Earnings call transcript: Sol Strategies reports Q2 2025 loss, stock dips 3.97%

Sol Strategies Inc. (HODL) reported a comprehensive loss of CAD 32.5 million for the second quarter of 2025, driven by a substantial unrealized loss on cryptocurrencies amounting to CAD 27.7 million. Despite a doubling of income from staking and validating activities, the company’s stock fell 3.97% following the announcement, closing at 0.17 USD. According to InvestingPro data, the stock is currently trading at $2.11, significantly above its 52-week low of $0.08, with a market capitalization of $340.86 million. Analysis suggests the stock is currently overvalued relative to its Fair Value.

Key Takeaways

• Sol Strategies reported a CAD 32.5 million comprehensive loss in Q2 2025.
• Staking and validating income increased by 104% to CAD 2.53 million.
• Unrealized cryptocurrency losses were significant at CAD 27.7 million.
• Stock price dropped by 3.97% post-earnings, closing at 0.17 USD.

Company Performance

Sol Strategies experienced a challenging second quarter, primarily due to significant unrealized losses in its cryptocurrency holdings. However, the company saw positive growth in its staking and validating operations, with income more than doubling compared to the previous year. This growth reflects the company’s strategic focus on blockchain infrastructure and validator expansion.

Financial Highlights

• Total comprehensive loss: CAD 32.5 million
• Staking and validating income: CAD 2.53 million (104% increase YoY)
• Unrealized loss on cryptocurrencies: CAD 27.7 million
• Adjusted EBITDA: CAD 714,000
• Cash on balance sheet: CAD 1.7 million
• Digital assets: CAD 48.3 million
• Long-term liabilities: CAD 40.2 million

Outlook & Guidance

Looking ahead, Sol Strategies aims to enhance its blockchain infrastructure by expanding its validator operations and pursuing a NASDAQ listing. The company is also focusing on the tokenization of real-world assets and exploring advancements in quantum cryptography security. Future earnings projections remain steady, with an EPS forecast of 0.03 USD for both FY2025 and FY2026, and revenue forecasts of 7.75 USD for the same periods.

Executive Commentary

Leah Wald, CEO of Sol Strategies, emphasized the company’s strategic direction, stating, "Solana isn’t just a blockchain, it’s the infrastructure layer of the future of finance." She reiterated the company’s commitment to innovation, adding, "We are not just participating in the next chapter of finance, we’re helping create it."

Risks and Challenges

• Volatility in cryptocurrency markets could impact financial performance.
• Regulatory changes in blockchain and cryptocurrency sectors pose potential challenges.
• The company’s financial health is tied to the performance of digital assets.
• Competitive pressures in blockchain infrastructure and validator markets remain high.

Q&A

During the earnings call, analysts inquired about the company’s tokenization roadmap and the economics of its white-label validator offering. There was also discussion on how Solana compares to other blockchain networks and the company’s approach to Maximal Extractable Value (MEV), reflecting investor interest in Sol Strategies’ strategic initiatives and competitive positioning.

Full transcript - Sol Strategies Inc (HODL) Q2 2025:

Conference Operator: On the call is Leo Wald, Chief Financial Officer and Max Kaplan, Chief Technology Officer and John Ragazino from ICR. At this time, I would like to turn the conference over to John Ragazino with ICR.

Please go ahead, sir.

John Ragazino, ICR Representative, ICR: Good afternoon, and thank you all for joining the Sol Strategies fiscal second quarter twenty twenty five earnings conference call. Before we get started, I want to remind everyone that certain statements discussed on this call are based on information as of today, 06/02/2025, and contain forward looking statements, which are subject to risks and uncertainties given our operating history, market volatility and industry growth. Trends could materially deviate from today’s levels, and as such, actual results could differ materially from our forward looking statements. The comments made during this conference call were in the latest reports and SEDAR filings, each of which can be found on our website at www.solestrategies.io or under our profile at www.cedarplus.ca. The company has made assumptions that no significant events occur outside the company’s normal course of business and that the current trends in respect of digital assets continue.

Listeners are cautioned that metrics of our business fluctuate and may increase and decrease from time to time and as such fluctuations are beyond the company’s control. The company does not undertake any duty to update any forward looking statements except or required by law. The company also wants to caution listeners that past performance is not indicative of future performance and that current trends in the business and demand for digital assets may not continue and listeners should not put undue reliance on past performance and current trends. This call will touch on certain unaudited performance metrics of the business through the quarter ended 03/31/2025, provided in the earnings press release issued on 05/30/2025, and I would encourage each of you to review the forward looking statements, risk factors, disclosures and similar disclosures in the press release. Please note the dollar amounts referenced are in Canadian dollars unless otherwise noted.

Lee will review Sol’s strategy activities within the rapidly growing digital assets industry during the March. Doug will then review the financial performance during the quarter and provide an update on our balance sheet and capital markets activity, and Max will discuss our operations and technology initiatives before we open the floor for your questions. With that, let me turn the call over to Leah.

Leah Wald, CEO, Sol Strategies: Thank you, John. This quarter marked a watershed moment in our transformation. We acquired Lane, one of the most respected validator operations in the Solana ecosystem, propelling our total staked assets from 1,570,000.00 SOL in December to 3,390,000.00 SOL by quarter end, a 113% increase that now places SOL strategies among the largest validator operators on the network. We now support over 5,500 unique wallets and have been recognized as a preferred validator within BitGo’s institutional platform. With industry leading compliance certifications in place and our planned up listening to the NASDAQ, we’re not just scaling, we’re setting the institutional standard for secure and transparent staking, redefining what institutional grade blockchain infrastructure looks like.

These milestones are not isolated achievements. They are clear signals of our role in shaping the financial rails of tomorrow. We’re standing on the edge of a generational shift in capital markets and Sole Strategies is building the rails for it. Years ago, I was drawn to Bitcoin for its promise to democratize access to financial systems. It was a bold foundational change.

Today, we’re witnessing that same transformational potential through tokenization. Just as electronic trading disrupted Wall Street, tokenization has the potential to transform how the world can access and trade assets making markets faster, cheaper, more transparent and truly global. And this transformation can only be built at scale on Solana. Solana’s unmatched speed, scalability and cost efficiency aren’t just nice to have, they’re prerequisites for tokenizing real world assets at scale. That’s why we’re not just betting on Solana, we’re building on it with conviction.

Tokenization isn’t a buzzword for us. It’s a strategic mandate. We are positioning full strategies to become the first public company to tokenize equity on Solana. And we’re leading that charge with intent, speed and credibility. We’re witnessing a fundamental shift in how financial markets operate.

Sabre Point regulation is crystallizing globally with Solana processing the second largest volume on USDC transactions worldwide. Real world asset tokenization isn’t theoretical anymore. It’s happening right now. And we’re not just watching from the sidelines, we’re building infrastructure that makes it possible. This is where Sole Strategy’s unique positioning becomes critical.

We are a technology company, Solana is technology company. We build infrastructure, operate validators, develop products and innovate within the ecosystem. Every initiative we pursue flows back to strengthening our core business delivering sustainable long term value to shareholders. Before we dive into our results, I want to acknowledge the remarkable dedication of our team and the continued support of our stakeholders during what has been a transformative quarter. But more than that, I want to share why this moment in time represents an unprecedented opportunity, not just for sole strategies, but for everyone who believes in the future of digital finance.

To make our vision real, we made a major strategic acquisition this quarter. We acquired one of the most respected validator operations in the Solana ecosystem, Lane. But this was far more acquisition. It marked a strategic turning point. Alongside this respected operation, we brought on Michael Hubbard as Chief Strategy Officer, a rare talent with deep expertise in both Solana’s technical architecture and global capital markets.

Michael now leads our tokenization roadmap and other transformative initiatives core to our long term vision. His leadership is already accelerating on execution and sharpening our strategic edge. What drives me personally, it’s the people. Across our validators Lane, Cogent, Orangefin and our sole strategies node, we now serve over 5,500 unique wallets with industry leading performance metrics. Retail participants who have been staking with our acquired validators for years through market cycles, through volatility, without tapering off.

And let me be unequivocal, we are not a fund, we are not a NAB story, We are not some pseudo tech marketing wrapper pretending to be innovation. This company was founded to shape the future, not chase someone else’s past. We’ve been building systems that will power the next era of finance. I’m here to lead builders. We’re here to win.

Our longer term vision for Sole Strategies is to be the premier institutional grade staking partner as the current trend of adoption continues to accelerate. By leveraging our focus on industry leading compliance, transparency, performance and technology to create the best user experience combined with industry leading performance and transparency, we expect to be the clear choice for the tremendous inflow of capital just beginning to step into the market. We have the team to execute this vision and as the only publicly traded pure play Solana native tech company in the world, we are not just a bet on soul. We are the strongest clearest expression of belief in its long term dominance. I’m incredibly proud of what we’re building and even more excited for what comes next.

This quarter, we also expanded our validator infrastructure through our white label program, including the addition of a dedicated validator for Pudgy Penguins, a globally recognized multibillion dollar brand. It’s a strong signal of institutional trust and the growing reach of our platform. We continued on our march to become the definitive institutional staking platform in the Solana ecosystem. The market cap for cryptocurrencies is already 3,290,000,000,000.00 and expected to continue to grow. Solana already capable of handling 10% of Nasdaq’s capacity and is becoming the backbone for tokenized real world asset flows.

As this trend accelerates, our infrastructure becomes increasingly vital. Our institutional staking strategy is taking hold. We’ve expanded our client base and secured additional delegated stall through our integration with Dicta, where we’ve been selected as a preferred validator within their institutional offering. This provides us with a powerful distribution channel to tap into a growing pipeline of high quality institutional delegators. A standout success this quarter was our exclusive partnership with DigitalX facilitated through BitGo’s infrastructure representing one of the largest institutional staking mandates in the Asia Pacific region.

It’s a powerful validation of both our performance and the trust BitGo and their clients place in our platform. We’re actively in conversations with traditional asset managers, family offices and crypto native ETFs. Institutional adoption is accelerating and our pipeline is the strongest it’s ever been. A critical pillar of this growth is our investment in compliance. The company completed SOC one and SOC two Type one audits alongside the already existing ISO 27,001 certification.

As Max will elaborate upon more in a moment, this level of transparency, risk management and control is what gives institutions the confidence necessary to delegate significant capital to our platform. On the tech side, we launched our staking app, not just a product milestone, but a leap forward in validator management infrastructure With features like advanced analytics, real time performance monitoring and integrated risk tools, we’re making staking institutional grade. Capital markets activity was also transformative this quarter. We filed a preliminary US1 billion base shelf perspective giving us the flexibility to raise capital as opportunities emerge. We drew down an initial US20 million dollars tranche of our $500,000,000 convertible note facility with ATW Partners, a first of its kind structure in this sector.

In the past six months, we have secured over US525 million dollars in capital commitments. We currently hold approximately CAD100 million of SOL on our balance sheet and due to our capital raising activities, we have the flexibility to raise much more. This isn’t just financing, it’s a validation of how capital markets are evolving to support blockchain infrastructure. We’ve deployed that capital to expand our sole balance sheet and validator network. Unlike others who outsource, we operate our own validator nodes.

That means in addition to staking rewards earned on our SOL, we earn an additional unique revenue stream through the block rewards as well as driving an enhanced return on our stake sold, which compounds over time. Looking forward, the tailwinds are undeniable. Solana’s daily active users and total value locked in DeFi are growing rapidly. Solana mobile, ecosystem grants and regulatory clarity are accelerating developer momentum and institutional interest. We’ve laid the groundwork, we’ve built the infrastructure, we’ve earned the trust and now we’re scaling.

Thank you for your continued belief in our mission. With that, I’ll turn it over to Doug.

Doug, CFO, Sol Strategies: Thank you, Leah. I’m pleased to present Sole Strategy’s financial results for the three and six months ended 03/31/2025. Before I dive into the specifics of the financial results for the period, I would like to take a moment to provide some important context for quarter results. Overall, we are very encouraged by the financial results achieved in our second fiscal quarter, which serve as an early validation of a long term trajectory we expect for our staking and validator business. The performance this quarter reflects meaningful progress in both operational scale and revenue generation, driven by growing stake balances and the early contribution from our recent acquisition of the Lane Validator.

For the three months ending 03/31/2025, our total comprehensive loss was approximately 32,500,000.0 compared to $7,700,000 of total comprehensive income for the prior period. During the first quarter, comprehensive loss was $24,700,000 compared to total comprehensive income of $14,700,000 in the first half of fiscal twenty twenty four. It’s important to emphasize that these figures include significant non cash mark to market adjustments related to the decline in solar prices during the quarter, which resulted in an unrealized loss on cryptocurrencies of $27,700,000 compared to $7,900,000 unrealized gain in the prior period. In the six month period ending 03/31/2025, the unrealized loss on cryptocurrencies was $23,000,000 compared to income of CAD12.2 million in the first half of the prior year. These results reflect an accounting treatment for SOL held on our balance sheet rather than any operational weakness of the company.

Encouragingly, sold prices have rebounded over 30% since the lows experienced near quarter end. And if these levels hold or the rebound continues, we would expect a similarly positive mark to market contribution to comprehensive income in the third fiscal quarter. Additionally, we cautioned against drawing straight line comparisons either to prior quarters or one attempting to extrapolate a run rate from this quarter’s figures. Second fiscal quarter results reflect only fourteen days of contribution from the Alane Validator, which we acquired in mid March, and therefore do not yet reflect the full impact of that acquisition. At the same time, this is the first full quarter that operations from our base staking and validator infrastructure further limiting comparability to any prior periods.

Despite the nuances, staking and validating income more than doubled to $2,530,000 up 104% from $1,240,000 in the first quarter of twenty twenty five. Supported by both organic growth and the Lane acquisition. In the first half of fiscal twenty twenty five, staking and validating income was 3,800,000.0 compared to nil in the first half of fiscal twenty twenty four. We believe the strong early momentum demonstrates the scalability of our platform and sets the stage for continued growth in the quarters ahead. Operating expenses in Q2 ’twenty five increased to $8,500,000 up $8,300,000 over the prior period.

Operating expenses of $174,000 In the first half of fiscal twenty twenty five, the operating expenses were $9,800,000 compared to $465,000 in the first half of fiscal twenty twenty four. The significant increase in operating expenses occurred mostly in the second quarter of fiscal twenty twenty five, reflecting the first full quarter of reported financial results from our staking and validating operations and include several noteworthy items, which include the following. First, the stock based compensation during the fiscal second quarter of $3,200,000 was up significantly over the prior period levels of $25,000 The sequential increase in stock based compensation reflects the issuance of option contracts of 1,250,000.00 shares and 550,000 RSUs to various employees, consultants and company directors during the quarter. The fair value of these contracts used for accounting purposes is calculated using the Black Scholes option pricing model and resulted in a $3,200,000 expense during the second quarter. Going forward, stock based compensation expense is expected to normalize at a more modest level subject to the future opportunistic use of options or RSUs as compensation for services in the future.

In the first half of fiscal twenty twenty five, stock based compensation was $3,800,000 compared to $63,000 in the prior period as most during the second quarter of fiscal twenty twenty five. Second, amortization expense of $2,500,000 compared to nil in the prior period. This represents an amortization of the present value of our validator acquisitions, which totaled approximately $76,600,000 including future share issuances. This has been amortized over five years on a straight line basis. Amortization in the six months ended 03/31/2025 was $3,800,000 compared to $15,000 in the prior period.

The majority of the amortization expense occurred during the second quarter as the Cogent and Orangefin acquisitions occurred in late Q1 of fiscal twenty twenty five and the Lane acquisition occurred late in the second quarter of fiscal twenty twenty five. Third, interest expense for the quarter of $669,000 compares to the prior period’s interest expense of $32,000 driven by the closing of the $30,000,000 convertible debenture offering as well as an increase in our $25,000,000 credit facility. The first half interest expense was $702,000 compared to nil in the prior period. Majority of the interest expense occurred during the second quarter of fiscal twenty twenty five due to the convertible debenture offering, which closed in Q2 and an increased drawdown on our credit facility, which was increased in the second quarter of fiscal twenty twenty five. Finally, other expense items, including G and A, consulting fees and various professional and consulting fees saw notable sequential increases commensurate with the full quarter of operations in our staking and validator business.

This is compounded by financing activities and the closure of the LEAN acquisition during the quarter. This resulted in a loss before tax of $6,000,000 in Q2 twenty twenty five compared to a loss of $241,000 in the prior period. In the first half of fiscal twenty twenty five, the loss before tax was $1,600,000 compared to income before tax of $2,400,000 in the prior period. As part of our commitment to enhancing transparency and providing investors with a clear view of our financial performance, we are introducing adjusted EBITDA as a supplemental metric this quarter. Under IFRS, our reported results may reflect significant non cash mark to market adjustments related to equity compensation, the fair value of digital assets, particularly Solana and other non cash expenses.

These accounting impacts can meaningfully influence reported net income from quarter to quarter, but do not reflect the underlying operating performance or cash generating ability of our core staking and validator business. Adjusted EBITDA will provide a more consistent and comparable view of our financial trajectory by excluding these non cash items, and we believe it offers investors a more relevant measure of the earnings power of our platform as it scales within the Solana ecosystem. For the three months ended 03/31/2025, we generated adjusted EBITDA of $714,000 compared to $243,000 in the prior period. For the six month period ending 03/31/2025, the company generated $5,600,000 of adjusted EBITDA compared to $2,500,000 of adjusted EBITDA during the prior period. The adjusted EBITDA in the six month period ending 03/31/2025 reflects a 4,400,000 realized gain on the sales of cryptocurrencies, which occurred in the first quarter of fiscal twenty twenty five.

Moving to the balance sheet, as of 03/31/2025, we had $1,700,000 in cash, dollars 257,000 Solana and 3.17 Bitcoin that had a combined value of $48,300,000 This is a significant increase from the end of the prior quarter and reflects the recent $30,000,000 convertible debenture financing in which Parify Capital is the lead investor. On the liability side, at 03/31/2025, we had total long term liabilities of $40,200,000 including $14,000,000 of convertible debentures, 4,300,000.0 in liabilities related to future share issuance as well as $16,200,000 in short term borrowings on our credit facility. Our Chief Technology Officer, Max Kaplan will now provide an update on our staking and validator operations, including several notable milestones regarding compliance and our institutional partnership portfolio, which highlight meaningful progress on our strategic plans to build the premier institutional grade staking platform within the Solana ecosystem. With that, I will turn the call over to Max.

Max Kaplan, Chief Technology Officer, Sol Strategies: Thank you, Doug. I also wanna echo Lia’s sentiment on how excited I am for the future of Solana. Like Lia, I also started in the Bitcoin ecosystem. I wanna make an important distinction, however. Bitcoin is an asset.

Solana is a network. Solana is more than just a blockchain. It’s the most capable infrastructure layer for the next wave of real world asset tokenization. With unmatched throughput, instant finality, and low transaction costs, Solana offers the scalability and efficiency required to support the institutional grade tokenization of real assets. This doesn’t just mean equities, but also real estate, credit, commodities and more.

As tokenization gains traction across financial markets, the need for a high performance network that can support massive transaction volumes becomes increasingly clear and Solana stands alone in its ability to meet that demand today. This emerging shift presents a multi trillion dollar opportunity for the Solana ecosystem. At Sole Strategies, we’re proud to lead this transformation. We recently announced our intention to become the first company to natively tokenize its common equity on Solana, a move that reinforces our position as both a technological leader and a capital markets innovator. We’re not alone in this vision.

Kraken, one of the world’s largest centralized exchanges, has also announced plans to issue tokenized equities on Solana, selecting it over their own Ethereum based layer two. The convergence of traditional markets and blockchain is happening, and Solana is quickly establishing itself as the foundational infrastructure powering this evolution. Due to our validator business, which I will get into next, we are uniquely positioned to benefit from the significant increases in transaction activity that the broader trends of tokenized real world assets, including equities such as our own shares are poised to drive to the Solana network. This past quarter was incredible for us from a growth perspective. To begin, I’d like to take a moment to remind everyone of how our business model functions, particularly for those newer to the story.

As a leading validator on the Solana network, SOL strategies plays a critical role in supporting the security and operation of the blockchain. In return for providing this infrastructure, we earn rewards denominated in SOL based based upon the amount of stake delegated to our validators. These rewards represent our core source of revenue. Simply put, the more SOL that has staked with us, whether from our own treasury or from the broader community, the more revenue we generate. And as Solana network activity increases, so too does the size and frequency of the reward pool.

This is where our strategic positioning becomes especially compelling. As a real world asset tokenization gains momentum, whether it’s tokenized equities, real estate or other financial instruments, the underlying infrastructure must scale to support that activity. Swana’s unmatched speed, low cost and composability make it the clear platform of choice for these use cases. As this trend plays out, validator operators like SolStrategy stand to benefit directly from the resulting growth in network activity and transaction volume, which expands the staking base and increases the total rewards distributed across the ecosystem. Now turning to some specific updates from the quarter.

As of the end of the second fiscal quarter, our total assets under delegation reached 3,390,000.00 sold. Our unique staker count also grew significantly up to 5,209 wallets. Importantly, only 11% of our total stake originates from our own treasury, further reinforcing that our growth is driven by community trust and adoption, not just internal capital. Combined, this places Sole Strategies among the top 25 validator operators on the Solana network alongside the largest centralized exchanges in the world. Innovation remains core to who we are.

This quarter, we are proud to launch our performance dashboard on Dune, which allows anyone, investors, stakers or ecosystem participants to view our unaudited performance data with daily granularity. In a world where most public companies report only quarterly, we believe this level of real time transparency sets a new standard. It’s a reflection of both our values and our long term commitment to building the most trusted and institutionally aligned validator platform in Solana ecosystem. In line with our commitment to building the most trusted and reliable institutional staking platform in the Solana ecosystem, we recently achieved three critical combined milestones, SOC one Type one, SOC two Type one and our ISO 27,001 recertification. These independent third party audits validate the strength of our internal controls, data security practices and operational reliability, key prerequisites for onboarding institutional partners, many of whom are subject to similar regulatory and audit requirements themselves.

These certifications position Sole Strategies as a highly credible, compliant counterparty capable of meeting the rigorous standards of today’s institutional allocators. We also remain on track to complete SOC two Type two by year end further raising the bar. Separately, we were honored to be named a validator for Marinade Select, a curated set of the top 30 staking operators in the Solana ecosystem. Marinate Select was recently identified as the infrastructure partner for a proposed Solana ETF in The U. S.

And if approved, Sole Strategies would receive a portion of ETF related inflows, yet another reflection of our credibility and growing influence within the institutional staking landscape. As we continue to scale our validator and staking business, the momentum we’re seeing from both institutional and retail channels is accelerating what we view as a powerful flywheel effect. As more capital and participants join the Solana ecosystem, Validator revenue rises, staking inflows increase and Sole Strategies is uniquely positioned to capture the upside from this compounding network growth. On the institutional side, one of our most impactful developments this quarter was our partnership with BitGo, one of the world’s largest digital asset custodians. This integration enables BitGo’s institutional clients who collectively manage billions in crypto assets to directly stake their SOL with SOLE strategies validators.

Access to BitGo’s platform is limited to a select group of providers, and this marks a major milestone in expanding our reach amongst institutional allocators. Following that, we announced a new staking partnership with DigitalX, a publicly traded digital asset management firm that maintains SOL on its corporate treasury. This makes DigitalX our second public company partner alongside Neptune Digital Assets that has entrusted Sole Strategies as their preferred staking provider, validating our platform’s compliance credentials, uptime reliability and strategic alignment with institutional needs. At the same time, we’re making meaningful inroads on the retail front. Last month, we launched the Orangefin mobile app on iOS, Android and Solana mobile, making it the world’s first dedicated mobile app for native Solana staking.

Since launch, Orangefin has already facilitated nearly $05,000,000 USD in staking inflows with a median stake size of just USD $2.50. That signals strong early adoption and long tail retail participants. We also debuted our white label validator offering, launching our first partnership with Pudgy Penguins, one of the most recognizable consumer brands in crypto. This business line allows high profile Web3 brands to extend their footprint to Solana, while sharing in validator rewards via branded staking experiences, a model we believe has broad scalability and revenue potential. Together, these partnerships across institutional retail and brand driven channels not only reinforce our positioning within driving our business.

With each new partner or delegation, the flywheel turns faster, fueling further growth in stake, revenue and validator influence across the network. As we reflect on progress made this quarter, our first full quarter of staking in our data operations, I couldn’t be more enthusiastic about the path ahead. The pace at which we’ve established ourselves as a credible compliant and fast scaling leader in the Solana ecosystem is both validating and energizing. From onboarding institutional partners to expanding our retail footprint and launching our new revenue generating business lines, we’ve built meaningful momentum that positions us exceptionally well for continued growth in the quarters to come. With the flywheel now in motion and strong tailwinds supporting increased network activity, I believe we are just beginning to unlock the full potential of this platform.

With that, I’ll turn the call back over to Leah for some closing thoughts.

Leah Wald, CEO, Sol Strategies: Thank you, Max, for the update on our staking and validator strategy. At Sol Strategies, we believe Solana isn’t just a blockchain, it’s the infrastructure layer of the future of finance. Its speed, scalability and low cost position it as the platform of choice for institutional adoption. And we’re building every day to meet that moment. We’re committed to operating at the highest levels of security, compliance and transparency.

That’s why we’ve completed SOC one Type one, SOC two Type one and ISO 27,001 audits, not just for our own business, but as a signal of how we believe the validator landscape should operate. And because blockchain data is inherently public, we’ve taken the extra step of making our performance more accessible and digestible. Our dashboard on doing referenced in our MD and A provides a daily unaudited view of validator revenue and activity, offering more visibility than traditional public companies, which typically report only quarterly. We believe transparency should be the default. We’re proud to lead by example and invite others to follow our journey through this level of open reporting.

Sole Strategies isn’t just participating in the next chapter of finance, we’re helping today. Operator, please open the line for questions.

Conference Operator: Certainly. Thank you, Ms. We’ll go first this afternoon to Darren Aftahi with ROTH. Darren, please go ahead.

Darren Aftahi, Analyst, ROTH: Hey, good afternoon. Thanks for taking my questions and congrats on the progress in such a short time. If I may, can you just start like you talked about tokenization and the Solana network. Can you just kind of maybe talk about your roadmap there and what that’s money going forward?

Leah Wald, CEO, Sol Strategies: Yes, Darren. Yes, I’ll start for one second. Darren, thank you so much for the great question and I’m glad that Max jumped in here, Dana, our CTO. I will toss it in him here because I think that it’s the most exciting initiative at the firm.

Max Kaplan, Chief Technology Officer, Sol Strategies: Cool. Yes, I can talk a little bit about that. So I think we announced our intentions to be the first company public company in the world to issue its shares natively on Solana. And, you know, I think one of the really exciting things about our business is really this. It’s that, you know, because we run validators, the more use the network is, the more revenue the company is going to generate.

And if there are more assets and there’s more trading volume that’s on Solana, we’re going to directly capture that really because we’re running validators. And really, in general, the more volume that happens the the more volume that happens on chain, the more revenue the company is going to generate. So in terms of roadmap, we’re going to keep pushing on we announced our intention to be the first company to lift its share there. We’re going to keep focusing on our staking business. And there’s other things that I think we’re going to look at, but nothing to say just yet there.

Darren Aftahi, Analyst, ROTH: Great. And a couple more if I could. Just on your tech stack beyond tokenization, kind of the plans for investment there. And then I’m kind of curious as you think through your balance sheet, when you look at the opportunities between kind of investment, maybe the third tranche versus investment in acquiring validators versus just like the market via treasury, like how do you kind of think about the use of your balance sheet and kind of deploying that for the overall platform?

Max Kaplan, Chief Technology Officer, Sol Strategies: Well, yes, I’ll take the tech question and then I’ll hand over the balance sheet one to Leah. But in terms of investment, we’re really focused on building right now the premier seeking product that there is. There’s a of things that I’ll talk about there. But you know, our the our total assets under delegation is is growing pretty quickly. We’re right now, we’re at 3,500,000.0 SOL delegated to us, which puts us in about the the top 20, I believe, operators on the network.

You know, we’re gonna keep focusing on on building better products there. You know, and similarly, you know, we just launched a mobile app. You know, that’s the first real mobile app that’s dedicated to staking, but, you know, it also functions as a wallet and there’s other things we’re looking at in that space. But I think primarily, we want to be an infrastructure provider. And I think you’ll see more things that we do in the infrastructure space.

I’ll pass it over to Leah to take the balance sheet question.

Leah Wald, CEO, Sol Strategies: No, I think that’s perfect. And I think that it’s definitely the question to ask. And thank you again for the question. So our treasury strategy as mentioned is structured to support both the organic and inorganic growth in a disciplined manner. On the organic side, we’re focused on reinvesting into the core infrastructure, validator operations, technology development that Max just spoke to.

And then again, meaningful returns and long term strategic value by continuing that flywheel. On the inorganic side, we continue to evaluate acquisitions. We’re always going to be evaluating opportunities on that front that creates strategic alignment, return on capital for our Validator business. So with respect to capital, as you asked the question around taking down the next tranche, obviously, I can’t speak to that at the moment. However, we are definitely explicitly always going to be looking to increase our SOLE treasury.

We believe that that makes us the best bet on sole as that means that are we are conviction driven, by increasing sole exposure, especially when paired with productive staking strategies that we believe we have, that supports both the treasury growth and the long term shareholder value since it’s reinvested and we gain that staking yield. So any moves in this area, as you can imagine, will be done methodically and transparently and definitely within existing risk and compliance frameworks, of course.

Darren Aftahi, Analyst, ROTH: That’s helpful. And if I could squeeze one more in, maybe for Max. This has been talked about a ton, with crypto, obviously, is super important. So I’m just kind of curious how in your roadmap quantum cryptography kind of fits in to the overall Sole Strategy’s kind of tech platform. Thanks.

Max Kaplan, Chief Technology Officer, Sol Strategies: Yes, great question. On the security front overall, there’s plenty of things that we’re doing. And one of the things we talked about was all the security audits that we’ve done. And we’ve also published blog posts on security. I knew your question was more specifically on Quantum.

And that is something that I think Solana is going to I don’t want to just say Solana, but really crypto in general is there’s differing opinions in terms of how close we are to that. But, you know, Solana was actually one of the first networks to to really, you know, do some innovation there in terms of, you know, quantum safe vaults and things like that. You know, it’s an area that we’re we’re looking at and certainly an area that we want to see Solana take seriously. And so far from everything we’ve seen, it definitely is. And we’re going to keep looking there.

But I think that’s what I have to say right now in regards to that.

Darren Aftahi, Analyst, ROTH: Perfect. Thanks, Appreciate it.

Leah Wald, CEO, Sol Strategies: Thank you.

Max Kaplan, Chief Technology Officer, Sol Strategies: Thank you.

Conference Operator: We’ll go next now to Kevin Dede of H. C. Wainwright.

Doug, CFO, Sol Strategies: Can you hear me okay?

Leah Wald, CEO, Sol Strategies: We hear you.

Doug, CFO, Sol Strategies: Great, great, great. Thanks.

Kevin Dede, Analyst, H.C. Wainwright: Thanks for having me on the call. Appreciate it. Could you maybe detail a few of the hurdles or bottlenecks you might encounter and timing you’re expecting for your NASDAQ listing?

Leah Wald, CEO, Sol Strategies: Thanks, Kevin. We will keep everybody appraised as we can. As of right now, what we press released is that our application has been filed and we’re working towards that goal.

Kevin Dede, Analyst, H.C. Wainwright: Working towards, I’m sorry?

Leah Wald, CEO, Sol Strategies: Working towards the goal of continuing to uplift the future plans being listing on the CSCs and NASDAQ and tokenized. Unfortunately, I just can’t speak to anything else at the moment. Apologies.

Kevin Dede, Analyst, H.C. Wainwright: No. No. Okay. Could you offer the business model view of your Pudgy Penguin deal? How are you white labeling?

And what are the financial implications?

Leah Wald, CEO, Sol Strategies: Yeah. I will turn it to Max here in a second to actually speak to it. It’s very exciting. So business model view, I’ll actually step back even further of business strategy. The exciting thing about Fudgy Penguin being it is our expansion of running a white label or validator service, which we believe is definitely gonna be seeing explosive growth, especially as more institutional players join not just the real world tokenized asset world, but also continue to tokenize their funds, many of which are being done on Solana.

So with Pudgy Penguins, you know, it’s very interesting to be running their validator. Max, maybe you can speak to some of the economics and how that actually works.

Max Kaplan, Chief Technology Officer, Sol Strategies: Yes, absolutely. Great question. Yes, the Pudgy Penguins thing is really exciting. Pudgy Penguins was predominantly on Ethereum, but, you know, over the last couple of months, they they’ve moved to Solana, and, you know, we’re pretty excited to to help such a big brand move to Solana. You know, in terms of the economics, you know, without getting into into the details, you know, really what we’re we’re doing is the the more stake that, you know, Pudgy Penguins is going to, attract, the the more money both of our our companies are going to generate.

And, you know, it’s set up in a way where that, you know, really, like, everyone is incentivized. Both parties, I should say, are incentivized to grow it out. And, you know, Pudgy Penguins is a big brand, and, you know, the the validator certainly has been growing. I think it’s at, like, 76,000 solar or something right now. And really, in general, the more stake that it continues to get, which has been growing, the more money we’re going to make and the more money Puzzy Penguins is going to make.

Kevin Dede, Analyst, H.C. Wainwright: So while I have you, Max, can you help me understand, biofeas aside, how you see Solana advantaged in the versus Avalanche and Algorand, both of which already have financial applications associated with them and maybe even Polygon because I think that’s got real estate attached.

Max Kaplan, Chief Technology Officer, Sol Strategies: Great, great question. So let’s go into that. But really, like, I wanna start higher level is, you know, like, you like, these assets are gonna wanna go where volume is and users are. Right? And if you look at, you know, most metrics, you’re right, you know, in terms of trade like, number of transactions, unique wallets, DEX volume, things like that, Solana is really the winner.

Right? And, you know, one of the most important things for for, you know, like, any asset is liquidity. And, you know, Solana consistently has been having, you know, bid in terms of DEXs, Solana has definitely had, you know, the highest volume. Right? You know, in terms of Avalanche, Polygon, those other networks, you know, I think they’re they’re really pushing forward in that space.

You know, like and then pushing forward in terms of biz dev, you know, and I I think some things might go there. But, you know, really in general, you know, I I don’t know the terms of any deal or anything like that. Right? But, you know, really, like, if if you look at in terms of what’s really important for an RWA, it really comes down to liquidity, volume, and users. And Solana is through and through the winner there, really.

You know, if you especially compared to the other networks that you talked about, which, you know, this data the cool thing about this is this data is public. And, you know, the other thing I think I would say too is that, Solana, the Solana Foundation itself has really you know, these these tokenized equities, they can’t really be treated like normal tokens because, you know, to hold a stock, you know, you you need to do KYC and things like that. Solana has pushed a standard forward where, you know, these assets could actually comply with that, where some of these other networks happen. Right? And I think the regulatory stuff is up in the air and I can’t comment on that.

But in terms of those three pillars I talked about, really users, liquidity and volume, I think it’s pretty clear to me and almost, I would say this, and it’s clear to me that Solana is going to be the winner there.

Kevin Dede, Analyst, H.C. Wainwright: Okay. I appreciate that perspective. Can we take it take your view on MEV now? I think Gido is closed and I should read something about FrankenDancer. Help me understand how you’re going to maneuver given the validator nodes you’re running and the amount of Solana you have state, how you’re going to maximize extractable value?

Max Kaplan, Chief Technology Officer, Sol Strategies: Another great question there. So you mentioned a few things there. You mentioned FireDancer. You mentioned MEV and JITO. And, you know, without getting super in the weeds here, we run so we run four validators, and we actually run two of them on Firedancer, two of them on JITO.

And the ones that run on Firedancer, they also run GDo as well. You know? But really in general, like, in like, maximizing NEV in terms of extraction is not really something that we’re necessarily looking to do. And the reason that I say like, know, we we we are I just wanna make this clear. We are capturing MEV.

But in terms of, you know, MEV can be toxic at points. Right? And, you know, really one of our worries is that, you know, if users aren’t getting the best prices, they’re not gonna wanna come on chain to trade a real world asset. Right? So in the short term, you know, maybe if we, you know, we’re, you know, ripping users off in terms of getting good prices and things like that, you know, that might lead to more revenue.

In the long run, that really hurts in my opinion where it’s going to, you know, it’s gonna prohibit, you know, these institutional flows from actually wanting to trade on chain. We’re really focused on doing the right thing here. And if you ask almost anyone in this space, the right thing is to make sure that users are getting good prices. And, you know, not all MEV is bad. You know, some MEV is is really there to make sure that, you know, your transactions get through quicker.

But, you know, we are not gonna do anything that you might have heard like sandwiching or things like that. That’s just not something that we’re going to do because we really believe that if these tokenized assets come on chain and users continue to get the best prices with the best liquidity, that is going to be best for us and Solana overall.

Kevin Dede, Analyst, H.C. Wainwright: Last question for me. Is your OrangeFin app available in The U. S?

Max Kaplan, Chief Technology Officer, Sol Strategies: Yes, is. It’s available on iOS, Android and the Solana Mobile store in The U. S.

Kevin Dede, Analyst, H.C. Wainwright: Okay. Within The U. S. Okay, great, great. Thanks so much Max for all the color.

I really appreciate it.

Max Kaplan, Chief Technology Officer, Sol Strategies: Thank you for your questions.

Conference Operator: Thank you. We’ll go next now to James Towers of Towers Family Office. James, please go ahead.

James Towers, Analyst, Towers Family Office: Hi, thanks for taking my question today. Can you guys hear me all right?

Leah Wald, CEO, Sol Strategies: We can.

James Towers, Analyst, Towers Family Office: Hello? Okay, great. Yes, so I was wondering given the $480,000,000 remaining under the convertible note facility with ATW Partners and the recent on file based shelf prospectus for $1,000,000,000 additional security, how do you guys think about capital allocation weighing in against shareholder dilution?

Leah Wald, CEO, Sol Strategies: We’re absolutely considering everything and being very measured as we consider financing opportunities. We’ll remain transparent as anything comes. However, we have a very experienced team, very experienced Board. Our CFO, Doug on the call has many, many years of experience looking at these types of deals. So I think that that’s a great question to ask, especially as a shareholder and we’ll be very measured in our approach of thinking what to do on that front.

Max Kaplan, Chief Technology Officer, Sol Strategies: Thank you.

Leah Wald, CEO, Sol Strategies: Thank you.

Conference Operator: You. Ms. Wald, it appears we have no further questions this afternoon. I’d like to turn the conference back to you for any closing comments.

Leah Wald, CEO, Sol Strategies: Yes. Thank you all so much for joining us today and for your continued interest and support of our company. We’re excited about the opportunities ahead and look forward to updating you again on our progress during our next quarterly call. Have a great week.

Conference Operator: Thank you very much, Ms. Wald. Again, and gentlemen, that will conclude today’s Sole Strategy’s fiscal quarter ended 03/31/2025 earnings call. Again, thanks so much for joining us everyone and we wish you all a great day. Goodbye.

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