Flag Ship Acquisition NASDAQ: ETHZ, referred to by executives as Forum Markets during its first-quarter 2026 earnings call, said it is continuing to build its platform around tokenized real-world assets while also using capital for share repurchases and evaluating strategic alternatives.
Chairman and CEO McAndrew Rudisill said the company has made progress expanding its asset origination pipelines, including entering AI infrastructure financing and developing potential co-investment partnerships with major financial investment firms. He also acknowledged what he called “a meaningful disconnect” between the market’s valuation of the company and management’s view of the platform’s intrinsic value.
“We’ve taken deliberate steps to directly address that gap, including activity through our share repurchase program and initiating a formal strategic review aimed at preserving the long-term opportunity in front of us,” Rudisill said.
Share Repurchases and Strategic Review
Rudisill said the company repurchased approximately 5.8 million shares since announcing its buyback program in April, spending about $24.9 million. The repurchased shares represented approximately 28% of shares outstanding and were retired and canceled. As of April 30, the company had approximately 14.5 million shares outstanding.
Management characterized the repurchases as an accretive use of capital at current levels. Rudisill said the company’s board authorized the program with flexibility to act “programmatically and opportunistically” depending on market conditions.
The board has also formed a special committee made up of independent directors to evaluate strategic alternatives. Rudisill said the review includes engagement with parties that have already approached the company and a broader evaluation of potential value-creation paths.
During the question-and-answer session, Rudisill said the special committee is meeting regularly and is being advised by Clear Street Investment Banking. He said the process should be given “at a minimum till the end of the year,” though he added that it could conclude before then.
Quarterly Results and Balance Sheet
CFO John Saunders said first-quarter revenue was approximately $2.9 million, up from $2.4 million in the fourth quarter of 2025. Revenue was driven primarily by $1.8 million of staking revenue and $1.1 million of aircraft engine revenue.
Selling, general and administrative expenses were approximately $7.5 million. The company reported a net loss of approximately $77.5 million, which Saunders said was primarily attributable to realized losses on the disposition of digital assets. Adjusted EBITDA loss was $76 million, which he attributed to price changes in digital assets.
“We anticipate this is the last quarter we will experience large mark-to-market adjustments associated with digital assets,” Saunders said.
As of April 30, Saunders said the company had total assets of approximately $170.5 million, excluding prepaid assets, accrued expenses and accounts payable. Cash and cash equivalents totaled approximately $62.5 million. The asset base included $17.6 million in aircraft engine assets net of depreciation, $1.8 million in auto loans and warehouse facilities, $14.8 million in manufactured home mortgages and approximately $28 million in ETH collateral, offset by a collateralized loan of approximately $26 million.
The company also held equity positions in strategic partners Satschel, Inc., Karus and Zippy, Inc., valued at $13.7 million, $9.8 million and $22.3 million, respectively. Saunders said those holdings supported a net asset value of approximately $144.5 million, or $9.93 per share, based on the April 30 share count.
AI Infrastructure Financing Becomes a Focus
Rudisill said the company has entered AI infrastructure financing through short-term bridge loans supporting the acquisition and deployment of NVIDIA GPUs. The loans are intended to finance the period between hardware purchases and long-term financing once GPUs become operational.
The company is targeting annualized returns in the mid-teens on the short-duration loans, according to Rudisill. He said the assets generate income from day one independent of tokenization, although the company intends to tokenize a portion of each deal.
In response to an analyst question about credit underwriting, Rudisill said the company evaluates the counterparties involved in data center buildouts and noted that many are well-capitalized private equity-backed, venture-backed or publicly traded entities. He said large offtake contracts with hyperscalers are included in the collateral package for GPUs. He also said the company is working with USD.AI on takeout financing for the first transactions.
Rudisill said AI infrastructure and aircraft engine leasing are likely to become major areas of focus. He described the AI infrastructure opportunity as “gargantuan” and said the company also has master services agreements with two of the largest commercial airlines in the United States.
Tokenization Strategy and Liquidity.io Upgrade
Management said the company is building two complementary distribution channels: retail access through tokenized products and institutional access through co-investment and distribution agreements. Rudisill said institutional investors have shown more interest in investing directly in assets through traditional structures, while tokenization may be more relevant initially for retail investors.
He said aircraft engines have drawn the most tokenization interest so far, followed by AI infrastructure finance. He also cited mortgages and auto loans as areas with durable yields, and said auto loan warehouse products could eventually fit into stablecoin and money market products because of their short duration and yield profile.
Liquidity.io remains central to the company’s retail distribution strategy. Rudisill said the platform is undergoing a major upgrade that will broaden its capabilities beyond digital tokens to include stocks, bonds, cryptocurrency and private credit securities. The updated platform is expected to launch in late second quarter or early third quarter.
Rudisill said the upgrade is designed to place tokenized products alongside more familiar securities and expand the buyer pool. He said user growth is likely to be gradual at first before potentially accelerating, and added that the company is working on cross-listing tokens across other token exchanges to increase liquidity.
Guidance Revised After Buybacks
Saunders said the company revised its full-year 2026 outlook to reflect capital allocated to share repurchases. The company now expects to exit 2026 with $100 million to $175 million in assets under management across tokenized and pre-tokenization credit portfolios, down from its prior expectation of $125 million to $200 million.
Full-year 2026 revenue is now expected to be $18 million to $22 million, compared with the prior range of $18 million to $26 million. Saunders said the revised range reflects a slower pace of near-term deployment because of buybacks, while still including yield income from existing assets, financing activities and early-stage origination and structuring economics.
Rudisill said the company will continue balancing share repurchases against capital deployment into revenue-generating assets. “There’s a direct correlation between the more shares we buy back, the less revenue that we generate,” he said. “We just have to take a balanced approach to it.”
About Flag Ship Acquisition NASDAQ: ETHZ
1180 Life Sciences Corp., a clinical-stage biotechnology company, develops therapeutics for unmet medical needs in chronic pain, inflammation, fibrosis, and other inflammatory diseases. Its product development platforms include fibrosis and anti-tumor necrosis factor (anti-TNF) platform, which is under Phase IIb clinical trials that focuses on fibrosis and Anti-TNF; Synthetic Cannabidiol (CBD) Analogs platform, which is under preclinical trials that are man-made derivatives of CBD; and a7nAChR platform, an immune suppressive, which is under preclinical trails that focuses on alpha 7 nicotinic acetylcholine receptor.
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