Hello and welcome to Forum Markets' second quarter 2026 earnings conference call. During today's discussion, all callers will be placed in a listen-only mode. Following management's prepared remarks, the call will be open for questions. This call is being recorded on August 13, 2026, and a replay will be made available on Forum Investor Relations' website later today. I will now turn the call over to John Kristoff, Senior Vice President, Corporate Communications and Investor Relations.

Thank you, Megan. Hello, and thank you all for joining Forum's second quarter 2026 financial results conference call. Joining me on the call today are McAndrew Rudisill, Chairman and Chief Executive Officer, and John Saunders, Chief Financial Officer. We hope you've had the opportunity to review our second quarter financial results issued earlier this morning. We've also posted an earnings presentation to our investor relations website. As a reminder, some of the matters we'll be discussing on this morning's call are forward-looking in nature. Please keep in mind that actual results could differ materially from what is expressed in these forward-looking statements. Forum assumes no obligation to update the information, and we encourage you to refer to our most recent filings with the SEC for a discussion of factors that could cause actual results to differ materially from these statements. Thank you, John, and good morning, everyone. Thank you for joining us.

Since our last call, we have continued to execute against Forum's operational strategy while taking a disciplined approach to allocating shareholder capital. We are building Forum by combining deep operating experience with disciplined capital allocation. Operationally, our focus is on acquiring and managing cash-flowing assets with attractive risk-adjusted returns in large, scalable markets with moderate to high complexity and durable demand. Thank you for joining us. Given the disconnect between Forum's market value and what we believe is the intrinsic value of the company, we determined that repurchasing a large percentage of our stock represented the most attractive use of capital available to us. During the quarter, we repurchased approximately 7.1 million shares, about 35% of our shares outstanding prior to those repurchases. All shares acquired under the program have been retired. Our second quarter results reflect a deliberate capital allocation decision. We chose to deploy a meaningful amount of capital allocated towards share repurchases rather than acquire additional revenue producing assets based on our view of the value that was available in our shares. We evaluate capital allocation continuously and we'll keep directing it to where it earns the best risk adjusted return for shareholders. With that discipline in place, our near-term core focus is anchored on deploying capital into cash-generating assets and growing revenue in the second half of the year, which John will cover in more detail. Turning to the Board Special Committee, we believe the process has advanced meaningfully since our last call, and we are encouraged by the quality and level of engagement we have seen to date. The Committee continues to evaluate each opportunity against a clear standard. Which path best maximizes long-term value for foreign shareholders? While we cannot comment on specific discussions, potential counterparties, or transaction timing, we expect to be in a position to provide shareholders with a meaningful update prior to our next earnings call. Management remains fully focused on operating the business and strengthening our fundamentals in the meantime. On the asset side, even accounting for capital deployed towards repurchases, we continue to expand our portfolio of income-producing real-world assets and have done so at an accelerating pace since quarter end. Most recently, we acquired two additional commercial aircraft engines, bringing our aviation portfolio to five engines under long-term lease to two of the largest U.S. airlines. Both engines were already on lease and generating contracted revenue at the time of purchase, and we are targeting double-digit annual returns on the pair. John will cover the financial specifics in his remarks. Commercial aircraft engines are representative of the types of high-quality real-world assets where proprietary deal flow, networks, and structuring create investment opportunities that are not broadly accessible through traditional public markets, exactly the profile we look for. We also continue to advance our AI infrastructure vertical, an access-constrained market where we see attractive opportunities to generate great returns and durable cash flow. Our initial work in short-term GPU financing helps surface adjacent opportunities within the same ecosystem, including the deployment and operation of AI equipment across data centers and inference compute locations, generating revenue from the compute. We are now close to deploying capital into AI infrastructure in the area of AI compute, which we expect to contribute meaningfully to the revenue in the second half of the year. We also continue to evaluate opportunities in short-term GPU financing with partners that align with our operational compute model. We believe aviation and AI infrastructure are particularly attractive areas for near-term expansion because both combine substantial capital demand with specialized origination requirements and access-constrained investment opportunities. At the same time, we have built origination capabilities across all four of our core verticals, and overall deal flow has accelerated meaningfully in 2026. That has broadened the range of opportunities available to us and allows us to be highly selective on structure, counterparties, and risk-adjusted returns. Manufactured housing and auto credit round out the platform by providing additional sources of secured cash-generating assets. These categories reflect prioritization of assets that generate attractive income, are backed by tangible collateral and strong off-take counterparties, and can create additional value through origination, management, and distribution over time. We will continue to deploy capital selectively where we see the strongest risk-adjusted returns with a particular focus on markets where our capabilities can improve capital formation. This multi-channel model supports several distinct sources of value, including yield on assets held by Forum, origination and structuring economics, asset management fees as third-party capital participates, and distribution or marketplace economics as those channels mature. In addition, Liquidity.io remains a part of Forum's long-term tokenization strategy, and its platform upgrade is expected to significantly broaden its capabilities during the second half of 2026. Markets, Incorporated, John Saunders We believe Forum has built a differentiated base of income-producing assets, proprietary origination relationships, and distribution capabilities. And we remain focused on increasing the value of that platform and ensuring that value is created for shareholders. With that, I'll turn the call over to John.

Thank you, McAndrew, and good morning, everyone. Before reviewing the quarter, I want to briefly reiterate the financial framework we use to evaluate Forum's progress. At this stage, the most relevant measures are the size and composition of our income-producing asset base, the yield and cash flow generated by those assets, our origination and management economics, and net asset value per share. Tokenization remains an additional distribution and liquidity option, but the underlying assets do not need to be tokenized to generate revenue or create value for Forum. Turning to the second quarter. Forum generated revenue of approximately $1.4 million, compared with $2.9 million in the first quarter of 2026. Revenue during the quarter was driven primarily by aircraft lease revenue of approximately $1.4 million. Manufactured housing and auto credit interest income was approximately $0.38 million, and interest and other financing income of approximately $0.42 million. The decline in revenue from Q1 was due to the elimination of $1.8 million in staking revenue, resulting from the strategic decision to sell the majority of our Ethereum holdings in March as we transition to our current operating model. Results for the quarter also reflect, in part, our decision to allocate capital into share repurchases rather than additional revenue-generating assets. Our revenue mix is becoming increasingly representative of Forum's current operating model of contracted asset income, financing yield, and as the platform scales, origination, structuring and management fees. General administrative expenses were approximately 10.3 million for the quarter compared with 7.5 million in the first quarter. General administrative costs included non-cash stock-based compensation expense of approximately 3.8 million and one-time cash charges of 1.8 million consisting of an early termination fee to exit our asset manager agreement and taxes paid in the UK to settle a VAT repayment liability associated with exiting the legacy biotech business. We continue to invest in the personnel, systems, underwriting capabilities and partnerships required to support platform growth while maintaining a disciplined approach to operating expenses. Net loss from continuing operations per the quarter was approximately 12.4 million compared with a net loss of 77.5 million in the first quarter. Adjusted EBITDA loss for the quarter was approximately $7.4 million, compared with an adjusted EBITDA loss of approximately $76 million in the first quarter. The first quarter results included substantial digital asset-related losses associated with the final repositioning of the balance sheet. The second quarter results provided a meaningfully cleaner view of our operating expense structure and the income generated by our real-world asset portfolio. Turning to the balance sheet, as of June 30, 2026, Forum reported total assets of approximately $159.1 million with cash and cash equivalents and marketable securities of approximately $48.4 million. Our quarter-end asset base included approximately $16.7 million of commercial aircraft engine assets, $14.7 million of manufactured housing loans, $2.5 million of auto loans and warehouse financing assets, and $45.7 million of strategic equity investments. Subsequent to quarter end, Forum deployed approximately $23.7 million in cash to acquire two additional commercial aircraft engines, both of which were already generating contracted lease revenue at the time of acquisition. Those assets are not reflected in the June 30 balance sheet. Based on our quarter end balance sheet, we estimate net asset value of approximately $127.8 million, or approximately $9.68 per share undiluted. Based on approximately 13.2 million shares outstanding. We view NAV per share as a useful reference point given the current composition of our balance sheet, while recognizing that our objective is to scale our operating platform to extend our value well beyond the assets currently recorded on the balance sheet. As McAndrew mentioned, capital allocation was a central focus during the quarter. Forum used approximately $31.3 million to repurchase approximately 7.1 million shares at an average price of $4.42 per share inclusive of fees. Those repurchases reduced the number of outstanding shares to approximately $13.2 million. We concluded that the discount on our equity represented one of the most attractive opportunities available to create value for shareholders. This choice reflected a disciplined capital allocation strategy, prioritizing high-conviction shareholder value creation over near-term revenue expansion. The Board subsequently extended the repurchase program through June 30, 2027, adjusting the aggregate authorization to $100 million, and authorized additional repurchase methods including derivative transactions. Further activity remains discretionary and will be evaluated relative to our liquidity needs, available asset returns, and the market price of forum shares. With respect to guidance, our full year 2026 expectations remain unchanged. Since quarter end, we have acquired two additional aircraft engines, both of which are already generating contracted lease revenue. As McAndrew mentioned, we are also in the advanced stages of finalizing a phased AI compute transaction that we expect to complete and begin generating revenue from in the fourth quarter. Based on the expected contributions from those assets and our current pipeline, we continue to believe we are on track to achieve revenue within our full year guidance range. We continue to expect full year 2026 revenue to be in the range of $18 million to $22 million. Revenue growth is expected to be uneven as it is dependent upon the timing of transactions and employment of capital. We are also striving to become cash flow positive by early 2027. Our focus going forward remains disciplined capital allocation, revenue growth from income producing assets, increasing origination and management economics, and continued improvement in NAV per share and long-term earning power. With that, I'll turn the call back over to the operator for questions.

We'll now begin the question and answer session. If you'd like to ask a question, please use the raise hand icon, which can be found in the black bar at the bottom of the webinar application screen. When you hear your name called, you'll be prompted to unmute your line and ask your question. We'll now take a moment to allow the cue to form. Our first question will come from Mark Palmer with Benchmarkstone X. Your line is open. Please go ahead.

Yes, good morning and thank you for taking my questions. Wanted to dig into your reiterated revenue guidance for the year. And the fact that that implies a pretty healthy ramp up in the second half of the year. Can you walk us through the components of that bridge and specifically how much of the revenue would be derived from the five engines that are now on lease? How much from manufactured housing and auto? And how much is contingent on the AI infrastructure deployment? closing and contributing in the fourth quarter. Thank you.

Hey Mark, it's McAndrew. Thanks for your question. I'll start with the last bit of your question first because it's probably the most impactful. We've done a lot of work over the last few months in Both the AI financing space on the short-term bridge loans that we've looked at as well as looking at AI compute models and the conclusion that we've come to is that short-term bridge financing on GPUs is a highly attractive business to be in but Markets, Incorporated, John Saunders and they can immediately start generating revenue. And we're very focused on doing that in the balance of the year. And that will make up a pretty large percentage of our total revenue in the back half of the year. But it ramps at an incredibly fast rate because of the economics of the business model of deploying GPUs today into the compute market due to the demand structure that we're seeing So, on an absolute percentage basis, I'll let John comment on that, but I'd say that becomes greater than 50% of our revenue in the back half of the year, and we have ample capacity to continue to ramp the engine portfolio up as well. You saw that we added another two in July. We can easily continue to add. The pipeline of engines is very strong, but the returns on the AI computer are So much greater than anything else that sits in front of us. I think you'll see us focus most of our energy on that in ramping the revenue up.

Yeah, this is John Saunders here. Just to chime in, we think that the aircraft engine revenue for the back half of the year will be somewhere in the five to six million. Based on those five engines operating, as McAndrew alluded to, we may decide to acquire additional engines. The AI infrastructure project would probably account for approximately 50% of that guidance revenue coming online in Q4. The early indications are somewhere in the $8 to $12 million range, but it could be higher depending on the timing. We will provide more update on that as we close the deal, but that's high-level indications of how we would get to the revenue guidance.

I'd also stress that the rate of incline on those revenues as GPUs is deployed goes up at a very high rate as you move into 2027. We're focused on Sort of large shifts in revenue that can occur over the entire course of 27 and 28 by the deployment that we're starting on in the Q4 of this year.

Thank you. And as a follow-up, I wanted to get your take on the current state of things at liquidity.io and what your thoughts are at this point about distribution in general, how you expect distribution to evolve as the rest of the platform continues to evolve. Thank you.

As we mentioned in the call, I think liquidity will come online in the back half of this year. They're actively working with Alpaca on integrating their private market systems. I think they're ready to go on stock trading and crypto and options and fixed income, which has been relatively straightforward. I think the integration of The trading of the private assets is really the key to success of the platform, and they're working on that with Alpaca right now to make it an easy transference if you want to buy a stock versus you want to buy a token. And just being completely transparent about the token market, from what we've seen, there's not a large market for tokens yet. Robert Vanneman Spake, So it's really a call option for us on the future of tokenization and all the assets that we have on our balance sheet can easily be flipped into a tokenization model from a programming perspective when the marketplace develops.

That makes sense. Thanks very much. Yep.

Your next question will come from Brendan McCarthy with Sidoti. Your line is open. Please go ahead.

Ray, good morning, everybody. Appreciate you taking my questions here. Just wanted to follow up on the regulatory environment of tokenization. McAndrew, I know you've cited the potential passing of the Clarity Act as maybe a key catalyst. Can you just talk about some of the regulatory hurdles you're seeing at the moment and what might ultimately kickstart tokenization activity?

Yeah, good to hear from you, Brendan. I'd actually point you to look at what the odds are on PolyMarket or Kalshi for the Clarity Act passage. And that's probably the best probability matrix that I can give you as to what's going to happen with that. But without the passage of the Clarity Act and defined regulation about how tokens can be distributed and who can be the buyer, I think all the tokens really are effectively fund offerings wrapped in a digital wrapper and put on an exchange that are just Reg D or Reg CF fund offerings. So it's no different than selling a mutual fund. So until you can get it into a more regulated framework that's packaged and allows people internationally to trade it, we might as well just sell an ETF.

Robert Vanneman Spake, Eric Van Lent, McAndrew Rudisill, John Saunders Do you anticipate that being ample capital to deploy into the AI opportunity as well as other aircraft opportunities to really reach that 2026 revenue guidance range?

That's a great question. First of all, in the AI compute The financing market is pretty interesting, and we've made a lot of inroads with the equipment providers and the distributors. And we can buy a lot of equipment in that market at a very high LTV because the offtake on the compute is contracted on a forward basis and a high percentage of the cash for that compute is actually received up front. So we can use the vendor programs like you recently saw NVIDIA put together, I think, a $500 billion program with a bunch of banks and funds. The vendors are actually putting together programs to allow people who have access to the power and offtake on the compute side to purchase the equipment up front. And so we're going to gain access to that, number one, for capital deployment. I'd say number two is we've developed some pretty good partners in the private markets that I think can participate with us from an equity perspective if we want to ramp that capital deployment up for the right types of opportunities. And then the third point I'll make is we have absolutely zero leverage on our balance sheet. It's purposeful. The aircraft engines are all contracted. They can carry some leverage. I think we've kind of got three very distinct levers to pull in terms of capital allocation. And we're going to just be very prudent about how we go about doing that. We have to put the three pieces in place on the AI compute, which is the power, the offtake, and then the financing to pull the trigger on the opportunities that are in front of us. And I think we've done that on all three fronts.

Understood. I appreciate the detail. On the capital allocation front, I know you prioritize buybacks in the second quarter. Is it fair to say that the capital allocation priorities have kind of shifted towards acquiring RWAs now over the buybacks, or is it still opportunistic at this point?

I mean, the buyback is still very much in the front and center of my mind, as well as the board's mind. It just comes down to equity price. So We do want to ramp revenue to your earlier questions. How do you get to Q4 revenue guidance? Well, you have to deploy capital into things that generate revenue. But if the stock is just providing us with an opportunity to continue to take down shares, then we will. I mean, these are just the decisions that we have to make and they're relative to one another.

Makes sense. And do you have an update on how much is left on the buyback authorization? Yeah.

I don't think we have touched the new buyback authorization because we were previously working off the old quarter billion dollar buyback authorization program. So the new one, I believe probably has like 90 something million plus dollars available on it.

Got it. Thanks, McAndrew. That's all for me. All right. Thank you.

Your next question will come from Brian Dobson with Clear Street. Your line is open. Please go ahead.

Hey, thanks very much. So for the airline or the airplane engines that you purchased, those both came through already at least generating double digit returns. Is that the type of hurdle rate that we should expect when you're committing capital or rather putting capital to work either via share repurchases or the purchase of new earning assets?

Yeah, Brian, our threshold is, you know, baseline high teens to even think about doing something right now. And yeah, On the AI compute, it's meaningfully higher than that in the structures that we're putting in place. And then on the buyback, you can see based on where we bought back the shares, what the percentage return was. I mean, that was the highest rate of return capital that we could have put to work in this quarter. And so that's how we're thinking about the world is where do you get the best rate of return relative to the risk that you're taking.

And then as you're contemplating, call it AI infrastructure assets, what size of purchase are you looking at and who would be your competitors in going after those assets?

We are thinking quite large in terms of the scale of deployment. And I'm not able to say total quantum, but we have... We are focused on access to large amounts of power capacity in the United States and varying geographies where you can immediately get compute assets online. And I think to play in this game, you need to play at large scale. And that's how we're approaching it. And we're approaching it with partners that can play at very large scale too.

Excellent. Thanks very much for the call. Yep.

There are no further questions at this time. I will now turn the call back over to John Kristoff for closing remarks.

Thank you, everyone, for joining us this morning. And as always, with any follow-up questions, please feel free to reach out to me directly. Thank you.

The call has concluded. Thank you for joining. You may now disconnect.