Ripple-backed Evernorth Holdings could raise approximately $80 million through a stock purchase agreement with Cantor Fitzgerald, with much of the money earmarked for buying XRP. The financing is conditional, and an earlier SEC filing points to another potential $132 million from warrants.
Evernorth Holdings could raise approximately $80 million through a new equity financing agreement with Cantor Fitzgerald to expand its XRP treasury.
The Ripple-backed company signed a stock purchase agreement with CF Principal Investments, a Cantor Fitzgerald affiliate, on Oct. 23. The deal allows it to sell up to 5.22 million newly issued Class A common shares over approximately 14 months.
How the Cantor facility works
An accompanying SEC prospectus estimates $80.7 million in gross proceeds, or approximately $78.3 million after fees and expenses. The estimate rests on Evernorth's Oct. 22 closing share price of $15.46.
Evernorth intends to put a substantial portion of the proceeds toward acquiring additional XRP. It plans to use the rest for working capital, corporate expenses, and activities within the XRP ecosystem.
The Nasdaq-listed company can direct Cantor to buy shares periodically at 97% of their volume-weighted average trading price. Management decides when to issue shares based on market conditions and financing needs.
However, purchases face limits, including a general cap of 20% of trading volume during the applicable purchase period and a 4.99% ownership threshold for Cantor. Evernorth must also pay an initial commitment fee of approximately $522,000, which could rise to $1 million under certain conditions.
The financing has not yet begun. The company must first secure SEC effectiveness for its resale registration statement and meet other contractual requirements.
Warrants add a possible $132 million
A separate SEC filing registers the potential issuance of nearly 11.5 million Class A shares through the exercise of outstanding public warrants. Those warrants, issued by the special purpose acquisition company behind Evernorth's public listing, let holders buy shares at $11.50 each.
If holders exercise them in full for cash, the warrants could generate approximately $132.2 million for Evernorth. Unlike the Cantor deal, that money depends on investors choosing to exercise their rights, and Evernorth said management would keep discretion over how it spends any proceeds.
Evernorth generally intends to raise additional capital when its stock trades at a premium to the net asset value of its XRP holdings. The approach follows a model pioneered by Michael Saylor's Strategy, which has sold MSTR shares to investors and used the proceeds to expand its Bitcoin holdings. Issuing additional shares would also dilute existing shareholders' ownership.
Source: CryptoSlate
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