This Solana treasury company may sell SOL as a DeFi loan ties up more than half its treasury

SOL Strategies may sell part of its Solana treasury to meet obligations, as much of its holdings remain pledged against debt.

According to an SEC filing, the company said it had C$1.87 million in cash as of June 30 and that roughly C$22 million of digital assets were unencumbered and available for conversion into fiat.

SOL Strategies also reported C$37.33 million of current liabilities, although those obligations are staggered and do not represent a single payment due immediately.

The financial statements show those obligations include about C$3.31 million of accounts payable, a C$7.75 million HoudiniSwap acquisition note, C$784,000 owed to a vendor, a C$865,000 current acquisition holdback, C$13.90 million borrowed through DeFi protocol Kamino Finance and C$10.73 million of current convertible debentures.

Their repayment schedules vary considerably. Trade payables are generally due within 30 days, while the Houdini note matures Dec. 1. A US$1.25 million Houdini acquisition holdback is split between payments nine and 18 months after the June 1 closing. Kamino carries no fixed maturity, while some debenture conversion or maturity dates extend into 2028 and 2030.

Management said its liquidity plan includes cost reductions, revenue from staking, validators and HoudiniSwap, selective SOL sales, securities issuance and potential additional borrowing through its ATW convertible note facility.

The disclosure puts greater focus on how the company finances operations while preserving a treasury of roughly 460,000 SOL worth C$48 million at quarter-end.

Notably, more than half of those holdings were already tied to borrowing. SOL Strategies pledged 252,851 SOL, valued at C$26.4 million, to Kamino Finance against roughly C$13.9 million of debt.

While the absence of a fixed maturity reduces immediate repayment pressure, Kamino can automatically liquidate collateral if the loan-to-value ratio reaches 75%, increasing the company's exposure to a sharp decline in SOL.

SOL Strategies said its digital assets provided roughly C$34 million of net liquidity after accounting for the Kamino borrowing. Management also said its available cash, crypto and other resources were sufficient to support operations for at least 12 months.

The company nevertheless reported a C$119.36 million net loss for the nine months through June. That included C$61.95 million in digital-asset revaluation losses, C$22.82 million in realized crypto losses, and C$16.11 million in impairment charges.

The accounting loss was much larger than the actual cash drain. SOL Strategies used C$7.80 million of cash in operating activities during the period.

Selling SOL is more than a hypothetical liquidity option for the company.

On June 8, SOL Strategies sold 65,001 SOL at an average of C$87.88, generating roughly C$5.75 million to repay debt.

Meanwhile, the company can preserve more of its SOL exposure by raising capital instead, but those routes can increase dilution or future liabilities.

During the nine months through June, holders converted US$2.85 million of ATW debt into about 1.78 million shares. SOL Strategies also raised C$2.14 million through its at-the-market equity program.

Its newly acquired HoudiniSwap business generated C$1.2 million in fees and C$768,000 of EBITDA during June, while staking and validator operations contributed C$622,299 during the quarter.

While those businesses could reduce reliance on asset sales and external financing, the near-term challenge is whether they can generate enough cash to meet staggered obligations without requiring substantially more SOL sales or shareholder dilution.

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