A：The purpose of the earnings call is to discuss the first quarter results and to talk about the strategic milestone of the company, specifically the acquisition of Aquinian, a leading global transfer agent.

A：Tokenization is the process of turning traditional financial assets into blockchain-based assets, turning static assets into active infrastructure assets that are digitally traceable and programmable.

A：The broader impact of the acquisition on capital markets and tokenization is transformative, as it creates a bridge between traditional financial services and the digital asset world, potentially offering unconstrained programmable ownership through tokenized assets and leading to the evolution of capital markets infrastructure.

A：The key elements of the strategic logic behind the transaction with Aquinian are: 1) end-to-end tokenization services, 2) a unified transfer agent ledger, and 3) a broad network of blue issue relationships with public company clients.

A：The role of the transfer agent is to manage the issuance, transfer, and cancellation of securities, and Liquidity's acquisition of Aquinian is significant because it provides access to the required tokenization services through a regulated transfer agent with direct relationships to thousands of public company issuers and a unified ledger that bridges traditional and blockchain-based assets.

A：The combined company is expected to be a formidable player in the market, becoming the global tokenization leader by providing the base layer of tokenization services and value-added services that ensure the success of tokenization.

A：Bullish signed several new clients including E-Trade and TD Ameritrade at the conference and continued to make progress. The event featured discussions around tokenization and attracted a large audience with 260,000 plus attendees from more than 100 countries. Net ticket sales for the conference were greater than those for Toronto, and there was significant enthusiasm around tokenization.

A：Bullish has recently filed to officially receive its futures and options exchange and Clearinghouse licenses, as well as a CS D to operate on both sides of the Atlantic. The company remains on track to receive European and US licenses prior to the end of the year.

A：Total page views were up significantly year over year in April, and monthly unique visitors surged roughly script higher quarter over quarter. This indicates an ongoing coindexed progress into the second quarter.

A：Bullish's total adjusted revenue for the first quarter was $92.8 million, up approximately 49% year over year from the fourth quarter. Despite digital asset price weaknesses, all revenue line items posted slight growth. Adjusted operating expenses were $57.7 million, up from $48.1 million in the fourth quarter, with a year-over-year increase in EBITDA reflecting a 39% margin.

A：For the second quarter, Bullish expects it to be the highest quarterly expense level driven by the successful consensus Miami event. For the full year 2026, the company expects adjusted operating expenses between the midpoint and upper end of a specified range, related to increased investment in the tokenization platform. Bullish is reaffirming all of those ranges for the full year.

A：The combined company's 2026 adjusted total revenue outlook is between $1.25 and 1.35 billion, with an adjusted EBITDA of less CapEx between $490 and $530 million, and adjusted net income between $270 and $290 million. The medium-term outlook anticipates approximately 6 to 8% annual revenue growth, 25 to 50 million in net cost reductions, and EBITDA, less CapEx growing at approximately $100 million per year, with an expected free cash flow of approximately $1 billion over the medium term period.

A：The process for obtaining DCM and DCO licenses involves interacting with stringent regulators such as the SEC, Boffin, and the New Yorkers with a bit. The experience with the CFTC has been positive, with quicker response times and full approvals for Vcos in under a year. Conversations with the CFTC have been productive, and the chairman and heads of various divisions have shown engagement.

A：The strategic reasons behind pursuing tokenization efforts include the potential to expand into options markets, which has grown from 0% to 14% market share, and the ability to offer a full stack pitch to firms contemplating tokenization. Additionally, tokenization can enhance trading opportunities, provide liquidity, and increase visibility through platforms like CoinDesk and Consensus.

A：Tokenization offers benefits to existing public companies and their shareholders by potentially changing the shareholder infrastructure, rewarding buy-and-hold shareholders, and providing more information about the shareholders themselves. It allows for increased interaction with investors, including lending shares and using them as collateral, thus creating a more informed and engaged investor base.

A：Tokenization will likely reduce privacy concerns and improve the ability to track who owns shares. It provides visibility into share trading, holdings, and the nature of shareholder engagement, such as whether they are buy-and-hold investors. This enhanced visibility can help in rewarding such investors and may lead to a more transparent and efficient market.

A：The outlook for the adoption of tokenization is positive, with a groundswell of support from potential adopters. It is expected to take off rapidly due to the realization that tokenization can significantly improve upon the current state of share transfer and investor engagement. This is evidenced by the interest from Dow companies and the desire to streamline operations by moving away from traditional, low-value added, and information-starved processes. Tokenization can lead to better price discovery, access to new buyers, and enhanced visibility into shareholder bases, which are all highly valuable to public companies.

A：To enable trading of securities, the company is pursuing two different licenses that will allow trading in a single global order book and unified account structure worldwide. It is expected that both licenses will be obtained during 2026, and there are plans for third-party trading venues to begin operations. This approach is anticipated to fulfill the liquidity needs and 24/7 price discovery, leading to increased shareholder visibility and additional services that can transform stock into an asset. The company is excited about the future potential of these developments.

A：SSO revenue remained flat due to headwinds including macro factors outside of the company's control, such as digital asset price depreciation, particularly bitcoin, and interest rates affecting stablecoin-based revenues. There was also a selective discontinuation of legacy Liquidity Services offerings that originated around the 2023 time period.

A：The discontinuation of legacy Liquidity Service offerings, which originated from approximately the 2023 time period, affected SSO revenue as those offerings were no longer priorities for the business. As a result, many contracts were not renewed, leading to an immediate impact on revenue in the first quarter.

A：The U.S. expansion initiative is going very well, as reported in previous calls. The customer base is ramping up, and there has been an encouraging sign that U.S. clients are now seeing benefits, including some firms that have met regulatory scrutiny. The U.S. launch is exceeding expectations and moving as planned, which is particularly exciting as it includes AUM ( Assets Under Management).

A：Yes, there is an opportunity for Liquidity to grow market share in the transfer agent space. The company has received interest from multiple customers from other transfer agents and believes that having a unified transfer agent ledger is an appealing message. The company plans to accelerate investment and build efforts to take advantage of this opportunity.

A：The strategic importance of the unified transfer agent ledger is significant as it works hand in hand with the issuer and only the issuer can allow for a token to represent a share of stock in a company. This realization led the company to work towards having a unified transfer agent ledger for thousands of issuers. The company has been preparing for this day for many months, moving towards an announcement in earnest since the week of Labor Day 2025, and has invested in the business in a thoughtful way to ensure readiness for the launch.

A：The purpose of tokenizing the shares of Bullish is to enable interesting functionalities with those tokenized shares, such as potentially offering them as part of a financial model, charging for tokenization services to issuers, and making incremental money from trading tokenized securities on platforms where the company is approved on both sides of the Atlantic.

A：Potential revenue streams from offering tokenization services include charging issuers for tokenization services, making money from trading tokenized securities, and adding liquidity services to help with tokenization. Additionally, there is an opportunity for liquidity services to be applied to the approximately 3000 public company issuers that currently have liquidity and the additional ones that are intended to be onboarded.

A：The company views the existing transfer agent service as a tax without value add, which is a fairly low cost for a public company to issue. They believe that there is substantial value provided via tokenization, which can increase the cost of the service without it being too expensive for the issuer, thus offering better value for money.

A：The company has not provided specific disclosure on the number and average price cost of the liquidity service offering. However, they have mentioned that there is a range of potential revenue from larger scale industrial relationships, such as with significant coin issuers or Treasury Solana network partners. The company sees a large opportunity for liquidity services to be applied to a large number of public company issuers and plans to work through this for incremental revenue growth over the back half of the year.

A：The company prefers to build its technology in-house rather than buying solutions, as they are disciplined buyers and have a great team of blockchain experts. They have been developing a transfer agent, have obtained a regulatory license, and are already building smart contracts and bridging layer ones to layer Lys. They are also performing tokenization services to stablecoins. They will continue to pursue their goals and strategic ambitions by building and will be in a strong position to buy if necessary.

A：The company ensures it is not forced to buy technology by focusing on building their own solutions. They emphasize their leadership in the market and the fact that they already have the necessary capabilities such as smart contract engineers and are not dependent on external solutions. This approach allows them to be in a better position to buy if desired, without being beholden to any seller in that situation.