Good day, and welcome to the iAccess Alpha Virtual Best Ideas Summer Investment Conference 2025. The next presenting company is Upexi, Inc. If you'd like to ask a question during the webcast, you may do so at any point during the presentation by clicking on the Ask Question button on the left of your screen. Type your question into the box and hit Send to submit. Right now, I'd like to turn the floor over to Mr. Brian Rudick. He was the Chief Strategy Officer for Upexi, Inc. Sir, the floor is yours.
Thank you very much, and it is a pleasure to be with everybody today. My name is Brian Rudick. I am the Chief Strategy Officer of Upexi, the leading Solana treasury company. Here you can see our background. We are a consumer products brand owner. We currently own three different brands. We are putting up roughly $15 million-$20 million in annually recurring revenue, and we are roughly break-even at this time. We actually announced in February our intention to move into the cryptocurrency space and have since honed that strategy to be one that is focused on acquiring and hoddling as much Solana as possible. We were fortunate to raise $100 million from 15 of the most prestigious crypto venture capital funds, deployed that quickly into the Solana treasury strategy, and that brings us to where we are today.
We believe one big differentiator of ourselves is our management team. We are led by our CEO, Allan Marshall. He is the founder of XPO Logistics, a $14 billion market cap company that is a leader in logistics globally. He's had many successful exits in the past as well. Our CFO is Andrew Nordstrud, who has been with Allan for most of their careers. I spent most of my time on Wall Street, mostly managing a book of bank stocks, always in the long-short construct for leading funds like Citadel and Millennium, and then spent the last four and a half years heading the research effort at GSR, which is one of the largest companies in all of crypto. Just as some background, a bit of a primer on digital asset treasury companies. Really, this all started with MicroStrategy back in August 2020.
It was tired of seeing the value of its Fiat erode due to inflation, and it decided to buy Bitcoin. The price of Bitcoin moved up. MicroStrategy's stock price started to move up as well. It continued to buy more Bitcoin, and pretty soon it was actually accessing the capital markets to buy even more Bitcoin. After that, you saw a number of other companies starting to employ this MicroStrategy model. It has been mostly focused on Bitcoin, but as you can see, there are more and more companies coming out more recently focused on other tokens like Upexi and Solana, and this is predominantly due to a more open SEC. There are a number of wonderful shareholder benefits that you get with a digital asset treasury company that actually might make it a better investment than holding the native token itself or another instrument like an ETF.
Number one, the digital asset treasury company shares can actually act as a proxy for that digital asset in the form of a familiar equity security. Number two, digital asset treasury company stock typically will trade with a beta to that underlying cryptocurrency. If you believe that that cryptocurrency will generally move higher over the medium term, you might want greater exposure to that. Number three, digital asset treasury companies are much more than a levered equity play on a cryptocurrency. They can actually engage in multiple value accrual mechanisms, most notably being intelligent capital markets issuance where a lot of the magic actually happens. We will get into this in much more detail shortly.
There's something that I like to call triple action, to where if the underlying digital asset move up, an investor could actually get three things that they see in the digital asset treasury company stock. Number one, the stock should move up with the cryptocurrency. Number two, the multiple that investors ascribe to that company, meaning the market cap over the value of that cryptocurrency, can expand. Number three, because that multiple is higher, the company can actually raise more capital and in a more accretive fashion. There's actually three big benefits that you get from a digital asset treasury company. Here you can see just how wildly successful that this model can actually be. I'd note that MicroStrategy has been the best performing stock of any stock in the U.S. since it moved to a Bitcoin treasury strategy in August 2020.
It's more than doubled the performance of Bitcoin, and it wasn't fully levered, so there has to be something there beyond just being this levered play. The other thing to note is that MicroStrategy actually holds as the second largest holder of Bitcoin behind only Satoshi himself. There could be some technical issues. I'm not sure if the next slide is up yet. Here we go. Okay, so what is Solana? There are a couple of different categories of digital assets. You can think of Bitcoin as being the store of value, and then you can think of high-performance smart contract blockchains as being almost this computer in the sky. Anybody can arbitrarily upload any code to it, and that code is processed in this trustless and decentralized fashion, and that emanates a lot of really great properties.
Put simply, we believe that Solana is the leading smart contract blockchain. It has the best technology, and it has the most vibrant ecosystems of users, developers, and decentralized applications. This is leading to Solana putting up the best metrics of any smart contract blockchain relative to its peers. Our thesis is actually quite simple. Upexi provides exposure to investors in the form of a familiar equity security, but it's actually much more than that. We can unlock significant value using proven capital market strategies. In addition, we can actually improve on MicroStrategy's playbook by staking our treasury to make it this productive asset or buying Lock SOL at this discount for built-in gains for shareholders. Lastly, we are capitalizing on crypto's secular expansion and Solana as an endgame winner. For any treasury company, there are really two key components. The first is external visibility.
You want everybody to actually know about your company to where you can maximize demand for the stock. Here you can see we have a bunch of different efforts afoot that span both the crypto side of things and the traditional investor side of things. We believe quite strongly that our expertise and our connectivity to both sides of the aisle position us well to really maximize our visibility externally. The second component is on intelligent capital issuance. This is where much of the value accretion for shareholders actually occurs, and we are hoping to be out there raising funds in an accretive way pretty soon. We feel that we've demonstrated this already by successfully executing a $100 million raise. We've raised the most of any Solana treasury company out there, and we'd like to do this again pretty quickly. MicroStrategy really gave the blueprint.
This will likely come in the form of convertible debt or additional accretive equity issuances, though we are open to whatever is best for the shareholders at the time based on market conditions. Our strategy is really three parts. The first is to go big and fast. It is a bit of a race. We are currently the largest Solana treasury company by number of SOL held, and that was in part due to our large initial capital raise. We also deployed those funds quite quickly, which is exactly what you want to do when you think that the digital asset over the medium term will tend to move up. Go big and fast. The second is we like to say that we come with the cryptosphere. We are backed by 15 of the leading digital asset venture capital funds. They are providing us with capital.
They are providing us with connectivity. They are helping to maximize our visibility, and some of them are even running validators for us. Lastly, the thing that differentiates us is we are trying to act in a manner that we think is befitting of a public company. We are not going to be too highly levered. We are not going to be doing a bunch of degen items on chain. We are only using qualified custodians, and we are diversifying amongst them. We think that these things provide two benefits. The first is it positions us well to withstand any market environment. The second one is we believe that this is a strategy that will resonate with both crypto investors and traditional investors alike. The thing that gets me so excited is there are multiple value accrual mechanisms that all compound.
This is actually why I decided to stake my career on this, because I believe so strongly just in the value creation for a digital asset treasury company, and specifically one based on an endgame asset like Solana. The first here is staking. We stake our Solana and earn a roughly 8% return. What this means is we are delegating our soul to a validator who is using it and basically pledging not to act in a nefarious fashion. In return for that, we are being compensated with this roughly 8% staking yield. We are turning our digital asset treasury into this productive asset. The second thing is we are buying Lock Solana at a discount.
What this means is when Solana was created, it pre-mined a bunch of tokens, which it sold to investors that were all not liquid immediately, and they vested over time. There actually is this pretty liquid OTC market, but you just can't trade it on an exchange. We're able to actually buy those Lock tokens at a roughly mid-teens discount for built-in gains for shareholders. That discount moves to par over time. It's roughly a 1.4-year weighted duration. Importantly, we still get the 8% staking yield on it. When you put this discount into any sort of yield equivalent fashion, we're roughly doubling that 8% staking yield in this risk-prudent way that fully aligns with our buy and hoddle strategy. We have the intelligent capital issuance.
I'll get into this much more on the next slide because this is where much of the magic happens, and it's deserving of its own deep dive. Just note that when you issue equity above book value, it is by definition accretive. The last driver of our stock is really the change in the price of SOL. Here, I'd note that there's a lot of upside potential. SOL's market cap is only 4% that of BTC's, and there are, in our minds, many more positive catalysts than risks for Solana from here. Here is our capital markets flywheel. Investors are currently awarding digital asset treasury companies a multiple in terms of its market cap relative to the value of the digital assets it holds. There's a number of reasons for this.
I think it could be as simple as wanting access to crypto in the form of a familiar equity security. My bank's analyst brain tends to think of this in terms of a bank. Effectively, just like a bank, we're earning spread income. We're earning the difference between our cost of capital and the return on Solana. When investors think that that spread is going to be positive, we earn it not just this year, but also in future years as well, and the market will actually present value that added to the NAV, and that is where this turns into something that is positive. We can actually monetize that premium for the benefit of shareholders. This is step two with intelligent issuance.
When we issue equity at, let's say, two times book, we are effectively selling a dollar for two, or we are buying Solana half off. This is exactly how MicroStrategy essentially created $13 billion worth of free Bitcoin for shareholders last year. The second component of this is convertible issuance, which is quite similar and can result in cheap or free funding for the company, delayed dilution, and actually selling equity at an even higher premium versus the current market price. All that results in an increasing soul per share for us, which should result in a stock price moving up and supporting the multiple. This capital markets flywheel can just continue. As far as valuation, this is really what enables this capital markets flywheel. You see MicroStrategy, I think last I looked at it was at one seven.
Let's just call it two times to make the math easy. What you see is when you move to smaller companies, there's actually this embedded growth premium. The reason for this is if a smaller company issues $100 million of equity at two times book, it's going to be highly accretive. Versus if MicroStrategy issued $100 million at any multiple, it really won't move the needle because they're so big. Smaller companies should trade at this embedded growth premium. Similarly, as you move off of BTC toward an altcoin, all else equal, there is more potential upside in that altcoin. Investors will tend to pay a higher premium for non-BTC treasury companies as well. As far as our Solana treasury, we are the leading holder of Solana for any public company. As of our last update, we had nearly 700,000 Solana.
At the time, it was valued at over $120 million. 60% of that is in the form of Lock SOL for those built-in gains for shareholders. You can see more information here on some of our purchases and our staking. The last that we guided was to generate roughly 8% or 48,000 tokens per year via staking income. Here is our slide on why we believe so strongly that crypto will be ubiquitous. The short answer is there are many use cases and benefits that you can get with crypto that you cannot get with any other technology. These are things like the removal of intermediaries, the democratization of value exchange, and new paradigms and constructs around ownership, governance, and business models. It will take time, just like any technology.
You saw the internet invented in the 1980s, and it was not until the mid-2000s that we got the internet as we know it today with social networks and user-generated content, but it is happening. That brings me to the second section. Crypto prices will ebb and flow based on speculation because it is such a nascent asset and subsector. If you actually look under the hood, we are in secular expansion. All of these underlying fundamental metrics, like number of global crypto users, number of developers, number of daily transactions, are all up and to the right. The last thing I would say is I personally think that we could be on the mother of all crypto bull markets. This is really because the biggest thing always holding crypto back was unclear rules and regulations in the U.S.
We are likely to get market structure legislation next year. If that happens, institutions will have to come in in a big way. They really haven't been doing too much, but they will kind of be forced to do so. Otherwise, they'll be disintermediated by those who do. If you think about it, it's actually the institutions that have billions of customers. They have billions of dollars to put at it. They've got built-in trust. They have top devs. If you can imagine Google Chrome actually adding a crypto wallet and Amazon accepting a stablecoin like USDC, we could be on the precipice of onboarding the masses. This should lead to a step change in functionality and usage. Solana and Upexi will be big beneficiaries of that. As far as why we chose Solana, we view Bitcoin as the best monetary asset.
We view Solana as the best high-performance blockchain. It really is that simple. There are roughly 20 other companies employing the MicroStrategy model. We did not want to be number 21. We would rather be the canonical Solana treasury company. Also, Bitcoin is already a $2 trillion asset. It will probably take immense sovereign buying for it to 5x from here versus something like Solana, which could potentially 5x by year-end. Much more potential upside for us. Lastly, there is a bunch of Solana-specific reasons which really get into the nitty-gritty on what makes it the leading Solana or the leading smart contract blockchain. The TL;DR is it does have the best performance. It has the most vibrant ecosystems of users, developers, and dApps, and is putting up the best metrics of any chain.
As far as why Upexi, hit on most of these points, but we believe that we have a top management team with great connectivity across both the cryptosphere and traditional finance. We are backed by leading firms, 15 of the most prestigious crypto VCs that are adding a lot of value. We are a first mover, so we are one of the first Solana treasury companies in the United States. We have extensive capital markets expertise both at this company and in prior companies as well. We do have leading connectivity to folks both in traditional finance and in the cryptosphere. We are doing things in a very professional manner that we think will resonate with all kinds of investors. There are a bunch of characteristics of our consumer brand company that we think make this a great opportunity. It is right sized.
Investors actually do not have to worry about all the details about the consumer brand operating company. It is roughly break-even. When we do raise funds, that goes to buying Solana, not to support operating company losses. We have a very pristine capital stack. That is it. We believe quite strongly that there are multiple value accrual mechanisms at play here and that Upexi, for some investors, could make a better investment than buying the underlying asset or an asset or an instrument like an ETF because of that. With that, I will move over to Q&A. The first question is, would you ever add any other digital assets besides Solana? The short answer is no. We have said that we are a buy and hoddle strategy for Solana only.
We really, truly do believe that it is the endgame-winning smart contract blockchain and will be the best performing token. What I notice is there are, you're seeing a plethora of digital asset treasury companies to market. We feel quite strongly that there will only be three to four that a model such as this can work on, Solana obviously being one of them. The big reason here is because the biggest determinant of any digital asset treasuries company's success is the token that it's built on. It doesn't matter what you do if the token moves down 95% over five years. You, A, have to be sure that that token will be around in five years. I can say that confidently about Solana, but for most other assets, I cannot.
B, you have to be fairly confident that it will generally perform quite well over those five years. You can say the same thing about Solana, not for a lot of other tokens. All that said, never say never, but we are kind of all in on Solana. Next question is, why did Solana or Upexi's stock price drop? I actually can't comment on our stock prices, but what I can say is that when we went out and we raised $100 million via a private placement, we had registered those shares, but that registration statement hadn't actually gone effective yet. What this means is all of the investors that invested in our pipe can now actually trade their shares if they wish.
I think that is the event that has caused our stock price to fall today, but I can't really comment on it outside of that. I believe that is all of our questions. Oh, can you talk about some of the Solana use cases for the blockchain? There are so many use cases for Solana. One thing that we really like about it is its strong performance. Solana is actually not the first high-performance blockchain. That is probably Ethereum. What I'd say there is Ethereum was the leader, and it is constrained by its original design decisions. Because it came out over a decade ago, it processes transactions one at a time. There are all these other details about how the chain was designed that you just can't really get around for backwards compatibility reasons.
What Ethereum ended up doing is it pushed out execution of transactions to other blockchains called Layer 2s. Now there's this whole big debate as to whether L 2s are parasitic to Ethereum value capture itself versus something like Solana, which is a monolith and has high performance and can keep all of that activity on its own chain. It is just a big, big benefit for Solana versus others. The TL;DR is almost anything you can think of, you can do on Solana. Obviously, one of the big benefits, as I mentioned, is the removal of intermediaries. There are a lot of intermediaries in finance. Solana is very focused on decentralized finance. You are seeing basically everything that you see in traditional finance replicated on-chain. Another area is called DePIN, so decentralized physical infrastructure networks.
You're seeing folks replicate these very cost-intensive, capital-intensive constructs with things like Helium Mobile that is providing for 5G networks for cell phones by using these DePIN constructs. You're seeing people trade meme coins. You're seeing gaming. You're seeing social networks. Anything that you can think of, anything that you can do on a normal computer, you can do on Solana. And just checking the queue. That is it. With that, we're almost at time anyway. I'll turn it back over to the operator. Thanks, everybody, for your interest and support.
Thank you, ladies and gentlemen. That concludes the Upexi Inc presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.