SOL Strategies Completes Initial $20 Million Closing of USD $500 Million Convertible Note Facility

Rhea-AI Summary

SOL Strategies Inc. (OTCQX: CYFRF) has completed the initial USD $20 million closing of a larger USD $500 million convertible note facility with ATW Partners. The company will use the proceeds exclusively to purchase SOL tokens for staking on their validators. The convertible notes will pay interest in SOL, calculated as up to 85% of the staking yield generated from the staked SOL tokens. Additional funding of up to USD $480 million is available through subsequent drawdowns. The notes are convertible into common shares at market price prior to conversion. Cohen & Company Capital Markets served as placement agent, receiving a 4% finder's fee on the initial closing.

Positive

• Secured significant initial funding of USD $20 million with potential for up to USD $500 million total facility
• Strategic investment structure allowing for SOL token acquisition and staking revenue
• Interest payments structured through staking yields, preserving cash flow
• No statutory hold period on convertible shares under Canadian securities laws

Negative

• 4% finder's fee reduces net proceeds from the initial closing
• Potential dilution for existing shareholders upon note conversion
• Future drawdowns subject to certain conditions, not guaranteed

Capital to be Exclusively Allocated to SOL Purchases and Validator Growth

Toronto, Ontario--(Newsfile Corp. - May 1, 2025) - SOL Strategies Inc. (CSE: HODL) (OTCQX: CYFRF) (formerly, Cypherpunk Holdings Inc, "Sol Strategies" or the "Company"), a publicly traded Canadian company dedicated to investing in and providing infrastructure for the Solana blockchain ecosystem, today announced the closing of the initial USD $20 million closing of its up to USD $500 million convertible note facility (the "Facility"), as previously disclosed in the Company's April 23, 2025 news release, and receipt of an initial USD $20 million tranche of proceeds. The initial USD $20 million of proceeds represent the first portion of the up to USD $500 million facility with ATW Partners, with proceeds being deployed to purchase SOL tokens to be staked on the Company's validators.

Pursuant to the Facility, the Company today issued convertible notes ("Notes") in the aggregate principal amount of USD $20 million as its first tranche (the "Initial Closing"), with additional capacity of up to USD $480 million available in subsequent drawdowns, subject to certain conditions. In this novel structure, interest on the Notes will be paid in SOL, calculated as up to 85% of the staking yield generated by SOL acquired through the facility and staked by SOL Strategies.

The Notes will be convertible into common shares of the Company at the prevailing market price on the date prior to conversion, subject to the terms and conditions of the Notes and the Facility.

The Notes, and the underlying common shares, are to be issued outside of Canada pursuant Ontario Securities Commission Rule 72-503 - Distributions Outside Canada and accordingly the common shares issuable under conversion of the Notes will not be subject to any statutory hold period under applicable Canadian securities laws.

Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, is serving as placement agent to SOL Strategies. A finder's fee of 4% of the gross proceeds from the Initial Closing was paid to the placement agent in cash.

About SOL Strategies

SOL Strategies Inc. (CSE: HODL) (OTCQX: CYFRF) is a Canadian investment company that operates at the forefront of blockchain innovation. Specializing in the Solana ecosystem, the company provides strategic investments and infrastructure solutions to enable the next generation of decentralized applications.

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.

Investor Contact:
John Ragozzino, CFA
solstrategies@icrinc.com
203.682.8284

Media Contact: solstrategies@scrib3.co

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; the deployment of proceeds; the Company's plans for validator growth and expansion, and the anticipated benefits to the Company's validator operations and SOL purchases. 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".

The Company cautions that future tranches beyond the initial USD $20 million are subject to certain conditions and there can be no guarantee these conditions will be met or that the full USD $500 million facility will be utilized. There is no assurance 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.

The purpose of forward-looking information is to provide the reader with a description of management's expectations, and such forward-looking information may not be appropriate for any other purpose. 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/250451

FAQ

What is the size of SOL Strategies' (CYFRF) convertible note facility with ATW Partners?

SOL Strategies has secured a convertible note facility of up to USD $500 million, with an initial closing of USD $20 million completed on May 1, 2025.

How will SOL Strategies use the proceeds from the convertible note facility?

The proceeds will be exclusively used to purchase SOL tokens that will be staked on the company's validators.

How is the interest paid on SOL Strategies' convertible notes?

Interest is paid in SOL tokens, calculated as up to 85% of the staking yield generated by the SOL tokens acquired and staked through the facility.

What are the conversion terms for SOL Strategies' (CYFRF) convertible notes?

The notes are convertible into common shares at the prevailing market price on the date prior to conversion, subject to the facility's terms and conditions.

Who is the placement agent for SOL Strategies' convertible note facility?

Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, serves as placement agent and received a 4% finder's fee on the initial closing.