Non-dilutive, First-of-its-Kind Transaction Follows Figure’s Successful TradFi IPO
Figure Technology Solutions, the leading blockchain-native capital marketplace for the origination, funding, sale and trading of tokenized assets, announced the filing of a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (the “SEC”) relating to the proposed offering of its Series A Blockchain Common Stock, par value $0.0001 per share (the “Blockchain Stock”). The Blockchain Stock will be a blockchain-native class of equity securities, will trade on Figure’s alternative trading system (“ATS”) and will be convertible into shares of Figure’s Class A Common Stock on a one-for-one basis. Holders of the Blockchain Stock will be able to borrow against and lend the Blockchain Stock out on Democratized Prime, a blockchain-based decentralized finance (“DeFi”) protocol on the Provenance Blockchain.
The Blockchain Stock utilizes a blockchain-only securities stack. Instead of being held by the Depository Trust & Clearing Corporation (“DTCC”), the security is issued on the Provenance Blockchain. Rather than centralized exchanges, the security trades on Figure’s non-custodial ATS and settles in self-custody user wallets. Instead of introducing brokers, traders can access the marketplace through their blockchain wallets. DeFi replaces the stock-based lending role of prime brokers.
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“This is a new capital markets infrastructure moment for efficiency and risk management — a huge leap forward from the legacy securities market infrastructure, and the start of a world that no longer needs it,” said Mike Cagney, Executive Chairman and Co-Founder of Figure.
Figure expects the securities issued in the transaction to demonstrate blockchain-driven structural cost advantages versus traditional public equities. The Blockchain Stock will be able to trade 24x7x365. Most importantly, rather than an opaque “locate market” intermediated by prime brokers, holders of the Blockchain Stock will be able to lend their stock out in a transparent manner, enabling holders to capture economic benefits, especially when stock is on “special” and lending rates are high.
“Today’s announcement extends Figure’s track record of using blockchain to deliver real efficiency and better outcomes across the capital markets,” added Michael Tannenbaum, CEO of Figure. “The ability to cross collateralize this equity with other blockchain assets is a huge improvement over the current siloed market.”
This proposed offering sets multiple industry firsts, and Figure expects it to serve as a blueprint for future issuances:
- First Blockchain-native public equity security issuance: The Blockchain Stock, which will have its own separate CUSIP, will exist entirely on the Provenance Blockchain and will settle exclusively on blockchain infrastructure.
- Decentralized process: Self-custody and self-settlement remove the need for traditional centralized intermediaries, like custody and clearing firms, and allow for third-party blockchain wallets.
- First stablecoin-only settlement: Figure’s $YLDS – the first SEC-registered transferable yielding stablecoin – will encumber all bids and settle all transactions in the secondary market.
- Active market-making: Initial market makers will be onboarded to the blockchain and enabled to provide market-making.
- Cross-asset margin and collateralization: Available via Democratized Prime.
- Direct on-chain governance: shareholders can vote securely and transparently without intermediaries like proxy firms, using blockchain as the single source of truth for ownership and voting.
- Seamless exchange: Holders can swap the Blockchain Stock and the NASDAQ-traded securities through Figure’s Treasury.
The number of shares of Blockchain Stock to be offered and the price range for the proposed offering have not yet been determined. This proposed offering is subject to market conditions, and there can be no assurance as to whether or when the offering may be completed or as to the actual size or other terms of the offering.
The offering will be non-dilutive to existing shareholders of Figure. In connection with the offering, shares of Class A Common Stock will be sold by existing investors to Goldman Sachs & Co. LLC, Morgan Stanley and Cantor, as underwriters (the “underwriters”). Upon issuance and payment of the Blockchain Stock to purchasers in this offering, Figure will purchase shares of Class A Common Stock from the underwriters on a one-for-one basis, and hold such shares of Class A Common Stock in treasury to effect conversions and exchanges, if any.
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