Sol Strategies Announces Update to Second Tranche Private Placement of CAD $2.5 Million

Rhea-AI Summary

Sol Strategies (CSE: HODL, OTC: CYFRF) has announced updated terms for its second tranche private placement of CAD $2.5 million. This follows previous financings, bringing total gross proceeds to CAD $30 million, paid in SOL tokens to increase the company's SOL treasury holdings.

The private placement consists of unsecured convertible debenture units, each comprising a CAD $1,000 principal debenture and 214 warrants (reduced from 400). Key terms include:

• 2.5% annual interest rate, payable semi-annually in cash or shares
• Convertible to shares at CAD $4.66 per share (increased from $2.50)
• Warrants exercisable at CAD $4.66 per share within 5 years
• Debentures redeemable after 3 years at 112% of principal value

The closing is expected around January 24, 2025, with no finder's fees. Issued shares will have a four-month trading restriction.

Positive

• Total financing reaches CAD $30 million, strengthening SOL treasury holdings
• Higher conversion price of CAD $4.66 (up from $2.50) indicates positive valuation adjustment
• No finder's fees reduces transaction costs

Negative

• Reduction in warrant allocation from 400 to 214 per unit may decrease investor appeal
• Potential dilution risk through share conversion and warrant exercise
• Low interest rate of 2.5% might not attract yield-focused investors

Proceeds to be used to Increase SOL Holdings and Expand Validator Operations

Toronto, Ontario--(Newsfile Corp. - January 22, 2025) - Sol Strategies Inc. (CSE: HODL) (OTC Pink: CYFRF) ("Sol Strategies" or the "Company"), a publicly traded Canadian company dedicated to investing in and providing infrastructure for the Solana blockchain ecosystem, wishes to announce updated terms to its previously announced second tranche private placement of CAD $2.5 million (the "Private Placement"). The second tranche will bring the total gross proceeds received pursuant to private placement financings to CAD $30 million, with the proceeds being paid in SOL, which will increase the Company's SOL treasury holdings.

The Private Placement will consist of unsecured convertible debenture units ("CD Units") for gross proceeds of CAD $2.5 million. Each CD Unit consists of one debenture ("Debenture") with a principal amount of CAD $1,000, and 214 warrants (updated from 400 warrants). Interest on the Debentures accrues at a rate of 2.5% per annum, payable semi-annually in cash or common shares of the Company (each, a "Share"), and the Debentures are convertible at any time into Shares of the Company at CAD $4.66 per Share (updated from $2.50 per Share). Each warrant entitles the holder to purchase one (1) Share of the Company at an exercise price of CAD $4.66 per Share (updated from $2.50 per Share), exercisable at any time on or before the five-year anniversary of the closing of the Private Placement. The debentures are redeemable in cash after the three-year anniversary of the closing of the Private Placement at 112% of the principal value, plus accrued and unpaid interest. Any Shares issued on the conversion of the Debentures, the interest thereon, or upon exercise of the warrants will be subject to restrictions on trading until the date that is four months and a day following closing. The closing of the Private Placement is expected on or about January 24, 2025, subject to customary closing conditions. No finder's fees will be paid in connection with the Private Placement.

About Sol Strategies

Sol Strategies is a publicly traded Canadian company actively investing in, supporting, and providing infrastructure for the Solana blockchain and ecosystem. The Company focuses on leveraging investment opportunities in staking rewards and Solana-based projects, enabling shareholders to indirectly participate in the decentralized finance landscape. Sol Strategies is headquartered in Toronto, Canada, and is publicly listed on the Canadian Securities Exchange under the ticker "HODL" and on the OTC market under the ticker "CYFRF".

To learn more about Sol Strategies, please visit www.solstrategies.io. A copy of this news release and all the Company's related material documents regarding the Company may be obtained under the Company's SEDAR+ profile at www.sedarplus.ca.

Cautionary Note Regarding Forward-Looking Information:

Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release contains "forward-looking information" within the meaning of applicable securities laws. All statements other than statements of historical fact may be forward‐looking statements and information. More particularly and without limitation, this news release contains forward‐looking statements and information relating to the Company's or the Company's management team's expectations, hopes, beliefs, intentions or strategies regarding the future, and expectations regarding the characteristics, value drivers, and anticipated benefits of the Company's business plans and operations related thereto. Forward-looking information can also be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved".

Forward-looking statements in this news release include statements regarding the completion of the Private Placement and its impact on the Company. There is no assurance that the Private Placement will close or that the Company's plans or objectives will be implemented as set out herein, or at all. Forward-looking information is based on certain factors and assumptions the Company believes to be reasonable at the time such statements are made and is subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance, or achievements of the Company to be materially different from those expressed or implied by such forward-looking information.

There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking statements are made based on management's beliefs, estimates, and opinions on the date that statements are made, and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates, and opinions or other circumstances should change, except as required by law. Investors are cautioned against attributing undue certainty to forward-looking statements.

Disclaimer:

Sol Strategies is an independent organization in the Solana ecosystem. Sol Strategies is not affiliated with, owned by, or under common control with Solana Foundation (the "Foundation"), and the Foundation has not entered into any association, partnership, joint venture, employee, or agency relationship with Sol Strategies.

None of the Foundation or its council members, officers, agents or make any representations or warranties, recommendations, endorsements or promises with respect to the accuracy of any statements made, information provided, or action taken by Sol Strategies and expressly disclaim any and all liability arising from or related to any such statements, information or action.

Officer/Director Contact:
Doug Harris
Chief Financial Officer
doug@solstrategies.io
Tel: 416-480-2488
SOURCE: Sol Strategies

Media contact: sol@kcsa.com

SOURCE: Sol Strategies Inc.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/238013

FAQ

What are the new terms of Sol Strategies (CYFRF) second tranche private placement?

The second tranche private placement of CAD $2.5 million includes convertible debentures with 214 warrants per unit (reduced from 400), convertible at CAD $4.66 per share (up from $2.50), with a 2.5% annual interest rate.

How much has Sol Strategies (CYFRF) raised in total through private placements?

Sol Strategies has raised a total of CAD $30 million through private placement financings, including this second tranche of CAD $2.5 million.

When can CYFRF convertible debentures be redeemed?

The convertible debentures can be redeemed in cash after three years at 112% of the principal value, plus accrued and unpaid interest.

What is the exercise period for CYFRF warrants in the January 2025 private placement?

The warrants can be exercised at CAD $4.66 per share at any time within five years from the closing date of the private placement.

How long is the trading restriction period for CYFRF shares issued from this private placement?

Shares issued through conversion of debentures, interest payments, or warrant exercise will have a trading restriction period of four months and one day following the closing.