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SOL Global Investments Corp
Symbol SOL
Shares Issued 117,314,582
Close 2024-12-20 C$ 0.36
Market Cap C$ 42,233,250
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SOL Global enters LOI to focus on position in Solana

2024-12-20 16:23 ET - News Release

Mr. Paul Kania reports

SOL GLOBAL ANNOUNCES STRATEGIC REORGANIZATION OF NON-SOLANA ASSETS

SOL Global Investments Corp. has executed a letter of intent to move all of its assets other than its native Solana token assets, together with its liabilities, into a newly formed subsidiary, in which SOL will have a minority equity interest. This strategic move is designed to enhance business focus on blockchain innovation, including its significant position in Solana, and decouple its new strategic approach from its historical liability.

Structure of the transaction

Under the terms outlined in the non-binding LOI, SOL Global intends to transfer all of its assets other than the Solana assets, together with certain liabilities, into a newly created special-purpose vehicle in exchange for shares representing a minority equity interest in the asset vehicle. In connection with the proposed transaction, SOL Global will settle the majority of its secured liabilities for a majority of the equity interest of the asset vehicle. The terms and conditions of the proposed transaction, including the transferred assets and the fair market value of the vehicle portfolio, will determine the relative ownership of the asset vehicle by SOL Global and the current holders of SOL Global's secured liabilities. The asset vehicle will operate as an independent entity, SOL Global will no longer be liable for the transferred liabilities and such transferred liabilities will no longer appear on SOL Global's balance sheet, which allows SOL Global to operate unencumbered. The company, through its minority interest in the asset vehicle, intends to invest remaining cash from liquidation of assets for additional Solana purchases.

Paul Kania, SOL Global's interim chief executive officer and chief financial officer, stated, "By removing existing liabilities and debts, the company will much more easily be able to raise future equity financings and attract institutional participation, which is essential for creating maximum shareholder value."

The company is expected to, following the proposed transaction, hold between 5 per cent and 10 per cent of the asset vehicle. As a result, any possible gain in the transferred assets will be largely held by other asset vehicle equity holders rather than SOL Global. It is possible that the value of the transferred assets could increase and the transferred assets continue to have speculative value. To mitigate a possible loss in potential value of the transferred assets, the LOI provides that the company shall have the option to, at any time, repurchase the transferred assets for cash at the same value at which they were transferred to the asset vehicle. Any gain in the transferred assets, whether through the asset vehicle or if SOL Global repurchases the transferred assets, is expected to be used for the purchase of additional Solana tokens. Under the terms of the LOI, the majority of the security interests in SOL Global will be discharged by the respective creditors.

Following the closing of the transaction, the only asset held in SOL Global's portfolio will be its Solana assets and its minority equity position in the asset vehicle. SOL Global is an investment issuer listed on the Canadian Securities Exchange and holds certain portfolio assets, which will consist predominantly of blockchain tokens following the closing of the proposed transaction, initially consisting only of Solana tokens. The transferred assets consist of securities of mainly electric vehicle companies together with some real estate assets. While the change in focus of portfolio assets does represent a new strategic direction of the company to increase value, the value of its portfolio, SOL Global will continue to be an investment issuer and may change the strategic focus of its portfolio at any time, including investing in portfolio assets other than blockchain tokens. This transaction may be subject to shareholder approval and may be considered a change of business pursuant to the policies of the Canadian Securities Exchange.

Next steps and timeline

SOL Global expects to finalize the definitive agreements by Feb. 25, 2025, and complete the transaction by Feb. 28, 2025.

Increased focus and specialization

Investing in blockchain technology and specific platforms like Solana offers unique opportunities in innovation, financial growth and diversification. Blockchain is transforming industries like finance, health care, supply chain, gaming and more by enabling decentralized, secure and transparent systems. SOL Global's investment strategy will focus its business efforts on blockchain innovation and aims to position itself to benefit from this paradigm shift. As a nascent industry, blockchain investments can yield significant returns, particularly in early-stage projects. Solana's ecosystem integrates with major platforms, wallets and chains, improving its interoperability and ensuring broader adoption. Blockchain technology eliminates intermediaries, reducing costs and improving efficiency. This distinct business model allows SOL Global to strategically position itself in competitive markets, aligning with this investor base that fosters an entrepreneurial culture, enabling focused innovation.

About SOL Global Investments Corp.

SOL Global is a diversified international investment and private equity holding company. The company is in the process of divesting its current investment partnerships and minority holdings. SOL Global recently announced the transition of investments to focus exclusively on digital asset technology, primarily on Solana and Solana-based technologies. SOL Global is among the first publicly traded crypto investment companies providing exposure to the rapidly growing Solana ecosystem. The company currently holds Solana and generates a passive yield through staking, and is also focused on identifying other strategic investment opportunities being built on the Solana blockchain.

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