Hey, everyone. I'm Steve Ehrlich, Chief Strategy Officer here at Sol Strategies. Today, I'm sitting down with our CEO, Michael Hubbard, and our CFO, Doug Harris, to walk through where their business stands for the nine months ended June 30th, 2026, how our three business lines fit together, and where we're headed from here. Truly excited to do this for the first time, and can't wait to share some of the highlights for the June 30th, 2026 quarter. One housekeeping note before we start. I want to remind everyone that certain statements on this call contain forward-looking statements subject to risks and uncertainties. Actual results may differ materially from these statements.
We refer you to our latest press release, MD&A, and SEDAR+ filings for detailed risk factors and assumptions. All dollar amounts are in CAD unless otherwise noted. The company assumes no significant events occur outside our normal course of business that current trends in the digital assets continue. However, listeners should note that crypto markets are volatile and our business metrics can fluctuate significantly. With that, Michael, Doug, thanks for doing this.
Happy to be here, Steve, and a great start with the disclaimer there.
Good to be here, Steve.
The June quarter was exciting for the company and brought new energy to our business. Before we talk about the quarter and the future, let's start at the top for anyone new to the story. In 60 seconds, what is Sol Strategies, Michael?
Thanks, Steve. We were the first publicly traded company built entirely around the Solana blockchain. Recently, we acquired Houdini Swap, which expanded our footprint, and now we have infrastructure to over 120 blockchains. We trade as STKE here on the Nasdaq and HODL on the CSE, and also trade on several German exchanges. In the last two years, we've built three interconnected business lines.
Our Validator business, our Privacy business, which is Houdini, and our owned corporate treasury. SOL we hold and stake on our own balance sheet. As of this most recent quarter, we've also started reporting on a segmented basis split between our Houdini Swap subsidiary and our core staking infrastructure business. A reflection of how much the platform has diversified.
You mentioned three business lines. Can you walk us through how these fit together?
Absolutely. Each one reinforces the others. The validator business is like running toll booths on the Solana network. Third parties delegate SOL to us. We charge a commission on their staking rewards, plus a share of MEV. None of that requires us to own the underlying SOL. We are one of the largest Solana validator operators, which lets us grow our treasury faster and cheaper than if we were just buying SOL on the open market. Now with Houdini, we've added a privacy and cross-chain execution layer that gives us another revenue stream. It's infrastructure, treasury, and privacy technology, all compounding as a blockchain infrastructure company.
Thanks for the foundation, Michael. Now let's transition over to the financials for a moment. Doug, since we're talking about the nine months ended June 30th, 2026, and Michael just talked about the Solana treasury, where did the balance sheet and treasury stand as of June 30th?
Great question, Steve. Based on the June 30th, 2026 SOL price of about $73 , a 20% increase in the price of SOL would increase our treasury from CAD 48 million to over CAD 57 million. That's almost CAD 10 million. Our digital treasury can provide a lot of capital when the markets turn and become bullish. At June 30th, 2026, we had approximately CAD 1.9 million in cash and cash equivalents, and our digital asset treasury was valued at approximately CAD 48 million.
What actually gets me excited is when we turn to the P&L and how the company, with the addition of Houdini, performed quite nicely for the June quarter, even though Houdini was only included for one month.
That's a really important point to make, Steve. Houdini was in our financials for only one month for the period. The business has been a solid performer for us, and at this point, the September quarter looks promising. The integration has been seamless so far. The Houdini team we acquired is very capable, and we believe that this is a big opportunity for growth in the firm.
We will get into the details of the Houdini transaction a bit later, but tell us about some other highlights of the quarter you would like the investors to know.
Steve, our numbers always include significant non-cash items that we really need to scrub out of the P&L. I would encourage investors to review the MD&A in detail to see these. At a high level, for the three months ending June 30th, 2026, about CAD 15.4 million, over 80% of our operating expenses are non-cash items.
Items such as intangible asset, amortization, impairment of almost CAD 6 million, and the revaluation of our digital asset treasury of over CAD 6.5 million. When you back out all the non-cash expenses, we have an EBITDA loss of just over CAD 1.1 million. Remember that this includes only one month of Houdini. Again, I encourage investors to review our MD&A for all the detailed information.
Going to hit you with one more question before I go back to Michael. Obviously, the price of Solana has an impact on our balance sheet. What would happen if the price of Solana increased by 20% from about CAD 103- CAD 120?
That is a great question, Steve. Based on the June 30th, 2026 SOL price, which is about $73 , a 20% increase in the price of SOL would increase our treasury from CAD 48 million to over CAD 57 million. That is almost CAD 10 million. Our digital treasury can provide a lot of capital when the markets turn and become bullish.
That is really interesting. As we start asking more questions, we dig back in here, we start going into the core engine, Michael, how does the validator business actually make money?
That is a fantastic question, Steve. As mentioned earlier, think of it like a toll booth. SOL holders delegate their tokens to one of our validators, earning passive yield while retaining full custody of their staked tokens. We take a commission on that yield, plus a share of MEV, which is the extra value a validator can capture from how it orders transactions in a block. We earn transaction fees on top, the toll for using the Solana network. Our validator and staking infrastructure processes well over 1 million transactions a day, capturing some sort of fee revenue on most of those transactions.
What stood out operationally during the nine month period?
A few things. All of our validators ran at 100% uptime in Q3 of 2026. Our Orangefin validator continues to deliver ahead of the network average with a 5.84% average APY in June, ahead of the network average of 5.53%. The Solana Mobile Seeker validator, the default validator for the Solana Mobile phone, has attracted more than 27,000 unique wallets by quarter end. We began early adoption of the Jito Block Assembly Marketplace on two nodes, which sets us up for future throughput improvements. We also formally announced becoming the sole staking provider to the VanEck Solana ETF during this nine month period. That is about as strong of an institutional validation as this business gets.
Pretty interesting stuff there. Now let's turn to STKESOL. That's our liquid staking token. Can you give us a little bit more input about that?
Totally. STKESOL launched in January of 2026 with over 500,000 SOL deposited at launch. The way it works is you deposit SOL and you get STKESOL back as a token in your wallet, and it's worth a proportionally larger amount of SOL over time as staking rewards accrue under the hood. Instead of concentrating on our own validators, it spreads deposits across roughly 75 validators using our Stakewiz Wiz Score methodology, and is usable across DeFi platforms like Orca, Squid, Kamino, and Loopscale. We earn a percentage of the pooled staking rewards, placing us as a middle layer and orchestrator directing staking decisions rather than purely a recipient.
Our STKESOL represents a representation and goes over 75 different validators rather than most staking products that are just one. Wow. That's pretty cool.
And you maintain liquidity at all times in your wallet.
That's pretty interesting and pretty unique. Now, I want to spend some real time here on the Houdini side of the world, because this is the part of the story I'm most excited about, and we really want to educate investors about. Michael, give us some input as to why did we step outside the pure Solana validator infrastructure to buy a cross-chain privacy swap aggregator?
Because privacy is the next layer institutions actually need. Houdini Swap is a non-custodial, privacy-focused cross-chain swap aggregator. It routes trades across more than 120 blockchain networks and never takes custody of user funds, while breaking the visible on-chain link between sender and receiver. It gives us a revenue line that's largely independent of SOL's price and technology base we can build on.
It also provides critical infrastructure for mobility between chains independent of privacy requirements, and has significant Solana touch points. In the last 12 months, we saw over 50% of volume actually touch Solana in some way. Too much focus is on fiat to crypto on and off ramps, meaning moving dollars into digital dollars or digital currencies. While we think crypto to crypto mobility is overlooked and a promising growth area.
But Doug, you didn't get away so easy here. So now can you walk us through how the deal itself was structured?
Yeah, I'd love to, Steve. Total consideration was approximately $18 million . That breaks down as $8.25 million in cash, $7 million paid at closing, and $1.25 million held back over 18 months as an indemnity holdback. A further $5.75 million of sellers notes are due six months after closing on December 1st, 2026, and $4 million in common shares priced at the 90-day VWAP were issued at closing and are subject to a four-month statutory hold.
There's also a two-year earn-out of up to $10 million tied to the business hitting a $2.5 million adjusted EBITDA hurdle annually. A meaningful piece of the total value is contingent on Houdini actually performing. So far, they are off to a good start, which is mutually beneficial for the sellers and our shareholders.
One thing I think is really underappreciated is when we financed the cash position of the cash portion without touching our SOL treasury. Michael, why did that matter?
Yeah, absolutely. We financed the cash consideration through decentralized finance protocols on Solana using our own balance sheet rather than selling treasury SOL into a depressed market. It's a good example of what we mean by capital efficient treasury management. The treasury isn't a passive holding.
It's productive collateral we can put to work for strategic purposes like M&A without crystallizing loss. We get extremely competitive rates on borrowing stablecoins, but are also still earning yield on our collateral. The deal is better than anything direct counterparties were able to offer us. Steve, how do you feel about Houdini's contributions to the business thus far?
The deal closed on June 1st, and we've only got one month of results in this quarter's results. But that one month contributed about CAD 1.2 million of revenue and CAD 685,000 of operating income, an amazing 60% margin, which is in line with our expectations. On an annualized basis, that would be less than three-year payback. But obviously, we want to grow the business. Doug, and how did the deal land on the balance sheet?
Steve, we recorded the goodwill of approximately CAD 21.4 million, most of it tied to the assembled workforce and expected synergies that we will get working with the Houdini team, plus a smaller piece from the deferred tax liability on the acquired intangible assets. We also recognized roughly CAD 1 million for the Houdini Swap brand and CAD 4.1 million for its technology platform, both of which are amortized over four years.
Thanks, Doug. Steve, what is our growth plan from here? Where do we take the business now?
This is really what gets me super pumped about this business. A few things at once. We keep adding exchange and wallet partners to Houdini. They already integrate with more than 40 wallets, including Solflare on Solana, plus Maestro, Bloom, Jumper, Terminal, OpenOcean, OneKey, and Rubic. We are expanding the product itself and going after other wallets that currently sit outside those integrations.
We are also incorporating Zyga's privacy technology into the product to serve both retail users and B2B customers who need compliant, confidential execution. Lastly, we have identified multiple sales channels, and with our experienced team, we expect to aggressively grow this business. On that note, Michael, tell people about Zyga and Darklake. How does that connect to Houdini?
Yeah. Darklake started at the Colosseum Global Radar Hackathon in May 2024, where the team placed second in the DeFi track out of over 1,300 submissions. They built a zero-knowledge automated market maker, private MEV-resistant trade execution, and along the way, solved a harder problem, keeping a single zero-knowledge proof valid even as markets move. That technology became Zyga, their proprietary ZK proving system.
We acquired substantially all of Darklake's assets and the founding team in April of this year. The team is now actively pursuing several high-potential applications of the Zyga technology within the Houdini ecosystem. We cannot wait to share more once we have a concrete product announcement. The goal, though, in short, is to utilize the ability to keep information private on-chain to improve our product offerings and margins.
Where does the integration actually stand today operationally?
We closed Houdini on June 1st, and we've moved fast. The first phase has been accounting, finance, and operational protocols, and we're now aligning sales, product development, and revenue strategy across the combined businesses. We see a lot of opportunity to utilize a talented team across many different verticals.
We've accomplished five acquisitions in under two years. Orangefin, Laine, Cogent, Darklake, and Houdini. What's the through line? What do we want everyone to know out of that?
Yeah. It's a great track record and consistency. Each one expanded us in a specific direction without diluting the core thesis. Orangefin, Cogent, and Laine built our validator footprint. Stakewiz, which came along with Laine, gives us the analytics platform that now powers the Wiz Score behind Stakewiz. Darklake gave us the ZK privacy technology and its team, and Houdini gave us distribution revenue and a second growth engine in cross-chain privacy.
Investors always get excited about M&A. So do I, actually, as it can grow businesses faster. What does the M&A pipeline actually look like going forward?
That's the $1 million question. We keep evaluating opportunities both inside the Solana ecosystem and in adjacent ecosystems. I won't get ahead of anything specific that's forward-looking by nature, but the filter stays the same. Does it scale distribution? Does it bring a technical capability we don't have? Is the team worth acquiring, not just the assets?
From my seat here as Chief Strategy Officer, deepening relationships to find more acquisition opportunities is a big part of my mandate. What we are seeing is that in the bear market, the opportunities are definitely increasing. We have to stay disciplined in our approach and ensure that new businesses fit, not just structurally, but culturally. The best transactions are when there are clear goals and plans before the transaction even closes.
We have shown we are very good in this area over the past two years and expect to continue this trend. Let's turn to questions we received from investors. The first question is from Gareth Gacetta of Cantor . Houdini first month generated CAD 1.2 million in revenue and had a 66% EBITDA margin now across 39 integrations. How large an opportunity to keep expanding integrations and the reach that comes with them? As value scales that way, how durable do you expect that margin profile to be?
Yeah. Thanks for the question. We believe that we have a very scalable infrastructure, people, and technology to significantly increase revenue with limited expenses. The exception is marketing dollars we will spend to accelerate the business growth. The B2B opportunity, in particular, is massive, and we're seeing low marginal cost to grow the existing business, while there are some easily executed value adds that may appeal to a particular clientele, such as Houdini Pay.
The follow-up question from Gareth was: How does management view the new governance proposals, SIMD-0550, accelerated disinflation, and SIMD-0553, the resource-based fee burning, and what impact would they have on your business model?
Excellent question. A very technical topic as well. We just announced this on our socials a few days ago, actually. These are community proposals, governance proposals on the Solana network that affect the long-term economics of how the network operates. The first proposes to increase the disinflation rate, the rate at which the amount of staking rewards decrease every year.
The second proposes that transaction fees should be aligned to the compute power they require to be executed. Without getting into all the technical details right now, and you can see on our socials some more of our reasoning, but I can say we are supportive of both proposals, and we will be voting accordingly.
Next question. Seems like Houdini accelerates the growth into blockchain infrastructure. Is that how you see the business moving forward? I might as well take this question. As we noted during this video, we shared how we are a blockchain infrastructure business and Houdini accelerated our growth in that space. When you look at the blockchain sphere, our public company comparables should be more towards the Circle, Coinbase, and Securitize of the industry.
When you look at what our business has started to do, you see opportunities to grow revenue and high gross margins. If you just take the one month of results of Houdini and our significant Solana value in our treasury, you can see it doesn't appear the market sees what we are doing yet. As of yet, we have built a few new sales funnels for Houdini and hired to increase our sales team and look forward to growing the business.
Yeah, Steve, that's a great point. I'll jump in here just briefly as well. We're all well aware that the macro environment for digital assets has been in the dumps recently. The first nine months of this financial year have not been easy for anyone in this industry. Our belief and our conviction, however, have remained steadfast, and our focus is building the foundation and the runway for the business to take off when it is our belief the digital asset economy takes off.
To finish it up, the last question to both you, Doug, and you, Michael, and I want Doug answering this one first because we always need the CEO to finish it up. What gets you most excited about the future of the business?
Well, Steve, I am really excited about working with our team. The people we have got, the team is really strong technically, financially, and operationally, and I am confident that we will have some really creative ways to grow the business.
Yeah. The foundation is solid. We have a significant foothold in the engine room of the Solana ecosystem. We have touch points across over 100 other blockchains, an incredibly talented team of engineers, marketers, finance wizards like Doug here, business gurus, et c. There is so much excitement for what this technology can achieve. It feels like a bubble of potential ready to burst.
Well, folks, investors, customers, that is the story for the nine months ended June 30th, 2026. A validator business that is scaling, a treasury we are using more actively. Now Houdini is giving us a genuine privacy layer on top of all that. The team is extremely excited about what we are working on and the continued growth of this business. The team continues to execute its game plan, and the results will continue to shine through over the coming months, quarters, and years. Michael, any closing thoughts?
I just want to thank our board and team for all the hard work that goes into building a business. We know the market is not rewarding us just yet for our efforts, but we will continue to work hard and let the results be our report card. I look forward to utilizing this medium to explain our future quarters. Thanks to all of our investors as well, and we truly appreciate the support.
For the complete filed financial statements, MD&A, and our continuous disclosure record is on SEDAR+ and EDGAR, and to reach our investor relations team through the contact information on our website. Michael, Doug, thanks for doing this, and I look forward to next time.
Thanks, Steve. This has been great.
Appreciate it, Steve.
Thanks for watching. We will see you next time.