team speak to the strategic logic behind the March transactions? Specifically, what led the team to prioritize a share repurchase at this moment, and how should investors think about the interplay between the Galaxy facility, the buyback, and the cost reduction plan?

I'll take the piece on the debt facility and the buyback, and then Mark, maybe you can handle the cost reduction plan. On the first two pieces, given we're SOL and our stock is trading, we decided to pursue non-dilutive financing, and we structured this master loan agreement with Galaxy, which we believe is very attractive for Forward. We'll continue to use this as a tool to actively lower our cost of capital, which we believe will further accelerate our compounding of SOL per share. The March share buyback was a direct result of the dislocation of our mNAV at the time of the repurchase. Given spot prices of SOL, we decided to repurchase the stock using the Galaxy facility without selling any of our SOL holdings while still keeping all of our staking yields.

Mark, over to you on the cost reduction.

Great. Yeah. Thanks, Ryan. On the $2.4 million reduction from our $72 million in Q1 to our run rate quarterly target of $4.8 million, it's really driven by several sort of distinct and largely permanent changes to our cost structure. As I mentioned earlier, the largest driver to this is the renegotiated services agreement with Galaxy Digital, which significantly reduced the fees we pay for their accounting and operational supports. We've also materially reduced outside legals and marketing spends, we've right-sized our third-party vendor and technology costs, and we've implemented a leaner organizational structure overall, I suppose. We do believe the new targeted run rate is both durable and sustainable.

Having said that, it is important to note that we do have some variable cost elements to our OpEx, primarily the asset management fee that we pay to Galaxy that is tied to a percentage of our AUM. It's probably also important to note that the cost reduction initiatives that we put in place are structural reductions, not one-time cuts or deferrals. Currently, we have no, you know, major reinvestment requirements that would cause these costs to increase on a go-forward basis. In fact, as our revenue grows with our, you know, staking and yield revenue, particularly, we expect, you know, operating leverage to improve further, meaning the absolute cost base would hold steady even as our top line expands.

I suppose it's important to, you know, reiterate, we will not cut costs where it matters strategically, but we are committed to running a lean, disciplined and fiscally conservative operation that compounds value for shareholders. I believe the, you know, the target run rates that, you know, we've forecast, you know, reflects that philosophy and practice.

Okay. Thanks, guys. Ryan, this last one is for you. Given the current discount to NAV, how should shareholders think about future capital allocation between share repurchases, SOL accumulation, and strategic deployment on chain?

For stock, for SOL purchases, we're always looking for ways to drive greater SOL per share, and that's on a risk-adjusted basis. Future capital deployment is highly market environment dependent, but at a high level, we'll continue to capitalize on major dislocations of our stock via those share repurchases. As our mNAV normalizes, we do expect to focus more of our attention back to SOL accumulation. It is worth noting, we do not view the stock buyback and SOL accumulation as mutually exclusive. As for strategic deployment on chain, not all DeFi is created equal, and we're selective about deployment on chain. We believe in using on-chain rails for superior cost and time performance, but also carefully consider various risks, namely smart contract risk. Notably, tokenized real-world assets pose an interesting opportunity set for us.

Unlike truly decentralized digital assets, tokenized RWAs carry the important structural protection. In the event of a smart contract exploit, an issuer can remedy the situation through a burn and remit process. That's a meaningful distinction, in our opinion, that reduces the risk profile. Tokens like ONyc have a durable off-chain yield source and provide non-correlated U.S. dollar-denominated yield, which we believe will be a big growth factor for both us and the Solana ecosystem as a whole.

Okay. Thank you. That concludes our pre-submitted questions. Now I'd like to pass it over to the operator to open up the call for live Q&A.

Certainly. We'll now be conducting a question and answer session. If you'd like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. One moment please while we poll for questions. Our first question today is coming from Fedor Shabalin from B. Riley Securities. Your line is now live.

Thank you very much, operator. Good evening, everyone. My first question is about Solana accumulation, token accumulation. You have emphasized SOL per share accretion as the North Star metric. Can you walk us through your current framework for incremental SOL acquisition beyond staking rewards? I know you already touched on buybacks partially. I just wanna figure out the trajectory going forward in the near term. Thank you.

Sure. In general, again, if our mNAV is significantly below 1x, we do view the buyback as a relatively low risk-adjusted way for us to, you know, drive meaningful share, you know, SOL per share accretion. I think there are also novel ways for us to start accumulating Solana through the use of derivatives, other mechanisms as well, potentially buying locked SOL at a discount, all of which we're always exploring. I think the ONyc token is also an interesting example. To kinda give you the framework, if we can get our overall dollar-denominated revenue base sufficiently high to offset all of our cash costs, inclusive of interest expense, personnel, et cetera, then we actually have a very strong, resilient base for us to further compound SOL per share agnostic of SOL price.

I kinda think about that as, like, the baseline layer, which, you know, OnRe and ONyc is the first step in that direction. I think the rest in terms of SOL versus the stock buyback, it's always gonna be a relative value equation. Again, it's not mutually exclusive between one or the other. Candidly, the stock repurchase obviously has some limitations in terms of our percent of daily trading volume. As we start to exit this bear market, most likely entering into a new bull market in the coming quarters, we will likely look to SOL accumulation as the main, the main instrument to express that view. I'm not sure if I totally answered your question. Feel free to follow up.

No, that's clear. Thank you. A quick follow-up on, quarter-to-date, Solana is up. The question is, has the high collateral value on fwdSOL, created any incremental capacity under the Galaxy facility? Are there any conditions under which you would expand the draw?

Yeah. There are definitely provisions in there without giving specific metrics that may or may not be publicly available, where if the value of the collateral gets sufficiently high, we have the ability to take some collateral back to maintain specific LTV ratios. With that said, yes, it does increase our borrowing capacity full stop on a dollar basis. We would look to utilize based on the opportunity set that is presented to us. Yes, long-winded answer is saying as Solana price goes up, our borrowing capacity increases commensurately. Again, we're actively working on optimizing our weighted average cost of capital.

Just given where Solana is and where our stock is, we still think non-dilutive forms of financing, especially at this interest rate at 2%+, make a ton of sense for us. Once Solana and our stock and NAV recovers, we look to do more of the traditional convertible debt potentially [press] down the road issuances. At this current time, you are correct, this is our main tool.

Yep. Thank you very much, and continue. Best of luck.

Thank you so much.

Thank you. Our next question today is coming from Devin Ryan from Citizens Bank. Your line is now live.

Hey, guys. This is Neo Eloff on for Devin Ryan. My first question's on agentic AI in the blockchain space and how this will ramp up activity. I guess I would love to hear your guys' thoughts on the topic and how you expect this to evolve in kind of the coming months, whether through trading, payments or lending. If you could touch on how you think SOL is well-positioned here, maybe relative to some of the other blockchains.

Yeah. Hi, everyone. Kyle here. Happy to chime in on this one. I think the first part of the question is kind of just like broadly how do we think about agentic payments, and then secondly, kind of how Solana positioned for that. Let's touch on the first part first here. you know, the opportunity for agents is, like, I think, quite exciting, more in the domain of payments than in trading. Not to say that it's bad for trading, but, like, there's already obviously lots of programmatic trading in the world, right? Market makers, HFT, all that stuff. Today, all of that stuff lives on Solana in a pretty real way.

The Solana blockchain today is the most liquid and highest volume place you can trade, for example, the SOL USD pair, as well as now Bitcoin and ETH are now actually more liquid on Solana blockchain than they are on, for example, Binance or Coinbase. That only happened as of the last few weeks. The reason that's happening is because of kind of this new innovation called Prop AMM that basically allow market makers to quote tighter and in more interesting ways. The agentic part of all of that is actually gonna be a little bit upstream, which is basically you can now use AI agents to actually build these Prop AMMs. I can actually say I'm doing that from firsthand experience.

It's, it's actually publicly documented on Twitter that I am now running a Prop AMM on on-chain, and I've been doing that. What's really cool is, you know, I couldn't have built something like that before. You know, the big unlock for Prop AMM, excuse me, for agentic trading is actually making it easier for people like myself to actually trade natively on-chain. I've been doing it now for probably six weeks or so, and I can tell you the tools are phenomenal. They work really well, and I can quote really effectively on-chain. There's actually a new startup building on Solana called Hadron by Tether that is working to take these ideas and basically make this accessible to truly everybody. That's kind of the trading side of things.

The stuff happening there is really cool. The payment side of things is probably more high profile and probably more interesting for the long-term story. I think kind of the right way to think about that is in two major buckets. One is, you know, imagine you're talking to your AI agent, think ChatGPT, Claude, whatever, and you wanna buy something. Being able to do that payment instantly, for effectively 0 cost, is quite compelling. There's an open standard called x402, written by Coinbase, as well as another one called MPP written by Visa, both of which are live on the Solana blockchain today. There's a ton of developers now building on top of those open protocols.

I expect to see their usage of that start to really ramp up in the back half of this year, as kind of major consumer applications start to adopt this stuff. The other real use case for agentic payments is kind of like, think large scale micropayments, and I think this is particularly compelling given the rise of agentic coding. You know, say if you're using Claude or Codex to build a new application, you can ask it, you know, to go and build, spin up some service, whether it's MongoDB or Supabase or Twilio or whatever.

Implementing all of those using, you know, agentic micropayments for basically use type of billing models, usage-based billing models is a really compelling story for both the developers as well as for the merchants 'cause the merchants get paid in real time. Again, I think this is gonna really take off in the back half of this year as the model providers start to incorporate this stuff. We're really excited about the growth of all of this. That's I think first part of the question. Second part of the question then is really specifically how is Solana positioned? I think here really unequivocally Solana is in the best position of all the major chains. What agentic payments fundamentally need is they need a high throughput, globally available, cheap, fast transactions.

Today, Solana wins on basically all of those fronts. Also the last one is on and off-ramps. This is actually probably the one that people don't appreciate, who look at this, but it's actually maybe the most important. What I mean by on and off-ramps is, you know, today, if you are Cloudflare, if you are Amazon, if you are any of these companies who wanna start implementing a lot of these ideas, it's not enough that, like, there is a stablecoin on-chain. You need to know that as that stablecoin gets moved around from user to user to user, that those people can on and off-ramp that stablecoin quickly and easily, irrespective of which jurisdiction they are in.

What's so powerful about Solana is today Solana, you know, integrates with every major on and off-ramp in the world, every major custodian, every major wallet, every major market maker. It effectively guarantees you're gonna have the most liquidity to get those stablecoins on and off-chain or to move them wherever else you might need to move them beyond the, the straight performance stuff. I think you can see the early signs of Solana winning this today with the adoption of their with x402 on Solana as well as MPP. There's some good dashboards out there that show this data, although it is still pretty early.

Thanks, guys. If I could ask one more question on just kind of asset allocation. As you think about upcoming quarters, is there a long-term target rate you're looking at for, say, native SOL staking versus Forward SOL staking versus kind of other initiatives you're looking at?

Sure. This is Ryan. I'll take that. Currently, our fwdSOL is roughly 25% of our total holdings today. I would expect that to increase over time as we functionally use our, you know, liquid staking token as probably the most efficient form of collateral. There isn't, like, a set number target percentage-wise, but, you know, I would expect that number to increase over time as we utilize and deploy. And was there a second part of your question? Sorry.

No, no. It was just, I guess, native SOL versus Forward versus kind of like other initiatives.

Oh, yeah. I mean, the way that our framework roughly is, you know, we have the 7 million of Solana, which, again, we're extremely convicted and bullish on for all the reasons that Kyle just mentioned. It generates a 7% native staking yield, which is kind of like the engine and kind of our baseline IRR for the business. With deals like OnRe and ONyc, we're actively layering on things that are above that native staking rate of return. In this case, let's say 12%. Because we're able to borrow against our LST at such attractive terms, it's extremely accretive for our business. Because we're borrowing dollars and deploying in also U.S.-denominated cash flows, our assets and liabilities are a lot better matched.

To just walk through an example, if we post $1 of collateral of fwdSOL earning 7%, and its whole price is constant, and we're borrowing, let's say, $0.50 on the dollar just to keep the math simple.

Paying 2%, we're actually only paying $1 of interest expense there, and we're still earning the 7 of SOL staking rewards. Our net on the total collateral package is still $6. It is a small hit to our all-in yield on our assets, but we now have $0.50 of collateral that's unencumbered dollars that we can deploy as we wish. In the example of ONyc, if it's 12%, you know, we're picking up 10% points of spread on that $0.50. It's actually, you know, $5 on top of the seven. We're actually able to increase that up to 12, and it's done in a thoughtful, in a thoughtful asset liability match way that does not increase our left tail.

Again, we don't have specific percentages, but we are actively diversifying and looking to increase our diversification into Real-World Assets on the Solana ecosystem.

Awesome. Thanks, thanks for answering the questions and the insights, guys.

Of course. Thanks for the questions.

Thank you. Next question today is coming from Sam Dufault from Oak Ridge Financial. Your line is now live.

Hey, guys. Thanks for taking my question. Kind of going off the OnRe, I was wondering if you guys were able to maybe list any specific companies currently placing risk with OnRe and maybe how big that underwriting book is today to, you know, generate that 10% spread that was just mentioned.

Yeah, I don't know if we're at liberty to discuss specific counterparties on OnRe's behalf, but what I can say that is publicly available is that their ONyc token, post our deal announcement, has now increased to almost $175 million of public float. At the time of our deal, the pro forma amount was $160 million. In just a week, already showing, you know, 10% growth in the total flow, which is great. Glad to see that we were right in our analysis that we could at least start to create our own catalysts with the OnRe equity platform. Specifically, I think they're accessing the same traditional reinsurance providers that you may or may not have heard of.

Again, I don't think it's appropriate to necessarily go into their counterparties, since it's not our information to share.

Yeah, no, it's totally understandable. Just on the non-debt M&A, any other opportunities in the pipeline that you guys see opportunistically to, you know, kind of, gain SOL per share going forward?

I think from a non-debt M&A perspective or minority investment perspective, again, we're always looking at all available companies and opportunities. I would say more RWAs, that could be, you know, reinsurance, that could be royalties, that could be asset-backed finance. You know, the list goes on. The premise, though, is looking for these opportunities where we can do the following. We can use our balance sheet as a tool to create a catalyst for the company that we are actively investing in, both as an equity partner and as an LP effective investor. Again, just to reiterate on OnRe, we have upside on the equity with OnRe via our Series A investment.

We also effectively LP into their ONyc token or, you know, provide liquidity to their ONyc token, which achieves our stated objective of earning above the native staking yield. Again, because we're borrowing $ at 2%, highly accretive, extremely attractive for us and actually makes the business more durable while also increasing our U.S. dollar cash flow.

Great. Then, on one of the slides, mentioned 44% annualized growth rate on that SOL per share. Are you guys able to break out, you know, how much of that was based off of the buybacks or the non-debt M&A strategies at all?

You know, maybe Mark can provide the specific numbers, but I can tell you the vast majority of that is gonna be driven from the March share repurchase transaction that we publicly announced. I would say the lion's share is definitely gonna be from share repurchases this quarter.

Yeah. It's, like Ryan said, the lion's share is gonna be share repurchases, not just the share transaction in March, but also our programmatic share repurchases that we've been doing over the course of the last, you know, couple of months. That's gonna be the lion's share of it.

Great. Just one quick clarification question? I saw that some of the Galaxy third-party related expenses are being reduced going forward. Are there specific material relationships between the two firms that are maybe ending, or is the relationship going on as similar quarters, just the reduced expenses?

Yeah. We have a services agreement with Galaxy that is gonna come to an end in June, and that's for certain operational resources that they've been providing to Forward, namely sort of financial and accounting services. The other relationship we have with them is them as a, as our asset manager, servicer. We have a asset management agreement with them that will continue. That's a long-term agreement. And like I said, that, you know, that is a variable cost within our SG&A. That's the fees are based on a percentage of our AUM. Those are the two material relationships we have with Galaxy.

Great. Yeah, thanks for answering my questions, guys, and congrats on the quarter.

Thank you.

Thank you.

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Kyle for any further closing comments.

All right. Well, everyone, thank you so much for joining us for our Q1 2026 earnings call. The company is doing phenomenal, getting everything in line after the PIPE transaction last year, delivering great SOL per share results, and starting to make strategic acquisitions and investments, as Ryan and Mark talked about. Thank you all for your time, and we'll talk to you soon.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Forward Industries' financial and operating results for the First Quarter of Fiscal 2026 ended December 31, 2025. By now, everyone should have access to the first quarter of fiscal 2026 earnings press release, which was issued today at approximately 4:05 PM Eastern Time. The release will be available on the Investor Relations section of Forward Industries website. This call will also be available for webcast replay on the company's website. Following management's remarks, we will open up the call for Q&A. I will now hand the call over to Forward Industries' General Counsel, Georgia Quinn, for introductory comments.

Thank you, operator. Before we begin, I'd like to remind everyone that today's call may include forward-looking statements within the meaning of the federal securities laws. All forward-looking statements made by the Board or management on this call are based on their assumptions and beliefs as of today. You should not rely on forward-looking statements as predictions of future events as these statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. More information about these risks, uncertainties and other factors can be found in Forward Industries' filings with the Securities and Exchange Commission. During today's discussion, we will reference certain metrics related to our Solana Digital Asset Treasury, including SOL Holdings, staking performance, validator operations and deployments. These metrics are core to evaluating the execution and progress of our strategy. With that, I will turn the call over to Forward Industries' Chairman of the Board, Kyle Samani. Kyle, please go ahead.

Thank you, Georgia, and good afternoon, everyone. 2025 represented an important inflection point with the evolution of Solana and Forward Industries. Over the last year, Solana has continued to grow into real financial infrastructure that's being used by companies around the world, including the most recent partnerships, including Revolut, Western Union, Calshi, Figure, PayPal and many others. For Forward, Q1 marked our first full reporting period operating as a Solana treasury company, and more importantly, a quarter that demonstrated strong execution amidst volatility in the market. We moved from launching the strategy to actively putting it to work, building the foundation to compound SOL per share over time. Our mindset remains long-term, as we're not managing forward around short-term market moves. And we're focused on building a permanent capital vehicle that's designed to participate directly in the growth of the Solana ecosystem and to evolve beyond simply a treasury and into an active value-generating business. On the topic of thinking long term, I'm sure some of you may have seen the news around my departure from Multicoin Capital. I won't go into the details which are publicly available, but I do want to take a moment to reaffirm my commitment to Forward Industries and its mission. I will continue to serve as Chairman of Forward, and I intend to significantly increase my personal holdings in Forward. Looking ahead, we believe the opportunity in front of Solana, and by extension for Forward, is increasingly clear. While the markets are volatile in both Solana and Forward, our assets are not immune to wider market volatility. Solana is no longer being evaluated on theoretical scalability or future potential. It's being used today at scale across payments, trading, DeFi, emerging market applications and more. This shift from promise to performance is critical. Forward Industries' strategy is intentionally aligned with this phase of Solana's life cycle. We are focused on compounding SOL per share by participating directly in the economic activity occurring on chain rather than relying on passive exposure alone. At the network level, Solana continues to demonstrate resilience, performance and reliability. The network has maintained high throughput, low transaction costs and consistent uptime, even during periods of elevated activity. Solana continues to lead across key metrics, including decentralized exchange trading volumes, real economic value generated, active users and developer engagement. These fundamentals matter because they represent sustained demand for block space and growing on-chain cash flows. The underlying drivers of long-term value for the network and for SOL as an asset. Momentum across the Solana ecosystem accelerated throughout 2025 and has carried into early 2025. We've seen continued growth in stable coins, payments, DeFi, and real-world asset experimentation, all enabled by Solana's ability to deliver speed, cost efficiency and composability at scale. Institutional engagement has also expanded meaningfully, whether through ETFs, tokenized financial products or integrations by large financial institutions and payment platforms. As an example, on January 28, WisdomTree, which is a $140 billion asset manager, expanded their full suite of regulated tokenized funds on Solana, enabling institutional and retail investors to access real-world assets natively on-chain at scale. We're also seeing new consumer-facing financial use cases emerge, such as Calshi's regulated prediction markets becoming available through Solana wallets via Jupiter, extending regulated financial products to a broader crypto-native user base. Taken together, these trends reinforce our belief that Solana is becoming the execution layer for what we often describe as internet capital markets. Central to Forward's strategy to deliver SOL per share growth for shareholders is to be an active participant in the Solana ecosystem. During the quarter, Forward became one of the first public companies to have its own SEC-registered shares live on a public blockchain with FWDI now issued on Solana through Superstate's Opening Bell platform. These are actual Forward Industries common shares, not synthetic or derivative representations, recorded and updated on chain in real-time by Superstate, an SEC-registered transfer agent. In addition to self-custodying their shares, eligible non-U.S. holders can now use tokenized FWDI as collateral in DeFi, including on Kamino, enabling stablecoin borrowing while maintaining exposure to the underlying equity. We view this as an important step in bridging public equities with programmable on-chain financial infrastructure and as a foundation for future functionality as regulatory frameworks evolve. In December, we announced our collaboration with Sanctum, the leading infrastructure powering Solana's largest liquid staking tokens, validators and apps, to launch fwdSOL, Forward's proprietary liquid staking token. Through this partnership, approximately 25% of our SOL holdings are represented by fwdSOL, allowing us to continue earning native staking yields while maintaining liquidity. fwdSOL enables Forward to deploy staked SOL more efficiently, including using the token as collateral for borrowing and selectively participating in on-chain strategies alongside institutional partners. We view liquid staking as a core component of our treasury strategy, one that allows us to move beyond passive staking and responsibly capture incremental sources of yield, while preserving flexibility and risk discipline. We also began testing our proprietary automated market maker or Prop AMM, developed with Galaxy and infrastructure expertise from Jump Crypto. The Prop AMM deploys proprietary capital into on-chain trading strategy and is integrated into Jupiter and other Solana aggregators and positions Forward to participate in Solana's growing trading activity. With that, I'd like to now turn the call over to Ryan Navi, Forward's newly appointed Chief Investment Officer, to dive into our Solana treasury operations. Ryan?

Thank you, Kyle, and good afternoon, everyone. As many of you know, I was appointed Chief Investment Officer of Forward in December 2025. In my first 60 days, I deeply familiarized myself with the business and have begun working with both our team at Forward and our partners to put in place our 2026 plan to deliver SOL per share growth for Forward shareholders. What is clear to me is that Forward has built a truly differentiated foundation, an at-scale SOL treasury larger than the next 3 largest SOL digital asset treasury companies combined, a clean balance sheet, high-quality partners in Galaxy, Digital and Jump and the strategy that's been thoughtfully constructed to operate through different market environments. This foundation enables us to execute deliberately, manage risk responsibly and focus on compounding SOL per share for our shareholders. With that context, I'll dive into how we're putting that foundation to work, starting with our treasury positioning and key metrics, which we view as the core drivers of value creation for our company and the lens through which we evaluate our performance. On December 31, 2025, Forward held approximately 6,962,501 Solana with more than 99% stake, generating native staking yield between approximately 6.5% and 7.2%. As of December 31, 2025, we have generated over 112,000 Solana in staking rewards. We've also compounded our fully diluted SOL per share from 0.0604 as of the end of September 2025 to 0.0624 as of December 31, 2025, using a SOL holdings of approximately 6,962,501 and a total fully diluted shares outstanding of 111,591,332. That share count is made up of 84,924,272 common shares, 26,359,600 warrants and 307,460 options. Our annualized sold per fully diluted share growth was roughly 13% in our fiscal first quarter. As of December 31, 2025, Forward's mNAV was approximately 0.85. Calculated using the closing price of Solana on December 31, 2025 of $125, a total of 6,962,501 Solana, a Forward stock closing price of $6.61 and a fully diluted outstanding share count of 111,591,332. I'm very proud of the progress we've made in the first few months operating under our Solana treasury strategy. While we are still early in that journey, we've established a solid foundation and we are well positioned to take advantage of the opportunities in the market to continue to scale Forward's treasury and drive SOL per share accretion for our shareholders. With that, I'll now pass the call over to our CFO, Kathy Weisberg, to walk you through our fiscal first quarter results. Kathy?

Thank you, Ryan. As a reminder, all comparisons and variance commentary refer to the first quarter of fiscal 2025, unless otherwise specified. Jumping into our financial results for the first quarter of fiscal 2026. Revenue in the first quarter of fiscal 2026 increased more than 4x to $21.4 million compared to $4.6 million. Our gross margin increased significantly as well to 78.6% in the first quarter of fiscal 2026 compared to 24.5% in the first quarter of fiscal 2025. These increases were primarily driven by staking revenue generated through Forward Solana treasury strategy. Selling, general and administrative expenses during the first quarter of fiscal 2026 were $7.2 million compared to $2 million in the first quarter of fiscal 2025. The increase was primarily driven by higher operational costs associated with Forward's transition to its Solana treasury strategy. For those who are not aware, I'd like to detail the current GAAP accounting treatment for our SOL holdings. Current accounting standards for digital assets require changes in the fair value of SOL and fwdSOL to be recorded as components of operating income or loss. These fluctuations do not impact our cash balance, yield generation or ability to continue compounding SOL per share. We believe this distinction is essential in evaluating our financial performance, which is driven by strategy execution, not short-term market volatility. As a result of this accounting treatment, in the first quarter of fiscal 2026, Forward recognized a loss on digital assets of approximately $560.2 million and an impairment charge of approximately $33 million leading to a net loss of $585.6 million compared to a net loss of $0.7 million in the first quarter of fiscal 2025. Again, this loss was primarily driven by the decline in fair value of our SOL holdings. As of December 31, 2025, cash was $25.4 million compared to $38.2 million as of September 30, 2025. This concludes our prepared remarks. I'd now like to pass it back to the operator to open up the call for live Q&A.

Thank you, Kathy, Ryan and Kyle. As we gather the queue for live questions, we'd first like to address a few of the questions that have come in via email. Kyle, we'll start with you. Could you share your perspective on the recent token price volatility? Given your tenure in the industry, how has your experience prepared you to navigate periods of drawdown like this?

Everyone, Kyle here. SOL is down something like 70%-ish from its all-time high, which in crypto is somewhat par for course. Last market cycle, SOL was down 90-some-odd percent from its all-time high in the '21 through '22 cycle. So this is somewhat standard and to be expected in crypto. I think the most important thing that we have done at Forward is to maintain a clean balance sheet. Ryan and I and others have dialed in conversing, and we all agree that we've made the right set of decisions to not lever up. And I want to position that in stark contrast to what a lot of our competitors have done who have levered up, who have purchased SOL at substantially higher prices than the current market price and who are now substantially at risk. Ryan, if you want to chime in and share any additional thoughts there?

Yes. We've taken no institutional debt so far, although that could change in the future. And that really gives us the ability to play offense in this environment where things are dislocated while some of our peers have to play defense. So definitely excited for the opportunity set ahead.

All right. This next question is for Ryan. Can you share your thoughts on potential M&A? Do you have a specific framework that you are using to evaluate potential targets?

Yes, that's a good question. I'd break it up into debt versus non-debt M&A. So for debt M&A, it's pretty straightforward. We'll look to acquire businesses that are accretive on an enterprise value to NAV basis. As I just mentioned, the recent crypto sell-off really has improved the opportunity set for us. So again, we have no institutional debt, so we can play offense when others are playing defense. For non-debt M&A, it's a little bit more nuanced. We want to invest in businesses that have product market fit, scalable unit economics, durable moats and push the Solana ecosystem forward. Specifically, we look at situations where we can create our own catalyst basically by utilizing our scale and involvement.

All right. Ryan, this next one is also for you. You frequently referenced SOL per share in your public remarks. How should shareholders think about that metric as an important framework for evaluating Forward's performance?

So yes, in the short to medium term, SOL per share -- per fully diluted share growth is our North Star KPI. So if you think about Solana plus its staking yield as the benchmark, that means that you have full beta plus a 6% to 7% yield. Our mandate is to consistently generate greater than that rate of return on a risk-adjusted basis. So this quarter, we did 13% annualized, so we effectively outperformed Solana staking yield by 2x. That's why I keep referencing it and that will most likely be one of our go-forward KPIs in the near to medium term.

Great. And then this last one for you, Ryan. While we understand you manage with a long-term mindset, is there a target growth rate or benchmark that investors should keep in mind?

Yes. So as I also just mentioned, I think the SOL staking yield as our effective benchmark for yield generation. So any spread above that has to make sense on a risk-adjusted basis. So that can be various DeFi strategies, CeFi strategies, derivatives, RWA assets, it can really range the gamut. And then from an M&A perspective, the opportunity cost is the upside on our Solana. So if we engage in non-debt M&A, with SOL prices down, obviously, the bar is a lot higher. We're definitely taking a long-term disciplined approach and believe that this is the best way to generate sustainable shareholder value in the future. What else I can say is we will continue to adapt and capitalize as the market environment evolves. And when things are this dislocated to the downside, there's arguably more opportunity than when things are extremely bullish. So given our clean balance sheet, as Kyle mentioned, I'm actually very excited for the go-forward opportunity set.

Okay. Thanks, Ryan and Kyle. That concludes the email submitted questions. So I'll now pass it back to the operator to open up the call for our live question-and-answer period.

Our first question comes from Devin Ryan with Citizens Bank.

This is Noah Katz on for Devin. I'll start off with a question on broader Solana adoption. You guys have called out adoption across payments, trading and emerging capital markets as a key to the thesis. Looking out over the next year, what are the most important catalysts that would signal Solana is moving from more of a high-growth ecosystem to mainstream financial rails? And how is Forward positioning itself to convert this into SOL per share compounding?

It's Kyle here. I'll chime in. I think there was a lot there in the question, but let me just state it back. I think the core of the question is, how do we know we're kind of entering mainstream adoption. Look, I think broadly with crypto, you should think about kind of all of crypto in 2 buckets, either payments or trading. And if you talk to people from each of those worlds, they tend to talk about crypto fairly differently. It's that old image of the 7 blind touching the elephant and they all describe it in a different way. Let me touch on each side. On the payment side, Solana, I think at this point is pretty unequivocally in the lead of all the major chains. Folks at Visa, Mastercard, Stripe, PayPal, Western Union, Square Cash have all that big on Solana. Today, Visa is settling USDC payments between banks on, I believe it's a daily basis at this point. They haven't disclosed the public -- the absolute scale of the numbers, but they have disclosed annualized growth, and it's all triple-digit percentages. Square Cash announced late last year that they're rolling out USDC payments to all 65 million Square Cash users on Solana. Western Union is launching a stablecoin. PayPal, although PYUSD is on many chains, their preferred chain is Solana. And that's actually where the bulk of PYUSD volume and market cap is at. So if you look across what we can see there publicly, Solana is doing a really good job. And I think the core of it is just it's the most adopted, most used globally -- global chain and it's fast and cheap, and that's what these guys want. All of the additional features that payments companies look to expect are also there. With the smart contract capabilities built in Solana, they can add things like chargebacks and whatever else they need on top of just the basic ability to send money from point A to point B. On the trading side, things are -- the entire industry is a little slower, and that's just because the existing asset classes that are traded that are non-crypto think equities, commodities, FX, et cetera, those are all regulated institutions and many of them are -- many of those institutions are regulated across jurisdictions and geographies. And so there's just inherently a lot more inertia in making those transitions. But obviously, you can see now public announcements from the SEC Chair, Paul Atkins and then more recently, CFTC Chair, Mike Selig, have all basically announced Project Crypto and that their intention is to move U.S. securities markets on chain. That is not yet -- the fruits of that are not yet in the public eye, but there's a lot of work happening behind the scenes. And I'm pretty confident that the -- a lot of folks are having all the relevant conversations with the relevant parties to make sure that Solana has a real shot at winning that. Given the demonstrated trading volumes of crypto on Solana, I think they're in the pole position to win and to substantiate that specifically. Today, the substantial majority of trading volume across all major blockchains for spot assets is on Solana today. So it is kind of the logical place for all of the major regulatory institutions and financial institutions to end up. Ryan, Georgia, if you all want to chime in on this one, please do.

Yes. I think to answer part of the -- second part of the question in terms of value capture for Forward, I think we'll look to partner, buy or build depending on what vector we want to lean in, whether it's payments, whether it's RWA tokenization. I think the world is kind of our oyster and we can be adaptive to where we're seeing product market fit to the point that any such investment or organic build-out would be accretive to shareholders.

Okay, great. And then if I could sneak in a quick follow-up on capital allocation. I know you spoke a little bit on M&A, but given the volatility with marking to market, prices tied to SOL, what does your capital allocation playbook look like across different environments, such as when you're trading at a premium versus a discount to implied NAV and when SOL volatility spikes or liquidity tightens?

Yes, I'll take that, Noah. So when things are a little bit more buoyant and we're trading at a premium, I think it's the well-known playbook of equity-linked securities, which can be pref, convertible notes, ATMs, which a lot of our competitors have also done when things were a little bit more buoyant during the summer of last year. I think when things are dislocated to the downside and things are trading at discounts, I think it becomes a lot more about, a, like balance sheet quality, is there actually like left tail risk or solvency risk? And I think some of our competitors are -- I wouldn't say like against the ropes or anything, but you're starting to see that discount reflected in how they trade. So that definitely opens up the playbook for us given we have no institutional debt to go acquire if we're trading at sufficient premiums where it's accretive for us even on a stock-for-stock basis. Again, I'm just speaking in generalities, no specific targets in mind. But I think that's like a critical differentiator is we're the largest more than the next 3 combined in the Solana space. So we have the scale, we have the clean balance sheet. So we can really be like the net consolidator. I think that's a big strategic advantage of Forward and our positioning when things are dislocated. To your point, though, when volatility is higher, we would look to be a lot more conservative as we have been to date in taking dollar-denominated debt. So whether that's lower LTV or like very low probability of any type of issues and withstanding significant shocks over and beyond what has already occurred. Again, none to date through 12/31, but the bar is that much higher, right? But if we see accretive opportunities and it makes sense to take on non-dilutive financing, we won't be afraid to take those shots on goal. But again, we have a very conservative risk-adjusted mindset in terms of how we are running this company.

And your next question comes from Fedor Shabalin with B. Riley Securities.

I have a few, and I would start with the macro one. Probably, Kyle, it's for you. How do you expect staking yields to trend as Solana network usage grows and validator competition intensifies? Because historically, increased network adoption can either increase yields through higher transaction fees or compress them through greater validator participation. Just would like to hear your thoughts on this one.

Yes, happy to take this one. So first, I'll address actually the second -- the very last thing you said, which is actually incorrect. As more validators come on to the network, that does not impact yield for stakers. Validators obviously compete for yield, but that doesn't change the total yield available, both in terms of inflation as well as in terms of tips and MEV rewards. So first comment there. Second comment is inflation on the Solana network is written into the code and has been trending downwards since the Genesis block in March of 2020. I actually, in a term sheet to Anatoly and Raj back in 2019, proposed what is today the Solana inflation schedule, which is that, Solana's inflation is reducing at 15% per year until it reaches a floor of 1.5%. I believe today, headline inflation or I should say nominal inflation is somewhere in the neighborhood of 4%, 4.5%. So that's second part of the question. Third part, this kind of gets to the first part of your question. As network activity increases and specifically as volatility increases, that creates more opportunities for MEV and more reason for users of the network to pay fees. And so as total network activity increases and as total volatility in market increases, that should increase yield to stakers, including to Forward. So we are explicitly -- Forward is explicitly long the growth of those transaction fees on the Solana Network. We do expect over time that the composition of Forward's yield that it earns from staking to transition away where today it's mostly from inflation, the transition to being mostly from network usage as we expect network usage to grow in absolute terms and inflation to decrease in absolute terms.

And my second one is a company specific. So your combined SG&A expense included, I believe, $3.4 million in related party G&A expenses. Can you clarify the nature and expected recurrence of these related party charges? Distinguish whether they relate to the digital asset business or other operations and provide guidance on, let's say, normalized SG&A run rate going forward?

Yes. I think I know what that's referring to, but either Ryan or maybe Georgia or Kathleen, you all might be a little closer to the middle on that one.

I think, Kathy, could you shed a little light on that?

Yes. So those related party expenses relate to the launch of our digital asset treasury strategy and pertain to accounting support and other related support as we launch the business. Those are expected to decrease in the coming months.

Okay. And what would be the guidance like a normalized like $3 million, $3.5 million per quarter? Is it the right ZIP code?

We don't have that information currently available. We are negotiating and it will be less, but I don't have those numbers.

And your next question comes from Sam Dufault with Oak Ridge Financial.

Congrats on the quarter despite the overall market volatility. My question is mostly relating around the yields for Forward Industries. I believe, Ryan, you mentioned it's about 13% right now, which is about 2x on the current native yield. Can you kind of dive into kind of the aspects of that outperformance? How much is that attributed to fwdSOL? And kind of just how that fwdSOL launch has played into the overall Forward strategy?

Yes, happy to take that. I would say that the outperformance on a SOL per share basis is a combination of just the staking yield across fwdSOL and just stake SOL, again, which I think we've publicly stated is roughly 99% of all our Solana at 6.5% to 7.2%. But then also, as I mentioned, there's a playbook when things are dislocated at different times, our stock was trading at significant discounts. And as you can see, our share count actually declined quarter-over-quarter. So we did use some cash to repurchase shares when things were sufficiently accretive to our internal kind of thresholds and benchmarks. So I think us being opportunistic will allow us to continue to outperform even when things are, let's say, more bearish such as today. But on your question on fwdSOL, to my knowledge, we are not generating -- it would be immaterial amount that would be attributed. So it's predominantly driven by our capital allocation today, broadly speaking, across different investments and share buybacks and the like.

And kind of going off the buybacks, I mean, given the current market conditions, what's kind of the deciding factor, kind of what goes into those decisions when you decide to do a buyback or maybe hold off and wait for some of those debt M&A opportunities? What kind of, I guess, metrics or decisions goes into that?

Yes, it's definitely a relative value equation. So ironically, the better FWDI trades, that lowers our appetite to buy back stock and increases our appetite to do stock for stock or even cash doesn't really matter, but stock for stock, M&A, while our competitors are more dislocated than us. So interestingly, if we're trading closer to 1x, the buyback doesn't make any sense, but M&A becomes a lot more relatively attractive. So like I mentioned in Q&A earlier, we have looked to be adaptive based on market environment, including how the market is trading us versus our peers. And it's constantly evolving, but we're definitely thinking about things on a relative value creation accretion basis.

And that is the end of our question-and-answer session. I'll hand the floor back to Kyle Samani for closing remarks.

All right. Thank you, everybody. Thank you for joining us today, and thank you for your continued support and confidence in our vision. We are encouraged by the progress we've made and the platform we've put in place as we move into 2026. With a strong balance sheet, expanding on-chain capabilities and deepening engagement across the Solana ecosystem, we believe Forward is well positioned to continue executing its strategy and compounding SOL per share. We remain focused on disciplined growth, responsible risk management and building long-term value for shareholders. As a reminder, we will have our Annual Shareholder Meeting, which is going to be held virtually at 10 AM Central Standard Time on March 3, and we encourage all shareholders to vote. Information on voting can be found on our website or in our proxy filing. We look forward to speaking with you again on our next earnings call.

Thank you. All parties may now disconnect.