Upexi, Inc. (UPXI) Earnings Call Transcript & Summary

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

Ahead. Thank you, Operator. Good evening and welcome everyone to the Upexi, Inc. fiscal fourth quarter and full year 2026 financial results conference call. I'm joined today by Allan Marshall, Chief Executive Officer, Andrew Norstrud, Chief Financial Officer, and Brian Rudick, Chief Strategy Officer. Before I begin, I'm going to remind everyone that statements made during this call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995. Actions ultimately differ materially due to a variety of risks, uncertainties, and other factors. For detailed discussion of some of the ongoing risks and uncertainties in the company's business, I'll refer you to the press release issued this evening and filed with the SEC on Form 8-K, as well as the company's reports filed periodically with the SEC. The company disclaims any intention or obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law. In addition, during the course of the call, we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the U.S., and they may be different from non-GAAP financial measures used by. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings release issued this evening, unless otherwise noted. I'd now like to turn the call over to Upexi's CEO, Allan Marshall.

Thank you, Valter, and welcome everyone to our fiscal fourth quarter 2026 earnings conference call. Our fiscal quarter ending June 30th, 2026 marks not only the end of our fiscal year, but also the one-year anniversary of our Solana Treasury Strategy. As such, I want to start with a brief review. We first embarked on our Solana Treasury Strategy in April 2025 as it became apparent that the U.S. administration and its agencies were turning from a headwind to a tailwind for digital assets. To bootstrap the strategy, we completed what we believe to be the first large-scale equity raise for an altcoin treasury, raising $100 million and kickstarting the digital asset treasury company trend in the U.S. We followed with a second highly accretive raise in July 2025, taking in an additional $200 million and including, we believe, the first in-kind convertible note, again demonstrating our innovation within the capital markets. Turning to the quarter, April, May, and June were characterized by a subdued market environment for digital assets and low volatility. Solana generally trended lower throughout the quarter. During this bear market, we focused on what we could control. Management works to fortify the balance sheet, with debt reductions and increasing capital on hand using our ATM. Secondly, we dramatically reduced expenses and streamlined our business to create a very predictable expense profile. On the balance sheet front, we spent the quarter focused on a number of initiatives to strengthen our financial position. We used some of the ATM proceeds to increase our cash position, which totaled $5.8 million as of June 30th, up 65% from the prior quarter end. Separately, in June, we extinguished roughly $20 million in debt. And subsequent to quarter end, we refinanced our existing credit facility, moving the interest rate from 11.5% to 7.5%, and reducing the amount of collateral required for the line. All in, we are in a much stronger position and ready for any market environment that may come. On expense management, we successfully completed our efficiency initiative, which included outsourcing our manufacturing, warehousing, and logistics operations. Reducing full-time employees from 59 a year ago to just 10 today. As previously guided, we expect these efforts to show up in the current quarter ending September 30th. And specifically for our staking revenue to more than cover our ongoing cash expenses on a go-forward basis. Before concluding, I want to express the fact that this is just our first year. And while the crypto market has not been what we hoped for, we believe it's still in the early innings. The market will turn up again. And when the bull market returns, which it will, the opportunities to create value will be abundant and the premiums will return. The work we have done this year will amplify the capitalization of those as we execute upon them. With that, I'd like to turn the call over to our Chief Strategy Officer, Brian Rudick.

Thanks, Allan, and hello everyone. Allan covered our strategic priorities and progress at the company, and I will provide an update on Solana. After all, the main determinant of the success of any treasury company will be the performance of its underlying token. Put simply, Solana remains incredibly well positioned. As a brief review, Solana is a high-performance blockchain and is uniquely positioned as the first second generation smart contract blockchain. It gives Solana both best in class technology from having come later than early generation blockchains and deep network effects with a plethora of users, developers and applications. While one may think of Solana and smart contract blockchains as a new computing paradigm, Solana is hyper focused on Internet capital markets. Where it aims to provide a single liquidity venue for all the world's assets, accessible to anyone, anywhere, anytime with just a simple internet connection. Personally, I like to think of this as reimagining our antiquated global financial infrastructure, which were quite literally built 50-plus years ago with internet and blockchain-based rails for massive speed and cost advantages and through items like stablecoins, tokenization, and AI agents. And with top performance and distribution, Solana is in the catbird seat to lead this revolution. Metrics agree and show that Solana is winning. Key statistics from last quarter include a 48% increase in stablecoin supply over the prior year, Tokenized equities growing to over $420 million from virtually 0 a year ago and with trading volume of over $5 billion amounting to a 97% market share. The cheapest median transaction fee of any chain at just 0.04 cents. 53% market share of all blockchain transactions, and strong spot ETF inflows compared to large outflows for others. A big reason for Solana's success and a pivotal factor for the future is Solana's growth with institutions. After all, institutions are likely the fastest way to onboard the masses, given their billions of customers, built-in trust, billions of dollars of capital, and leading developers. Notable corporate announcements during the quarter were numerous and occurred in various areas from key players like in payments and stablecoins from SoFi, Western Union, MoneyGram, and MasterCard, in tokenization and capital markets from State Street, Amundi, Securitize, and Ondo, and in infrastructure from Google Cloud, Amazon Web Services, Moody's, and All Funds. It's early innings, but institutions are reimagining our antiquated financial infrastructure with Solana as the rails and we are on our way towards Internet capital markets. As that continues Solana and Upexi, Inc. are well positioned to benefit. And with that I'll turn the call over to our Chief Financial Officer Andrew Norstrud for a review of our financial performance.

Thank you, Brian. As of June 30th, 2026, the company had approximately $5.8 million in cash, $165.3 million in Solana, and $180.1 million in total assets. And $45.6 million in working capital. Turning to the Treasury, as of June 30th, 2026, the company had approximately 2.34 million Solana tokens, a cost basis of approximately $360.3 million, equating to an average cost per token of $154. And approximately 95% of these tokens were staked. For the year ended June 30th, 2026, the Treasury had approximately $17.4 million in digital asset revenues or approximately earned 135,000 Solana tokens. Was $195.1 million in unrealized losses and $11.7 million in realized losses. For the year ended June 30th, 2026. General administrative expenses were $26.4 million compared to $11.9 million in the prior year. The increase reflects the build-out of the Treasury strategy includes a $7 million increase in employee compensation, a $4 million increase in public company expenses, a $1.5 million increase in digital asset Treasury fees, a $1.2 million increase in legal fees, and a $1.1 million increase in travel. Stock-based compensation was approximately $21.9 million compared to $2.4 million the prior year. Interest expense was $13.6 million compared to $1.2 million in the prior year. The increase reflects the increase in short-term and convertible debt obtained to increase the company's treasury. The company has recently negotiated a lower interest rate on the short-term debt to reduce the interest expense. There is a gain on extinguishment of debt of approximately $10.3 million. This reflects the debt reduction on an acquisition loan and the partial repayment of a convertible debt that the company stopped. Net loss for the fiscal year was $246.1 million, or $3.87 per share, compared to a net loss of $13.7 million, or $1.73 per share, in fiscal year 2025. The loss was driven primarily by $195.1 million of unrealized losses on digital assets. $11.7 million of realized losses on digital assets and $21.9 million stock compensation. During the year, we repurchased approximately 2.9 million shares of common stock at an average weighted price of 96 cents per share. For total consideration of approximately $2.8 million under the $50 million repurchase program our Board authorized in November of 2025. Consequent to year-end, we issued approximately 2.5 million shares under the at the market program for gross proceeds of approximately $2.5 million. Total stockholders' equity was negative $53.8 million at June 30, 2026, against positive equity of $90.1 million a year ago. The year-over-year change in stockholders' equity primarily reflects the impact of the unrealized losses on our digital asset treasury and other changes associated with the execution of our treasury strategy. Management continues to focus on growing Solana holdings on a per share basis through disciplined capital activities, staking opportunities, purchase of discounted locked tokens while maintaining prudent leverage and risk management. And now I'll turn it back over to Allan for concluding remarks.

Thanks, Andrew. I wanted to close the call by reiterating the progress we have made. Despite the difficult market environment for crypto. The improvements to our balance sheet and the material reduction to our expenses to capitalize on the inevitable upturn. The company results will improve materially when this happens and all the groundwork we did will be amplified with material improvement in the Solana price. With that, I'll turn it over to the operator for questions.

Thank you. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing *2. Our first question is from Brian Kinslinger with Alliance Global Partners. Please proceed.

Great. Thanks so much. Two questions. My first one is I'm curious if you can discuss the progress and or ways you can maximize yield and some of the avenues you're exploring to achieve your goals. And then what are your top priorities for Upexi, Inc. in the current fiscal year? And then I'll ask my second question.

Brian, do you want to take that one? Do you want me to take it? This is Allan Marshall.

Sure, happy to. All right, great. Yes, Brian, thanks for the call. I'd say that we slow-played this a bit. We looked at several different opportunities. At first, one was quite attractive from both risk and return perspectives. Recall we have a quite high bar. We want to make sure it's very low risk and we want to make sure that it can be recurring and also something that investors understand. What I'd say is some of the opportunities that we were looking at got less attractive during the quarter. And we think that as the crypto market comes back, a lot of those opportunities will improve as well and we can become much more active there. So not a ton to report there, but we're still actively looking and that is something that we do want to do.

Great. My second question is.

Could you explain with the stock price well below the strike price for the converts, why is management choosing to calculate MNAV as though these will convert, as it seems like they won't. You're trading at 1.4 times, and so capital raising would be accretive to SOL per share.

I'd love to hear your thought process on those converts. Sure. Brian Allan Marshall. I mean, I think we spoke about this in the past. I mean, you're speculating on SOL price and asking us to do that, and I just don't think we're in a position to do that. I mean, in July of 2025, within 150 days, SOL went from $234 to $82. So, I mean, we have 281 days assuming we don't either, you know, extend them or find a way to convert them like we did with the Hivemind deal. So anything we do would have a speculation in it. So we reported these, we know what the dates are and presume that they're not going to convert in 281 days when SOL, like I said, that went from $234 to $82 in 150 days. It just was something I'm not willing to make. I mean, we did this transaction a six, I mean, they would convert. And if SOL were back at $200, they would convert. I guess we could do a, you know, like a percentage wise on what we think it is, but it'd all be speculation. So this is, we're just being consistent with how we reported it. Like Danny said, we have, you know, we report on our on our website. We think we'll be able to, you know, either greater value with these converts, find a way to convert them, so on. I could go above a level that would make them convert. So you're making one assumption that it's not going to convert, and I just don't know how we could make that, you know, responsibly make that same, you know, I guess speculation. If I was that good at speculating, I would have sold all my Solana at $234 and bought it back at $82.

Okay, fair enough. Thank you. Brian, one thing I would add is if you take the embedded option in our in-kind notes and you run it through any sort of options pricing model like Black-Scholes, you're going that delta is actually still quite high it's because like the vol on our stock is extremely high like we would trade with the beta to SOL and SOL is quite volatile as you know so um that suggests that there's actually still a really, really darn high chance that they do end up converting. And I think that volatility is often overlooked. So I wanted to mention that as well.

Thank you. And just not to go further, but you saw we did the Hivemind deal, we converted early. So even if somehow we had to possibly reprice them, if it was close or something, so maybe there would be some additional dilution. We just can't do a zero. We can't do an all or nothing kind of transaction. Speculating me just it's just hard, you know, for us right now. Thanks for the question.