Solana treasury discount at Forward Industries hits 30%

The Solana treasury discount at Forward Industries looks wide at first glance: its shares trade about 30% below the company’s net assets. Its own SEC filing shows that gap shrinks to 2.4% once every warrant, option and stock award counts. The difference comes down to about 29.6 million potential shares.

The quick take

Price: $SOL $81.50, -1.7% ↓ in 24 hours (CoinGecko, 6:41 p.m. ET).
Trigger: Forward’s Nov. 10 filing puts its stock at $5.53 against $7.87 of net assets per common share.
Watch: 13.4 million advisor warrants at one cent that unlock only above $27.75 a share.

What happened

Forward Industries, a Nasdaq-listed company that holds Solana ($SOL) as its main asset, filed a mid-quarter update with the SEC on Tuesday, Nov. 10. It reported 8,727,694 $SOL as of Nov. 9, about 1.5% of the circulating supply by its own count.

The filing puts net asset value at $600.3 million. That is the fair value of its $SOL, other tokens and cash, minus $187.5 million of debt. Spread over 76.3 million common shares, it comes to $7.87 per share.

The filing values the stock at $5.53. So each common share traded about 30% below its slice of the treasury. Forward reports this as an mNAV of 0.703x, where any figure below 1 means the market prices the stock under its assets.

Why it moved

The discount depends on how many shares get a claim on those assets. Forward’s capitalization table shows three counts, and each one gives a different answer.

The middle count adds 12.3 million vested warrants with a $0.00 exercise price, plus in-the-money options and restricted stock units. That lifts the total to 90.3 million shares. Net assets per share fall to $6.65, and the discount narrows to about 17%.

The broadest count adds 13.4 million advisor and lead-investor warrants priced at one cent. It also adds out-of-the-money options and performance stock units. At 105.9 million shares, net assets per share drop to $5.67, and the discount is just 2.4%.

“The difference is who could eventually share in the assets,” CryptoSlate editor-in-chief Liam ‘Akiba’ Wright wrote in an analysis published Thursday at 5:50 p.m. ET.

Who’s buying and selling

The advisor warrants are the swing factor in that math. Forward’s Nov. 9 prospectus supplement says they unlock in three equal parts. Each part opens only after the stock closes at 150%, 200% or 250% of the $18.50 private placement price for 20 of 30 trading days.

That works out to $27.75, $37.00 and $46.25 a share. The lowest trigger is about five times the $5.53 price in the filing. Until the stock gets there, those warrants cannot be used.

Forward is also still selling new stock. The same prospectus added Barclays as a sales agent next to Cantor, in a share sale program of up to $4 billion. Through Nov. 6, Forward had sold 529,257 shares for about $12.1 million before costs.

What to watch next

The $SOL price matters most for the gap. The filing valued each $SOL in the treasury at $86.61. The token traded at $81.50 at 6:41 p.m. ET Thursday, CoinGecko data show, 5.9% below that mark.

At that price, the $SOL in Forward’s treasury is worth less than the filing shows, while the debt stays the same. Forward also calls all of these figures preliminary and unaudited.

For readers, the takeaway is simple. A discount to net assets only means something next to the share count behind it, and Forward’s table gives three.

Bottom line: Forward’s discount looks wide for today’s common shareholders, but most of it disappears once cheap warrants and stock awards count.