Smarter Web's Capital Structure and MORE Preferred | Andrew Webley SLP780

On the question of debt, I'm just looking on your website now, SmarterWebCompany and the leverage ratio on the analytics page.

So it looks here, you have debt over NAV.

So that's about 10.5% as a overall leverage.

So can you give us an idea, what is your, let's say your target, do you have a target range that you believe that should stay within? Talk to us about your percent of debt and how you think about that going forward.

Yeah, so the first thing to say is that we state our debt in a more conservative way than many people would.

So a lot of Bitcoin treasury companies, and we will change to this in the later part of next week, they show their debt relative to their Bitcoin as opposed to how we show it, because our debt is shown relative to, as you say, our net asset value.

And the net asset value is not only your Bitcoin, but then it's reducing it by your liabilities, you know, your debt.

So if we were showing it relative to the Bitcoin holdings, it would be lower than that percentage.

So we state it in an overcautious fashion, and we do that for a couple of reasons.

But we feel that where we're going in the future, it's the right thing to change it to show debt relative to the Bitcoin holdings.

In terms of a percentage, I think we went up to about 15-ish percent.

We said internally, you know, we'd probably be comfortable with maybe 20%, maybe slightly more.

What you also have to factor in there, though, is that Say you're happy with, let's say, 20% for argument's sake, then Bitcoin goes down, obviously that ratio goes up.

So it's after a moment in time.

And that's why I think the companies that are happy with a responsible level of debt at the moment are, in my opinion, making the right choice.

And because I believe the asset is going to go up, therefore the ratio is going to come down.

Now, if you then put in other types of funding into the mix, like preferred equity, I think you can go an awful lot higher.

In our prospectus that we released a week or so ago, we said initially we would go up to about 35%.

So that would be a combination of your preferred equity, in our case, plus your Coinbase credit facility, reduce that by your cash assets, and then use that as a ratio against your total Bitcoin holdings.

You know, I got asked the question over the weekend, you know, would you go higher than 35%? If you look at strategy at the moment, I think they're about 40%.

I think Strive, last time I checked, you know, making an adjustment in my head, probably about 50%, maybe a bit more.

I'm not sure.

And the answer to that is, yeah, we can see how mathematically that works, but the reality is we don't have to make that decision at the moment.

We need to get to 35% and then see what we do from there.

And the beauty of that sort of thought process is that like a lot of the things that we've done, we've been able to learn from other companies So when we need to make a certain decision, we've been able to benefit from what people have done before.