Bit Digital Inc (NASDAQ:BTBT) is raising $135 million through an 'upsized' sale of convertible notes, giving the crypto-focused company fresh funds to expand its Ethereum strategy.
The company said late Tuesday it had priced an offering of 4% convertible senior notes due 2030. Convertible notes are a type of debt that pays interest but can later be exchanged for shares in the issuing company, giving investors potential upside if the stock rises.
The notes will mature on October 1, 2030, unless holders choose to convert them earlier or the company redeems them. They will pay interest twice a year at a rate of 4%.
Investors can convert $1,000 worth of notes into 240.3846 shares, equivalent to a conversion price of $4.16 a share. That represents a 30% premium to Bit Digital’s closing price of $3.20 on Sept. 29.
The deal, expected to close on Oct. 2, also gives underwriters a 30-day option to buy an extra $15 million in notes to cover excess demand. Barclays, Cantor Fitzgerald and B. Riley Securities are acting as joint bookrunners.
Bit Digital estimates it will net about $128.9 million from the offering, or as much as $143.3 million if the additional notes are sold.
The company said it plans to use the proceeds mainly to purchase Ethereum, the world’s second-largest cryptocurrency after Bitcoin, and may also allocate funds for acquisitions and other digital asset investments.
Founded as a Bitcoin mining operation, Bit Digital has in recent years pivoted toward Ethereum.
It now runs one of the largest staking infrastructures, a system where holders lock up their tokens to help secure the blockchain and in return earn rewards.
The company says its platform combines custody services, validator operations and yield optimisation, offering institutions a way to earn returns from the Ethereum network.
Bit Digital filed the offering under a shelf registration with the US Securities and Exchange Commission, allowing it to issue securities more quickly. A final prospectus will be available through the SEC’s website once filed.