Prepared remarks
Good afternoon, everyone, and thank you for participating in today's conference call to discuss Forward Industries' financial and operating results for the second quarter of fiscal 2026 ended March 31, 2026. By now, everyone should have access to the second quarter of fiscal 2026 earnings press release, which was issued today at approximately 4:05 p.m. Eastern Time. The release will be available on the Investor Relations section of Forward Industries' website. This call will also be available for webcast replay on the company's website. Following management's remarks, we'll open up the call for Q&A. I'll now hand the call over to Forward Industries' General Counsel, Georgia Quinn, for introductory comments. Georgia, please go ahead.
Thank you, operator. Before we begin, I'd like to remind everyone that today's call may include forward-looking statements within the meaning of the federal securities laws. All forward-looking statements made by the Board or management on this call are based on their assumptions and beliefs as of today. You should not rely on forward-looking statements as predictions of future events as these statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For more information about these risks, uncertainties and other factors, please refer to Forward Industries' filings with the Securities and Exchange Commission. During today's discussion, we will reference certain metrics related to our Solana digital asset treasury, including SOL holdings, SOL per share, staking performance, validator operations and deployments. These metrics are core to evaluating the execution and progress of our strategy. With that, I will turn the call over to Forward Industries' Chairman of the Board, Kyle Samani. Kyle, please go ahead.
Thank you, Georgia, and good afternoon, everyone. Our second fiscal quarter was defined by disciplined execution. Against the backdrop of continued market volatility, we took decisive steps to strengthen Forward's capital foundation, improve our cost structure and deepen our engagement across the Solana ecosystem. In March, we completed a strategic share repurchase that reduced our common shares outstanding by 7.4%, accessed $40 million of institutional debt from Galaxy Digital on highly advantageous terms and implemented a cost reduction initiative that has yielded material operating expense savings through disciplined cost management. Together, these actions reflect the long-term mindset that we bring to managing Forward: disciplined capital allocation, compounding SOL per share, which is currently above 44% on an annualized basis on an annualized in-the-money basis, and positioning the business to grow and diversify alongside the Solana ecosystem. These two themes, our continued conviction in the Solana ecosystem, particularly its accelerating momentum across stablecoins, payments and real-world assets, and the opportunities we see to deepen Forward's engagement with the Solana ecosystem to grow and diversify our revenue are where I want to focus our time today. Starting with the network. Solana's transition from promising technology to real financial infrastructure has accelerated meaningfully in recent months. For stablecoins and payments, Solana is emerging as the default settlement layer for dollar-denominated value on chain. According to a Messari report published in early March, total payment volume on Solana grew more than 8x year-over-year, which is nearly 3x the median growth rate of comparable fintech and blockchain platforms. The Solana Foundation's launch of Payments.org in late February and the Solana developer platform in March, which brings together Mastercard, Worldpay, Western Union and other global payments partners, has consolidated what had been a fragmented set of partnerships into a single institutional-grade payment stack. Western Union is expected to go live with its U.S. dollar payment token, USDPT, on Solana in the first half of this year, connecting on-chain dollar transfers to Western Union's network of more than 360,000 physical cash locations worldwide. On real-world assets, in January, Ondo Finance launched over 200 tokenized U.S. stocks and ETFs on Solana, joining an ecosystem where tokenized equities had already processed over $3 billion in transaction volume. Forward was among the first public companies to put its SEC-registered shares on chain through Superstate, and we view the rapid expansion of tokenized equities on Solana as further validation of the thesis that Solana is becoming the settlement layer for capital markets. In March, the SEC approved NASDAQ's proposal to trade tokenized securities alongside their traditional counterparts on the same order book, covering Russell 1000 stocks and major ETFs. As a NASDAQ-listed company that already has its shares tokenized on Solana, we view this as a powerful convergence. The infrastructure that Forward helped pioneer is now being adopted by the exchanges themselves. On the infrastructure side, the rollout of Firedancer, Jump Crypto's independent validated client for Solana, represents a landmark moment for the network's decentralization and resilience. Firedancer's testnet results showed throughput exceeding 1 million transactions per second, and the client is now phased into mainnet deployment. This is exactly the kind of foundational infrastructure maturation that institutional participants need to see before committing capital at scale. At the network level, Solana continues to lead across the metrics that matter: decentralized exchange volume, real economic value generated, active users and developer engagement. These fundamentals reinforce our view that it is not just another blockchain; it is the execution layer for what we often call the Internet capital markets. Before we move on to Forward's strategic initiatives, I want to address a topic that's gotten a lot of attention lately: the security incidents involving Drift Protocol on Solana and, more broadly, the other exploits we've seen across a number of networks in the crypto industry. The key point here is that the incident involving Drift was a social engineering attack, not an explicit exploit of the Solana protocol or contract code itself. That actor gained privileged access through social engineering, not through any underlying vulnerability in the network. To be clear, Solana's core Layer 1 network has not experienced a consensus-level breach. The base protocol has continued to operate with full uptime, strong validated decentralization and no cryptographic vulnerabilities. Think of it this way: a breach at a company running on AWS does not mean AWS is broken. The same logic applies here. If anything, these incidents reinforce how seriously we take operational security in managing our own holdings. As the Solana ecosystem continues to accelerate, so do the opportunities for Forward to leverage protocols in the network to drive revenue growth. As such, priorities for 2026 are focused on two initiatives: first, deepening our engagement with the Solana ecosystem in ways that grow and diversify our revenue; and second, using our strengthened balance sheet to lower cost structure and accelerate SOL per share growth. On the ecosystem engagement front, we've made meaningful progress on initiatives we've discussed previously. First, tokenized FWDI. Forward remains one of the only public companies with SEC-registered shares that live on a public blockchain through Superstate's Opening Bell platform. There are currently more than 6.9 million shares of FWDI tokenized on Solana and the communal pool where FWDI can be utilized as collateral for on-chain loans is approximately at 91% utilization. The next initiative I'd like to talk about is our Forward Validator and fwdSOL. Today, over 6.9 million SOL are staked to Forward Validator and it is the eighth largest validator in the Solana network by stake weight. Our proprietary liquid staking token, fwdSOL, has become a cornerstone of our capital market strategy. It is collateral supporting our $40 million institutional debt facility with Galaxy, which Ryan will discuss in more detail. On the revenue front, I want to highlight Forward Industries' minority investment and deployment of capital into OnRe, a Solana-native reinsurance protocol that is building infrastructure to bring traditional risk transfer markets on chain. Since launch, OnRe has attracted meaningful liquidity, onboarded its first reinsurance counterparties and built a real reputation as one of the more interesting DeFi-native risk protocols on Solana. What's compelling here is that Forward participates in OnRe both as an investor and as a participant in the OnRe protocol by purchasing ONyc tokens. So we have direct upside as the protocol grows and generates fee revenue. That also adds USD-denominated, non-correlated revenue for Forward, which helps diversify our revenue base beyond SOL. Each of these initiatives is designed to accomplish the same thing: turn Forward from a passive treasury holder into an active participant in the Solana economy, generating yields above the native staking rate, expanding our surface area on chain and creating durable sources of revenue beyond staking alone. With that, I'd like to turn the call over to Ryan Navi, Forward's Chief Investment Officer, to further discuss our strategic initiatives and treasury performance during the quarter. Ryan?
Thank you, Kyle, and good afternoon, everyone. Since stepping into the CIO role in December, I focused on building out a comprehensive plan to drive meaningful SOL per share growth, lower our cost of capital and position Forward as the Berkshire Hathaway of Solana in the long term. Today, I'd like to walk through our progress on all three, starting with treasury performance, moving through our capital structure actions during the quarter and closing with how we're positioning Forward for the future. As of March 31, 2026, Forward held a little over 7 million Solana with nearly all of our holdings generating native staking yields between 6.5% and 7.2%. Cumulative staking rewards since our inception in September 2025 have now exceeded 200,000 Solana. Twenty-five point one percent of our Solana is now represented as fwdSOL, our proprietary liquid staking token developed with Sanctum. fwdSOL is what allows us to continue earning native staking yield while simultaneously using our holdings productively as collateral, and it is the foundation of the institutional debt facility I'll discuss in more detail later. Turning to SOL per share, we continue to compound our fully diluted SOL per share from 0.0604 in September 2025 to 0.0624 as of December 31, 2025, and to 0.0669 as of March 31, 2026. That reflects annualized SOL per share growth of 29.1% on a fully diluted basis since the launch of our treasury strategy. On an in-the-money share basis, our annualized SOL per share growth exceeds 44%. Our fully diluted share count as of March 31, 2026, was 105,231,015 shares, comprised of 76,314,617 common shares net of treasury, 25,759,600 warrants, 1,599,066 options and 1,557,732 unvested restricted and performance stock units. The reduction in common shares outstanding from 84.9 million to 76.3 million reflects our March repurchase of 6.2 million shares and our ongoing share repurchase program, which reduced our basic shares outstanding by 10.1%. As of March 31, 2026, Forward's MNAV was 0.827, calculated using the closing price of Solana on March 31 of $83.12, total SOL holdings of 7,044,079, plus our cash balance less debt towards closing price of $4.43 and a fully diluted share count of 105,231,015 shares. The most consequential actions during the quarter were in our capital structure. In March, we completed two highly strategic transactions that, taken together, represent the disciplined capital allocation we believe is required to deliver long-term value to our shareholders. This, in turn, gave us the balance sheet strength to capitalize on opportunities like our investment and deployment into OnRe, which provides Forward with upside as the tokenized RWA ecosystem on Solana grows and adds a USD-denominated revenue stream for the company. First, we entered into a Master Digital Currency Loan Agreement with our long-standing partner, Galaxy Digital, and drew on an initial $40 million facility collateralized by fwdSOL with a weighted average interest rate of 3.4% and a weighted average maturity of five months. I really want to underscore how compelling these terms are. At a 3.4% weighted average interest rate, this facility represents access to capital at a cost that is, in our view, not only highly advantageous relative to what is available to most companies in our sector, but also most publicly traded small- to medium-sized market cap companies. Our extremely attractive cost of capital is the direct product of the strength of both our balance sheet and our team's approach to risk management. Given the recent drawdown of Solana in conjunction with our shares trading at a discount to NAV, we made the conscious decision to lower our cost of capital via non-dilutive financing, meaning that we're able to access liquidity without issuing equity or selling our SOL holdings. It's also important to note that approximately 40% of this facility is evergreen in nature, which means it automatically renews and does not require active refinancing. This provides us with a stable recurring capital base and means the effective refinancing burden on the remaining portfolio is both manageable and well within our liquidity planning horizon. Second, on March 19, we announced the deployment of $27.4 million of that $40 million credit facility to repurchase 6.2 million shares of our common stock at $4.44 per share. This transaction reduced our basic shares outstanding by 7.4% and our fully diluted shares outstanding by 5.5%, which drove an immediately compelling SOL per share accretion of 8.0% on a common share basis and 5.8% on a fully diluted basis. Third, on May 5, we announced our investment and deployment into OnRe. Alongside RockawayX, the global multi-strat digital asset investment firm, Forward co-led OnRe's $5 million Series A at a $25 million post-money valuation and has begun deploying capital into ONyc, OnRe's yield-bearing token on Solana. ONyc provides Forward with real-world cash flows that are both complementary and uncorrelated to Solana. By gaining exposure to reinsurance through a tokenized on-chain structure, we're unlocking a new layer of durable dollar-denominated income while remaining fully aligned with the Solana ecosystem. Together, the series of transactions gives us three things: dramatic SOL per share growth, a robust balance sheet to continue operating and investing in the business and most importantly, an enhanced capital structure that lowers our cost of capital, which unlocks a wider opportunity set to pursue strategic transactions beginning with OnRe that will deliver greater SOL per share growth and value to shareholders over the course of 2026. Looking ahead, we will continue to focus on driving efficiencies across the business while executing on three strategic priorities. First, continuing to leverage our advantageous access to capital through the Galaxy facility and new potential relationships to further optimize our capital structure and lower our cost of capital, which will further accelerate our ability to compound SOL per share. Second, identifying and executing on select opportunities that accelerate our SOL per share growth above the baseline native Solana staking rate while also pushing the Solana ecosystem forward as a whole. This includes evaluating M&A, strategic investments, structured transactions and scaling our on-chain operating initiatives. OnRe is a good example of this. It's a Solana-native reinsurance protocol that's grown quickly and already showing real traction. Forward is in as both an investor and a liquidity provider, but we have direct upside as OnRe scales, and we're generating USD-denominated revenue in the process. Third, positioning Forward to not only provide sustainable best-in-class SOL per share growth, but also to continue to grow the absolute scale of our treasury. We believe the foundation we've built, coupled with our leading scale, robust balance sheet, improved cost structure and deep partnerships with Galaxy, Jump and others will enable us to execute on our 2026 growth and profitability objectives on our way to building the Berkshire Hathaway of Solana. I'll now welcome and pass the call over to our newly appointed Chief Financial Officer, Mark Brazier, to walk you through our GAAP financial results and the cost reduction plan. Mark?
Thank you, Ryan, and good afternoon, everyone. I'm very pleased to address you all for the first time as Forward's new Chief Financial Officer. As many of you may be aware, I joined Forward approximately a month ago on April 13, succeeding Kathy Weisberg, who continues to serve the company as Director of Financial Reporting. I would like to take a moment to thank Kathy for her leadership during a truly transformational period for Forward and for the strong expertise and partnership she continues to offer. By way of introduction, I bring with me more than 25 years of experience across both digital assets and traditional finance, most recently as Chief Financial Officer and Head of Regulatory at XBTO Global and previously as Chief Financial Officer at Stablehouse. I'm excited to join the team at such a pivotal moment in the company's history and in particular to help execute against the cost discipline and capital structure priorities Ryan just outlined. Now I'd like to turn to our financial results for the second quarter of fiscal year 2026. As a reminder, all comparisons and variance commentary refer to the second quarter of fiscal year 2025 unless otherwise specified. Revenue in the second quarter of fiscal year 2026 increased more than 4x to $13.0 million compared to $3.1 million in the prior year period. Gross margin expanded materially to 70.0% in the second quarter of fiscal year 2026 compared to negative 5.7% in the second quarter of fiscal year 2025. These increases were primarily driven by staking revenue generated through Forward's Solana treasury strategy. Selling, general and administrative expenses during the second quarter of fiscal year 2026 were $6.6 million compared to $7.2 million in the first quarter of fiscal year 2026, an early but meaningful indication that the cost reduction plan we announced in March is beginning to take effect. The year-over-year increase of $5.0 million was primarily driven by higher operational costs associated with Forward's transition to its Solana treasury strategy. As of March 31, 2026, our cash position was $16.6 million compared to $25.4 million as of December 31, 2025. The sequential decrease primarily reflects the use of $47.1 million to repurchase 9,214,655 shares during the quarter. Institutional debt outstanding as of March 31, 2026, was $40.0 million at a weighted average interest rate of 3.4% and a weighted average maturity of five months. With regards to the cost reduction plan, we are continuing to implement measures to reduce our SG&A spend. Our targeted quarterly SG&A run rate, excluding stock-based compensation, is approximately $4.8 million, down from $7.2 million in Q1 and $5.8 million in Q2. The primary drivers of that reduction are renegotiated fees under our services agreement with Galaxy Digital, lower outside legal and marketing spend, reduced third-party vendor costs and broader operational efficiencies, all part of the SG&A reduction initiative that we commenced at the end of 2025. That said, our SG&A will still remain subject to certain variable costs, most notably the asset management fee we pay Galaxy, which is tied to a percentage of our AUM. We remain committed to evaluating our cost structure on an ongoing basis and identifying additional efficiencies throughout the year. I'd also like to reiterate the current GAAP accounting treatment for our SOL holdings. Current accounting standards for digital assets require changes in the fair value of SOL and fwdSOL to be recorded as components of operating income or loss. These fluctuations do not impact our cash balance, yield generation or our ability to continue compounding SOL per share. This accounting distinction is essential in evaluating our financial performance, which is driven by strategy execution, not short-term market volatility. As a result of this treatment, in the second quarter of fiscal year 2026, Forward recognized a loss on digital assets of approximately $201.7 million and an impairment charge of approximately $85.1 million related to our fwdSOL holdings, leading to a net loss of $283.1 million compared to a net loss of $585.7 million in the prior quarter and $1.5 million in the second quarter of fiscal year 2025. Again, this loss was primarily driven by the decline in the price of SOL and therefore the fair value of our SOL holdings. I will now pass the call back to our General Counsel, Georgia Quinn, to cover regulatory updates.
Thank you, and welcome, Mark. I'd like to briefly address several regulatory developments that occurred during the quarter because they are directly relevant to how investors should evaluate Forward and our strategy. The first calendar quarter of 2026 was one of the most consequential quarters for U.S. digital asset regulation ever. I'll touch on three developments in particular. First, on March 11, the SEC and CFTC executed a memorandum of understanding, establishing a formal framework for coordination on matters of shared regulatory concern. The MOU committed both agencies to streamline regulatory reporting, coordinated examinations and harmonized oversight, and it laid the procedural groundwork for the joint guidance that followed and creates the necessary foundation from which to begin joint rule-making once clarity or its progeny legislation is passed. Second, on March 17, the SEC issued a commission-level interpretive release titled Application of the Federal Securities Laws to Certain Types of Crypto Assets, with the CFTC joining and confirming it will administer the Commodity Exchange Act consistent with the SEC's interpretation. The release establishes a five-category taxonomy for digital assets and clarifies the application of federal securities laws to airdrops, protocol mining, protocol staking, among other activities. We believe two elements of this guidance are particularly important for Forward and our shareholders. First, the interpretive release is consistent with our view that Solana, the digital asset at the core of our treasury, is a digital commodity rather than a security. It is also consistent with the view that protocol-staking activities of the type conducted through our validator infrastructure are not, in and of themselves, securities transactions. We want to be clear that this guidance is interpretive in nature and does not carry the weight of statutory law, but it represents a meaningful step towards the regulatory clarity that has long been needed in our industry. Third, the Digital Asset Market Clarity Act, which passed the House in July 2025, remains under consideration in the Senate. The Clarity Act would, if enacted, codify a comprehensive market structure framework allocating jurisdiction between the SEC and the CFTC for digital asset markets. While the legislative process is ongoing, and we cannot predict the timing or final form of any legislation, we are encouraged by continued bipartisan engagement on this bill and the MOU previously noted, and we believe that statutory clarity will further reinforce the foundation on which our strategy is built. Although not during our reporting period, on April 13, the SEC staff also issued guidance that, pursuant to certain guidelines, the providers of user interfaces to crypto services, both centralized and decentralized, may receive transaction-related compensation without being subject to broker-dealer registration. This provides comfort to developers trying to bridge traditional finance and digital assets by creating user-friendly and educational experiences, enabling users to access on-chain finance. I'll add one final note. None of what I've just described changes our underlying strategy, our compliance posture or our disclosure obligations. While we are pleased to see the continued progress toward regulatory clarity and the willingness of lawmakers and regulators to engage with the industry, we have built Forward to operate to a public company standard of governance and transparency regardless of the regulatory environment, and we will continue to do so. This concludes our prepared remarks. Before I pass it back to the operator to open up the call for live Q&A, we'd first like to address a few of the questions that have come in via e-mail over the past few weeks. Ryan, to start, can you please share more about the OnRe transaction? Specifically, how was the transaction financed? Can you explain the deployment into the ONyc tokens? And how much was deployed? Can you share any color on the yield Forward is earning relative to the cost of capital for the deployment?
Yes, sure. So the OnRe deal has two parts. First, Forward completed a minority investment into OnRe's $5 million Series A, which we co-led with RockawayX. Second, we deployed $16 million into ONyc, OnRe's yield-bearing token on Solana. For reference, ONyc provides us non-correlated U.S. dollar-denominated revenue tied to reinsurance. The cash for both investments was funded from $40 million in new evergreen loans with an interest rate of 2%. So if ONyc yields, let's say, 12%, we pick up 10 points of net spread with assets and liabilities well matched. With respect to the expected yield on ONyc, the trailing yield has been roughly 10%, and we think the upper bound is probably in the mid-teens. So for modeling purposes, something around 12% plus or minus, we believe, would be appropriate. And in terms of the overall deal rationale, importantly, we have equity upside in OnRe as it scales, while we are also simultaneously diversifying our revenue at an attractive net yield, which should make both our business and capital structure more durable over time. And for those who are interested, you can refer to our 10-Q for further detail.
Okay. Thanks for that, Ryan. And next question is also for you. You mentioned strategic transactions that accelerate SOL per share growth. Can you share your framework for evaluating those opportunities, including potential M&A? And how do you think about balancing accretion versus flexibility?
Yes, this is a great question. So we evaluate each investment opportunity on a relative value risk-adjusted basis. So depending on the market environment, we may prioritize buying more SOL, buying our stock, minority investments or M&A. On the SOL side, if our MNAV remains dislocated, we will likely continue buying our stock. If our MNAV is closer to 1, we'll be more focused on scaling SOL and potential debt M&A. For non-debt M&A and minority investments, we are looking for opportunities to deploy our balance sheet in high-quality real-world assets on Solana that are above the native SOL staking yield, as Kyle mentioned in the prepared remarks. Additionally, we want to ensure we get equity upside as we use our balance sheet to create our own catalysts and are looking to produce win-win outcomes for Forward. OnRe and ONyc are great examples of this. On the accretion versus flexibility part of the question, we've done a great job preserving flexibility to play offense. And now in this dislocated environment, we can take full advantage, which is evidenced by our annualized 44% SOL per in-the-money share accretion this quarter. Even though we are now starting to take on some debt, we are still lowly levered, roughly in the low teens on a percentage basis and retain significant financial flexibility. So spot and MNAV remain extremely dislocated. We will continue to be on the offensive while mitigating less tail risk.
Okay. Thank you. So this question is for the team. Could the team speak to the strategic logic behind the March transactions? Specifically, what led the team to prioritize a share repurchase at this moment? And how should investors think about the interplay between the Galaxy facility, the buyback and the cost reduction plan?
So I'll take the piece on the debt facility and the buyback, and then Mark can handle the cost reduction plan. So on the first two pieces, given we're SOL and our stock is trading dislocated, we decided to pursue non-dilutive financing, and we structured this master loan agreement with Galaxy, which we believe is very attractive for Forward. We will continue to use this as a tool to actively lower our cost of capital, which we believe will further accelerate our compounding of SOL per share. The March share buyback was a direct result of the dislocation of our MNAV at the time of the repurchase. And given stock prices and SOL, we decided to repurchase the stock using the Galaxy facility without selling any of our SOL holdings while still keeping all of our stake in yield. Mark, over to you on the cost reduction.
Yes. Thanks, Ryan. So on the $2.4 million reduction from our $7.2 million in Q1 to our run rate quarterly target of $4.8 million, it's really driven by several distinct and largely permanent changes to our cost structure. As I mentioned earlier, the largest driver to this is a renegotiated services agreement with Galaxy, which significantly reduced the fees we paid for their accounting and operational support. We've also materially reduced outside legal and marketing spend, rightsized our third-party vendor and technology costs, and we've implemented a leaner organizational structure overall. We do believe the new targeted run rate is both durable and sustainable. But having said that, it is important to note that we do have some variable cost elements to our OpEx, primarily the asset management fee that we pay to Galaxy that is tied to a percentage of our AUM. It's probably also important to note that the cost reduction initiatives that we put in place are structural reductions, not one-time cuts or deferrals. Currently, we have no major reinvestment requirements that would cause these costs to increase on a go-forward basis. In fact, as our revenue grows with our staking yield revenue, we expect operating leverage to improve further, meaning the absolute cost base would hold steady even as our top line expands. So to reiterate, we will not cut costs where it matters strategically, but we are committed to running a lean, disciplined and fiscally conservative operation that compounds value for shareholders. And I believe the target run rate that we've forecast reflects that philosophy and practice.
Okay. Thanks, guys. And Ryan, this last one is for you. Given the current discount to NAV, how should shareholders think about future capital allocation between share repurchases, SOL accumulation and strategic deployment on chain?
Yes. So for stock versus SOL purchases, we're always looking for ways to drive greater SOL per share on a risk-adjusted basis. Future capital deployment is highly market environment-dependent. But at a high level, we will continue to capitalize on major dislocations of our stock via those share repurchases. As our MNAV normalizes, we expect to focus more attention back to SOL accumulation. It is worth noting we do not view the stock buyback and SOL accumulation as mutually exclusive. As for strategic deployment on chain, not all DeFi is created equal, and we're selective about deployment on chain. We believe in using on-chain rails for superior cost and time performance, but also carefully consider various risks, namely smart contract risk. Notably, tokenized real-world assets pose an interesting opportunity set for us. Unlike truly decentralized digital assets, tokenized RWAs carry an important structural protection. In the event of a smart contract exploit, an issuer can remedy the situation through a burn and remit process. That's a meaningful distinction in our opinion that reduces the risk profile. Tokens like ONyc have a durable option yield source and provide non-correlated U.S. dollar-denominated yield, which we believe will be a big growth vector for both us and the Solana ecosystem as a whole.
Okay. Thank you. That concludes our pre-submitted questions. Now I'd like to pass it over to the operator to open up the call for live Q&A.
Questions and answers
Our first question today is coming from Fedor Shabalin from B. Riley Securities.
My first question is about Solana accumulation — tuck-in accumulation. You emphasized SOL per share accretion as a North Star metric. But can you walk us through your current framework for incremental SOL acquisition beyond taking rewards? I know you already touched on buybacks partially, but I just want to figure out the trajectory going forward in the near term.
Sure. So in general, again, if our MNAV is significantly below 1x, we do view the buyback as a relatively low risk-adjusted way for us to drive meaningful SOL per share accretion. I think there are also novel ways for us to start accumulating Solana through the use of derivatives and other mechanisms as well, potentially buying locked SOL at a discount — all of which we're always exploring. I think the ONyc token is also an interesting example to kind of give you the framework. If we can get our overall dollar-denominated revenue base sufficiently high to offset all of our cash costs, inclusive of interest expense, personnel, etc., then we actually have a very strong resilient base for us to further compound SOL per share, agnostic of SOL price. So I kind of think about that as the baseline layer, which OnRe and ONyc is the first step in that direction. But I think the rest in terms of SOL versus the stock buyback is always going to be a relative value equation. Again, it's not mutually exclusive between one or the other. And candidly, the stock repurchase obviously has some limitations in terms of our percent of daily trading volume. So as we start to exit this bear market, most likely entering into a new bull market in the coming quarters, we will likely look to SOL accumulation as the main instrument to express that view. I'm not sure if I totally answered your question; feel free to follow up.
No, that's clear. And a quick follow-up — quarter-to-date, Solana is up. Has the higher collateral value on fwdSOL created any incremental capacity under the Galaxy facility? And are there any conditions under which you would expand the draw?
Yes. So there are definitely provisions in there, without giving specific metrics that may or may not be publicly available, where if the value of the collateral gets sufficiently high, we have the ability to take some additional borrowing capacity while maintaining specific LTV ratios. With that said, yes, it does increase our borrowing capacity on a dollar basis. And we would look to utilize it based on the opportunity set that is presented to us. As Solana price goes up, our borrowing capacity increases commensurately. And again, we're actively working on optimizing our weighted average cost of capital. Given where Solana and our stock are, we still think non-dilutive forms of financing, especially at attractive interest rates, make a lot of sense for us. I think once Solana and our stock and NAV recover, we'd look to do more traditional convertible debt or other issuances. But at this current time, this facility is our main tool.
Our next question today is coming from Neo Eloff on for Devin Ryan from Citizens Bank.
This is Neo Eloff on for Devin Ryan. My first question is on agentic AI in the blockchain space and how this will ramp up activity. I'd love to hear your thoughts on the topic and how you expect this to evolve in the coming months, whether through trading, payments or lending. And then if you could touch on how you think SOL is well positioned here maybe relative to some of the other blockchains?
Yes. Kyle here. Happy to chime in on this one. So I think the first part of the question is broadly how we think about agentic payments and then how Solana is positioned. The opportunity for agents is quite exciting, more in the domain of payments than trading, not to say that it's bad for trading, but there's already a lot of programmatic trading in the world today — market makers, HFT, etc. Today, a lot of that activity lives on Solana in a real way. The Solana blockchain is the most liquid and highest-volume place you can trade, for example, the SOL-USD pair as well as tokenized BTC and ETH, which in recent weeks have become more liquid on Solana than on some centralized exchanges. That has been driven by innovations like programmatic AMMs, which allow market makers to quote tighter in more interesting ways. The agentic part of this is a bit upstream: you can now use AI agents to build these programmatic AMMs. I've been doing that firsthand; it's publicly documented that I am running a programmatic AMM on chain and it's been working well. There's also a startup called Hadron Finance building in this area. On the payment side, which is likely the higher-profile long-term story, imagine talking to your AI agent and wanting to buy something — being able to do that payment instantly for effectively zero cost is compelling. There are open standards like x402 and MPP that are live on Solana today, and many developers are building on top of those protocols. I expect to see usage ramp up in the back half of this year as major consumer applications adopt them. Another use case is large-scale micropayments, particularly relevant to agentic coding and tooling, where real-time, usage-based billing models are compelling for both developers and merchants. Solana is well positioned for these uses because it provides high throughput, global availability, cheap and fast transactions. Also important are on- and off-ramps: Solana integrates with many major custodians, wallets and market makers, which helps ensure liquidity for stablecoins and other tokens moving on and off chain. You can already see early signs of this adoption with x402 and MPP on Solana, though it's still early.
Then if I could ask one more question on asset allocation. As you think about upcoming quarters, is there a long-term target rate you're looking at for native SOL staking versus fwdSOL versus other initiatives you're pursuing?
Sure. Currently, our fwdSOL is roughly 25% of our total holdings today. I would expect that to increase over time as we functionally use our liquid-staking token as probably the most efficient form of collateral. So there isn't a set percentage target, but I would expect that number to increase over time as we utilize and deploy fwdSOL. We view our baseline as the SOL holdings generating native staking yield — around 7% — which is the engine for our business. With deals like OnRe and ONyc, we're layering on returns above that native staking rate. Because we're able to borrow against our liquid staking token at attractive terms, it becomes highly accretive for our business. To illustrate, if we post $1 of collateral in fwdSOL earning 7%, and borrow $0.50 against it at 2%, paying interest on that borrowed amount while deploying the dollars into an asset producing, say, 12%, the economics are accretive and asset-liability matched. So while we don't have fixed percentage targets, we are actively diversifying and increasing allocations into high-quality RWAs on Solana that generate yields above native staking.
Your next question today is coming from Sam Dufault from Oak Ridge Financial.
Going off OnRe, are you able to list any specific companies currently facing risk with OnRe and maybe how big that underwriting book is today to generate that roughly 10% spread that was mentioned?
I don't know if we're at liberty to discuss specific counterparties on OnRe's behalf. What I can share that is publicly available is that ONyc has increased to almost $175 million of public float post our deal announcement. At the time of our deal, the pro forma amount was $150 million, so that's already a meaningful increase in a short period, which is encouraging. OnRe is accessing traditional reinsurance providers as part of its counterparties, but the details on specific counterparties are OnRe's to disclose.
Understood. On non-debt M&A, any other opportunities in the pipeline that you see opportunistically to gain SOL per share going forward?
We are always looking at opportunities. From a non-debt M&A or minority investment perspective, we're particularly focused on RWAs: reinsurance, royalties, asset-backed finance — the list goes on. The premise is to use our balance sheet as a tool to create catalysts for companies where we can participate as an equity partner and provide liquidity or other support. The OnRe example is instructive: we have equity upside via the Series A investment and we deployed into ONyc to earn a yield above native staking. We're looking for similar win-win structures going forward.
On one of the slides you mentioned 44% annualized growth rate in SOL per share. Can you break out how much of that was based on buybacks versus other strategies this quarter?
The lion's share of that quarter-over-quarter SOL per share accretion was driven by the March share repurchase transaction that we publicly announced.
Yes. Like Ryan said, the lion's share is share repurchases — both the announced March transaction and programmatic repurchases we've executed over recent months.
One quick clarification: I saw that some Galaxy third-party-related expenses are being reduced. Are there specific material relationships ending, or is the relationship continuing but with reduced fees?
We have a services agreement with Galaxy that is coming to an end in June; that agreement covered certain operational resources they've been providing to Forward, namely financial and accounting services. We also have an asset management agreement with Galaxy that will continue; that is a longer-term arrangement and is a variable cost tied to a percentage of our AUM. Those are the two material relationships with Galaxy: the operational services agreement that is ending and the ongoing asset management relationship.
We reached the end of our question-and-answer session. I'd like to turn the floor back over to Kyle for any further or closing comments.
All right. Well, everyone, thank you so much for joining us for our Q2 2026 earnings call. The company is executing well, getting everything in line after last year's PIPE transaction, delivering strong SOL per share results and starting to make strategic acquisitions and investments, as Ryan and Mark discussed. Thank you all for your time, and we'll talk to you soon.
Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.