OpenWorld (OPNW) Q4 2026 Earnings Call Transcript

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DATE

Thursday, Nov. 12, 2026

CALL PARTICIPANTS

• Investor Relations - Richard Land
• Chairman and Chief Executive Officer - Matt Shaw
• Chief Financial Officer - Gerard Hernandez
• President - Russ McMeekin

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TAKEAWAYS

• Revenue -- $7.4 million, reflecting a decline from $20.8 million due to high one-time token generation revenue in the prior year.
• Real-World Asset Revenue -- $6.4 million, contributing 86% of quarterly revenue compared to zero in the prior year.
• Gross Margin -- 84%, rising from 77% in the prior year due to a shift toward higher-margin real-world asset infrastructure services.
• Net Loss -- $10.2 million, or $0.93 per share, primarily reflecting nonrecurring transaction costs and noncash stock-based compensation.
• Adjusted EBITDA -- $2.3 million, calculated by excluding $6 million in transaction fees and $6.4 million in stock-based compensation.
• Digital Assets and Capital Markets Revenue -- $0.4 million, declining from $20 million because of nonrecurring one-time token generation events in the prior year.
• General and Administrative Expenses -- $14.6 million, which included $6 million in professional fees for the reverse takeover and public listing process.
• Stock-Based Compensation -- $6.4 million, consisting of noncash expenses from options and restricted share grants during the three months.
• Unsatisfied Performance Obligations -- $21.2 million, representing the transaction price allocated to remaining real-world asset arrangements.
• Cash Position -- $4.5 million as of Sept. 30, 2026, supplemented by a subsequent $3.5 million direct offering.
• Contract Assets -- $9.5 million, largely related to unbilled real-world asset work pending contractual billing conditions.
• Nine-Month Real-World Asset Revenue -- $9.1 million, reflecting the ramp-up of the platform starting in early 2026.
• Meridian Program -- $1 billion, involving a distributed artificial intelligence inference network across 10,000 residential sites.
• BeyondAI Transaction -- $130 million, focused on the tokenization of specialized artificial intelligence intellectual property.
• Solana Real-World Asset Volume -- $5 billion, representing a sixfold increase in real-world assets on the Solana blockchain since the start of the year.
• Registered Direct Offering -- $3.5 million, closed subsequent to the end of the quarter to provide additional liquidity.
• Nine-Month Net Loss -- $16.1 million, or $1.58 per share, impacted by merger-related professional fees.
• Research and Development Expenses -- $0.4 million, focused on building out the core platform technology.
• Management and Technology Expenses -- $0.9 million, supporting the growth of the combined company.
• Sales and Marketing Expenses -- $0.5 million, reflecting increased business development efforts for the enterprise platform.

SUMMARY

OpenWorld, Inc. (NASDAQ:OPNW) reported its first quarterly results following a reverse takeover, highlighting a strategic transition toward high-margin real-world asset (RWA) tokenization. Management reported that the company is shifting away from project-based activity to focus on long-term platform-oriented infrastructure and recurring revenue. The financial results were impacted by significant nonrecurring costs related to the public listing and noncash stock-based compensation, though underlying operations generated positive adjusted EBITDA. The company also confirmed it is advancing a pipeline of large-scale tokenized financing programs totaling more than $1.1 billion across the artificial intelligence, energy, and intellectual property sectors.

• Management indicated that the Meridian partnership focuses on using residential Tesla Powerwalls to generate inference AI without requiring grid power or water cooling.
• Chief Executive Officer Shaw stated, "Solana itself has actually shown huge growth in this area just this year, with RWAs on Solana now reaching over $5 billion, which actually is a six-fold increase since the beginning of the year."
• The company closed the acquisition of Blocksight Holdings Co. in the fourth quarter to support asset verification and investor onboarding for enterprise programs.
• President McMeekin noted that capital formation is underway for definitive agreements in the U.S. and the Middle East, with a planned launch on the Solana blockchain to support these initiatives.
• Management reported that tokenized equity went live on Solana in November, allowing eligible investors to facilitate 24/7 trading and move between tokens and underlying stock.
• The BeyondAI partnership involves tokenizing artificial intelligence intellectual property for global use cases in conjunction with investors such as Aramco and G42.

INDUSTRY GLOSSARY

• RWA (Real-World Assets): Physical or intangible assets, such as real estate, energy infrastructure, or intellectual property, that are tokenized on a blockchain.
• Tokenization: The process of converting ownership rights to an asset into a digital token on a blockchain.
• DeFi (Decentralized Finance): Financial services offered through public blockchain networks without traditional central intermediaries.
• Inference AI: The process of using a trained machine learning model to make predictions or decisions based on new data.
• RTO (Reverse Takeover): A transaction where a private company acquires a public company to bypass the traditional initial public offering process.
• CUSIP: A unique nine-character identification number assigned to stocks and registered bonds in the U.S. and Canada.
• Solana: A high-performance public blockchain platform used for decentralized applications and asset tokenization.

Full Conference Call Transcript

Operator: Thank you for standing by, and welcome to OpenWorld's Q3 2026 earnings conference call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. To remove yourself from the queue, you may press star one again. I would now like to hand the call over to Richard Land. Please go ahead.

Richard Land: Thank you, operator, and good afternoon, everyone. I'm Richard Land of Alliance Advisors Investor Relations. On the call this afternoon are OpenWorld Chairman and CEO Matt Shaw, CFO Gerard Hernandez, and President Russ McMeekin. OpenWorld issued its 2026 Q3 earnings release earlier today, which is available on the company's investor relations website. Let me read the safe harbor language, and then we'll get right into the call. All statements and comments made by management during this conference call, other than statements of historical fact, may be deemed forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995.

OpenWorld cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward-looking statements made during the call. For additional details on these risks and uncertainties, please see the company's annual report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission and OpenWorld's subsequent public filings with the SEC. OpenWorld undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, we will reference various non-GAAP financial measures during this call.

Please refer to our earnings release for an explanation of these measures and how we use them, and in the case of the non-GAAP financial measures, reconciliations to their nearest GAAP equivalents. With that, it's now my pleasure to turn the call over to Matt Shaw. Matt, please go ahead.

Matt Shaw: Thank you, Richard, and good afternoon, everyone. Thank you for joining us. I'm Matt Shaw, Chairman and Chief Executive Officer of OpenWorld. This is our first earnings call as a combined company following the reverse acquisition that closed on September 30. I'd like to welcome all of our investors, those who have been with us through the VerifyMe chapter, those who have joined us from the OpenWorld side, and our new shareholders who have come on board since the merger. We're happy to have all of you with us for what we expect will be a very bright future for the company and our shareholders.

Before we get into the Q3 results and recent developments, let me set the stage for how we approached building our platform. Since early this year, we have seen a clear and accelerating uptake in interest in real-world asset tokenization from some of the largest companies in the world. What began as initial exploratory conversations around how we can bring value to our partners is now starting to formalize into term sheets and definitive agreements. That is exactly the progression we designed the business to capture. Our anchor deals, those we intend to scale from, are taking shape across the U.S., the Middle East, and we expect soon in Southeast Asia.

These are the geographies where we see the strongest near-term opportunity to move from signed term sheets into capital formation and platform deployment. With that context, I will now turn the call over to our Chief Financial Officer, Gerard Hernandez, who will walk you through the financial results for the third quarter. After Gerard, our President, Russ McMeekin, will take you through the build-out of our RWA pipeline from signed term sheets through the start of capital formation and give you a preview of what is coming next. Gerard, over to you.

Gerard Hernandez: Thank you, Matt. Good afternoon, everyone, and thank you for joining us. I will review our third quarter results with particular focus on the substantial growth in our real-world asset business and the nature of certain non-recurring expenses we incurred in the period. The quarter's results clearly reflect OpenWorld's strategic priorities. We have been deliberately shifting the business from project-based token launch activity toward higher value, recurring, long-term arrangement, and platform-oriented real-world asset infrastructure and tokenization services. That strategic focus is visible in the third quarter numbers, which we believe are just the starting point for what our business model can deliver consistently going forward. For the three months ended September 30, 2026, total revenue was $7.4 million.

Of that amount, real-world asset platform revenues contributed $6.4 million, or approximately 86% of quarterly revenue. There was no RWA revenue in Q3 2025, as our ramp-up of RWA revenue only began in early 2026. We see significant opportunities to continue growing our RWA business over the coming quarters and years. The Q3 revenue performance represents major growth and is a direct reflection of the strategy we have been executing against. For the first nine months of 2026, RWA revenue reached $9.1 million. As of September 30, approximately $21.2 million of transaction price remained allocated to unsatisfied or partially unsatisfied performance obligations under our RWA arrangements, providing visibility into future revenue recognition as these contractual performance obligations are satisfied.

Digital assets and capital markets revenue was $0.4 million in the quarter, down from the $20 million in Q3 2025. Much of which was one-time revenue associated with specific token generation events last year. Gross profit in the quarter was $6.3 million, producing a gross margin of 84%, up from 77% a year ago, driven by those higher margin mix from the RWA work. Turning to expenses, our third quarter results were significantly impacted by costs associated with a reverse takeover transaction and one-time non-cash stock-based compensation. General and administrative expenses totaled $14.6 million.

Within that amount, $6 million consisted of professional fees associated with RTO and public listing process, and $6.4 million was stock-based compensation from option and restricted share grants. These two items accounted for the majority of quarterly G&A expenses, reflecting significant transaction-weighted costs and non-cash stock-based compensation. Other operating expenses were modest. Management technology of $0.9 million, research and development of $0.4 million, and sales and marketing of $0.5 million. As a result, we recorded a net loss of $10.2 million or $0.93 per share. As with the merger-related professional fees and non-cash stock-based compensation, the underlying operating result would look materially different. After adjusting for certain non-cash and non-recurring expenses, adjusted EBITDA for the third quarter was $2.2 million.

On the balance sheet, cash at September 30 was $4.5 million. Contract assets were $9.5 million, primarily related to the unbilled RWA work pending contractual billing conditions. Subsequent to quarter end, we completed a registered direct offering that generated approximately $3.5 million in gross proceeds. Based on our current operating plans, we believe our existing cash, anticipated collections of receivables and contract assets, and proceeds from our recent financing will provide sufficient liquidity to meet our operating obligations at least for the next 12 months from the issuance of our financial statements.

In summary, the quarter demonstrates meaningful progress on our strategic priority of scaling the RWA platform business, while the elevated expenses are predominantly explained by RTO costs and one-time non-cash stock-based compensation. Our revenue growth, strong gross margins, and positive adjusted EBITDA demonstrate the potential of our business model as we continue to scale our RWA platform. We remain focused on fulfilling our remaining RWA performance obligations and building the recurring platform economics that underpin our longer-term model. I will now turn the call to Russ, who will walk you through our RWA growth roadmap.

Russ McMeekin: Thank you, Gerard. As Matt Shaw mentioned, I will walk you through the recent progress and carry us through to year-end. First and foremost was one of the largest tokenized projects in the world, which was the deal we announced with Meridian, focused around Tesla Powerwalls, in which we will use existing homes and existing commercial buildings and leverage their existing infrastructure, plus some solar sites that is needed to generate inference AI. This is unique in that we do not need grid power, we do not need water cooling, and we have built-in offtake for each of these as we bring them online to satisfy this massive domestic and global demand for inference AI.

The Meridian partnership is very strategic, in which we are able to capture the Powerwall assets on a very favorable tax basis, making the IRRs and the yields on these projects very attractive. The initial announcement was for up to $1 billion, but there is room to grow this quite considerably, and the agreement considers something significantly larger. Our second major deal was tokenized industrial IP. Our customer for this initiative is BeyondAI, a very iconic California-based AI company with investors such as Aramco, BP, G42, spin-out of NASA. So very, very attractive IP with global use cases.

We are in very close partnership with the customer, as well as Aramco, who is also an investor and a major customer for this intellectual property. We are targeting multiple global synergistic users of this IP. The on-chain tokenization structure will facilitate a lot of these added agreements and added IP to this mix. This plays our business model very well of leveraging the blockchain, fractionalized structures, high yields, and the ability to generate recurring revenue. In summary, these agreements are now in definitive agreement phase. Capital formation is well underway. We saw an announcement this week where we have planned a launch on the Solana blockchain that will help with capital formation.

There will be many other similar arrangements being announced throughout the month of November and December, where capital formation, definitive agreements, and scale will be the primary theme. As Matt mentioned, we are very focused here in the U.S., Middle East, and soon Southeast Asia, where these exact structures, these types of use cases, and the capital formation associated with these will bring us to a global scale. I will now turn the call back to the operator.

Operator: Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To remove yourself from the queue, you may press star one ne again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jack Vander Aarde of Maxim. Your line is open, Jack.

Jack Vander Aarde: Okay. Good evening. Congrats on the OpenWorld merger, and Q3 results, which seem to outperform the preliminary expectations you put out there a few weeks ago. I have a couple questions. First question maybe for Matt or Russ. With all these moving parts here, some of these strategic opportunities and non-binding agreements, what is needed to move the goalposts here of these announcements so far to actually close them? Thanks.

Russ McMeekin: Yeah. Hey, Matt, I'll take that one. Thanks, Jack. As I said in the prior remarks, definitive agreements, which are underway, we have law firms on both sides of the deal, us as the originator and the customer, so that's proceeding very well, and capital formation. These things come together and close. I'm actually here in the Middle East right now doing exactly that. In summary, on the deals we've announced and several deals we have not yet announced, we're working on all those components. The closure occurs when the definitive agreement is signed and the initial capital formation begins.

Some of these are long-term agreements, so there'll be additional capital formation thereafter, things that are a billion dollar plus, like the Powerwall example. That one will have many tranches, but structurally, they all look the same.

Jack Vander Aarde: Okay, great. I appreciate the color there, Russ. Maybe a follow-up question on the Solana announcement. Help us understand, just given to those that are new to the story, also new to tokenization in general, as well as some Web3 trading, why is Solana and Backpack trading strategic, or why should that be viewed by investors as so important for your company and maybe even the industry? Thanks.

Matt Shaw: Yeah, happy to take that one, Jack. I think obviously the first point to make is it allows for 24/7 trading, so trading outside normal trading hours, and accessing the deep liquidity in DeFi, in decentralized finance. I think, as important though, in OpenWorld, we're in the business of tokenizing real-world assets, so I think it's very strategic and indeed crucial that we actually lead the way by tokenizing our own stock. The actual product, I think, is really great for investors. Investors can move seamlessly between the token and the stock. For instance, a holder of OPNW in tokenized form can request delivery from Backpack, which is the issuer of the underlying CUSIP stock, directly to their brokerage account.

So, it has that sort of seamless two-way flow. In terms of why Solana, I think Solana, one of the major protocols, it has very broad distribution and deep liquidity. Solana Foundation is very supportive of RWAs and tokenized stocks. We believe that tokenizing our stock on Solana brings a new Web3 native, highly educated community to our stock. Lastly perhaps, and very importantly, we also believe Solana will be very helpful in capital formation for our RWA deals. Solana itself has actually shown huge growth in this area just this year, with RWAs on Solana now reaching over $5 billion, which actually is a six-fold increase since the beginning of the year.

So, yeah, I think very strategic for us and a very exciting development, I think.

Jack Vander Aarde: Okay, got it. I appreciate all that color. It is very helpful. I look forward to tracking that development as it plays out. If I may, maybe just one more question, then I will hop back in the queue. One thing to point out with the recent results is that the margins, both gross margin and adjusted EBITDA margin, were fairly strong out of the gate for just over $7 million of revenue. Can you help us understand, help investors understand these margin levels and how these kind of evolve going forward? Are they sustainable? Is there more upside? Any color would be helpful. Thanks.

Gerard Hernandez: Yeah, absolutely, Jack. Thank you for the questions. As you have heard in our discussion this afternoon, we have a very attractive business model that is gaining momentum. Our RWA business combines specialized structuring, implementation, and tokenized services with ongoing platform and servicing fees. Therefore, initially, these engagements establish the infrastructure, establish the infrastructure, then while recurring revenues can build on that foundation, while with relatively limited incremental delivery costs. As we grow, we expect this combination of reusable technology, specialized expertise, and recurring fees to support attractive margins and additional operating leverage. Our Q3 demonstrates that, right? The margin potential of this model, and we see the opportunities for further upside as the business scales.

Jack Vander Aarde: Okay, great. Well, gentlemen, I appreciate all the color. Congrats again on the closing of the merger, and look forward to watching the story play out. Thanks.

Gerard Hernandez: Thank you.

Operator: Thank you. As there are no further questions in queue, this concludes today's conference call. Thank you for participating. You may now disconnect.

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