Bitzero to Use $22.375M of $25M Raise to Repay Loan

Bitzero Holdings raised about C$24.77 million (approximately $25 million) in a private placement and plans to apply C$22.375 million of the proceeds to repay the principal on a secured loan on or about Aug. 6.

The company closed the placement on July 30 by selling 5,828,342 special warrants at C$4.25 each. A July 31 prepayment notice began a required five-business-day countdown to the payment date. Accrued and unpaid interest and any other amounts owed on the payment date will be added to the C$22.375 million principal.

As of Aug. 4 the payment had not occurred and the related collateral remained subject to liens and security interests that Bitzero expects will be released after payment.

Each special warrant will automatically convert at no additional cost into one common share and one common-share purchase warrant at the earlier of a prospectus-qualification event or four months and one day after the July 30 closing. That automatic conversion would create 5,828,342 common shares and issue the same number of purchase warrants.

Each purchase warrant will be exercisable for one common share at C$5 during a five-year term measured from the special warrants’ July 30 issuance. If all resulting warrants are exercised, the placement would add another 5,828,342 shares, bringing the placement’s total new shares to 11,656,684.

The Canadian Securities Exchange showed 54,035,007 shares issued and outstanding as of Aug. 4. Using that observed count, the automatic conversion would equal about 10.8% and full exercise of the warrants would equal about 21.6%. The exchange figure did not include an effective date and does not include other options, warrants or convertible securities.

Bitzero has not disclosed final net proceeds from the placement or the full payoff amount for its secured debt, so the amount of cash remaining after repayment is unknown.

The next items to monitor are confirmation that the loan payment occurred and documentation that liens and security interests were released on or about Aug. 6.