Sol Strategies Announces Letter of Intent to Acquire High-Performance Validators for USD $34 Million

Rhea-AI Summary

Sol Strategies Inc. (CSE: HODL) (OTCQX: CYFRF) has announced a non-binding letter of intent to acquire one of Solana ecosystem's largest validators for USD $34 million (CAD $48.7 million). The transaction would increase Sol Strategies' delegated SOL to over 2.9 million SOL (CAD $800 million), representing an increase of 1.2 million SOL.

The acquisition terms include: USD $10 million in cash at closing, USD $12 million in shares at closing, and USD $12 million in common shares on the one-year anniversary. The estimated yearly contribution to net income from this acquisition is projected at CAD $8.6 million. The transaction completion is subject to definitive agreement and required consents, with no finder's fees payable.

Positive

• Significant increase in delegated SOL by 1.2 million tokens
• Expected CAD $8.6 million yearly contribution to net income
• Strategic expansion in Solana validator ecosystem
• Structured payment terms with only 29% cash requirement at closing

Negative

• Substantial share dilution with USD $24 million in equity issuance
• High acquisition cost of USD $34 million
• Non-binding agreement with execution uncertainty
• Net income projections subject to crypto market volatility

Toronto, Ontario--(Newsfile Corp. - February 14, 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 that on February 14, 2025, it entered into a non-binding letter of intent to acquire one of Solana ecosystem's largest validators. The Proposed Transaction would increase the amount of SOL delegated to Sol Strategies-owned Solana validators to over 2.9 million SOL (CAD $800 million), an increase of over 1.2 million SOL, enabling Sol Strategies to earn revenue on this delegation.

The USD $34 million (CAD $48.7 million) total consideration payable pursuant to the Proposed Transaction is as follows:

(i) USD $10 million (CAD $14.3 million) in cash, payable at close;

(ii) USD $12 million (CAD $17.2 million) in Sol Strategies shares, issued at closing; and,

(iii) USD $12 million (CAD $17.2 million) in Sol Strategies common shares, issued on the one year anniversary of the closing date (CAD $17.2 million).

Completion of the Proposed Transaction is subject to customary conditions including, but not limited to:

(i) the Company and the Vendor entering into a definitive agreement; and

(ii) receipt of all required consents.

There are no finder's fees payable in connection with the Proposed Transaction.

The estimated yearly contribution to net income from the Proposed Transaction is CAD $8,600,000, showcasing the potential of the validator's economic contributions to Sol Strategies' business model.

The Canadian dollar (CAD) amounts in this news release are based on cryptocurrency price rates from Coinbase on February 14, 2025.

Net income calculations are based on SVT One Dashboard and are subject to change due to market volatility and network conditions.

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.

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 Proposed Transaction and its intended impact on the Company. 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.

Investor Contact:

Doug Harris
Chief Financial Officer
doug@solstrategies.io
Tel: 416-480-2488

SOURCE: Sol Strategies

Media Contact: sol@kcsa.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/240978

FAQ

What is the total value of Sol Strategies' (CYFRF) validator acquisition?

Sol Strategies is acquiring the validator for USD $34 million (CAD $48.7 million), structured as USD $10 million in cash and USD $24 million in shares.

How much additional SOL will CYFRF manage after the validator acquisition?

The acquisition will increase Sol Strategies' delegated SOL by 1.2 million, bringing the total to over 2.9 million SOL (approximately CAD $800 million).

What is the expected annual income from CYFRF's new validator acquisition?

The estimated yearly contribution to net income from the acquisition is CAD $8.6 million, subject to market volatility and network conditions.

How will CYFRF pay for the validator acquisition?

The payment structure includes USD $10 million in cash at closing, USD $12 million in shares at closing, and USD $12 million in shares one year after closing.

When will CYFRF complete the validator acquisition?

The completion date is not specified as it's subject to conditions including entering a definitive agreement and receiving required consents.