Earnings call transcript: Sol Strategies Q3 2025 sees stock dip

Sol Strategies Inc. reported its third-quarter 2025 earnings, revealing significant financial strides and strategic initiatives. The company, currently valued at $155 million by market capitalization, has shown remarkable volatility in its stock performance. According to InvestingPro data, while the stock has delivered an impressive 584% return over the past year, it recently fell by 3.12% to $0.17, reflecting investor caution amid broader market conditions. The company’s Solana treasury grew substantially, and it continues to innovate within the blockchain sector, although market reactions suggest concerns over future profitability.

Key Takeaways

• Sol Strategies’ Solana treasury increased to $90 million, up from $48 million.
• Total assets rose significantly to $164 million, with liabilities also increasing.
• The company launched a white-label validator business and partnered with Solana Mobile.
• Stock price dropped by 3.12% in response to the earnings call.
• Strategic focus remains on the Solana ecosystem and potential M&A opportunities.

Company Performance

Sol Strategies demonstrated robust growth in its digital asset operations, evidenced by a significant increase in its Solana treasury and total assets. The company has positioned itself as a leader in the digital asset treasury sector, leveraging its dual-revenue model. With an EBITDA of $5.49 million and revenue growth of 912% in the last twelve months, the company shows strong operational momentum. However, the rise in liabilities from $40 million to $62 million indicates increased financial commitments that may concern investors. InvestingPro analysis reveals 13 additional key insights about the company’s financial health and growth prospects.

Financial Highlights

• Staking and validator income: $3 million
• Comprehensive income: $900,000
• Adjusted EBITDA: $800,000
• Solana treasury: $90 million, up from $48 million
• Total assets: $164 million, up from $125 million
• Liabilities: $62 million, up from $40 million

Outlook & Guidance

Sol Strategies is optimistic about its future, focusing on expanding its presence in the Solana ecosystem and exploring mergers and acquisitions in the validator and technology spaces. The company aims to tokenize its stock on Solana, a move that could set it apart in the public markets. Revenue growth is expected to continue, driven by treasury and delegation business expansions.

Executive Commentary

CEO Leah stated, "We’re not just holding Solana, we’re building it," emphasizing the company’s commitment to the Solana blockchain. CTO Max highlighted cost efficiency, saying, "Our goal is to offer the best product with the lowest cost for our clients." Leah also noted, "Fiscal twenty twenty five is proving to be the year where differentiation in digital asset treasuries truly matters."

Risks and Challenges

• Increasing liabilities may strain financial resources.
• Regulatory changes in the digital asset space could impact operations.
• Market volatility in digital assets poses a risk to treasury value.
• Competition from new entrants in the digital asset treasury market.
• Execution risks associated with planned mergers and acquisitions.

Sol Strategies continues to make strategic moves within the blockchain sector, positioning itself for future growth despite current market challenges. Trading at a P/E ratio of 105.4x and currently showing signs of being overvalued according to InvestingPro Fair Value calculations, investors seeking detailed analysis can access comprehensive Pro Research Reports covering over 1,400 stocks, including in-depth analysis of Sol Strategies’ market position and growth potential.

Full transcript - Sol Strategies Inc (HODL) Q3 2025:

John, Moderator/Operator, Sol Strategies: Good afternoon, and thank you for joining the Sol Strategies Fiscal Third Quarter twenty twenty five Earnings Call. Today’s discussion based on information as of 08/26/2025, will include forward looking statements subject to risks, uncertainties and market volatility. Actual results may differ materially from these statements due to factors beyond our control. We’d like to refer you to our latest press release, reports and SEDAR plus filings available on our website and through our SEDAR plus profile for detailed risk disclosures and assumptions, including that no significant events outside the normal course of business. Please note that past performance and trends in the digital asset sector may not continue, and listeners should not place undue reliance upon them.

The company does not undertake to update forward looking statements except as required by law. This call will also reference unaudited performance metrics for the quarter ended 06/30/2025, as outlined in today’s press release. Unless otherwise noted, all dollar amounts are in Canadian dollars. Lee will review our progress towards our strategic objectives in the digital asset sector. Max will then provide an update on our operations and technology.

And Doug will discuss our quarterly financial results before we open the floor with questions. With that, let me call turn the call over to Lita.

Leah, CEO, Sol Strategies: Thank you, John, and good afternoon, everybody. This has been another transformative quarter for Sole Strategies. As I look across the digital asset landscape, it’s increasingly clear that fiscal twenty twenty five marks a true inflection point, not only for our company, but for the broader institutional adoption of blockchain infrastructure. We’re operating against the backdrop of meaningful regulatory progress. The Genius Act advancing in Congress and the SEC’s Project Crypto initiative are providing the clarity and consistency that public companies have long needed to participate more fully in digital assets.

This isn’t just incremental progress, it’s laying the foundation for how digital assets will be integrated into the global financial system over the coming decade. The pace of adoption has been remarkable. Year to date, digital asset treasury or DAT companies have raised over $39,000,000,000 Today, there are more than two ninety publicly traded companies that are deploying digital assets on their balance sheets representing over $100,000,000,000 in aggregate allocation. For public investors, DAT companies offer something unique, SEC compliant, liquid and efficient vehicles to gain crypto exposure through equity markets. But with rapid adoption comes market saturation and not all DAT models are created equal.

The market is coalescing into three distinct categories and understanding this evolution is critical to our positioning. First, non yield generating treasuries, predominantly Bitcoin companies whose growth depends almost entirely on external capital raises and financial engineering. They provide simple exposure, but without organic compounding. Second, yield generating treasuries built on proof of stake based tokens such as Ethereum or Solana, earning about 8% annually through staking. These are more capital efficient than Bitcoin only models, but remains constrained by staking yield limits.

Third, SOLE strategies represent what we call DAT plus plus pairing organic staking yield with infrastructure driven validator revenues. This dual engine allows us to compound treasury holdings and nearly double the rate of peers, while contributing meaningfully to network security and decentralization. Let me be specific about what this means. While staking only companies are able to grow their treasury by about 8% annually, our strategy compounds at roughly 16% on an organic basis. That difference may appear incremental on a single year, but compounded over multiple years, it creates a step change in scale, efficiency and shareholder value.

Our operational metrics this quarter demonstrate the strength of our execution. We surpassed $1,000,000,000 in delegated sold with almost 7,000 unique wallets taking to our validators, reflecting growing trust from both institutional and retail delegators. We maintain perfect 100% uptime on our core lane validator and delivered APYs consistently exceeding network averages. On the capital markets front, we continue advancing on our U. S.

Listing strategy with strong progress towards NASDAQ uplisting. We completed the required stock consolidation and our recently filed shelf registration provides us with the flexibility to raise capital opportunistically when market conditions in our valuation create accretive opportunities. Importantly, this capital is not required to fund operations. Our business is self sustaining through validator revenues and staking yields. But it does provide optionality to expand our sole treasury and accelerate growth when the right opportunities arise.

We’ve built strategic partnerships that validate our position as institutional grade infrastructure. Industry leaders including BitGo, TetraTest, Neptune, Pudgy Penguins and Solana Mobile have selected Sol Strategies as their trusted partner. Most recently, we’re proud to welcome ArcInvest as our staking provider for their digital asset revolution fund. These partnerships aren’t just business relationships, they represent our deep integration into both the financial mainstream and the Solana ecosystem. We’ve also launched a public facing Dune analytics dashboard that provides real time on chain visibility into reflects our commitment to building trust and holding ourselves accountable to both investors and the broader community.

The distinction is critical in an increasingly crowded market. We’re not simply a treasury vehicle providing exposure to Solana’s price movement. We’re simultaneously a significant treasury holder and a critical infrastructure provider to the Solana ecosystem itself. The dual role strengthens our credibility with institutional delegators, creates reoccurring high margin revenues and ensures we’re directly contributing to the resilience and decentralization of the network. In doing so, we become not just the beneficiaries of Solana’s growth, but the builders of it.

As we move forward, our vision remains clear to establish SolStrategies as the premier institutional grade Solana infrastructure platform. Through our DAT plus plus model, validator leadership and strategic partnerships, we’re building what believe we believe will be one of the most efficient and durable value creation engines in the digital asset sector. 2025 is proving to be the year where differentiation in digital asset treasuries truly matters. We’re confident our strategy positions us not just to participate in the growth of institutional blockchain adoption, but to help lead it. Now let me turn it over to our CTO, Matt, to discuss the technical infrastructure that makes this all possible and where the industry is heading.

Max, CTO, Sol Strategies: Thanks, Liam. Let me start with what matters. Pernish and Validator consistently ranked in the top three validators on the entire network in terms of APY. Our returns with stakers far exceeded any major players in the space, including names such Coinbase, Kraken, Binance and more. Our biggest validator by stake, Lane, continued its streak of 100% uptime for over one year now.

With our high yields consistent uptime, brand recognition and compliance framework, it’s for these reasons we crossed over CAD 1,000,000,000 in delegated sold this quarter with over 7,000 unique wallets trusting us with their assets. That’s not luck, that’s good old fashioned execution paying off. Our goal on the staking side of the business is really simple, offer the best product with the lowest cost for our clients. Many businesses out there charge extremely high commissions in the name of compliance reporting and business development. With automation and strong brand recognition, we are able to charge lower commissions and offer our customers a better product at a lower cost.

This is the model we are using to continue to grow our staking business, which is continuing to grow and picking up bigger and bigger clients. One of the areas of our business we are extremely excited about is the growth of one of our new verticals, white label validators. This quarter, we onboarded Solana Mobile as a new client for our white label validator business. The Solana Mobile validator is a default validator for Solana Mobile’s new phone, the Seeker. The Seeker, which just began to ship a few weeks ago, had over a 150,000 preorders, one of the most impressive launches in history for any phone.

In just under two weeks, the Solana Mobile Validator already has over 1,500 unique wallets sticking to it, an extremely impressive stack considering most devices have not even been shipped yet. We are very excited about the launch of the Seeker, which places SOLE strategies in front of 150,000 potential customers through the Solana mobile validator we operate and share in the revenue from. Additionally, I want to talk about some efforts we completed this quarter to help the Solana network overall. This quarter, we open sourced a tool we call Solana Validator Failover. This tool helps other validators on the network, ensuring high uptimes, keeping the network resilient and fast.

Crypto was built on the ethos of open source technology. At Sole Strategies, we are passionate about being good stewards for the network and we’ll continue to build and launch tools that benefit all network participants. We are extremely proud of what we accomplished this quarter and excited for what we have planned for the future, but we are also excited for the upcoming technical developments coming to the Solana blockchain. Many SIMDs, Solana improvement documents are being proposed, implemented and shipped, which brings significant improvements to the Solana blockchain. One of the ones we are most excited for is SIMD three twenty six, which is the first SIMD behind AlpenGlow.

AlpenGlow is a proposal for Solana’s new consensus algorithm, which could bring slot times down to around one hundred milliseconds from four hundred milliseconds. This opens up all new types of use cases for Solana, including more applications for trading. Speaking of exciting innovations coming to Solana, JITO, one of crypto’s most successful protocols, also recently announced BAM, known as Block Auction Marketplace. Sole Strategies was picked up as an initial launch partner for BAM, which allows applications more customizability around how their users’ transactions get put into blocks. I expect BAM to be a massive success for Solana.

We are excited about Solana’s growth and how well positioned we are to be an important technology participant in that growth. With that, I’ll pass it on to Doug.

Doug, CFO, Sol Strategies: Great. Yes. Thanks, Max. So the June marked another important step in the transformation of SOLE Strategies. This is the first quarter in which our results fully reflected contributions from all of our recently acquired Validator operations.

We saw strong top line growth, generating just over $3,000,000 in staking and Validator income. Looking ahead, we expect continued revenue growth as we scale both our treasury and third party delegation business with further upside potential from any appreciation in the price of Solana. I would also like to highlight a new revenue initiative. During the quarter, we began actively managing our treasury with available financial tools to enhance yield. While income from this activity was modest at approximately $30,000 in the quarter, We see significant opportunity to grow this contribution as our treasury expands.

For the three months ended June 30, we reported comprehensive income of approximately $900,000 a solid result given several nonrecurring expenses incurred during the period. These included $900,000 in legal fees related to our NASDAQ listing process, prospective filings and fundraising activities as well as $2,400,000 in transaction costs associated with the financings completed in the quarter. Excluding these onetime items, operating expenses were approximately $1,700,000 largely reflecting corporate overhead and professional service fees tied to ongoing operations. Adjusted EBITDA for the quarter was $800,000 This was derived from net income before taxes, adjusted to exclude $4,000,000 of amortization from validator acquisitions, dollars 2,400,000.0 of nonrecurring transaction costs and $1,800,000 of stock based compensation. We provide this measure to give greater clarity in underlying operating performances performance by excluding significant noncash and nonrecurring items.

At the same time, we continue to emphasize comprehensive income as our primary profitability metric, in line with U. S. GAAP peers following the late twenty twenty four update on cryptocurrency valuation treatment. Turning to the balance sheet. Our Solana treasury increased significantly over the quarter, ending at just over $90,000,000 compared to $48,000,000 last quarter.

Total assets rose to $164,000,000 from $125,000,000 at March 31, primarily reflecting the increase in Solana Holdings at that time. Liabilities grew to $62,000,000 from $40,000,000 in March, mainly due to the increase in convertible debentures. Overall, we continue to strengthen our balance sheet, expand our validator and staking revenues and grow our EBITDA base. We are excited by the opportunities our treasury and validator assets create for us as the Solana ecosystem continues to expand. With that, I’ll turn it back to Leah.

Leah, CEO, Sol Strategies: Thank you, Doug. As we step back and reflect on the quarter, the story is clear. Sole Strategies is executing across all fronts. We’re strengthening our competitive moat as the premier Solana focused GAT plus plus company by delivering faster organic treasury growth and peers, expanding validator revenues through third party delegation and continuing to accumulate SOLE in a capital efficient manner. Our uplisting progress registration are enhancing visibility and providing flexibility to scale with institutional demand.

And our partnerships with leading institutions, custodians and consumer platforms demonstrate the trust that we’ve built in the market. What excites me most, however, is the road ahead. We are not just building a treasury vehicle, we are establishing an institutional grade Solana infrastructure platform at the center of blockchain adoption. Solana has emerged as the leading layer one for high throughput, low cost applications and its importance will only grow as tokenized real world assets, payments and new financial rails take hold globally. Looking forward, our vision is clear, to make sole strategies synonymous with institutional grade digital asset infrastructure.

Through disciplined growth, validator leadership and targeted partnerships, we aim to create one of the most efficient and durable models for long term value creation in the sector. Fiscal twenty twenty five is proving to be the year where differentiation in digital asset treasuries truly matters and we are confident that our DAT plus plus strategy gives us the growth engine and positioning to lead. Our business is built on the foundation of underlying yield generation supported by technology and infrastructure we actively manage. By combining reoccurring revenues from staking and validation with investments in the core networks themselves, we are able to create durable and sustainable growth. This approach not only delivers value to our shareholders, but also strengthens the ecosystems we operate in, ensuring that the technology and infrastructure continue to evolve and support broader adoption of decentralized platforms.

We’re not just holding Solana, we’re building it. And that’s why we’ll be here long after the tourists go home. With that, we’ll now open the call for questions. Operator, please go ahead.

Operator: And we’ll take our first question from Bill Papadimisayo with KBW. Please go ahead. Your line is open.

Bill Papadimisayo, Analyst, KBW: Good evening and congrats to the team on all the progress. I just have a quick question for the team here. Max, maybe you could walk us through your tech stack roadmap and what’s in store for building or buying more Solana. If you could rank that based on your priorities, that’d be appreciated. Thank you very much.

Max, CTO, Sol Strategies: Yeah. Absolutely. You know, I I’ll I’ll say this is that, you know, like, we we view the the Validator business as something really, really core for for many reasons. Right? Number one is it helps us accrue more soul.

Right? And, you know, it’s a real revenue generating business. And, you know, listen, I’m biased, but I think we’re we’re doing a good job with it, and I think the results speak for themselves. Secondly, the the important thing of validators is really this is we really believe in the salon and network as well. Right?

And, you know, as a validator, you know, really high level, the more transactions that happen on Solana, the more we benefit as a business because we are getting those transaction fees. Right? So the reason we’re running validators here is really because, you know, we we we love SOL. You know, we wanna accrue as much SOL as possible, but, you know, we also are really, really believe in the Solana network as well. And we want a big stake in it, pun not intended there.

But we really want to we think the Solana network is going to continue to grow, especially with things like RWAs and all these really new exciting instruments that are coming on chain. The more successful those things are going to be, the more we’re gonna directly benefit from that. So, you know, to answer your question, we’re gonna continue to on validators and attracting more stake. And, you know, I think we’re doing a good job this quarter because of, you know, the the fact we just announced ARK as a partner and things like that. But at the same time, we really view it as two verticals.

We have the treasury side and we have the validator side. But really, you could abstract that as the tech side, right. So hopefully that answers your question. Let me know if not.

Bill Papadimisayo, Analyst, KBW: No, that

Doug, CFO, Sol Strategies: was No, very I

Leah, CEO, Sol Strategies: it. And maybe I’ll just cap it off. Max, I think that you covered everything. That was fantastic. Maybe I’ll have fun with the buy side of the spectrum of your question.

I like it. So Max is absolutely right. We’ve seen both that organic development and also we are always looking for those strategic acquisitions. It’s through the Orangefin acquisition that we got Max and that was maybe the biggest asset that came through that acquisition. It’s just we’ve had a lot of success in the past for those acquisitions and our appetite for M and A hasn’t changed.

So we see that build and buy approach as the reason that we’ve created the nineteenth largest validator operation out of over 1,000 validators on Solana. And again as mentioned that $1,000,000,000 assets under delegation that we reported tomorrow. So I guess that what’s important to take away is innovation that’s on the build side regarding traditional acquisitions that’s also where from the innovation side we’re developing proprietary infrastructure. So I did want to call out which gets a little unnoticed that we did launch the first mobile app for native Solana staking. And that also automated validator management platforms and real time on chain reporting all under Max.

So kudos to you Max. So the last takeaway maybe just that what is the strategic view, how do we really think about the build first buy. We see that validator acquisition strategy does create powerful network effects. We think we’re going to see a large consolidation in the DATs this year. And every major validation operation that we acquire validates, pun intended I guess, our strategy and also brings that established institutional relationships that we’re continuing to build.

So we see ourselves as watching the early stages, if you will, of a self reinforcing cycle where that operational efficiency, drives better yield, which drives more delegation and that creates this virtuous loop that transforms us hopefully from the startup that we were last year to where we’re just on the run to really that dominant infrastructure provider where we’re trying to be.

Bill Papadimisayo, Analyst, KBW: Thank you. That was very helpful. I appreciate the great color. Looking forward to see you guys take the lead under that DAT plus plus category. Thank you.

Leah, CEO, Sol Strategies: Thank you for the question.

Operator: We’ll take our next question from Brett Knobluch with Cantor Fitzgerald. Please go ahead. Your line is open.

Bill Papadimisayo, Analyst, KBW: Hey, guys. Thanks for the question.

Max, CTO, Sol Strategies: As I look at kind of

Bill Papadimisayo, Analyst, KBW: where the business is trending from both a delegated and maybe state perspective, continued very strong growth quarter over quarter, how should we think about the pace of maybe Seoul being delegated to your guys’ validators? It seems like the Solana mobile app has the potential to meaningfully inflect that higher, though I would assume retail might be a bit lower on a per wallet base from the amount of sold being staked. But generally, you think that we’re trend the trend line we’re seeing now is going to continue? Do you think we see faster growth in delegated sole or just generally how should we think about that trend?

Leah, CEO, Sol Strategies: Yes. Brett, thank you so much for joining. And I’ll start as a dictator over here because I like the question and then I think I’m going to toss it to Max one more time. Definitely excited and do believe that we are in the first inning for sure on institutional involvement in this ecosystem. If you even take the advances in tokenization, tokenization, I think that’s a great example to look at.

We haven’t even launched tokenized stocks yet or seen most of the real world asset or funds on that have expressed desire to tokenize on rails yet. A lot of these firms including BlackRock have mentioned their desire to launch on Solana rails. So just so much hasn’t happened yet that we cannot see such an immense future of potential. And as you’re aware and everyone here, the exciting thing is, it’s a flywheel for our firm whereby the success of the network directly correlates to revenues for us because we are running those validators. So we’re very excited on that front.

I think also something that’s important to note is that Genius Act that I just spoke about and importance there. We are seeing such regulatory tailwinds. The DC impact is just incredible. All of us know that, but I think it’s just starting to take off. We haven’t seen the Solana sole stake ETFs from spot being launched yet.

We’ve seen rec shares, but we haven’t seen the filers, the issuers approved yet by the SEC. So that’s going to be a huge catalyst as well. Those have seen over $1,000,000,000 in AUM across the Swiss six and other European exchanges, very successful in Canada as well with Purpose Evolved and 3IQ. So we’re definitely getting there. You have SAB 121 and that unlocks the bank custody services.

You had Paul Atkins dismissed eight SEC enforcement cases. And I think the big one to note here is that crypto is now allowed in four zero one accounts and that’s a $7,000,000,000,000 addressable market. So the institutional partnerships we have with ARK, Biko, TETRA, we all see that as having accelerated after regulatory clarity. And Max has stewarded the SOC one, SOC two, ISO 2,701 certification. So we have worked really hard to position ourselves as a key player for institutions because most of them require those certifications.

So if we could get a portion of that retirement market, we’ll be very happy over here, but that’s definitely something that we’re going to be going after. And as we become as NASDAQ approved their application hopefully soon again pending regulatory approval or pending approval by the NASDAQ, our goal in The U. S. Is to start having boots on the ground with the RIAs, family offices. We’re already speaking to issuers and just try to take over that market.

So coming in with force.

Doug, CFO, Sol Strategies: Awesome. Thanks, Dave. Really appreciate the time. Congrats on a great quarter.

Leah, CEO, Sol Strategies: Thanks so much, Brett. Appreciate it.

Operator: We’ll take our next question from John Roy with Water Tower Research. Please go ahead. Your line is open.

John Roy, Analyst, Water Tower Research: Thank you. You were mentioning obviously the 7 ks staking wallet that you’ve got recently. Could you give us some more color on Solana Mobile and I believe the new phone that was out recently, the Seeker phone? Some color on that would be wonderful. Then I have a follow-up.

Leah, CEO, Sol Strategies: Great. And it’s great to have you here. Thank you again. That is squarely a question for you, Max. So tapping Max in here, but it’s been just enormous growth because of that partnership with Solana Mobile.

So a very exciting partnership indeed. Max, can you

Max, CTO, Sol Strategies: shed a little more light? Yes, sure. Absolutely. So there’s an entity, I would say, with Solana Mobile, and it is a phone. You know, the the phone is called the Seeker.

And, you know, what it really is is, you know, it’s a phone that really is putting crypto first. And what do I mean by that is that, you know, there there’s a few problems that that the phone solves, but, know, one of the ones that’s really interesting, you know, and I could talk about this firsthand was, you know, there there’s kind of a duopoly, you know, within the app stores today between Apple and Google. And, you know, one of the problems that crypto apps faced was, you know, a lot of developers and companies, you know, like big companies would go and try and, you know, put an app in the App Store, and one of two things would happen. When I say App Store there, I mean, between Apple and Google. So one of two things would happen there.

One, they would get outright rejected. You know, not all the companies are, but there’s plenty of companies that got outright rejected. And two, you know, it’s pretty well out there that, you know, Apple and Google take really high fees in terms of digital goods. You know, 30%, you know, at times. And, you know, there’s been some, you know, famous lawsuits, with companies against Apple and Google where the results are are favorable towards developers.

But Solana really took an approach of, hey. Let’s go and build a new phone. And, you know, let let and what they actually did was there’s actually a separate app store within the Solana mobile phone called the Seeker. On top of that, there’s some really cool security features of it, you know, that I won’t get into the technical details of, but, you know, it keeps your private key more secure and and things like that. To talk a little higher level, one of the cool things about the Seeker is it had a 150,000 preorders, which is, you know, a lot of devices.

And those phones are really just starting to ship now. And, you know, one of the things the Seeker did was it actually shipped with a wallet. And inside that wallet, the default validator to stake to is the Solana mobile validator, which we are now running as part of our new white label validator business, a new vertical that we’re running. That’s our second white label validator business. One of the cool things another cool thing I guess I should say is that we do make all of our data public and our Dune dashboard.

And if you look at unique wallet staking, it’s just been like a straight line up really because of the impressive work that Solana Mobile did in terms of just distribution. And a lot of these phones aren’t even shipped yet. In terms of how many there are, I’m not privy to that. How many are shipped versus how many aren’t? I’m not privy to that.

But I know a lot of people that haven’t even gotten their phones yet. So, you know, the in in summary, the the Solana mobile phone is really a phone that’s dedicated towards, you know, aspiring crypto businesses and developers that, you know, are looking to keep a 100% of their profits and also be able to just get distribution. And, you know, we’re really excited that you know, we also have an app inside the Solana mobile app store, you know, for our OrangeFin app as well. So we’re really trying to we’re definitely really excited about it. We support it in two different ways with running the validator and also having an app in the app store.

So hopefully, answers your question. It’s a very good one. Thank you.

John Roy, Analyst, Water Tower Research: No, that was excellent. As a follow-up, certainly congratulations on going over $1,000,000,000 in assets under delegation. I was wondering, you talked a little bit about the flywheel and how it all relates with acquisitions, etcetera. Do you feel like you will get another level of acceleration if you see more regulatory clarity out of The U. S?

I’m really talking about the Clarify stuff that they’re talking about. I don’t know what’s going to happen this year or soon, but certainly that seems like that would put the pedal to the metal at that point.

Leah, CEO, Sol Strategies: I’ll jump in on this one. That’s exactly right. And for us who have been in the digital asset space for a while, I mean, is just a new frontier. We’re not used to this and all the different support that we’ve seen from the SEC and across DC effectively every regulatory body is helping support crypto companies with regulation and clarity to your point about the Clarity Act. So that’s only helpful for us especially as we look to grow our base of investors as well as our technology in The United States.

So absolutely, we’re following DC very closely, obviously very close to the ground on SEC approval of stake sold ETFs and generally how the SEC is engaging with the community on staking, providing more clarity there. As a Canadian issuer, we know what’s going on in our background here in our backyard, but we’re just seeing so much opportunity in The U. S. That we also think that cross list on NASDAQ will unlock those opportunities beyond market liquidity. So very much following DC.

I was born and raised a Washingtonian, so maybe I couldn’t stop myself anyways. But no, it’s definitely a new year here and I think that it’s going to only continue. Thank you so much for the question.

John Roy, Analyst, Water Tower Research: Thank you. And again, congratulations. Thank you so much.

Operator: We’ll take our next question from John Tadaro with Needham and Company. Please go ahead. Your line is open.

John Tadaro, Analyst, Needham and Company: Hey guys, thanks for taking my question and congrats on the quarter here. I guess I

Max, CTO, Sol Strategies: just wanted to take

John Tadaro, Analyst, Needham and Company: a step back and go to some of the earlier comments that were made. How do you marry more financial products, which benefit the Solano ecosystem in SOL, but then also maybe increases the competition on your part and maybe increases the competition on getting investor interest. How do you just kind of marry the two? And I guess, how does that look near term? And then what are your thinking three, five years down the road?

Leah, CEO, Sol Strategies: I’ll jump in here. John, thank you so much for joining. And great question, because I think it’s a two pronged question truly. I think it’s that GATCO and differentiating as well as trying to support the new competitors that are out as well as absolutely supporting the Solana ecosystem. Is that also taking away potential clients that would be staking to our validators if we’re generally pushing them to potentially other custodians that have a preference towards others?

How do we walk that fine line of supporting the ecosystem and being that spokesperson when maybe it doesn’t lead to investment specifically for us? And that’s definitely something that I know at least the difficulties of very clearly coming from Valkyrie and being one of the first issuers to launch structured products in the market with lot of competitors, whereby I still always believe that a rising tide is what you’ll see. And if you’re out there educating, it will always be a rising tide by working with collaboration and there’s no downside to education. That’s why it’s just been remarkable with Larry Fink on TV every day and all the other supporters that we’ve had teaching about the different differences and what they can and can’t do, what they’re supporting, what they’re not and why and this is what matters. But going back to the DAT question, there is definitely a lot of competitors coming out.

Now again, they fall into that first bucket, that we’ve a tier bucket that we talked about of DATs where you have static holdings, which is Tier one, Tier two being static holding or holdings that are stake to validators that aren’t theirs, thereby only yield. And then us as a DAT plus plus in the market, who’s actually yielding on both sides of the equation while also building tech. So we squarely see ourselves again as you can see within the name as a DAT but with that plus plus element that just takes us to your question what’s in store for the three to five years that takes us there for actually being a very serious staking infrastructure provider three to five years from now that also has the capabilities to acquire our way and build our way into other verticals as the environment changes. And as mentioned in earlier today, the DATCO, right, it’s a digital asset treasury company. So some people say DATCO, some people say DAT co, I’ll say that co here.

But the DAT co space does control and over $100,000,000,000 in digital assets and there were 15 new entrants in just thirty days is what I just read. So corporate purchases exceeded ETF inflows for the three straight quarters. So we all thought that the ETFs were creme de la creme of what you were seeing with institutional participation, but it really is this DATCO environment. The way that we’re trying to support is again by pushing the pillars that make Solana important that we believe in by open sourcing technology, by building on Solana. We still aim to be first, the first public company to tokenize their stock on Solana that is still important to us and continuing to build.

So be friends out there, yet also very vicious competitors in regards to promoting just our key difference of that plus plus and that we actually believe that that model will matter in the future by compounding our treasury organically through the validator rewards.

John Tadaro, Analyst, Needham and Company: Great. Thank you for that, Leah. I appreciate the viewpoints and congrats again. Thank

Leah, CEO, Sol Strategies: you so much.

Operator: We’ll take our next question from Kevin Dede with H. C. Wainwright. Please go ahead. Your line is open.

Kevin Dede, Analyst, H.C. Wainwright: Hi, Leah. I was wondering if you might talk about the process that you’re working through to list in the states given you’ve offered so much focus on reg changes in the states versus at the OSA?

Leah, CEO, Sol Strategies: Yes. And it’s always great to hear from you, Kevin. So as you know, I can only mention what’s public. And that actually I’m very happy you asked the question because I think there was confusion around some of the events recently. All of the stock consolidation, other things we’ve done has been very specifically to progress that NASDAQ application listing forward.

So we completed the eight to one stock consolidation that was done on August 5, again to meet that NASDAQ price requirement. There’s also been progress done on the regulatory and other listing requirements. Our 40F was approved by the SEC. So we’re in final stages now of continuing to move forward on NASDAQ for that final approval. And as you can imagine, not just enhanced visibility do we want to the institutional investors as soon as we can access the NASDAQ market.

But something very important to me is also to move forward to start speaking to other allocators and issuers to hopefully have inclusion in indexes and thematic ETFs.

Kevin Dede, Analyst, H.C. Wainwright: And is the validator that you’re running for Sole Mobile under that white label umbrella, is the benefit there just that that Solana sits on your validator nodes? Or is there any sort of software licensing or any sort of affiliated alternative revenue stream that I might be missing?

Leah, CEO, Sol Strategies: Yes. Great question. Max, I’ll tap you in here. And I think that there’s a lot to that that we can speak to.

Max, CTO, Sol Strategies: Yes. Absolutely. Thanks. And thanks for the question. So the validator we’re running for Solana Mobile, it’s a white label validator.

And what I mean by that more specifically is that it is a it is a whole separate validator that is dedicated to Solana Mobile. You know, if you were to look it up on chain, I’m not saying you should, but, you if you wanted to go to do that, you would see a new validator that’s running on the Solana network called the Solana Mobile validator. The benefit to us specifically is that there’s a revenue split. Right? And, you know, with with the with the revenue that is generated from the validator, we are getting a a portion of that.

Right? So, you know, like, we’re we’re doing two things there. You know? So we’ve we’ve built one. Like, do wanna talk a little bit about something here.

You know, we we’ve spent a lot of time automating our operations so that we can do things like this. And, you know, I I think, you know, our team is doing an awesome job in terms of just, you know, building some cutting edge infrastructure to go and do this, right? We’ve written blog posts that have been well received. We’ve built open source tools that other validators are using. And then we also have our own proprietary stuff.

And what we talked about here is we are able to spin up validators for new entities that want to come on and run a validator just like Solana Mobile did. There might be other businesses out there that want to run a Solana validator because it is a profitable business if you can scale it out. So specifically to us, the real benefit here is that, you know, as the validator grows, the the revenue that we generate as well as, of course, Solana Mobile goes up. So I wanna be and just to be, like, very clear, it’s a new valid ator. Right?

So we we run four validators on our own that are a 100% owned by the company. And then as part of our white label validator, we are now running two validators on behalf of other entities, Solana Mobile and Pudgy Penguins, which is really Pengu, which is their token. And Pudgy Penguins is one of the biggest brands in crypto. They have toys all over Walmart, things like that.

Kevin Dede, Analyst, H.C. Wainwright: Yes. So, Leah, you talked at length about your M and A perspective, but I guess I’m still a little confused. Not sure if you’re targeting technology development or if you would look for other sole treasury companies that might be suffering a discount to NAV and building your accumulated sole treasury.

Leah, CEO, Sol Strategies: There’s definitely opportunities across the spectrum, and we’re looking at all. So we’re most used to the validator acquisitions that we’ve done in the past, but we’re looking across the spectrum at different technologies that have been built in Solana that are very interesting. But I do think we’re going to see a lot of consolidation across the market for the various DATs with similar tokens. I also think that you’ll likely see consolidation of underperforming DATs and a transfer of the tokens on their balance sheet into tokens of the acquirers vision and investment thesis. So looking at all those opportunities very actively right now.

Very good question.

Kevin Dede, Analyst, H.C. Wainwright: You’re also holding coins obviously other than Solana such as SUI. And I’m wondering if you’re thinking about building some of the technical developments into those chains.

Leah, CEO, Sol Strategies: Yes. Good question. So we acquired SUI Validators alongside the acquisitions of Orangefin as well as Cogent. So we were running those as just small passive income in the background, but quite nominal amount of income that was generated. There was no concerns around it was effectively the same left to continue doing so.

However, very nominal amount on the notionally nominal amount on the balance sheet and definitely not a key focus. But we’re definitely to your greater question I believe doing a lot more and being more strategic with the JITO SOL and some of the other tokens that we’ve decided to invest in as investing in the ecosystem. Again, our core treasury is and will always be SOL and sticking to our validators, this debt plus plus that we’ve been hammering on this call. But we are making, if you will, strategic reserve ecosystem asset investments for our balance sheet in projects that we think are of huge opportunity. Max, would you want to talk a little bit more about what we’re thinking on the Cheetosol front and a couple of the others and why we started looking and more actively participating?

Max, CTO, Sol Strategies: Yes. Just to talk about the SWE comment you mentioned there, we are running SWE validators, but ours main and sole focus is Solana, right? So I want to make that clear. On Jito’s soul and, you know, j JTO, you know, we we are holding Jito’s soul. And to be very, very clear, that is stake soul, which we are earning revenue from in in really a different way.

But Jidosol is stake sole and you are earning revenue from that. With Jidosol itself, it’s algorithmic stake pool. And I know those are some fancy words there. So I don’t want to go like too deep on that. But one of the things I want to mention on JITO SOL is that we’re actually a part of the delegation set with JITO SOL.

So Orangefin is the third ranked validator inside the JITO stake pool. So a good portion of the funds that, you know, like the overall funds of of JITO SOL actually get staked to, you know, the origin validator, which is our validator. Right? There are some benefits of liquid staking versus native staking, which, you know, I I won’t necessarily get into on this unless we want to. But, you know, the the JITO ecosystem is is really interesting to us.

You know, also because of BAM, which I mentioned, you know, which was really well received. You know, JITO is really one of the most successful protocols in all of crypto, if not the most successful. And, you know, we were just announced as a launch partner for BAM, which is one of the most exciting developments on Solana. So, you know, we’re we really like JITO. We really like the JITO Soul, the JITO team, and we are holding a small portion of our treasury in JITO SOL.

Kevin Dede, Analyst, H.C. Wainwright: So while I have you, Max, just one one other question. Four own validator nodes and two that you’re running on your white label. But I’m just kinda wondering how they’re separated in, I guess, in physical server operation, what kind of redundancy you’ve got and how that complements the 100% uptime that you were talking about at Lane?

Max, CTO, Sol Strategies: Yeah. Absolutely. Great question. Well, I’ll start high level here is that I want to say we’re ISO twenty seven zero one certified, SOC two certified. And the reason I say that is because we hold ourselves to high standards, and we view those as like at the minimum.

Right? But, know, part of those certifications is uptime and availability. To go a little deeper into that question, every validator and what I what I mean by validator is, you know, like, when you mentioned those six, you you talked about four of our proprietary, two of our white labels. I’m talking about those, like, in the when we’re talking about validators. But each of those actually have an active and a passive server in a completely different data center across the world.

Right? So in the event of, you know, like, a disaster happens, you know, which and there’s there’s different types of disasters. One of them is just like, you know, most obvious one, you know, like, hard drive crashes or something. We could automatic we could we could fail over to, you know, the the other server and have that validator up within, you know, minutes and, you know, potentially even less. Right?

So, know, to to really ensure high uptime. You know, the second thing, you know, the second type of disaster we look at is, you know, there’s also compliance disasters. Right? And that’s another reason, that’s another thing we look at in terms of why we run validators in different data centers across the world. We have really what I would consider world class monitoring, you know, where we have a twenty four seven, engineering team here across the spread out across the world, you know, ready to dive into any incident at any moment.

So, you know, if it’s 3AM for myself, it’s 3PM for someone else, and, you know, we’re ready to to go as well as, you know, building out automation. You know? Like, the the cool thing about these is that, you know, one of the benefits of Solana is that it moves really quickly. For our business, it is great because, you know, that’s what made Solana successful. But what really actually, you know, makes those upgrades, like, roll out to the network is validators upgrading.

And, you know, with our model, we’ve actually automated all the upgrades, you know, thanks to the great work of the team. And, you know, we’re really able to to spend a little time there and really focus on, you know, monitoring and preventing against all sorts of types of disasters, which we’ve seen just I’ve seen in past lives at other companies like when I worked at Kraken and even here where listen, like things come up and things happen. And we have incidents, but we’re ready we’re prepared for really anything. So we’re running here a world class shop. We have redundancy on everything, and we’re prepared for any disaster that might come.

Kevin Dede, Analyst, H.C. Wainwright: Okay. Thank you, Max. And thanks, Leah. Thanks for having me on the call.

Leah, CEO, Sol Strategies: Thank you so much.

Operator: And there are no further questions on the line. I’ll turn the program back to management for any additional or closing remarks.

Leah, CEO, Sol Strategies: Yes. Everybody, thank you so much for joining us today and also for your continued trust as we execute on the strategy. Looking forward to updating you next quarter as we keep building on this momentum and deliver long term value for our shareholders. I promise we’re all going to be working very hard over here. Have a great day.

Operator: This does conclude today’s program. Thank you for your participation. And you may now disconnect.

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