Upexi Aktie

Good day, and welcome to the Upexi, Inc. Fiscal Third Quarter 2026 Financial Results Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Valter Pinto, Managing Director at KCSA Strategic Communications. Please go ahead.

Thank you, operator. Good evening, and welcome, everyone, to the Upexi Fiscal Third Quarter 2026 Financial Results Conference Call. I'm joined today by Allan Marshall, Chief Executive Officer; Andrew Norstrud, Chief Financial Officer; and Brian Rudick, Chief Strategy Officer.

Before we begin, I'm going to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially due to a variety of risks, uncertainties and other factors. For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I'll refer you to the press release issued this evening and filed with the SEC on Form 8-K as well as the company's reports filed periodically with the SEC.

The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law. In addition, during the course of the call, we may refer to non-GAAP financial measures that are not prepared in accordance with the accounting principles generally accepted in the United States and they may be different from non-GAAP financial measures used by other companies.

The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings release issued this evening, unless otherwise noted. I'd now like to turn the call over to Upexi's CEO, Allan Marshall.

Thank you, Valter, and welcome, everyone, to our fiscal third quarter 2026 earnings conference call. I'm happy to review our quarterly results and discuss why we're particularly optimistic about the future.

Our fiscal third quarter was characterized by a challenging environment, most notably a continued decline in both the price of Solana and industry multiples. Both had a direct impact on our stock and were the result of a general bear market in crypto. That said, Solana has rebounded from its intra-quarter low of approximately 77% to current 96%, and our multiple is also well off the lows and now sitting above NAV and our fully loaded measure.

Brian will cover our thoughts on the downturn and why we believe prices and valuations can and will improve in the future. And while we, like any treasury company, are heavily impacted by token prices and valuation multiples, we are not simply waiting around for the environment to improve, but rather are taking a proactive approach with several efforts of foot.

One key initiative, which will always be a core component to the company is intelligent capital issuance. Like peers, we generally traded at a discount to NAV during the quarter. We took advantage by buying back approximately 2.5 million common shares for roughly $2 million or $0.80 per share. As a reminder, buying shares below 1x NAV increases our Solana per share. In addition to the buybacks, we remain active on the issuance front, issuing a $36 million in-kind convertible note in January, which materially reduced credit risk given the in-kind nature and will also increase our Solana per share that the notes convert given the conversion price above NAV at the time of the issuance.

Lastly, we completed an approximately $7 million equity plus warrants offering, which was done above NAV and also increased our Solana per share. Despite the difficult environment, we demonstrated an ability to utilize the capital markets to create value with both buybacks and issuances. Second key initiative during the quarter was an intense focus on expenses, including both treasury-related and for our brands business. On the treasury side, expenses have been elevated since the launch of our treasury due to initializing the strategy but will now normalize going forward.

On our brand business, we moved from in-house operations, including manufacturing, warehouse and logistics to outsourced operation with third-party providers. Importantly, our costs are now rightsized and are more closely tied to the revenue generated. All in and assuming a continued 6% to 7% staking yield, we would expect that by July 1, the ongoing cash expenses for operations and interest will be less than the treasury staking revenue. And our goal is to have the lowest expense base of Solana treasury company peers.

The last key initiative during the quarter was yield generation, where we aimed to increase the native 7% Solana staking yield in a low-risk and recurring manner. We continue to examine traditional sources of yield and are working towards a strategy that, if successful, would materially increase the total yield earned on the treasury. We believe the market would pay for the additional yield earned beyond the native staking yield. If the yield is low risk and recurring.

And if we are correct and successful, this would be accretive to our multiple, potentially giving us a sustained premium valuation that we can monetize and perhaps even perpetually enabling the digital asset treasury company capital markets flywheel. With that, I'd like to turn the call over to our Chief Strategy Officer, Brian Rudick.

Thanks, Allan, and hello, everyone. Solana fell from roughly $125 per token to about $83 per token during the quarter for a 33% decline.

This compares to Bitcoin's 22% fall over the same period. We believe the main reason for the decline in the price of Solana during the quarter was the decline in the price of Bitcoin, whether due to investors lumping all of crypto together, combined with Solana's much smaller market cap or to programmatic funds trading digital assets together, Solana tends to trade with a beta of Bitcoin.

And Bitcoin fell materially due to a myriad of reasons, including OG token holder selling, 4-year cycle fears, fallout from the October 10 deleveraging event, precious metals stealing the show, digital assets competing with alternative investment opportunities like AI and more, which pulled Solana lower.

While we believe the biggest determinant of the price of Solana will be the price of Bitcoin over the near term, we see this changing over the next few years. This is primarily because Bitcoin and Solana are 2 completely different constructs with the former store of value or digital gold and the latter a new type of computer and one that is upgrading our antiquated financial infrastructure.

We believe that Solana will increasingly be viewed independently from Bitcoin as investor knowledge increases and judge based on its own underlying fundamentals. Here, Solana fundamentals remain strong. As a reminder, Solana's North Star is what it calls Internet Capital markets, where it aims to have all the world's assets trading on a single liquidity venue accessible 24/7, 365 by anyone with an Internet connection.

While Solana is simply a computer capable of running any application, we see particular opportunity in upgrading our antiquated financial infrastructure, much of which is old, slow and expensive with Internet and blockchain-based rails for massive speed, cost, transparency, composability and capital access benefits.

Specific areas in this financial infrastructure upgrade include stablecoins, which enable near-free and near instant payments to anyone anywhere in the world. Stablecoin transfer volume on Solana totaled $2.1 trillion in the quarter, up 60% over the prior year and leading traditional companies like PayPal, Western Union and Societe Generale are continuing to build and issue stablecoins on Solana due to its top performance in distribution.

Another is tokenization, also known as real-world assets or RWAs, which move off staying assets on chain for massive benefits around asset management and administration, market efficiency and liquidity and financial inclusion and economic growth.

Solana RWAs hit $2.4 billion in 1Q, up from just $317 million a quarter a year ago, including assets from leading issuers such as BlackRock and Franklin Templeton and including tokenized equities where Solana commanded a 99% market share of trading volume in the first quarter.

Finally, Agentic payments, which are financial transactions executed autonomously by AI agents are another large opportunity as many experts believe that one day, the bulk of economic activity will be performed by agents. BI agents cannot simply open up a traditional bank account, but rather need a hyper-performing, credibly neutral and permissionless network on which to transact.

This puts Solana in the catbird seat to capitalize on this nascent but emerging trend tying AI progress with Solana's future success.

Finally, I will conclude by saying that recent price action, in my opinion, creates a compelling opportunity. Bitcoin pulled the price of Solana lower while the fundamentals from stablecoins to tokenization, AI agents and beyond are higher. Over time, prices follow fundamentals and a lower price against improving fundamentals creates an improved risk reward.

Upexi and Solana are well positioned to benefit. And with that, I'll turn the call over to our Chief Financial Officer, Andrew Norstrud, for a review of our financial performance.

Thank you, Brian. As of March 31, the company had approximately $3.5 million in cash, $2.5 million Solana tokens, $1.4 million liquid and the remaining 1 million tokens locked.

During the quarter ended March 31, 2026, taking generated approximately 35,000 tokens or $3.5 million in revenue. We reduced the overall short-term debt by approximately $7.6 million, which included reducing short-term treasury debt by $5.4 million. We reduced the recurring general and administrative expenses compared to the second quarter ended December 31, 2025, and reduced the overall employee count to 10 employees.

During the remainder of the year, management expects to eliminate and/or reduce additional ongoing general and administrative expenses and transition all consumer brands fulfillment to third-party providers. Based on the execution of these plans, the ongoing cash expenses will be less than the ongoing estimated staking revenue.

For the 9 months ended March 31, 2026, the company had digital asset revenue of approximately $14.7 million or approximately 100,000 tokens. Our tokens earned from staking has increased quarterly, and we expect the trend to continue. The direct treasury expenses for the 9 months ended March 31, 2026, were approximately $8.6 million, which includes management fees, custodian fees, service fees and interest.

For the 9 months ended March 31, 2026, the treasury had an unrealized loss on digital assets of approximately $178.8 million, reflective of the Solana price per liquid token of $83.11 and $71.47 per locked token as of March 31, 2026. There were no comparable financial results for the prior period. The company continues to develop the digital asset treasury with a focus on maximizing the return for shareholders and had substantially all tokens stake at March 31, 2026.

For the fiscal third quarter, total revenue was $4.6 million compared to $3.2 million in the prior year quarter. For the 9 months period ended March 31, 2026, total revenue was approximately $21.8 million compared to $11.5 million in the prior year period. This increase reflects the addition of our digital asset treasury business in 2025.

Net loss for the quarter was approximately $109 million or $1.67 per share. $92.3 million related to the unrealized loss on digital assets during the quarter. During the quarter, we increased the total number of Solana tokens held by approximately 189,000, equating to 9% increase or 35% annualized.

Our focus is growing Solana Holdings on a per share basis through disciplined capital activities, taking yield and opportunistic purchases while maintaining prudent leverage and risk management. Operationally, we will continue to align our expenses with that strategy. And now I turn the call back over to Allan for concluding remarks.

Thanks, Andrew. Upexi is operating from a position of strength. We have what we believe is the lowest average Solana purchase price of our larger peers.

We have perhaps the cleanest capital structure, and we have leading trading volumes and a leading valuation. These characteristics put us in an advantaged position to execute on value-creating actions from accretive equity and in-kind convertible notes issuances to accretive M&A and beyond.

Lastly, I want to remind everyone of the 4 items that differentiate Upexi from peers. First, we have a differentiated management team, one who have been extremely successful in the past with a very deep capital markets expertise.

Second, we have a strategy to maximize shareholder value in a risk prudent manner, which we believe positions us well for any market environment and appeals to investors of all kind. Third, we have and will continue to lead innovation and have done several firsts in the industry on the capital markets side. And lastly, we have demonstrated ability to create value for shareholders, executing on our value creation mechanisms to increase adjusted Solana per share by 35% last year and a full 32 percentage points more than investors would have gotten by simply staking Solana natively themselves. With that, I'll turn it over to the operator for questions.

[Operator Instructions] And we'll go first to Brian Kinstlinger with Alliance Global Partners.

In the press release, you highlighted a 9% sequential increase in the Solana count. Can you highlight the underlying yield for Solana that you're generating outside of what was acquired through the capital raise? And then what are the ways you're evaluating to improve that yield?

Andrew, do you want to take that part?

Yes. So during the quarter, the staking yield or the staking revenue was a little bit less than 35,000 tokens that we got. We had the 265,000 convertible debt that we did, and we also sold off 100,000 tokens during the quarter.

So that we had a net of $187,000 increase of tokens. No, I was just going to say and for the staking yield, overall, the total rewards has been down a little bit, but it's just below 7% for the native staking that we're doing.

Great. And then you mentioned in your prepared remarks, accretive M&A. Can you highlight how management is thinking about M&A and what types of assets might be intriguing or go hand-in-hand with your business?

Thanks, Brian. Right now, we're just exploring options on ways where we could increase the overall return on our capital. So the way we look at it is for the steak tokens, it's 7%.

And for the lock tokens, it's closer to double that or just less than double that. So anything we do would have to -- we have to keep in mind that the barrier for us to do something would have to beyond those yields. We've looked at multiple things. But obviously, with just the overall market conditions right now, we're kind of waiting to see what options become available. It's just an expansion of the way we were thinking before.

So before we think strictly buy as much Solana we possible take it. We are still thinking that, but we're also open to looking at opportunities that could increase that yield. Anything we did do, though, would not mean we sold any of our Solana. We would either use some sort of leverage debt or and to do that, it would have to surpass the income we would get from the Solana tokens.

Great. I've got one follow-up. When I look at the balance sheet and the Q, the Q says on the first page, you get 70 million plus shares. You've got $238 million of debt.

And so that's your enterprise value at $455 million and your NAV is $227 million. Why is that not the right way to think about it that you've got an EV to NAV of 1.5x. You guys are talking about having it below 1x.

Brian, do you want to -- Brian or Andy, I'm not sure appropriate on that statement.

Yes. I appreciate the question. Yes, we put out our investor deck and in the appendix, we have 2 ways that we calculate it. It really depends on whether or not our in-kind convertible notes end up converting.

If you run that embedded option through any sort of options pricing calculator, it suggests that they're still more likely than not to convert. But if those do convert, then all that so is ours, and we will have to issue additional shares backing that.

And so on our fully loaded NAV, which is how we like to look at it, we assume that those converts convert and we assume that we sell sole to pay back our line outstanding. And that's what gets you to a roughly 1x mNAV.

The other one, which I think you're referencing is assuming there's no conversion, we have to give back some of that sole, but we also don't have to issue those additional shares, and that's where we're way above NAV.

My personal view is that there's probably a blend of the 2 based on the probability of those in-kind converts converting. Again, we do think that those will convert, which is why we tend to manage the company based on our fully loaded mNAV.

We'll take our next question from Gareth Gacetta with Cantor Fitzgerald.

I was wondering if you could dive in on the cost structure and kind of the path to a self-sustaining treasury. Could you maybe talk about what existing cost actions need to be hit before you get to July 1 milestone? And then maybe once you get there from that base, is the yield strategy, will that kind of provide some operating leverage on top of kind of where you think it will sit today?

Sure. I can open it up and then Andy can get into any details. So the way we're looking at it is we've reduced the headcount. We've outsourced all of the brand businesses.

So they all run at a cost basis where we can manage it much more easily and competitively. And then I think the couple of things we have to do. One is we need to refi a little bit of the debt we have or get some sort of like small appreciation in Solana's price.

That would reduce expenses enough like on the debt profile to bring us really close to cash flow neutral. And then any increase, the way we're thinking about it is any increase in the price of Solana, obviously, that yield becomes very material for us. But do you want -- Andy can break down any more detailed information you want or Brian can.

Yes. So just real quick. I mean, we have some expenses like warehouse leases and everything else that will come -- will be expiring, we will go and be using them in this quarter.

So that's kind of what the July 1 date states so that these leases are gone, all the employees are done, everything is finished with any of the logistics that we were doing before.

Now it will become -- everything will be measured on profitability through the inputs. The second area of it, as Allan started to allude to, is that right now with that short-term treasury debt, we do have $500-plus thousand per month of interest that we're going to be looking at a couple of different ways to reduce that significantly in the next 3 months, which will reduce the overall operating expenses in that treasury significantly.

That right now, even without that, that's where we can just about breakeven, plus or minus a little bit based on the price of sole. But as we start taking care of those in the next 2 months, that will get us well over that. And yes, there will be excess cash from those revenue stakings as we're projecting right now, if everything goes as planned.

Got you. That's really helpful. And maybe I know it's further down the line, but if you do end up generating some cash flows from this staking business, can you talk about maybe how you think about allocating that and returning it to shareholders? Would you maybe buy more sole or lock sole or think about repurchases?

We would look at all like during the quarter, we repurchased shares because they're at 0.8 or even less of NAV. We had the excess cash. So yes, I mean any excess cash we have come in will go into building the treasury position that's sold per share, whether it be repurchasing shares or buying more sole.

Okay. Awesome. And then maybe last one. Could you just kind of double-click on the high-yield strategy and like what portion of the treasury is initially allocated to it and your appetite to maybe allocate more or a greater percentage of it towards that in the future?

Yes. We've been looking at certain strategies. Obviously, the yields on some of these strategies have been moving all over the place over the last 90 days.

I think we would do small initial amount into that, like $25 million or $50 million and then work on that yield if we can get high enough. And once we do refinance the debt, we'll have more availability to put more into a strategy like that should the yield generate the way we think it's going to.

And we're doing all of this off chain. So we're trying not to do anything on chain. We're using more traditional Wall Street instruments.

And this does conclude our question-and-answer session. I would now like to turn the conference back over to Allan Marshall for closing remarks.

I just want to thank everybody for joining the call today. We really appreciate the support. Thanks for the great questions, and we look forward to updating everyone on the year-end. Have a great evening.

And the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day. Welcome to Upexi Inc. Fiscal Second Quarter 2026 Financial Results Conference Call. Please note this event is being recorded.

I would now like to turn the conference over to Valter Pinto, Managing Director at KCSA Strategic Communications. Please go ahead.

Thank you, operator. Good evening, and welcome, everyone, to the Upexi Fiscal Second Quarter 2026 Financial Results Conference Call. I'm joined today by Allan Marshall, Chief Executive Officer; Andrew Norstrud, Chief Financial Officer; and Brian Rudick, Chief Strategy Officer.

Before we begin, I'm going to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of risks, uncertainties and other factors. For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I'll refer you to the press release issued this evening and filed with the SEC on Form 8-K as well as the company's reports filed periodically with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law.

In addition, during the course of the call, we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States, and they may be different from non-GAAP financial measures used by other companies. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings release issued this evening, unless otherwise noted.

I'd now like to turn the call over to Upexi's CEO, Allan Marshall.

Thank you, Valter, and welcome to our second quarter 2026 earnings conference call. I'm happy to review our results and discuss why despite the difficult market backdrop, I remain extremely optimistic for the future and why we remain well positioned to win. The market presented 2 key challenges for us last quarter with both declining asset prices and treasury company multiple compression. This was reflected in our quarterly results as well as in our stock price.

I'll discuss each in succession. On the former, the price of Solana fell 40% during the quarter, and it has fallen a further 31% since the quarter end. While there have been many reasons cited, including rising geopolitical risks, precious metal stealing a show and many more, the fact of the matter is the biggest determinant of any treasury company's success has and always will be the performance of its underlying token. Thus, we are not immune and Solana's performance had a big impact on the company.

That said, I remain encouraged for 3 key reasons. The first is given their nascency, such volatility is normal with digital assets. And Solana often exhibits large movements in both directions along a significant uptrend over time. Second, as Brian will discuss in more detail, the underlying fundamentals for Solana continue to improve as global finance moves on chain. Here, I'm particularly optimistic because over time, price follows fundamentals and improving fundamentals against the falling price is a recipe for greater potential upside. Lastly, as a treasury company, we have multiple mechanisms not available to native tokens or ETFs that can create value for shareholders like accretive issuance and discounted lock token purchases. We have in the past and aim to, in the future, increase our Solana per share to help offset any decline in token price or to add to any increase in price in an upmarket.

So overall, between the volatility being expected, a positive view for potential Solana price appreciation and our ability to increase Solana per share, we remain positive about the opportunity and continue to believe 2026 will be a strong year for Solana and Upexi. The second key challenge during the quarter was general multiple compression in the treasury space. We believe this was due to the law of supply and demand. With over 200 treasury companies, it's not hard to see why many are trading at discounts to net asset value. Despite this, I remain optimistic for so many reasons. First, I believe the subsector will work through some of its oversupply, either through M&A or from treasury companies selling their digital assets to close the discounts. Secondly, I believe there are fundamental reasons why Upexi can and should trade at a premium valuation in constructive market environments.

As discussed in the past, these have to do with our multiple value accrual mechanisms, which have value. Third, as we have publicly stated, we are working to increase the yield that we generate on a treasury in a risk prudent and recurring fashion. Should we be successful, we believe this would increase our multiple, which in turn would accelerate the model and differentiate Upexi from others. Lastly, I believe we're likely to see multiple expansion in a bull market. This has been the case historically with public companies and there are large catalysts like the potential passage of U.S. digital asset legislation that could quickly bring this to fruition.

In closing, while we have had a turbulent start to 2026, we remain positive about the future and the company has developed a strong strategic plan to: one, increase yield; two, hedge positions us the maturing option market; and lastly, capitalize on opportunities the volatility creates. All of these things should lead to significant growth in yield, cash flow and stability for 2026 and beyond.

With that, I'd like to turn the call over to our Chief Strategy Officer, Brian Rudick.

Thanks, Allan, and hello, everyone. Despite the challenges during the quarter, the underlying fundamentals for both Solana and Upexi remain solid. As a brief reminder, Solana's North Star is what it calls Internet Capital Markets, where it aims to upgrade our antiquated global financial infrastructure. Existing constructs like ACH and the credit card issuer networks were created 50-plus years ago and are slow and expensive, while even fintech is simply a front-end wrapper on this antiquated infrastructure. But we can now use Internet and blockchain-based rails to upgrade this antiquated infrastructure for huge speed and cost savings in addition to other benefits around transparency, composability, investor access and many more.

Solana continued to progress throughout the quarter with increased development, adoption and usage. The Spot Solana ETF launched and have seen over $850 million of net inflows since. Stablecoin supply reached a new record, tokenized equities are booming, non-native tokens like MON and STRK began trading on Solana and the Firedancer client launched on Mainnet. And importantly, key announcements were made by various leading institutions, including Western Union, Visa, Coinbase, Revolut, Robinhood, Kalshi and SoFi. In short, Solana demonstrated strong momentum and particularly so related to its Internet capital markets goal. The opportunity to revolutionize finance is massive, and Solana is at its very heart.

We remained active with the capital markets, highlighted by the private placement of up to $19 million in common stock and warrants and subsequent to quarter end, an additional $7 million common stock and warrants offering as well as a $36 million in-kind convertible note issuance. Both were done at a premium to our fully loaded NAV, meaning they increased adjusted Solana per share. We also became self-eligible during the quarter and quickly filed our shelf registration statement on Form S-3 with the SEC, which is now effective. And we announced a $50 million share repurchase program, adding another important tool to manage capital.

On the visibility front, we participated in over 10 conferences and events during the quarter, including Solana Breakpoint, Maxim, Cantor, Rothchild, ROTH, Clear Street and others. These resulted in myriad presentations and panels as well as in over 100 investor meetings where we continue to evangelize both Solana and Upexi. And we continue to appear in many news articles and podcasts throughout the quarter. Put simply, Solana is executing on its Internet capital markets road map and Upexi is adding additional value for shareholders.

And with that, I'd like to turn the call over to our Chief Financial Officer, Andrew Norstrud, for a review of our financial performance.

Thank you, Brian. As of December 31, the company had approximately $1.6 million in cash and 2.17 million Solana tokens. 1.32 million of those tokens were liquid, 850,000 of those tokens were locked. For the 6 months ended December 31, 2025, the company had digital asset revenue of approximately $11.2 million or approximately 65,700 tokens added. We expect to increase the number of tokens we hold in our treasury each quarter and also increase the quarterly revenue from the treasury. The direct treasury expenses for the 6 months ended December 31, 2025, were approximately $6 million, which included management fees, custodial fees, service fees and interest.

For the 6 months ended December 31, 2025, the treasury had an unrealized loss on digital assets of approximately $86.4 million, reflective of the Solana price per token of $124.48 at December 31, 2025. There are no comparable financial information for the prior period as the digital treasury was started in April of 2025. The company continues to develop the digital asset treasury with a focus on maximizing the return for shareholders and had approximately 95% of all tokens stake at December 31, 2025.

For the second quarter, total revenue was approximately $8.1 million, an increase of approximately $4 million or just over 100% compared to $4 million in the prior year quarter. For the 6 months period ended December 31, 2025, total revenue was $17.3 million compared to $8.4 million in the prior period. This increase reflects the addition of digital asset treasury business in 2025. The net loss for the quarter was approximately $178.9 million or approximately $2.94 per share. This loss was primarily driven by the $164.5 million of unrealized losses on digital assets, reflecting noncash quarter end fair value adjustments as well as approximately $8.3 million of stock compensation expense. Excluding these fair value changes, the underlying treasury is performing -- performance has remained strong.

We increased the number of Solana tokens in our treasury during the quarter by approximately 106,000 tokens. The increase was driven by spot token purchases, partially offset by a decline in the lock Solana through a swap transaction. We continue to strengthen our balance sheet in light of the changing market environment. Due primarily to accretive equity raises previously mentioned, we currently have approximately $9.7 million of cash on hand. Management continues to focus on growing Solana's holdings on a per share basis through disciplined capital activities, staking yield and opportunistic purchases of discounted lot tokens while maintaining prudent leverage and risk management.

And now I'll turn it back over to Allan for concluding remarks.

Thanks, Andrew. I wanted to conclude the call by highlighting our top priorities. While we, as always, remain hyper-focused on external visibility and intelligent capital issuance, there are 2 key initiatives worth highlighting. The first is a continued focus on accretive growth. We aim to raise capital above NAV to increase our digital assets per share. We will continue to look for ways to raise equity capital in the most cost-effective manner available. Additionally, we will also continue to issue in-kind convertible notes at a premium to NAV. Such notes offer differentiated risk reward for investors while significantly reducing credit risk for both parties.

Our second key focus going forward is to increase the yield on the treasury in a low-risk fashion, which we believe would enhance our valuation. If we are successful, we should trade at a sustainable premium, which itself would accelerate the capital markets flywheel. In closing, we've remained active even in a significant downtrend, completing both a capital raise and an in-kind convert, both at slightly or above NAV. While this has not helped stem the downturn or the stock performance, we believe it will accelerate the upturn when Solana and crypto begin to recover from the current drawdown.

With that, I'll turn it over to the operator for questions.

[Operator Instructions] Our first question is from Brian Kinstlinger with Alliance Global Partners.

With the recent pressure on Solana, coupled with your high conviction, is there any change in terms of your capital raising strategy? Are you more willing to raise capital at a lower premium and NAV so to reduce your average purchase price? And then is the goal to use the ATM as much as possible to lower your cost of capital?

I think I'll jump in here, Brian, this is Allan Marshall. I don't think we've changed our perspective at all on this. We have one of the lowest costs on Solana tokens. We were able to, like we do 2 capital raises subsequent to the quarter end with the one with Hivemind and then the cash one not too long ago, just over NAV. So we don't want to panic here and -- or I shouldn't say panic, but make decisions based on just daily movement. We continue to bring that cost down. We'll definitely be open to raising capital as that gap to NAV closes again, but we're still going to look to raise above NAV or at NAV as often as possible. The ATM, obviously, is the lowest cost. Now that we have all the tools in place going forward, we'll certainly be willing to use that, but we'll also be willing to sell Solana to buy stock back if that gap gets too wide as well.

Well, to that point, you've got $9.7 million of cash. How do you weigh buying SOL versus keeping a reserve?

I think the one thing that this downturn has taught everybody is to keep a reserve, right? Like the volatility has been even -- I think even from the crypto would be considered pretty volatile in such a short period of time, especially into what everyone consider tailwinds. So right now, we're going to just be prudent. We do think we're getting close to washing out at the bottom here. Hopefully, it will bounce around for a while and recover. So cash reserves are okay. What we've done is just kind of shore up the balance sheet, make sure that we're set.

The other thing with the whole market, and I said it in our call is the options market and everything are getting much more liquid. So you're going to have a lot more opportunity to hedge these positions or to partially hedge these positions. We tried to do it earlier in the year. We're just unable to get a liquid enough market to do the size we want it. Looking back, we wish we could have. But with all of the new kind of attention to it, all of the ETFs launching, liquidity is coming. So everything is maturing, and I think all of that's going to still bring a lot of opportunity both to raise capital again to hedge any movements to sit on cash. Right now, we're just in general, like playing it as close to the best we can, but we're still looking to grow.

My last question is you've alluded to your high-yield strategy plans. I think you had a press release a while back on that, too. Any more you can share? We've seen a number of that lend their digital coins. They've generated a much higher return. I guess I'm curious, is there a lower appetite or would be partners for this type of transaction given the pressure in cryptocurrency? Or are there still a number of parties that have a high degree of interest in something imminent?

A couple of things. One is, like I want to see how that yield, like we understand how they're looping those tokens and everything. I don't believe that creates the yield that they're talking about. So I want to see how that's I'm not sure it's presented in an apples-to-apples presentation. So we want to see that. However, we are currently going through the exercise to pinpoint like the risk-adjusted high-yield strategies we're looking for opportunities. While we do believe there's a time and a place for on-chain yield, today is not it for us. We're still not willing to go on chain. We're still waiting for that regulatory clarity. The on-chain comes with additional smart contract liquidation risks. We don't want to enter into any of that, like you said, with that volatility, and those yields can also compress.

So what we're looking at is a more familiar and really easily understood by traditional kind of investors. We're looking at something that's more familiar in the markets. We're going to try to launch that here into the second quarter, so April forward. And at that point, we'll probably give more clarity on how we're doing that. But it's not on change. That's all I can tell you for now.

[Operator Instructions] Our next question is from Brett Knoblauch with Cantor Fitzgerald.

I might have missed this, but is there an updated SOL balance following the direct offering and the placement of the convertible notes? In the press release, you said around $2.4 million. Is that the number that we should be using?

That's the public number we have so far. It's really close to that number. Nothing much has changed.

Perfect. Appreciate it. And then just to maybe double-click on the generating additional yield outside of staking. Can you maybe elaborate in what forms of activities you would be participating in? Obviously, you said nothing on chain, but any additional color on how or where you would generate additional yield to staking?

Yes, I'll let Brian step in here. But yes, what I will say is we will definitely elaborate on that going forward. But right now, we're trying to get it set up the way we want to get it set up. But I'll let Brian step in and elaborate a little bit there.

Yes. Thanks, Allan, and thanks, Brett. Yes, as Allan mentioned, we're still in the exploratory phase. We think that we've identified specifically one strategy that can generate high yield in a low-risk way. But we're waiting until we're a bit further along in that path before we reveal too many details. The one thing I'd say is like we've got really 2 key things that we're focused on. One is making sure that this is recurring and number two, making sure that this is low risk. And so when we think about it internally, our hurdle rate is that low to mid-teens that we can get on the locked and so we bought locked Solana at a 15% discount. When you think of it like OID and you put that 15% discount into the yield equivalent, we still get the 7% staking yield on that. And so it translates to an all-in low teens yield. And so that -- and we view that as low risk as well. So that is kind of the hurdle rate of what we're looking to do. And everything that we do will be compared against that. But we will give more information in the future as we continue to progress there.

There are no more further questions. I would like to turn the conference back over to Allan Marshall for closing remarks.

We want to thank everybody for joining the call. I know it's been a tough quarter for everyone at crypto. We -- like I said, during the call, we do think the future is still bright. We think we're on the right path. And thank you for the great questions, and we look forward to updating you guys during the quarter and look forward to the next conference call. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Upexi Fiscal First Quarter 2026 Financial Results Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Valter Pinto, Managing Director at KCSA Strategic Communications. Please go ahead.

Thank you, operator. Good evening, and welcome, everyone, to the Upexi Fiscal First Quarter 2026 Financial Results Conference Call. I'm joined today by Allan Marshall, Chief Executive Officer; Andrew Norstrud, Chief Financial Officer; and Brian Rudick, Chief Strategy Officer.

Before we begin, I'm going to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of risks, uncertainties and other factors. For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I refer you to the press release issued this evening and filed with the SEC on Form 8-K, as well as the company's reports filed periodically with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law.

In addition, during the course of the call, we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States, and they may be different from non-GAAP financial measures used by other companies. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings release issued this evening, unless otherwise noted.

I'd now like to turn the call over to Upexi's CEO, Allan Marshall.

Thank you, Valter, and welcome, everyone, to our first quarter 2026 earnings conference call. I couldn't be more excited to hold our first earnings call since adopting the Solana Treasury strategy. It has been truly transformational for the company, and as such, I wanted to comment on our past since inception.

As you know, we primarily were a consumer Amazon brand owner. As the Amazon business became increasingly more difficult we started to think about the best ways to create shareholder value going forward. After a thorough analysis of many options, we made a strategic decision to invest our time and resources into digital assets. This was due to 2 reasons. The first was a new found openness towards crypto in the U.S., mainly due to the change in administration and its various regulatory bodies. Put simply, the U.S. administration went from a headwind to a tailwind for digital assets and which we believe will accelerate innovation, adoption and ultimately affect prices moving upwards. Second was a greater appreciation for the value MicroStrategies has created for shareholders. Indeed, it has been the best performing stock in the U.S. since adopting a Bitcoin treasury strategy in 2020. And more importantly, it has more than doubled the return of Bitcoin with only minimal leverage, meaning its capital markets activities are creating tremendous value for shareholders.

We first publicly announced a pivot towards digital assets in February. And as we honed our strategy, we settled in on one built around Solana. We'll cover the rationale in more detail later in the call, but the decision on -- to focus on Solana was simple. From an asset perspective, we believe strongly that Solana has the best chance to be the end game winning high-performance blockchain and particularly so as the new rails for global finance. Second, from a treasury perspective, Solana offers additional ways to create value for shareholders via activities like staking and purchasing of discounted locked SOL. Our plan was simple: close on a large scale capital raise, employ and improved the proven capital markets playbook from MicroStrategies where issuing equity above book value is by definition accretive. Then innovate on MicroStrategy's model by staking our Solana to generate yield to turn the treasury into a cash flowing asset and also buy on locked discounted SOL for built-in shareholder gains.

We did just that in April, successfully completing a $100 million equity private placement in what we believe was the first large-scale equity pipe for an Altcoin strategy. We followed it up with a $200 million raise in July, which included an innovative in-kind convertible note issuance, offering with significant benefits for both investors and the company. And again, we believe that to be an industry first. Each time we deploy the funds into spot and locked SOL at attractive entry prices, sticking nearly all of it to generate cash flow. The company currently owns $2.1 million SOL valued in excess of $327 million. While raising capital and deploying the capital in a systematic way, we remain hyper focused on both external visibility and intelligent capital issuance.

Success in raising capital and deploying it are only part of a successful public strategy. We have put forth an enormous effort to build our online and traditional finance following and to educate the market on our vision and the investment opportunity. We are proud to have been quoted in over 50 news articles since launching the strategy, participating in multiple leading podcasts each month, establishing an advisory committee with Arthur Hayes, Jon Najarian and SOL Big Brain, and attended or are scheduled to attend over 20 mostly traditional finance-oriented conferences and have conducted hundreds of individual investor meetings. As previously stated, we have remained steadfast on utilizing the capital markets to create value for shareholders. Notably, our July raise not only materially increased our Solana per share, but also led to multiple expansion as we demonstrated our ability to raise funds in an accretive fashion.

On the financial side, our Consumer Brand business continues to perform as expected. Most importantly, our stacking revenue is uniquely providing a huge boost to company revenue. Our fiscal Q1, we generated over $6 million in digital asset revenue, and we are currently adding over $75,000 a day. As we look ahead, Q2 will benefit from having all of 2.1 million SOL stake for the future quarter.

I'll now turn the call over to Brian Rudick, Chief Strategy Officer.

Thanks, Allan, and hello, everyone. The biggest determinant of any treasury company's performance will be that of its underlying token. Here, we are supremely confident in and feel very fortunate to be underpinned by Solana. We chose Solana for 3 reasons. First, it's the first second-generation smart contract blockchain. This means that it benefits from having best-in-class technology like parallel transaction processing like modern computers do, but also from strong network effects having launched in 2020.

Second, Solana has a vibrant and growing ecosystem of users, developers and decentralized applications. You can really build anything on Solana from decentralized finance to deep into stable coins tokenization, gaming, art, social AI agents, meme coins and more.

And third, Solana is already putting up the best metrics of any blockchain, often beating out all of them combined. These metrics include daily active users, decentralized application revenues and decentralized exchange volumes. But what gets me so excited is the potential for Solana to revolutionize the world's antiquated financial infrastructure. Indeed, current financial rails, for example, ACH and the credit card issuer networks were created 50-plus years ago, and even fintech is a front-end wrapper that uses these antiquated rails on the back end. However, blockchain technology allows us to entirely reimagine these antiquated rails and to utilize things like stable coins and tokenization to remove rent extracting intermediaries and democratize value exchange.

Tangibly, this means huge cost savings and speed benefits, not to mention improvements in settlement times, transparency, composability, investor access and much more. And Solana is purpose built for exactly this in what it calls Internet capital markets. Its goal is to have all of the world's assets trading on the same liquidity venue, accessible 24/7 to anyone with the Internet connection. And institutions are taking note from PayPal to Societe Generale, Fiserv, Western Union and others.

Leading financial companies are building stable coins on Solana due to its industry-leading speed, cost and reliability. Tokenization infrastructure firms like Securitize, Superstate and R3 are bringing real-world assets on chain from leading asset managers like BlackRock, VanEck, Apollo, Franklin Templeton, Hamilton Lane and others. And Visa is using Solana for its USBC stable coin merchant settlement program for cross-border payments. Finance is moving on to the blockchain, and it's happening on Solana. We are in the very early innings, but this transformation is absolutely happening and with Solana front and center.

Lastly, I'd point out that we have what I consider to be the mother of all catalysts that can drastically accelerate this transformation in the U.S. passing comprehensive digital asset legislation. Indeed, a lack of clear rules in the U.S. has, in my opinion, always been the biggest item holding crypto back. Institutions have thus far only dabbled in digital assets and blockchain technology and have been loath to materially adopt the technology when it comes with heightened legal and regulatory risks.

However, if and when the U.S. passes this market structure bill called the Clarity Act, which is currently being worked on in the Senate with high bipartisan support, institutions will be forced to jump in, in a big way. Otherwise, they will be disintermediated by those who do. And it's big pack and big finance that have billions of customers built in trust, billions of dollars for investment in the top developers. Imagine Google adding a built-in crypto wallet to its Chrome browser or Amazon integrating stable coin payments.

We just may be on the precipice of onboarding the masses, leading to a step change in digital asset innovation, adoption and usage. Solana and Upexi are well positioned to benefit.

And with that, I'll turn it over to our Chief Financial Officer, Andrew Norstrud.

Thank you, Brian. Total revenue increased by $4.9 million to $9.2 million for the quarter. Net income was $66.7 million for the quarter, and earnings per share was $1.21 for the quarter. All of these increases were related to the Solana treasury performance. Solana tokens increased during the quarter by approximately 1,322,000 tokens. This increase was from both liquid and locked Solana purchases and swaps with approximately $181 million in noncash Solana purchases. The company has purchased approximately 2,029,100 tokens through direct purchases and swap transactions. The average price of Solana tokens purchased is $155.57, 31,347 of the quarter's increased tokens were from the $6.1 million in staking revenue generated from the treasury. In total, the treasury has generated approximately $7.1 million and 37,742 Solana tokens since inception. Unrealized gains of approximately $78 million was recognized during the quarter and had significant impact to the reported financials.

Management understands the volatility of the digital assets and we'll continue to focus on growing the number of Solana tokens held in the treasury in a way that will maximize the return for our shareholders. And now I'll turn it the call back over to Allan for concluding remarks.

Thanks, Andrew. Upexi is a truly differentiated treasury company with many advantages. We have a differentiated management team that is more traditional finance rather than crypto oriented. I founded what is now New York Stock Exchange listed XPO Logistics, and Andrew was our CFO at XPO and has been a public CFO for decades. Brian spent years at the most prestigious hedge funds managing hundreds of millions of dollars. This is relevant because at the end of the day, this is a capital market exercise, and we believe our experience will be paramount to our future success. We led the innovation to create what is now the DAT industry and look to innovate in the future to stay ahead of peers. With the first large-scale equity raise for altcoin treasury and the first in-kind convertible note, we have set Upexi on trajectory for a very bright future.

We do several things to be more in line with traditional finance to differentiate our strategy. First, we only take on prudent amount of credit risk leverage and limit it to 20%. We do not partake an aggressive on chain trading that increased our contract, liquidation and legal regulatory risk. Lastly, we only use qualified custodians and top validators and diversify amongst them for operational risk management and best practices. We believe this strategy will not only position us well for any market environment, but also will appeal to crypto and traditional investors alike.

Finally, and again, quite uniquely, we have a proven ability to create value. We have increased adjusted SOL per share in SOL terms by 47% and in U.S. dollar terms by 82%. As a reminder, the former measures our ability to capture our 3 value accrual mechanisms and accretive issuances, staking income and purchases of discount on locked SOL tokens, while the latter also incorporates the price of Solana. We are in an advantaged position to win. We are underpinned by an end game winning asset with nearly unlimited upside and offering additional value accrual mechanisms in staking and discount on locked purchases.

We have a differentiated management team with best-in-class capital markets expertise. We have a risk prudent strategy, positioning us for any market environment and resonating with investors of all kinds. Lastly, we have a proven track record of innovation and shareholder value creation.

With that, I'll turn it over to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Brian Kinstlinger with Alliance Global Partners.

Great. The company has added a few high-profile crypto investors to the advisory committee, like you mentioned. So can you talk about the impact we're having on the company? And any recommendations the committee is making as we think about differentiation of DAT, for example, outside of SOL accumulation and yield. Is the committee recommending or is management thinking about ancillary revenue generating businesses? And if so, can you share any details.

Thanks, Brian. So two parts. One is, so far, it's been a short amount of time we've been working with them, but we've gotten a lot of good feedback both on how we're presenting ourselves to the market, their opinions on SOL, the overall opinion on how we're positioning the company to communicate to both TEFI, I mean, traditional finance and also the crypto community. No one right now is talking about anything outside of Solana and revenue-generating outside of that, like we still believe as we get some clarity here going forward on regulatory changes that Solana is in line for in all of crypto or all of the top cryptos in line for a pretty big move.

So we're going to continue with the strategy we have, like we've said to our investors and stay focused. We will try to maximize yield. And we have had internal discussions, but none of that's public yet. We're going to do the right thing to increase our yield for our investors as quickly as possible, and we always open to input from the people we bring on board and also the outside community we talk to.

Great. I have 2 more questions. The first 1 is, given you didn't have a full quarter of SOL holdings, can you tell us what your effective yield has been? And is there any way to enhance that? Or are you maximizing that already? Maybe any information on the yield would help?

I can let Andrew answer that question. I will say, as we've been -- because we've been building it step by step, not everything is staked as quickly -- well, it's staked quickly, but as quickly as possible. And just moving things around and getting things set in like the risk-prudent factor, the way we manage it, Also, we're always working with different -- we've been working with different validators. We've been increasing the yield as it goes. So I think this is probably the baseline for us and it's going to go higher from here and especially since it's mostly all staked now that we have on board. So I can turn it over to Andrew, if he has a rate, but I'm not sure we've been able to blend it exactly just because of all the steps along the way, but Andrew?

Yes, you're not going to be able to blend it yet. Next quarter will be a lot better. But just to add to Allan's note, we've got a program that we put in place to look at the various different validators to have them compete against each other on any fees or anything else that's being done. We've got some great partners with us on that side and continue to look at how to increase that yield, plus we've had some other opportunities to try and increase the yield higher than just the standard staking yield. So more and more of that will come out this next quarter as we kind of have everything under control and have some of these programs in place. So -- unfortunately, I can't give you an exact yield, but going forward, you'll be able to calculate a lot better next quarter.

But to close that off, Brian, we definitely think this is kind of like the baseline for us, like this is the low end and it will continue to rise from here.

Okay. The last one, several of the DATs are trading below 1x, steep discounts, in fact. Thankfully Upexi is not. But I think investors are interested in management, in general, of DAT companies plans with capital markets, should Upexi face a deep discount. What -- how would you address that?

We have plenty. I think Brian and I and Andrew have always said when -- if for some reason, we do trade at a discount, it's -- the model is just on top. Like we still believe that inevitably crypto yield, the crypto increases and the yield and us maximizing that and also keeping company expenses as low as possible and continuing to get better at that. We'll warrant a premium. So at those moments in time, I mean, the company does have plenty of options, right? It can turn its staking revenue into a buyback. It could actually buy back shares. There's plenty of ways to offset that. But what I want to stress like this is a longer game, right? Like we don't want to think about it as 1 quarter at a time. We really do believe even if there is some sort of crypto pullback, it's just a pause. And I'll let Brian chime in here a little bit because him and I have talked about this over -- with multiple investors and I'm sure he would like to add in something on this one.

Yes. Thank you, Allan, and thank you, Brian. Yes, plus 1 on the capital market side of the equation, just being a bit on pause. I think that there's no better example than MicroStrategy. So 2024, it increased Bitcoin per share by 74%. In 2021, it was something like 47%. And then when it got into a bear market, and it did trade at a discount to NAV it still was able to increase Bitcoin per share, but it was something like mid-single digits. So it was just a bit on pause. Like Allan mentioned, there are things that we can do to compress any discount should 1 come to fruition. And importantly, we actually don't have to sell our SOL to do that.

You could actually borrow some funds to repurchase your shares to compress any sort of discount. And then the last thing I'd say is like we make an 8% staking yield on almost our full treasury. And then on top of that, a lot of the SOL that we've bought is locked form, which when you put that discount into any sort of yield equivalent. It's nearly doubling that 8% staking yield. So all in, we're making this really nice return on our treasury and so while we are waiting to issue capital in this accretive fashion, we were able to increase our SOL per share at a very nice pace.

[Operator Instructions] There are no further questions at this time. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

My name is Valter Pinto, Managing Director of KCSA Strategic Communications. I'm joined today by Allan Marshall, CEO; and Brian Rudick, Chief Strategy Officer.

I'm really looking forward to this timely discussion with Allan and Brian. Cryptocurrency industry is becoming increasingly mainstream. It's no longer crypto, it's an idea. It's obviously globally recognized.

We're coming out of the BTC Conference in Vegas just a few weeks ago, there were over 50,000 attendees, Vice President, J.D. Vance gave the keynote presentation. So it's obvious that a global shift is happening.

We welcome Brian today who recently joined Upexi, has quickly become an integral part of the organization contributing valuable insights in helping drive key strategic initiatives forward in the company's crypto strategy.

Before we get into our Q&A, let me quickly remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995 and federal securities laws. And that actual results may differ materially from what is contemplated by such forward-looking statements due to a variety of risks, uncertainties and other factors.

For a detailed discussion of some of the ongoing risks and uncertainties, I refer you to the company's quarterly report on Form 10-Q as well as the company's investor presentation and other reports filed periodically with the SEC.

The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law.

Again, I want to thank everyone for joining our call today. As many of you know, Upexi historically has been a brand owner. The company recently diversified its operations into the cryptocurrency space, being one of the first public companies to execute on a Solana treasury strategy.

At the conclusion of our fireside chat today, we'll have a live Q&A. Please submit your questions via the Q&A function at any time. We'll do our best to get to each of your questions within the time frame allotted for today's call. If for any reason, we don't get to your question, it's okay, please e-mail us at [email protected]. This call is being recorded today, Thursday, June 26, 2025, at 11:00 a.m. Eastern. The recording will also be available on the company's Investor Relations website under the Events section at the conclusion of this call.

With that, I'd like to start the call off with a few questions for Allan and Brian before we open up the call for our audience. And Allan, if I may, just a few questions to start off with you. I give you a lot of credit for being the visionary of the Solana treasury strategy for Upexi. The mechanics to me, and I'm sure many in our audience, how this all came about seems quite complex. I'm curious, when did you start thinking about going down this path? And how did this all come together?

Well, as you know, in the past and currently, we are a brand company. Amazon, we aggregated a bunch of Amazon brands. We grew the company pretty substantially from 2020 into 2023. I think got from $20 million to close to $100 million run rate. The problem was that we always anticipated being able to refinance the debt. And over the last -- those 4 years, it was very difficult for microcap companies to execute on refinancing that debt.

Fortunately, we had bought brands that had significant underlying value, and we were able to basically sell those off and get back to kind of starting from scratch again almost. I mean, the current business is estimated $15 million to $20 million in revenue. It contributes enough cash to finance operations. It should grow single digits, single -- low single digits.

Well, we've got a team that runs that. It runs kind of on autopilot. And in February, management, myself and Andy started looking at, well, MicroStrategy is more in depth. And we've looked at some other companies initiating and expanding their Bitcoin strategies.

The financial aspect around investing in the underlying crypto using equity and other financial instruments was very compelling. And we really decided if we were going to raise more capital, like would we raise more capital to buy more brands or would we raise more capital to expand on that kind of strategy.

The opportunity was compelling for many reasons, and it's rare that so many things are set up to be the catalysts at the same time. So in February, we were looking at it. The recent election really lessen regulation, allowing the industry to flourish.

The current administration seems to be outspoken proponent of crypto, as you mentioned in your opening remarks. So whenever those headwinds that crypto has faced over the last year became tailwinds, really made an easy decision for us to enter into this space instead of increasing our brand exposure.

Yes. And of course, Allan, in order to execute on the treasury strategy, you need to raise capital. You did so successfully. You raised $100 million. But not only did you raise $100 million, you raised $100 million led by several of the most prominent crypto venture capital firms in the country. And yourself and your family included, Brian included. I guess, when you think about how that investor group came together, they could invest in a lot of different securities. They invested in Upexi. I'm sure they have other investments, obviously. But why Upexi versus other other investments? And frankly, if you want exposure, why not Solana directly?

That's a good question. I mean, I think first, Brian can talk more about Solana. He's more in tune to the crypto expert than I am. I mean, I understand why we chose Solana. I mean, our original idea was to be broad-based in the crypto industry. But really, we looked at -- when we met Brian, we met GSR through AGP, we really looked at Solana as an asset that was up and coming.

And some of the things that made a difference in there was -- a few examples is that we're able to stake our treasury to earn about 8% yield. So that turns Solana into an asset that's producing yield for us, where Bitcoin is not producing yield and just sits on the balance sheet.

Secondly, some of the things we looked at and some of the things we presented to investors was that there's a significant amount of locks sold out there that we've been able to buy at discounts. Currently, our total position is probably 60% locked SOL. That produces -- we were able to buy that at about a 15% discount. So that produces a great built-in gain for shareholders.

And thirdly, over time, as we trade at that premium to NAV, we should be able to issue equity. And equity above NAV, obviously, is accretive to our shareholders, and it's a great value creator for us. But essentially, all will be doing is utilizing the capital markets for the benefit of shareholders. And that compounding thing and all of those levers are extremely powerful.

That's helpful. I appreciate that, Allan. And Brian, if I may, we did speak about GSR, very well-known and well-respected investor in the crypto space. It's where you led a lot of the research effort for 4 years. First, welcome to the team, Brian, a pleasant addition to the management team. But just curious why make the move from GSR to Upexi? Why did you invest in the company and believe in the vision of Upexi going forward?

Thanks, Valter. So I left GSR to help push on Upexi's Solana treasury strategy really for three reasons. The first is just a deep belief in the size of the opportunity. So if we are able to procure a similar percentage of SOL that MicroStrategy has done for Bitcoin, and we are awarded a similar multiple, that would make us a $4 billion company. And as we'll get into, you could actually argue the multiple should be a good amount higher.

The second is my confidence in our ability to capture that opportunity. So we're currently the largest Solana treasury company by the number of SOL held. We are backed by 15 of the most prestigious digital asset venture capital firms. We do have top management. So Allan founded XPO Logistics, which is a $14 billion NYSE listed company. We have deep ties to traditional finance that we're hoping to leverage. And then, we're operating in a way that will maximize shareholder value, but also in the risk prudent fashion that we believe is a strategy that will resonate with both crypto and traditional investors alike.

And then, lastly is a deep belief in all the benefits that we can provide shareholders. And so, Allan already talked about some of these multiple compounding value accrual mechanisms, and I'm sure we'll get into it much more. But I really do think that investing in a digital asset treasury company such as Upexi can be the best way to actually invest in crypto for many investors.

That's helpful, Brian. And we started to talk about it with Allan a little bit, but let's dig in a little bit further on the treasury strategy. Everybody is familiar with MicroStrategy or strategy as they're known now. They've been investing in Bitcoin for many years. There may be some investors on the call that don't frankly understand the difference between Solana and Bitcoin and other cryptocurrency. How do you simplify kind of the differences between both cryptocurrencies? And again, is there anything else you want to add as to why you chose Solana versus, frankly, investing in Bitcoin or any other cryptocurrency?

That is a great and key question. So what I'd say is Bitcoin was originally meant to be the electronic cash system. There were technical limitations in a fixed supply that saw it morph into the store of value. But you can really think of Bitcoin as a bunch of unrelated computers all around the world that keep this local copy of this Excel spreadsheet that simply keeps track of who paid what, whom and when. And then the network can actually just compare everybody's copy of that spreadsheet to figure out if anybody acted nefariously. And if so, they'll just throw out that local copy. And so it is able to come to this source of truth in this decentralized and permissionless manner.

But at the end of the day, it is just simply the store of value. And then, smart contract blockchains by contrast, which is what Solana is, don't just keep track of this digital ledger, but they also actually process code. And so then they can simply compare the output of that code from each computer to ensure that the code was processed correctly, but also in this decentralized and permissionless manner.

And this results in all these really amazing benefits that you can't get with any other technology. These are things like the removal of intermediaries, the democratization of value exchange, the new paradigms around ownership, governance and business models. And you can basically think of a smart contract blockchain as this computer in the sky. And the addressable market really is global compute.

And so Bitcoin is really the store of value asset. Solana is this global computer. And we chose Solana quite simply, because Solana is the leading smart contract blockchain. We do believe it has by far the best chance to be the endgame winner in this category.

That's great insight, Brian. Here's another interesting topic. I get this asked a lot to me, as I'm sure you do, as well as Allan. Let's talk about valuation. So whether you're looking at strategy, Upexi, any other comp in the space, the common question amongst investors is what should these companies be trading at? All of them trade at a premium to net asset value or NAV, but the multiples vary quite a bit. I guess from your point of view, I guess, putting your investor hat on, how should investors look at valuations in the space for Upexi and all the other comps in the industry?

That is a key question. It's a very, very brief background. I spent a decade as a bank analyst, mostly managing a book of bank stocks for Citadel, Millennium, and Balyasny. And at the end of the day, all these digital asset treasury companies are just banks. They earn spread income in terms of the difference between the cost of capital and the return on the digital asset. And then like a bank, they will trade at a premium to book.

So with that as context, I would say that digital asset treasury companies can trade at this premium to book for a couple of reasons. One is investors will simply pay to access digital assets in this form of a familiar equity security. Think about folks wanting to buy Solana in their Schwab account, which you can't do currently.

But then the second is really for access to all these multiple value accrual mechanisms. And this is particularly around the capital market strategy that can really compound value for shareholders over time. And so you have MicroStrategy that is currently trading at 1.7x the value of its Bitcoin.

And then, as you think about other companies and how they should be valued, in my opinion, when you move off MicroStrategy and move to smaller companies, there should be this embedded growth premium for those smaller companies. And this is just because similarly sized, similarly priced raises will lead to more accretion for shareholders.

So if Upexi issues $100 million of equity at a material premium to book, that would be highly accretive, and our stock should move up in a similar fashion. But if MicroStrategy issued $100 million of equity, it really doesn't move the needle, because they're so big.

And then the second thing is, as you start to move off of Bitcoin and to some Altcoins, as long as they are the right ones and will perform well in the future, those should also trade at higher premiums, because there's more potential upside in those assets, all else equal. So just quickly, Bitcoin is a $2 trillion asset. It's going to be hard for it to 5x from here. Solana is literally 4% the market cap of Bitcoin, could easily 5x over any sort of short period of time.

And so, I kind of look at MSTR's 1.7x as the lower bound and that companies that are smaller and those underpinned by assets outside of Bitcoin can trade at much higher multiples, and that's what you're generally seeing in the market today.

That's really helpful and it makes total sense. And Allan alluded to this. So we are generating yields from our Solana portfolio via staking revenue. I want to take a step back. Some investors may not even realize what staking revenue is or how -- like what are the mechanics of how it works? Can you Brian, just kind of tell us exactly what staking revenue is, how it all works in the background?

So this gets into the consensus mechanism of a blockchain. So how all of these unrelated computers all around the world come to an agreement. But for a proof-of-stake blockchain, which is what Solana is, all the computers in the network are known as validators and they process the smart contract code, as I mentioned.

And then, there needs to be a way to keep them honest. So they actually stake SOL by locking it up into the smart contract. And then if they misbehave, they can actually be penalized in what's known as slashing, so they can see some of that SOL go away. Solana actually hasn't implemented slashing yet, but this is in theory how it can and could work in the future.

And then the validators actually earn staking rewards for performing their duties correctly and not behaving nefariously. And so staking and staking yield is a way to help compensate validators for processing that smart contract computation and it helps secure the network. So Upexi, we are not actually running validators ourselves. We are delegating our SOL to validators who stake on our behalf, and then we earn that roughly 8% yield on our SOL for doing that.

That's helpful. Thanks, Brian. And I appreciate we have a large audience today. I appreciate all the questions. And Allan, this is actually one of our audience questions that I was curious about. Obviously, we provided an update this morning into our portfolio. Can you give our audience just an update, what does our treasury holdings portfolio look like today?

So we released an update this morning that even we hold currently 735,692 SOL. It's an 8% increase over our last update in May and current value -- well SOL price was all up, this morning was like $107 million.

That's helpful. And as I mentioned, there was a press release that went out this morning that has that information in it. And Allan, as you look longer term, obviously, we're in the early innings. All of this has come together in the last couple of months. But as you look longer term, what's the long-term vision of the company? I imagine the company will continue to raise capital in an accretive way for shareholders to invest in its Solana portfolio. Are there other currencies you're looking at? What are some other initiatives that you may be looking at for the future?

Well, I mean, really, we're solely focused on Solana at this point in time. We have a buy-and-hold strategy, and there's no current plan to switch from that strategy. I think, one of the things we discussed in the very beginning was sticking to the story, keeping it very clean.

I think, MicroStrategy has proven very successful how that model can work, right? They don't mine Bitcoin, they just buy Bitcoin, and they've created a huge amount of value over the last 4 years. So sticking to a single strategy is where we're really focused at this moment in time.

And as we talked all through this, the different ways to drive value by issuing equity that's accretive in an accretive fashion when we're trading above NAV. Taking that staking revenue, building the balance sheet, increasing ways that we can increase that staking revenue using locked SOL purchases. I think all of those are the mechanisms that we're going to use to create as much value as we can and then just stick to a really clean single story at this moment in time.

And Brian, this is a question that I'm curious about. I mean, obviously, today, there's so many ways that you can invest in cryptocurrencies. You can buy the tokens outright. You can invest in ETFs, you can invest in multiple public companies. How do you look at the benefits of all of these different mechanisms for investors that want exposure to the cryptocurrency space. They have a lot of options. But how do you look at the differences between all of the different options that investors have today?

Yes. So I believe strongly that investing in a digital asset treasury company like Upexi can be the best way to invest in digital assets over something like owning the tokens natively or investing in other instruments like an ETF. And it mostly revolves around having these additional value accrual mechanisms that we've been talking about that are not available with other assets.

And so, this is the ability to take on prudent leverage. This is the ability to buy locked SOL at a discount for built-in gains for shareholders. And then, this is the ability to engage in intelligent capital issuance and really monetize that premium to book that the market is awarding us.

And so, I actually think there's three ways an investor can benefit if the digital asset will rise, and it's something that we like to call triple action. So if Solana rises, you could see Upexi stock rise with the price of SOL and then the multiple that the market ascribes to our stock, relative to our NAV can actually increase.

And then, because our multiple is higher, we can actually engage in more and more accretive equity issuance. And so there are these three big benefits that you can get with a digital asset treasury company like Upexi that you can't get with other instruments or native tokens. And so for anybody that has this positive medium-term view of Solana, I actually really think -- believe strongly that Upexi could be the best way potentially for some investors to invest in digital assets.

Thanks, Brian. And thanks, Allan, as well for answering those questions. That was really helpful. As I mentioned, we have a ton of questions from our audience, which is great. And one of our questions, I guess, for you, Brian, you started to talk about leverage. How do you think about leverage as part of your treasury strategy? What is the right amount of leverage when continuing to accumulate Solana?

That is a great question and a key question. So I'd actually take it out a little bit wider than just like a leverage question. And I think, it's much more about instituting best-in-class risk management practices, which includes leverage. And what I'd say is like not all of our peers are doing this. So it's a key thing for investors to really understand the risk that they could be taking on.

And so we will only take on a prudent amount of leverage. Just for context, MicroStrategy limits its leverage to 20% of NAV. And we think like, this is appropriate, because we're dealing with a highly volatile asset, and you have to make sure that you are well positioned to weather any market environment.

But the second thing is, we're not doing a lot of on-chain degen activity, which we think will limit smart contract risk and really limit regulatory risk as well. So we need to see much more regulatory clarity. We do, do things that we can get comfortable around that supports Solana's ultimate vision. Like you saw, this morning, we announced plans to tokenize our equity, but we're not going to be doing a bunch of things that could heighten risk for our investors on chain.

And then, we are only using qualified custodians. We're diversifying amongst them. So all in, we do feel we have best-in-class risk management practices that can maximize value for shareholders, but do it in this prudent fashion. And so we believe that this is a strategy that will keep us here for the long term and will resonate with both crypto and traditional investors alike.

Well said, thanks, Brian. And just another question from our audience. This is more industry related, and I'm actually curious, Brian, to your thoughts. In the next 3 to 5 years, do you expect multiple blockchains to be big winners or one will emerge as a clear leader? And why or why not may Solana be that winning blockchain?

This is a key question and a key question, especially when you're investing in a digital asset treasury company, because at the end of the day, for any digital asset treasury company, the performance of it will largely be determined by the token ecosystem that underpins it.

It's hard to say whether or not there's going to be one winner take all or whether there's going to be thousands and thousands of blockchains. It's probably somewhere in between. We do think that Solana has the best chance at being the winning smart contract blockchain. This is for a few reasons.

The first is that, it is the first second-generation smart contract blockchain. So ETH was a first mover and a big fan of ETH, and it is a bit constrained by its original design decisions. It's had to push out execution to other blockchains called Layer 2s. And now folks are talking about that execution by these other chains being parasitic to Ethereum value capture. You don't get that with Solana. It's just monolith, all built on the same platform.

But in addition, like it does have these big technical upgrades, so it can process transactions in parallel, which is where a lot of this best-in-class speed emanates from. And so all said, Solana is the most performant blockchain out there. It's resulting in this large and growing ecosystem of users, developers and decentralized applications, and that's resulting in Solana putting up the best metrics of any chain.

And this includes things like daily average users, decentralized application revenues, tax volumes and kind of almost across the board, it's leading the pack. And so we think that Solana will only continue to widen this lead going forward.

Thanks, Brian. And we just have a few minutes left. Maybe one more question, I guess, for Allan and Brian, if you want to add to it. What is the biggest -- and we talked a little bit about this, but what is the biggest differentiator for Upexi as compared to other public companies in the crypto treasury strategy?

I mean, I don't know what the biggest differentiators. I think,each person and each company is kind of doing it their own. We raised all equity, so we didn't take on a lot of leverage on our balance sheet. We really did that, because of the volatility around the underlying asset, and we wanted to be able to add that when it made sense. But I think we have a really solid team here. Bringing Brian on from the crypto industry, and then my kind of expertise in the public markets and years of financing and building larger companies.

One of the hardest things to do is go from a small company to a big company. And revenue-wise, that's not that difficult, but building a team around that, and I think adding Brian and as we continue to build that team to make really good decisions going forward, that will be -- that should help us be more successful.

We did bring in and are backed by a lot of the 15 leading digital asset companies. So we'll be able to hopefully leverage those relationships. We've been able to leverage those right now, like increasing our staking revenue, working with really solid partners. I think all of those things will enable us to capture a little additional upside over time and hopefully make a little difference for our shareholders.

Thanks, Allan. And Brian, anything to add?

Not particularly. What I'd say is for any digital asset treasury company, there's really two components. One is external visibility and making sure everyone knows about you, so you can maximize demand for your stock.

And then, second is intelligent capital issuance, which is where a lot of the magic happens. And what I'd say is like we believe very strongly that our expertise and our connections will allow us to do this in a big way and execute on our plan quite successfully.

Well said. Thanks, Brian. And we're just at the conclusion of our call. There were some questions that we didn't get to, but please e-mail us at [email protected].

Allan, Brian, I really appreciate the time today. I think it was very helpful and educational. Before we conclude today's call, any last thoughts?

No, just thank everybody for the call. Thank you, Valter, for setting it up, and thanks, Brian, for all the help he's doing for the company, and we wanted to welcome him on board publicly, because it's been a great addition for us.

This is great. I really appreciate it, guys. Again, we had a big audience, and I really appreciate everybody's participation. This is not the first or the last that we're going to do. We're going to do many of these, and we look forward to speaking with everyone in the future. Thank you, everyone. Bye.

Thanks, everyone.

Good day, and welcome to the IAccess Alpha Virtual Best Ideas Summer Investment Conference 2025. The next presenting company is Upexi Inc. [Operator Instructions] I'd now like to turn the floor over to Mr. Brian Rudick, who is the Chief Strategy Officer for Upexi Inc. Sir, the floor is yours.

Thank you very much, and it is a pleasure to be with everybody today. My name is Brian Rudick. I am the Chief Strategy Officer of Upexi, the leading Solana treasury company. Here, you can see our background. So we are a consumer products brand owner. We currently own 3 different brands. We are putting up roughly $15 million to $20 million in annually recurring revenue, and we are roughly breakeven at this time. We actually announced in February our intention to move into the cryptocurrency space and have since honed that strategy to be one that is focused on acquiring and HODLing as much Solana as possible. We were fortunate to raise $100 million from 15 of the most prestigious crypto venture capital funds, deployed that quickly into the Solana treasury strategy, and that brings us to where we are today.

We believe one big differentiator of ourselves is our management team. So we are led by our CEO, Allan Marshall. He is the founder of XPO Logistics, a $14 billion market cap company that is a leader in logistics globally. He's had many successful exits in the past as well. Our CFO is Andy Norstrud, who's been with Allan for most of their careers. And then I spent most of my time on Wall Street, mostly managing a book of bank stocks, always in the long/short construct for leading funds like Citadel and Millennium and then spent the last 4.5 years heading the research effort at GSR, which is one of the largest companies in all of crypto.

So just as some background, a bit of a primer on digital asset treasury companies. Really, this all started with MicroStrategy back in August 2020. It was tired of seeing the value of its fiat erode due to inflation, and it decided to buy Bitcoin. Then the price of Bitcoin moved up, MicroStrategy stock price started to move up as well. It continued to buy more Bitcoin and pretty soon, it was actually accessing the capital markets to buy even more Bitcoins. After that, you saw a number of other companies starting to employ this MicroStrategy model. It's been mostly focused on Bitcoin. But as you can see, there are more and more companies coming out more recently focused on other tokens like Upexi and Solana, and this is predominantly due to a more open SEC.

There are a number of wonderful shareholder benefits that you get with a digital asset treasury company that actually might make it a better investment than holding the native token itself or another instrument like an ETF. Number one, the digital asset treasury company shares can actually act as a proxy for that digital asset in the form of a familiar equity security. Number two, digital asset treasury company stock typically will trade with a beta to that underlying cryptocurrency. So if you believe that, that cryptocurrency will generally move higher over the medium term, you might want greater exposure to that. And then number three, digital asset treasury companies are much more than a levered equity play on a cryptocurrency.

They can actually engage in multiple value accrual mechanisms most notably being intelligent capital markets issuance where a lot of the magic actually happens, and we'll get into this in much more detail shortly. There is something that I like to call triple action to where if the underlying digital asset move up, an investor could actually get 3 things that they see in the digital asset treasury company stock. So number one, the stock should move up with the cryptocurrency. Number two, the multiple that investors ascribe to that company, meaning the market cap over the value of that cryptocurrency can expand. And then number three, because that multiple is higher, the company can actually raise more capital and in a more accretive fashion. So there's actually 3 big benefits that you get from a digital asset treasury company.

So here, you can see just how wildly successful that this model can actually be. I'd note that MicroStrategy has been the best performing stock of any stock in the U.S. since it moved to a Bitcoin treasury strategy in August 2020. It's more than doubled the performance of Bitcoin, and it wasn't fully levered. So there has to be something there beyond just being this levered play. And the other thing to note is that MicroStrategy actually holds as the second largest holder of Bitcoin behind only Satoshi himself. There could be some technical issues.

I'm not sure if the next slide is up yet. Here we go. Okay. So what is Solana? There are a couple of different categories of digital assets. You could think of Bitcoin as being the store of value, and then you can think of high-performance smart contract blockchains as being almost as computer in the sky. Anybody can arbitrarily upload any code to it, and that code is processed in this trustless and decentralized fashion, and that emanates a lot of really great properties. Put simply, we believe that Solana is the leading smart contract blockchain. It has the best technology, and it has the most vibrant ecosystems of users, developers and decentralized applications. And this is leading to Solana putting up the best metrics of any smart contract blockchain relative to its peers.

So our thesis is actually quite simple. So Upexi provides exposure to investors in the form of a familiar equity security, but it's actually much more than that. We can unlock significant value using proven capital market strategies. In addition, we can actually improve on MicroStrategy's playbook by staking our treasury to make it this productive asset or buying Locked SOL at this discount for built-in gains for shareholders. And then lastly, we are capitalizing on crypto secular expansion and Solana as an end-game winner. So for any treasury company, there's really 2 key components. The first is external visibility. You want everybody to actually know about your company to where you can maximize demand for the stock. And here, you can see we have a bunch of different efforts afoot that span both the crypto side of things and the traditional investor side of things.

We believe quite strongly that our expertise and our connectivity to both sides of the aisle position us well to really maximize our visibility externally. And then the second component is on intelligent capital issuance. This is where much of the value accretion for shareholders actually occurs, and we are hoping to be out there raising funds in an accretive way pretty soon. We feel that we've demonstrated this already by successfully executing a $100 million raise. It's -- we've raised the most of any Solana treasury company out there, and we'd like to do this again pretty quickly. MicroStrategy really gave the blueprint. This will likely come in the form of convertible debt or additional accretive equity issuances, though we are open to whatever is best for the shareholders at the time based on market conditions.

So our strategy is really 3 parts. The first is to go big and fast. It is a bit of a race. We are currently the largest Solana treasury company by number of SOL held, and that was in part due to our large initial capital raise. We also deployed those funds quite quickly, which is exactly what you want to do when you think that the digital asset over the medium term will tend to move up. So go big and fast. The second is we like to say that we come with the Cryptosphere. We are backed by 15 of the leading digital asset venture capital funds. They are providing us with capital. They are providing us with connectivity. They're helping to maximize our visibility and some of them are even running validators for us.

And then lastly, the thing that differentiates us is we are trying to act in a manner that we think is fitting of a public company. So we are not going to be too highly levered. We're not going to be doing a bunch of degen items on chain. We are only using qualified custodians, and we're diversifying amongst them. We think that these things provides 2 benefits. The first is it positions us well to withstand any market environment. And the second one is we believe that this is a strategy that will resonate with both crypto investors and traditional investors alike. The thing that gets me so excited is there are multiple value accrual mechanisms that all compound. This is actually why I decided to state my career on this because I believe so strongly just in the value creation for a digital asset treasury company and specifically one based on an endgame asset like Solana.

And so the first here is staking. So we stake our Solana and earn a roughly 8% return. What this means is we are delegating our SOL to a validator who is using it and basically pledging not to act in a nefarious fashion. And then in return for that, we are making -- we are being compensated with this roughly 8% staking yield. And so we are turning our digital asset treasury into this productive asset. The second thing is we are buying locked Solana at a discount. And what this means is when Solana was created, it pre-mined a bunch of tokens, which is sold to investors that were all not liquid immediately and they vest it over time. And so there actually is this pretty liquid OTC market, but you just can't trade it on an exchange, and we're able to actually buy those locked tokens at a roughly mid-teens discount for built-in gains for shareholders. That discount moves to par over time. It's roughly a 1.4-year weighted duration.

And importantly, we still get the 8% staking yield on it. So when you put this discount into any sort of yield equivalent fashion, we're roughly doubling that 8% staking yield in this risk prudent way that fully aligns with our buy and HODL strategy. Then we have the intelligent capital issuance. I'll get into this much more on the next slide because this is where much of the magic happens and it's deserving of its own deep dive. But just note that when you issue equity above book value, it is by definition, accretive. And then the last driver of our stock is really the change in the price of SOL. Here, I'd note that there's a lot of upside potential. SOL's market cap is only 4% out of BTCs and there are, in our minds, many more positive catalysts and risks for Solana from here.

Here is our capital markets flywheel. So investors are currently awarding digital asset treasury companies a multiple in terms of its market cap relative to the value of the digital assets it holds. There's a number of reasons for this. I think it could be as simple as wanting access to crypto in the form of a familiar equity security. My bank's analyst brain tends to think of this in terms of a bank. So effectively, just like a bank, we're earning spread income. We're earning the difference between our cost of capital and the return on Solana. When investors think that, that spread is going to be positive, we earn it just not this year, but also in future years as well and the market will actually present value that, add it to the NAV, and that's where this turns into something that is positive.

And then we can actually monetize that premium for the benefit of shareholders. So this is step 2 with intelligent issuance. And when we issue equity at, let's say, 2x book, we are effectively selling $1 for $2 or we are buying Solana half off. And this is exactly how MicroStrategy essentially created $13 billion worth of free Bitcoin for shareholders last year. The second component of this is convertible issuance, which is quite similar and can result in cheap or free funding for the company, delayed dilution and actually selling equity at an even higher premium versus the current market price. And then all that results in an increasing SOL per share for us, which should result in a stock price moving up and supporting the multiple and then this capital markets flywheel can just continue.

As far as valuation, this is really what enables this capital markets flywheel. So you see MicroStrategy, I think last I looked at it, it was at 1.7, let's just call it 2x to make the math easy. And what you see is when you move to smaller companies, there's actually this embedded growth premium. And the reason for this is if a smaller company issues $100 million of equity at 2x book, it's going to be highly accretive versus if MicroStrategy issued $100 million at any multiple, it really won't move the needle because they're so big. So smaller companies should trade at this embedded growth premium. And then similarly, as you move off of BTC toward an altcoin, all else equal, there is more potential upside in that altcoin. And so investors will tend to pay a higher premium for non-BTC treasury companies as well.

As far as our Solana treasury, we are the leading holder of Solana for any public company. As of our last update, we had nearly 700,000 Solana at the time was valued at over $120 million. 60% of that is in the form of Locked SOL for those built-in gains for shareholders. You can see more information here on some of our purchases and our staking and the last that we guided was to generate roughly 8% or 48,000 tokens per year via staking income. And then here is our slide on why we believe so strongly that crypto will be ubiquitous. The short answer is there are many use cases and benefits that you can get with crypto that you can't get with any other technology. These are things like the removal of intermediaries, the democratization of value exchange and new paradigms and constructs around ownership, governance and business models. It will take time, just like any technology.

You saw the Internet invented in the '80s, and it wasn't until the mid-2000s that we got the Internet as we know it today with social networks and user-generated content, but it is happening. And that brings me to the second section. Crypto prices will ebb and flow based on speculation because it is such a nascent asset and subsector. But if you actually look under the hood, we are in secular expansion. And so all of these underlying fundamental metrics like number of global crypto users, number of developers, number of daily transactions are all up and to the right. And then the last thing I'd say is I personally think that we could be on the mother of all crypto bull markets. And this is really because the biggest thing always holding crypto back was unclear rules and regulations in the U.S. We are likely to get market structure legislation next year. If that happens, institutions will have to come in, in a big way. They really haven't been doing too much, but they will kind of be forced to do so. Otherwise, they'll be disintermediated by those who do.

And if you think about it, it's actually the institutions that have billions of customers. They have billions of dollars to put at it. They've got built-in trust. They have top devs. And so if you can imagine Google Chrome actually adding a crypto wallet and Amazon accepting a stablecoin like USDC, we could be on the precipice of onboarding the masses, and this should lead to a step change in functionality and usage and Solana and Upexi will be big beneficiaries of that. Then as far as why we chose Solana. So we view Bitcoin as the best monetary asset. We view Solana as the best high-performance blockchain. It really is that simple. There are roughly 20 other companies employing the MicroStrategy model. We didn't want to be #21. We'd rather be the canonical Solana treasury company. And then also, two, Bitcoin is already a $2 trillion asset. It will probably take immense sovereign buying for it to 5x from here versus something like Solana, which could potentially 5x by year-end. So much more potential upside for us.

And then lastly, there's a bunch of Solana specific reasons, which really get into the nitty-gritty on what makes it the leading Solana or the leading smart contract blockchain. But the TLDR is it does have the best performance. It has the most vibrant ecosystems of users, developers and DAPs and is putting up the best metrics of any chain. And then as far as why Upexi hit on most of these points, but we believe that we have a top management team with great connectivity across both the Cryptosphere and traditional finance. We are backed by leading firms, 15 of the most prestigious crypto VCs that are adding a lot of value. We are a first mover. So we're one of the first Solana treasury companies in the United States. We have extensive capital markets expertise, both at this company and in prior companies as well. We do have leading connectivity to folks, both in traditional finance and in the Cryptosphere.

And then we are doing things in a very professional manner that we think will resonate with all kinds of investors. And then there are a bunch of characteristics of our consumer brand company that we think make this a great opportunity. It's rightsized. So investors actually don't have to worry about all the details about the consumer brand operating company. It's roughly breakeven. So when we do raise funds, that goes to buying Solana, not to support operating company losses, and then we have a very pristine capital stack. And that is it. So we believe quite strongly that there are multiple value accrual mechanisms at play here and that Upexi for some investors could make a better investment than buying the underlying asset or an asset or an instrument like an ETF because of that. And with that, I will move over to Q&A.

The first question is, would you ever add any other digital assets besides Solana? So the short answer is no. We have said that we are a buy and HODL strategy for Solana only. We really truly do believe that it is the endgame winning smart contract blockchain and will be the best-performing token. What I noted there are -- you're seeing a plethora of digital asset treasury companies to market, and we feel quite strongly that there will only be 3 to 4 that a model such as this can work on, Solana obviously being one of them. The big reason here is because the biggest determinant of any digital asset treasuries company's success is the token that it's built on.

It doesn't matter what you do if the token moves down 95% over 5 years. And so you, a, have to be sure that, that token will be around in 5 years. I can say that confidently about Solana, but for most other assets, I cannot. And then b, you have to be fairly confident that it will generally perform quite well over those 5 years. And I can say the same thing about Solana, not for a lot of other tokens. So all that said, I never say never, but we are kind of all in on Solana.

Next question is, why did Solana -- Upexi's stock price drop? I actually can't comment on our stock prices, but what I can say is that the -- when we went out and we raised $100 million via a private placement, we had registered those shares, but that registration statement hadn't actually gone effective yet. And so what this means is all of the investors that invested in our pipe can now actually trade their shares if they wish. And so I think that is the event that has caused our stock price to fall today, but I can't really comment on it outside of that. And then, yes, I believe that is all of our questions.

Can you talk about some of the Solana use cases for the blockchain. There are so many use cases for Solana. And one thing that we really like about it is its strong performance. So Solana is actually not the first high-performance blockchain. That is probably Ethereum. And what I'd say there is Ethereum was the leader, and it is constrained by its original design decisions. So because it came out over a decade ago, it processes transactions one at a time. There are all these other details about how the chain was designed that you just can't really get around for backwards compatibility reasons. And so what Ethereum ended up doing is it pushed out execution of transactions to other blockchains called Layer 2s. And now there's this whole big debate as to whether L2s are parasitic to Ethereum value capture itself versus something like Solana, which is a monolith and has high performance and can keep all of that activity on its own chain.

And it's just a big, big benefit for Solana versus others. But the TLDR is almost anything you can think of you can do on Solana. So obviously, one of the big benefits, as I mentioned, is the removal of intermediaries. There are a lot of intermediaries in finance. And so Solana is very focused on decentralized finance, and you're seeing basically everything that you see in traditional finance replicated on chain. Another area is called DPIN. So Decentralized Physical Infrastructure Networks. You're seeing folks replicate these very cost-intensive, capital-intensive constructs with things like Helium Mobile that is providing for 5G networks for cell phones by using these DPIN constructs.

You're seeing people trade meme coins. You're seeing gaming, you're seeing social networks. Anything that you can think of, anything that you can do on a normal computer, you can do on Solana. And just checking the queue. And that is it. So with that, we're almost at time anyway. I will turn it back over to the operator. So thanks, everybody, for your interest and support.

Thank you, ladies and gentlemen. That concludes the Upexi Inc., presentation. You may now disconnect. And please consult the conference agenda for the next presenting company.