Helius Medical Tech (NASDAQ:HSDT) released first-quarter financial results and hosted an earnings call on Friday. Read the complete transcript below.

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Summary

Helius Medical Tech announced a significant increase in first-quarter revenue to $3.6 million, driven primarily by staking revenue.

The company is expanding its digital asset treasury platform, focusing on advisory services, validated infrastructure, and platform business to capture growth in the APAC region.

Despite cryptocurrency market volatility, Helius Medical Tech achieved a net staking yield of 6.9% and executed strategic share repurchases and capital raises to enhance shareholder value.

The company divested its cash-burning medical device business, signaling a strategic shift towards digital asset management.

Management highlighted the importance of capital allocation strategies and maintaining a lean operational structure to support future growth initiatives.

Full Transcript

OPERATOR

Thank you for standing by and welcome to the Solana Company's first Quarter Operating Results Conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded and now I'd like to introduce your host for today's program, Serena Jassy, Investor Relations. Please go ahead.

Serena Jassy (Investor Relations)

Thank you operator before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, May 15, 2026 only and includes forward looking statements and opinion statements including predictions, estimates, plans, expectations and other similar information. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in the sections entitled Risk Factors in our Annual report on Form 10-K filed with the United States securities and Exchange Commission or the SEC on March 31, 2026 as well as in subsequent filings with the SEC. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward looking statements. We disclaim any obligation to update or revise these forward looking statements. Please note that this conference call will be available for audio replay on our website under the News and Events section of our Investor Relations page. With that, I would now like to turn the call over to Solana Company's Chairman, President and Chief Executive Officer Joseph Chee.

Joseph Chee

Thank you Serena. Good afternoon everyone and welcome. Solana Company's first quarter 2026 earnings call. I'm pleased to report on another quarter of significant progress as we continue to build out our multifaceted digital asset treasury platform and execute our Solana treasury strategy. Before diving into our strategic initiatives, I would like to highlight key additions to the Solana Company. In early April, we welcomed Madeline Gemmy as our Chief Operating Officer and Deputy Chief Financial Officer and today announced that she will serve as our Chief Financial Officer, Treasurer and Secretary Madeline is joining us on this earnings call for the first time and she will be presenting our financial results later in the call. In late April, we closed the strategic capital raise as disclosed in our public filings. The instrumental offering led by Global institution investor Miray with participation by hash key marks an inflection point demonstrating both deep commitment from leading APAC institution investors and a market premium for our Solana strategy. Now turning to the first quarter of 2026 in a quarter of crypto market volatility and headwinds, I'm proud that our first quarter's performance and how we stayed focused on execution, the strategic use of capital markets, on chain opportunities and operational discipline enabled the company to maximize our Solana per share during the first quarter. Our first quarter revenue increased exponentially from the prior year. Notwithstanding the volatility of Solana price, we remain resilient and continue our execution of generating consistent staking reward of 32,500 Solana tokens in the first quarter 2026 compared to 34,000 Solana tokens in the fourth quarter 2025. At Solana Company we are building a diversified revenue engine architect to target institutional demand, which we believe to be one of the fastest growing digital asset regions in the world. We support the growth of on chain ecosystem through three integrated revenue generating service lines. Advisory Services we provide bespoke advisory traditional financial institutions and corporates enabling them to unlock tangible business value through blockchain adoption. Second, validated infrastructure we offer what we call Pacific Backbone, a compliant high performance infrastructure necessary for regulated institutions to scale staking and validation activities. In Solana platform business is a third piece. We bring an AI powered end to end compliance stack. This serves as the critical foundation for long term collaborative digital asset operations. Seamlessly connecting our global business partners with these initiatives represent a multi year trajectory. We expect the operational impact to be felt within this fiscal year. We are not simply participating in APAC growth trend. We aim to be positioned to drive meaningful impact through accelerated Solana adoption through our bespoke advisory Services, Pacific Backbone compliant and high performance infrastructure and orchestration through our platform business. To illustrate how this unlock recurring revenue, we view them as a self reinforcing flywheel. First, our bespoke advisory services provide a strategic roadmap and implementation services for major financial institutions and corporates to transition on chain and unlock tangible business outcomes. By focusing on high impact use cases, specifically stablecoin payments and real world asset tokenization, we lower the barrier to entry moving our partners from concept to execution with speed and regulatory confidence. Next, the Pacific Backbone serves as the foundation of our flywheel. The infrastructure provides the enterprise great throughput security compliance operation that institutional clients demand. By offering what we believe to be a trusted high performance environment, we enable our partners to scale the on chain operation with the reliability unique to our specialized APAC footprint. In early May, we announced a strategic partnership with JITO to advance yield optimization capabilities to our validated operation. The Broader Digital Asset. The Platform Business is our AI powered orchestration foundation offering an end to end compliance and operations stack. It acts as a conservative connective tissue for collaborative digital asset operations. It continuously brings and connects business partners serving as the essential layer to foster digital asset operation and business partnerships. Asia Pacific represents the majority of the world's crypto users at a substantial share of global cross border payments and trading activities, yet it remains significantly underserved by Solana's existing network infrastructure. We believe our integrated approach, advisory infrastructure and platform position us to serve this market and potentially capture meaningful recurring revenue streams if and as adoption accelerates. With that, before I turn it over to Cosmo to elaborate on our treasury management and capital markets results, I would also like to mention that as you were able to see in our even subsequent section of 10Q, we have completed the divestiture of our cash burning pawn business, the medical device business, and completed a series of rationalization steps in Q2. The positive financial results will be felt in Q2. Let me pass the Put him back to Cosmo.

Cosmo Jiang (Director at Solana Company and General Partner)

Thanks Joe hey everyone. I'm Cosmo Jiang, Director at Solana Company and General Partner at Pantera Capital. Pantera Capital is the Asset Manager for Solana Company's Digital Asset treasury since the close of the pipe transaction in September 2025 and I am pleased to report on another quarter of disciplined execution. As we discussed last quarter, the digital asset treasury market is moved on from its genesis phase and is solid in its execution and consolidation phase. The first quarter of 2026 continues to validate this. We saw further differentiation among digital asset treasuries (DATs) with operators that have institutional grade infrastructure, transparent reporting and disciplined capital management beginning to outperform. The broader digital asset market experienced significant volatility during the quarter with solana declining approximately 32% in price from December 31, 2025 through the end of the first quarter. Despite this headwind, we remain focused on our core strategy which is growing our Solana per share through accretive capital allocation, generating consistent staking yields and building out the revenue generating business that is designed to drive long term value creation. Staking remains one of the most important and differentiated aspects of our business for the quarter of 2026. For the first quarter of 2026 our average net staking yield was 6.9%. This compares to the system wide average of approximately 6.0% over the same period representing outperformance of 90 basis points. This yield is generated through careful validator selection, active MEV capture and continuous rebalancing, the same institutional approach that Pantera applies across its broader digital asset portfolio staking rewards are also automatically restaked to compound returns, resulting in consistent daily on chain revenue. Turning to Capital Markets we remain committed to capital allocation strategies that are accretive on a Solana per share basis regardless of market conditions whether stock traded at a discount to NAV during periods of broader market weakness. We executed approximately 3.5 million in share repurchases during the first quarter and $5.0 million in share repurchases year to date under our previously announced repurchase program, as reflected in our treasury stock position. These repurchases were funded through strategic sole sales at prices that were at a discount to our NAV per share at the time of repurchase, making them accretive to our NAV per share. At the end of April, we successfully completed a strategic capital raise of $8 billion through a structured equity offering, a portion of which we deployed into sole purchases at favorable entry points. This capital raise was at a price of $2.60 per share, which at the time was roughly 1.1 times MNAF or multiple of NAV, and the result immediately accretive to our sole per share. This is the highest multiple of NAV capital raise of any Solana digital asset treasury that we know has completed since the beginning of the downturn in 2025. We believe this is our ability to do so is indicative of both industry factors, namely that the digital assets market has shown some signs of bottoming as well as factors idiosyncratic to capital market participants. Recognizing and appreciating our relative execution we believe the ability to operate opportunistically on both sides of the capital structure, issuing our stock at a premium and buying back and trading at a discount is a powerful mechanism for creating shareholder value across different market environments. As of March 31, 2026, Solana Company held approximately $193.8 million of Solana across all categories, including liquid holdings, staked positions and receivables and $4.4 million of cash and cash equivalents. The company's diluted share count, including common shares and in the money warrants was 82.5 million shares as of March 31, 2026. As of May 12, 2026, Solana Co. Held 2.37 million SOL tokens, the company's diluted share count including common shares and in the money warrants was 86.0 million shares. I will now turn the call over to Madeline Gemmy, our Chief Operating Officer and Deputy cfo, for the detailed financial results.

Madeline Gemmy (Chief Operating Officer and Deputy Chief Financial Officer)

Thank you Cosmo, and thank you Joe for the introduction. I'm thrilled to be joining Solana company at such an extraordinary inflection point and an honor to present our financial results for the first quarter of 2026. Our first quarter revenue was 3.6 million, consisting primarily of 3.4 million in staking revenue and 0.2 million in other revenue. This represents significant growth from the 49,000 in revenue recorded in the first quarter of 2025, which did not include contributions from our staking revenue attributable to our treasury strategy. Cost of revenue for the first quarter was 180,000, resulting in a gross profit of 3.4 million compared to a gross loss of 72,000 in the prior year period. Cost of revenue increased primarily due to the increase in staking revenue related costs General and administrative expenses for the first quarter of 2026 were $5.2 million compared to $3.9 million in the first quarter of 2025. The increase reflects the expansion of operations associated with the Company's digital asset treasure. During the quarter we recorded an unrealized loss on digital assets and digital assets receivable of approximately 89.2 million, reflecting the approximately 33% in Solana prices during the quarter. We also recorded a realized loss on capital and digital assets of 7 million related to strategic sales executed as part of our capital allocation program and an unrealized loss on our digital assets Fund investment of 1.7 million due to the decline in the value of SOL. Total operating expenses for the first quarter were 103.1 million compared to 3.9 million in prior year operating expenses included Non cash charges of 89.2 million for unrealized loss on digital assets and digital asset receivable, 7 million for realized loss on digital assets related strategic sales executed as part of the Company's capital allocation program and 1.7 million for unrealized loss on digital assets fund investment due to the decline in value of Solana. The resulting loss from operations was $99.6 million compared to a loss of 4 million for the prior year period. Non operating expense for the quarter was 0.2 million, primarily attributed to dividend income earned on investments of excess cash in money market funds offset by foreign exchange loss due to fluctuations in the Canadian to US dollar exchange rates as compared to 0.2 million non operating income for the prior year period. We reported a net loss for the first quarter of 2026 of 99.8 million, or a loss of 1.3 per basic and diluted common share based on weighted average shares outstanding of 76 basis. This compared to a net loss of 3.8 million or $382.29 per basic and diluted common share based on weighted average shares outstanding of 10,000 in the prior year period. As of March 31, 2026, we had total assets of 200.7 million, including $4.4 million in cash and cash equivalents, $21 million in current digital assets and $172.8 million in long term digital assets across various categories, including stake positions, restricted assets, receivables and fund investments. During the quarter, we executed approximately $3.5 million in share repurchases during our previous authorized stock repurchase program, which are reflected in treasury stocks on our balance sheet. With that, I now hand it over to Joseph for closing remarks.

Joseph Chee

Thank you, Mehdi. Well again, thank you all for joining the Solana first quarter 2026 operating results update. We look forward to updating you on our progress again in the coming quarters. Operator, Please open the call for questions.

OPERATOR

Certainly. And as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone. Our first question comes from the line of Matthew Galinko from Maxim Group. Your question please.

Matthew Galinko

Hey, thanks for taking my question. Maybe if we could talk about the flywheel that you discussed in the prepared remarks and be particularly around the advisory, maybe touch on what sort of traction you have there, what level of engagement you have and is there a revenue model there or is it primarily just, you know, sort of engaging, you know, counterparties into the Solana ecosystem? Thanks.

Joseph Chee

Thank you, Matthew. I guess since I talk about that, I'll address your question here. The answer comes directly yes, it's supposed to be a revenue generating business line and this advisory business actually works very closely, the Solana foundation in targeting some of the major financial institutions and some tech corporates in the region. And we are in the process of signing some contracts which represent relatively significant revenues to us even for this year and we expect to do that over time. A lot of financial institutions in APAC sort of coming from behind this whole trend of major banks, asset managers, different financial institutions in the US getting on their asset cash management products on chain and different kind of products as well, and also somebody getting onto stablecoin based payments with the US Leading the way. And now there are a lot of institutions that have not done much in the past now have mandates from the top to get this thing done as soon as possible. And a lot of them have not spent a lot of time understanding how to get that done. And they have some basic understanding, but it comes to execution, project managing the whole thing based on the guidance coming from the top, they need some help. And I think with us and the foundation in this part of the world, we are like the first stop from the ask questions.. And I think that's a good time that we could to suggest that we could help them manage this and then charge them for managing a project.

Matthew Galinko

All right, that's very helpful and maybe just as my follow up. I think currently you operate with a pretty lean structure and so I'm wondering how you deliver those advisory services and to the extent that you're generating, you know, material revenue there, how do you think about the allocation of any cash flow you might begin to generate from those sorts of activities? Thanks.

Joseph Chee

Good question, Matthew. We are doing this very carefully. We do not want the we are not going to let cost lead the revenue per se. With the current team of two and a half people, we have hired the head of business development and advisory from Boston Consulting Group and a couple of juniors to get going and we believe that with the revenue that we're generating from the contracts we could easily cover the cost that we just incurred on the human resources side and the additional revenue net of cost or cash flow net of costs will be used to execute our strategy. The core one is still to purchase soldiers and obviously some of that will be used to reinvest in some of the infrastructure that we need to build to provide more services to these clients or partners that we bring on board to generate more revenues on a recurring basis to Solana company.

Matthew Galinko

That's great. Thanks for the caller. I'll jump back in the queue.

OPERATOR

Thank you. And our next question comes from the line of Fidor Shabalin from B. Riley. Your question please.

Fidor Shabalin

Thank you very much operator and good afternoon everyone. I have a first one on a Pacific backbone infrastructure. Can you tell us where we are with the validator infrastructure today versus where we were, where we were at the quarter end and specifically how much SOL is currently delegated to their if any and what's the stake ramp trajectory you're targeting over the next two maybe or three quarters?

Fidor Shabalin

Just how should we think about economic uplift from the GT integration on MEV capture relative to the standard staking yield you're currently realizing?

Joseph Chee

Yeah, thank you. Thank you for Your question? Since we announced this a couple months ago, we have also mandated the same team which built out the advisory business to build the infrastructure for the validation business. We have put together a detailed execution plan and tracking quite well the notes that we are building at the moment. We are starting with three nodes will be operational according to plan in late June. On your question of how much Seoul, especially third party Seoul that we will bring on board, we are still in the process of pitching and we already have some verbal commitments, but at this stage I probably cannot provide you with a projected number, but based on what we could see, it will be a fairly significant number that would add good revenues to our platform over time. It is something that we want to build not only to serve the clients that we would attract on our advisory services platform. For many of the larger players that have Solana at the moment, they're probably sticking their SOL with some players which are not structured the way we are structured at the moment. We are structuring this as the highest end top quality institutional grade infrastructure and we would hire a certification engineer to make sure that the whole process front and back will be properly certified and would meet the requirements of the most demanding financial institution across apac. We believe that we could move some of the Solana from some of the players which stake their soul with other less smaller or less institutional grade players. So we have high hope. But I guess I will probably only give you a more, I guess higher confidence guidance in next quarter.

Fidor Shabalin

Thank you, that's super helpful. And another one is on how should you think about buybacks, cadence going forward and overall Solana accumulation? Like anything, should we expect something beyond staking revenue in Solana tokens, I mean, or at risk at current MNAF level, you will stick with staking only and will not pursue any external purchases of extra tokens. Thank you.

Joseph Chee

That's a good question. It's something we debate all the time. I think the right person to answer this question is Cosmo. Why do I pass it on to Cosmo?

Cosmo Jiang (Director at Solana Company and General Partner)

Hey Fedora, thanks for the question. As you can appreciate, we're constantly monitoring or constantly having dialogues with capital providers to see where we can potentially raise capital in an accretive way, which we're really excited to do this past quarter with major strategic investors in Asia. And we're also evaluating when our stock trades below nav, what we do in that case. We're pretty proud of the fact that we are trading well above most of our peers and certainly the average of our peers in terms of that does mean that buybacks are less accretive for us than they are for some of our peers at this point because our MNEB multiple has held up. But that does mean in which case it means the capital markets window opens up a little bit more on the accumulation front as opposed to the buyback front. And so I'm sure there will be volatility in our multiple as well as volatility in Solana and we'll just try to make the best decision as we go forward. But I would expect that at these levels that we're looking to raise capital accretively as opposed to buying back aggressively.

Fidor Shabalin

Thanks for caller and I promise my last one it will be quick. It's on SGA run rate going forward. So obviously you build an infrastructure of the operating business you described in Asia and how should we think about this line item run rate from here and is the 1Q a reasonable jumping off point or maybe are there step ups? We should model in 2Q and 3Q as you scale the business maybe headcount will grow from two and a half to three and a half or four and a half.

Joseph Chee

We don't have a set of board approved numbers that we could disclose on this call to guide you on that but we could probably give you the thinking process behind it. So it might be helpful to you on building out your model. What are we building here including the validated infrastructure and first of all we are building this in Asia. The kind of IT talents that you could hire for your money is versus the western world is night and day. And then in terms of the third party consultants that we can hire to build out certain part of our infrastructure that also come at a very low cost. I don't think you should expect very large capex going into this. It's all at a very very low level. You're probably not going to notice it in the overall financial results. And I mentioned at the end of my presentation that we have divested in the second quarter this year the medical device business pons and that will slow down after all the one time and everything else. And there's a serious step that we took to rationalize cost base but that's all happening in the second quarter for those you would expect some pretty significant positive impact of that on our operation on a recurring basis going forward. We can only talk about that in the second Q when the second Q results are available and we do the next call. So I think all in all in a way that I don't think you should be expecting an uptick your cost and then two and a half percent to 3.5% to four and a half. That would rely on the additional revenue that is the contract we sign rather than we could let the cost front run the revenue. So I think that's sort of, that's the principle that how we agreed to build out this business. Because if you want the investors that invest in us that getting access to Solana exposure and they would not be piled on by additional costs that would skew their calculation.

Fidor Shabalin

That is super helpful. Thank you very much for all the color and continue. Best of luck.

OPERATOR

Thank you. Thank you, ladies and gentlemen, for your participation in today's question and answer session. This does conclude the question and answer session. I'd like to hand the program back to Joseph Chi for any further remarks.

Joseph Chee

Well, I guess thank you for that. And again, thank you for joining us today on the call and we look forward to updating you on the progress in the coming quarters. And for some of you, if there are calls set up separately, happy to provide more colors in what's going on and what's going to happen. Thank you very much.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.