ProCap Financial, Inc. 8-K

What Happened

• ProCap Financial, Inc. (BRR) on Feb 8, 2026 entered into an Agreement and Plan of Merger to combine with CFO Silvia, Inc.; Merger Sub (a ProCap subsidiary) will merge into CFO Silvia, which will become a wholly owned subsidiary. The transaction is intended to qualify as a tax‑deferred reorganization under Section 368(a). Closing is subject to customary conditions, including stockholder approvals and any required Hart‑Scott‑Rodino filing.
• On Feb 9, 2026 ProCap entered privately negotiated repurchase agreements to buy approximately $135.0 million aggregate principal of its outstanding 0.00% Convertible Senior Secured Notes due 2028 for about $119.0 million in cash, which if settled will reduce outstanding principal to roughly $100.0 million. The Company stated it remains in compliance with the Indenture’s 1:1 loan‑to‑collateral ratio; collateral at filing was 2,800 Bitcoin and $145 million cash.

Key Details

• Merger date: Merger Agreement signed Feb 8, 2026; closing subject to conditions (filings, approvals).
• Earnout: Holders may receive additional "earnout" shares if ProCap’s volume‑weighted average price (VWAP) equals or exceeds $9.00 on the applicable measurement date; earnout payable only once and conditioned for Noor on continued employment.
• Consideration mechanics: CFO Silvia shares convert into ProCap common stock; outstanding SAFEs will be terminated and SAFE holders will receive a pro rata portion of merger and earnout consideration.
• Debt repurchase: Repurchase of ~$135M principal for ~$119M cash; expected settlement ~Feb 10, 2026, reducing outstanding Convertible Notes to ~ $100M.
• Management and restrictions: Upon closing, Shain Noor (co‑founder of CFO Silvia) will join as Chief Technology Officer under an employment agreement (base $700,000; $300,000 target cash bonus; $5,000,000 signing bonus; $4,000,000 in time‑based RSUs vesting over 4 years) and will sign a three‑year non‑compete/non‑solicit. Sellers and certain investors will enter lock‑ups (generally six months or until $9 VWAP), and holders will receive registration rights (demand and piggyback limits apply).

Why It Matters

• Strategic and capital structure impact: The Merger brings CFO Silvia’s business into ProCap and will be paid in ProCap stock (plus possible earnout shares), which will increase outstanding shares and temporarily restrict resale through lock‑ups and escrow. SAFE holders will be converted into equity per the merger terms.
• Debt profile: The repurchase materially reduces outstanding convertible debt (from prior levels down to ~ $100M), which changes leverage and collateral dynamics; the Company confirms compliance with the Indenture’s collateral rules (Bitcoin counted at 0.5:1).
• Governance and personnel: Bringing Shain Noor onboard as CTO with significant cash and equity compensation is a material executive change (Item 5.02) and may affect execution of ProCap’s stated strategy (including expanded use of AI and automation noted in its Form S‑1).
• Closing risks: The deal is subject to stockholder approvals and regulatory filings; investors should watch for definitive closing announcements, any dilution from issued stock or earnout shares, and timing of registration filings that affect when new shares can be sold.