Good day and thank you for standing by. Welcome to Antelpha's second quarter 2026 earnings conference call. Today's call is being recorded. All participants are now in the listen-only mode. After management's prepared remarks, there will be question and answer session. I'd now like to turn the call over to Chris Mamone, managing director of the Blue Shirt Group and representative for Antelpha's investor relations team. Mr. Mamone, please go ahead.

Thank you, Operator, and welcome everyone to today's call. Joining me today is Paul Gang, Antalpa's Chief Financial Officer. Please note the following. First, all year-over-year comparisons in today's call are for Q2 2026 versus Q2 2025, unless otherwise stated. Second, consolidated financial statements, including Aurelian, began from Q4 2025. As such, Q2 20-25 compared to the figures reflect Antalpa's standalone results. Third, our remarks today will include forward-looking statements based on current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially. For discussion of these risks, please refer to Antalpa's filings with the SEC. We do not undertake any obligation to update forward-looking statements except as required by law. This call also contains references to unaudited non-GAAP financial measures. Reconciliation to the most comparable GAAP measures can be found in our press release and SEC filings. Now, I'll turn the call over to Paul Liang, who will provide the Q2 operating and strategic overview, as well as the financial highlights and outlook. Paul, please go ahead.

Thank you, Chris, and good day, everyone. Thank you for joining us today. The second quarter reflected a more measured financing environment across the digital asset ecosystem versus earlier periods, as many of our customers focus on liquidity management, operational efficiency, and prudent capital allocation. Against this backdrop, we remain selective in deploying capital, optimize our funding structure, and maintain our high underwriting standards. Since inception, our objective has been to build a financing platform that delivers sustainable long-term value for our clients and shareholders, rather than maximizing loan growth in any particular quarter. We believe the strongest evidence of that approach is our record of zero principal loss since inception achieved across a broad spectrum of market environments while building long-term trend relationship. During the quarter, we strengthened the underlying economics of our financing platform while advancing our brought a strategy of building a leader that provides financing, technology, and risk management solutions to the Web3 industry. Further to this point, we made progress across NINA, our Web3 AI business, and Aurelien expanded our capabilities in digital gold, despite the short-term accounting volatilities. reflected in this quarter's financials. With that context, let me first provide an update on the operating performance of our key business during the quarter before turning into our financials. Let me begin with Nalpha Prime, which is our flagship financing platform and primary revenue and earnings contributor. During this quarter, we focused on preserving portfolio quality by maintaining prudent underwriting standards and executing with long-term perspective. While financing activity moderated, we were highly selective in deployed capital, prioritizing long-term risk-adjusted return over short-term loan growth. Most importantly, we maintain our record of zero principal loss since its inception. We believe this record reflects the effectiveness of our underlying standards, active collateral management, and comprehensive risk management capabilities across multiple market environments. As institutional participation in digital asset financing continues to evolve, we believe these capabilities combined with the trust we have earned from our clients and funding partners will remain important competitive differentiators for Nalpha Prime. As well, we deepen relationships with long-standing clients while selectively originating new loans, reflecting the trust we have built through consistent execution across different market cycles. Although the total value of loans facilitated declined during the quarter, We view that as a reflection of both customer financing behavior and our selective capital deployment, rather than a change of our long-term opportunity. Net fee margin improved year-over-year, while funding costs remained broadly stable. Turning now to Nina and all of us, prior Pre-triage Agentech Initiative As we discussed last quarter, we firmly believe AI is becoming an increasingly important layer of drug-free infrastructure through this ability to help users more efficiently discover information, analyze opportunities, and interact with decentralized applications. During the quarter, We made encouraging progress in further developing our Web3 AI business. We advanced several key product enhancements and expanded product availability through publicly available iOS and Android applications, making the platform more accessible to a much broader universe of adopters. Nina has now reached several thousand registered users across its website and mobile applications, with the majority of registered users completing at least one core product interaction. While Nina remains in the early stage of commercialization, it is very encouraging to see these initial engagement indicators. Our near turn focuses remain on product development, user engagement, and evaluating NINA's commercial potential. We look forward to keeping you updated on our progress. With that overview of our operating performance, now let me turn to our financial results for the quarter. Total revenue for the quarter was $12.2 million, ahead of the midpoint of our guidance. The revenue of this quarter down 28% year-over-year compared with $70 million in the second quarter of last year. As a reminder, our prior year comparison included contributions from the CanGo facility, which was almost fully repaid during the first quarter of 2026. Excluding that facility, revenue declined just 15% year-over-year, primarily reflecting lower average loan balance across the remaining portfolio as financing activity moderated during the quarter. Looking at the composition of the revenue, technology financing fees were 7.7 million, down 40% year-over-year, reflecting lower financing activity and average loan balances. Offsetting this decline, technology platform fees increased 10% year-over-year to 4.5 million. primarily reflecting improved pricing in our margin loan business. We believe the combination of financing and platform revenue provides a solid foundation for the long-term development of our business. Turning to our loan portfolio, Total value of loans facilitated was $1.35 billion as of June 30, compared with $1.61 billion at the end of the first quarter. As discussed earlier, this reflected both more measured financing activity across the market and our disciplined approach to capital deployment. financing reached approximately 30.9 exahash representing approximately 3.1% of the global Bitcoin network hashrate at the quarter end. From a lending economics perspective, we continue improving the efficiency of our business. Funding causes remain broadly stable at 69% of technology financing fee compared with 67% in the second quarter of last year, while the net fee margin improved by approximately 10 basis points year-over-year, primarily driven by improved pricing within our margin loan portfolio. Turning to operating expenses, in Q2, operating expenses that excluded fair value loss on crypto assets were $15 million, down 14% year-over-year, reflecting time cost discipline amidst ongoing investments in our strategy initiatives. These expenses include funding costs of $5.3 million and non-cash equity-based compensation of approximately $1.3 million. GAAP operating loss was $25.1 million. compared with operating loss of 0.5 million in the prior year period. Excluding non-cash items, non-GAAP operating loss was 23.8 million. Turning to the bottom line, net loss attributed to N-alpha was 12.5 million compared with net income of 0.7 million in the second quarter of 2025. As a reminder, Q2 2025 reflects Nalpha's standalone results as consolidation of Aurelion began in Q4 2025. Adjusted EBITDA loss was $27.4 million, including approximately $26.2 million in unrealized loss related to XAUT and XAUE holdings. Excluding the XAUT and XAUE-related value movements adjusted EBITDA loss was just $1.2 million. To put this consolidated result in context, Nalpha remained profitable on a standalone basis. Let me now discuss the performance of Prime and Aurelien separately. Nalpha Prime generated standalone revenue of $12.2 million. during the quarter and operated profitably on the standalone gap basis. The business improved its operating economics through funding optimization while maintaining prudent underwriting standards throughout the quarter. Prime standalone adjusted EBITDA loss of $3.3 million, includes a $3.9 million fair value loss related to Prime XAOE Holdings. Adjusted for the fair value loss, Prime generated $0.6 million of adjusted EBITDA compared to $4 million in the prior year period, representing a 5% and 24% adjusted EBITDA margin respectively. I will now turn to Aurelien's performance and our perspective on its role with Enelpha's capital strategy and long-term value creation. As I mentioned earlier, Aurelien's reported results this quarter was primarily affected by unrealized fair value adjustment on its XAUT holdings. While these fair value movements significantly affected our reported consolidated earnings this quarter, they do not change our long-term strategic rationale for the business. During the quarter, Aurelien contributed approximately $24.4 million of operating loss primarily reflecting approximately 22.3 million of fair value loss as XAOT price declined from approximately 4,667 per unit at the beginning of the quarter to approximately 3,996 at the quarter end. Since June 30, XAOT prices have been recovered to above 4,300 as of August 18, reinforcing our long-term confidence in the value of tokenized gold and its potential as an on-chain digital asset. Turning to Aurelien's partnership, as of June 13, 2026, Aurelien's net asset value was approximately 91.9 million. reflecting $134.7 million of digital assets and cash, including 33,318 units of XOT and XOE value at approximately $3,996 per unit, net of $42.8 million of that. During the quarter, Aurelien completed the subscription of XOE with 8,000 units of XOT, which were staked into the protocol. Based on our 42% economic interest, Aurelien represents approximately $29 million of attributable net asset value. We continue to believe tokenized gold will play an increasingly important role in the evolving digital asset ecosystem. As institutional adoption continues to broaden, we believe investors will increasingly see assets that combine the stability of traditional safe haven assets with the liquidity, transparency, and programmability of on-chain infrastructure. In that context, tokenized gold can serve simultaneously as a long-term store of value, high-quality collateral, and a new generating asset through protocols such as XAOE. To sum up, we have full confidence in our long-term strategy and are pleased that Nalpha Prime remains a resilient foundation for our current business while we actively explore growth enhancing opportunities. With that, let me conclude with a few thoughts on our outlook and priorities going forward. We expect first quarter 2026 revenue between 10 million to 12 million. While the overall financing environment remains muted, our priorities have not been changed. We will allocate capital selectively, maintain our student-wide funding standards, and strengthen the long-term economics of our financing platform. We believe risk management remains the foundation of sustainable shareholder value creation and we will execute with long-term perspective rather than optimizing any single quarter financials. More broadly, our objective is to build an on Nalpha Prime's strong foundation while selectively deploying opportunities where our capabilities in financing, technology, and digital assets can create long-term shareholder value. Thank you again for your support and interest in Nalpha. Operator, we are now open for questions.

Thank you. To ask a question now, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We will now proceed to take our first question. And our first question comes from the line of Ed Engel from Compass Point. Please ask your question, Ed. Your line is open.

Hi, thanks for taking my question. Do you mind providing a little bit more detail on the yield that you're earning on the XAUE holdings? And then I guess any yield that you generate, is that reported as Thank you, Jack.

Thanks for the question. So as for your questions, the earnings is not recorded as revenue. As you can see from the financial statements from ANALPHA, it's $12.2 million. for this quarter. They are purely from the lending business. And so it was recorded in the non-operating part. So as for the yield, Well, it's you generating this quarter, although it's not significant. But we see this is the first step for us to utilize rather than just sitting there holding an XO key. And it's meaningful for us at least to have some revenue coming in.

Great. Thanks for the color. And then I guess just more broadly, as you think about a recovery, in Bitcoin and then your lending book. Is there a level that you think Bitcoin needs to reach for maybe your customers to get back to breakeven and start reinvesting in their fleets? Or is there not really a specific Bitcoin number that you think needs to be hit or exceed in order to grow your loan book again? Thanks.

Thanks. I think at this moment, it's a very good question, but I don't think I have the answer. We have to monitor the market on a regular basis, but definitely at this point, so we are quite conservative and our customers are also conservative to to have some more financing activities. But we believe if the trading volume is going up, the price is going up, it's definitely, it will be more active from our point of view.

Great. Do you have an idea of what the average cost to mine is for your customer base? I know you guys talked about that in the past.

It's case by case. I think there's a lot of factors on the mining machine, different types of mining machine, and also about the electricity price. It's a very difficult question to say it broadly, but we do see some of our customers still generating profits at this point of price. But it all depends on the location of the mining site, the electricity, and what kind of models, mining machines they are using. Great. Thank you for the call, Eric.

Thank you. As a reminder, before we move to our next question, if you wish to ask a question now, please press star 11 on your telephone keypad. We will now take our next question from the line of Devin Ryan from Citizens Bank. Sorry, Devin, please go ahead. Your line is open.

Hey, this is Noah Katzon for Devin. Thanks for taking my questions. First, I want to focus on your expansion into AI infrastructure with your AI agent, Nina. To your comments, Nina has now moved beyond the initial launch and is generating early user engagement with several thousand registered users and more than half completing at least one core product interaction. Can you outline for us your commercialization strategy for Nina? And also, as you look at the early activity, what are users engaging with most and what have you learned so far from the product? And How are these learnings shaping the product roadmap from here? Thanks.

Thanks, Noah. Thank you very much for the question. So I think Bonina is still in the very early stage. We are still validating the product. The current focus, I think, is first to build a product that our users find useful, improving the engagement and retention, and then expand functionally. So currently, yeah, I think for those users, in general, The interaction is quite boring. They asked about the trend of the Bitcoin price and also and what kind of applications are quite hot right now. So we have kind of daily trends. Actually, I'm looking at my screen right now. For example, they also ask a lot of economic related questions. So there's a question here in my screen. Is Bitcoin volatility collapse? Why are the traders saying nothing creates money? And yes, so there are different, well, they are quite different. So I would recommend that if you have time, you can just download from the iOS or Android to take a look at what's going on there. It's quite interesting, I can say. So currently, I think our goal is to make the app easier for the Web3 users. and so that they can use to bring more information and they can also find some interesting trends on transaction related stuff and so that so I think at this stage is still quite early so and and we will continue to improve the product user experience. So is that, I'm sorry, is that, did I answer most of your questions?

Yeah, that was very clear. That's helpful. I can definitely recognize that it's early in this industry, so definitely understand If I can switch gears a little bit, talk more about the crypto lending market. You know, we've seen periods of Bitcoin volatility that have impacted borrow demand and then the way lenders manage collateral and risk. Against that backdrop, can you walk us through the specific risk mitigation strategies you have in place? And then looking forward, what is your outlook for the loan book look like and what's giving you confidence in the direction of demand you're seeing? Thank you.

Thanks, Noah. It's a very good question. I think we take a conservative approach to manage the credit risk, which we also mentioned during the call. And our framework combines careful underwriting over collateralization, active collateral management, and continual engagement with the and also from mining related loans, collateral can also be built over time. The Bitcoin mine is also deposited within the control wallet. This provides an additional layer of protection. And I mean, there's no credit model is perfect. It cannot eliminate all the risks. But our experience through multiple market environments reflects the rigour built into our management process. And I think on the long book, we expect to remain selective. I think the current constraint is not the access of capital, but finding opportunities that meet our risk-adjusted return threshold. has remained relatively conservative and we are not assuming a sharp increase in the near term and we will continue to see demand actually we continue to see demand from the existing and prospective customers but The conversion into our new loan will depend on the market stability, collateral quality, and also definitely the pricing. We have capital available to deploy when those conditions are met, but we are not to review a PBL simply for the sake of balance sheet or revenue growth for the next quarter. So this, to us, is a long-term business, and risk management is the first priority for us. I think we need to stay in the market, especially in the bear market. It's a long-term business for us. I think over time, when a more stable digital asset environment and improved borrower confidence, it should support a higher origination activity. But the pace of recovery will depend on the opportunities we actually see. Yeah, I think that's probably what we can see at this moment, at this market environment.

That's helpful. Thank you for answering my questions.

Thanks, Noah.

Thank you. That concludes the questions and answers period. Thank you again for joining our call today. You may now disconnect.