Forward Industries (NASDAQ: FWDI) is looking to consolidate the Solana digital asset treasury (DAT) sector through acquisitions. On Monday, the firm announced its intent to acquire fellow SOL DATs, SkyAI, Inc. (SKYA) and Solana Company (HSDT). 

The firm sent two non-binding proposals to the boards of both firms, floating all-stock business combinations. According to the announcements, Solana Company declined Forward’s initial offer while SkyAI did not respond. 

Forward offered to issue new FWDI shares to compensate HSDT stockholders at a premium of about 10%, with HSDT stockholders receiving 0.386 newly issued Forward common stock for each share of HSDT common stock at $1.63, according to the announcement. 

Additionally, Forward offered a similar all-stock deal to SKYA holders, offering a 20% premium to SKYA’s recent price. 

The announcement comes about a week after Forward disclosed its bid to acquire Solmate, another Solana treasury firm, which was rejected. 

Ryan Navi, the chief investment officer for Forward, told The Block last week that Forward was well-positioned to acquire some of its SOL DAT competitors. Notably, the firm is set to join the Russell 2000 and 3000 indexes at the end of the month, which will serve as a major liquidity boost for FWDI from passive buyers.

Forward is also the biggest Solana treasury by an order of magnitude, with its SOL holdings larger than its next three competitors combined. The firm holds over 7 million SOL, the majority of which is staked or deployed in Solana DeFi.

Digital asset treasuries have fared poorly in recent months, with the majority trading at a discount to their net asset valuations, meaning that investors perceive them to be worth less than the value of their total holdings. The six active SOL DATs tracked by The Block are all trading between a 0.34 and 0.76 mNAV, with Forward at 0.69 based on its basic market cap. Navi noted, however, the firm has a stronger 1.01 mNAV on a fully diluted basis.

The Solana ecosystem is distinct in the number of DATs that formed to acquire SOL, backed in part through discounted deals on SOL tokens provided by the Solana Foundation, The Block previously reported. 

These firms, which collectively hold over 16 million SOL, largely acquired their tokens at prices above $200, where Solana was trading during the heyday of DAT formation. The token is now trading around $76, up over 11% on the day, according to The Block’s price page, though it has been as low as $60 in recent days. 

Forward has deployed other strategies to earn revenue using its holdings. The firm is also borrowing against its liquid staked SOL through a deal with Galaxy, one of the firm’s three principal backers, and using "freed-up cash" to deploy in "non-correlated, high-yield opportunities" like its investment in the OnRe reinsurance platform, Navi noted. 

Without going into specifics, Navi said Forward is making overtures to acquire smaller SOL DATs using what should be attractive terms. The firm is offering existing shareholders a premium and the ability to increase their SOL exposure through a larger, stronger pro forma company.

Solana Company is the second-largest SOL DAT with about 2.3 million tokens, while SkyAI has roughly 2 million tokens. 

The alternative, for many, Navi argued, would be expensive liquidation proceedings as many SOL DATs struggle during a prolonged bear market. Notably, if a SOL DAT winds down, Navi said it would most likely be forced into a cash-only distribution, meaning any backers of unsuccessful DATs who contributed tokens to a collective strategy would not even receive those assets back. 

"We see a lot of opportunities, especially in this dislocation, where we can play offense and others are playing defense," Navi told The Block. "There's room for win-win outcomes."

"SKYA trades at a significant discount to the net asset value of its treasury and its recent AI pivot has only exacerbated that discount with its shares meaningfully underperforming both SOL and its treasury-company peers since their pivot," Navi said in Monday's statement. "In the current market environment, it can be difficult for subscale treasury companies to perform when high relative fixed operating costs cause meaningfully lower yields and negative cash flows, which continue to erode shareholder value."

Solana Company's HSDT is up over 11% on Monday, trading around $1.72, and SKYA is up 12.95% to $1.29. FWDI is up over 14% to $4.92.