BTC Digital Ltd. Announces Pricing of $20.0 Million Underwritten Public Offering

Rhea-AI Summary

BTC Digital (NASDAQ: BTCT) has announced the pricing of a firm commitment underwritten public offering expected to raise $20.0 million in gross proceeds. The offering consists of 2,500,000 Ordinary Shares and Pre-Funded Warrants at $8.00 per Common Share. The Pre-Funded Warrants are priced at $7.999 with a $0.001 exercise price and are immediately exercisable.

The company granted Aegis Capital Corp. a 45-day option to purchase additional shares up to 15% of the offering to cover over-allotments. The transaction is expected to close around December 9, 2024. The proceeds will be used for general corporate purposes and working capital.

Positive

• Secured $20.0 million in gross proceeds through public offering
• Immediate capital availability through exercisable Pre-Funded Warrants
• Additional 15% over-allotment option could increase total proceeds

Negative

• Potential shareholder dilution from 2,500,000 new Ordinary Shares
• Additional dilution possible from Pre-Funded Warrants exercise
• Further dilution risk from 15% over-allotment option if exercised

Insights

Financial Analyst

This $20 million public offering represents a significant capital raise for BTC Digital, priced at $8.00 per share with 2.5 million ordinary shares. The structure, including pre-funded warrants, provides flexibility for investors while ensuring immediate capital access. The dilutive impact is notable given BTCT's market cap of $64.9 million - this offering represents roughly 31% of their current market value. The 45-day over-allotment option of up to 15% could further increase dilution. While the fresh capital strengthens their balance sheet for general corporate purposes, the significant dilution and pricing mechanism suggests some pressure on maintaining shareholder value. The timing and structure indicate a strategic move to capitalize on market conditions, though existing shareholders may face near-term pressure.

Legal Expert

The offering's compliance framework is robust, leveraging an effective shelf registration on Form S-3 with proper SEC oversight. Key legal safeguards include:

• Clear disclosure of terms and conditions
• Engagement of specialized securities counsel for both parties
• Proper regulatory filings and documentation

The inclusion of over-allotment options and pre-funded warrants demonstrates sophisticated structuring. The explicit disclaimer regarding jurisdictional sales restrictions and the detailed prospectus requirements reflect thorough regulatory compliance. This structured approach mitigates legal risks while maintaining transparency for investors.

SINGAPORE, Dec. 6, 2024 /PRNewswire/ -- BTC Digital Ltd. (NASDAQ: BTCT) (the "Company"), a blockchain technology company, today announced the pricing of a firm commitment underwritten public offering with gross proceeds to the Company expected to be approximately $20.0 million, before deducting underwriting fees and other estimated offering expenses payable by the Company.

The offering consists of 2,500,000 Ordinary Shares and Pre-Funded Warrants. The public offering price per Common Share is $8.00 (or $7.999 for each Pre-Funded Warrant, which is equal to the public offering price per Ordinary Share to be sold in the offering minus an exercise price of $0.001 per Pre-Funded Warrant). The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until exercised in full. For each Pre-Funded Warrant sold in the offering, the number of Ordinary Shares in the offering will be decreased on a one-for-one basis.

In addition, the Company has granted Aegis Capital Corp. ("Aegis") a 45-day option to purchase additional Ordinary Shares of up to 15.0% of the number of Ordinary Shares sold in the offering solely to cover over-allotments, if any.

Aggregate gross proceeds to the Company are expected to be approximately $20.0 million. The transaction is expected to close on or about December 9, 2024, subject to the satisfaction of customary closing conditions. The Company expects to use the net proceeds from the offering, together with its existing cash, for general corporate purposes and working capital.

Aegis Capital Corp. is acting as the sole book-running manager for the offering. VCL Law LLP is acting as U.S. counsel to the Company. Kaufman & Canoles, P.C. is act as U.S. counsel to Aegis Capital Corp.

The offering is being made pursuant to an effective shelf registration statement on Form S-3 (No. 333-283367) previously filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on December 5, 2024. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC's website located at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Aegis Capital Corp., Attention: Syndicate Department, 1345 Avenue of the Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com, or by telephone at +1 (212) 813-1010.

Interested parties should read in their entirety the prospectus supplement and the accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About BTC Digital Ltd.

BTC Digital Ltd.is a blockchain technology company, with a long-term strategy to create value across the metaverse, blockchain and cryptocurrency mining industry. The Company is committed to developing blockchain related businesses in North America, including cryptocurrency mining, mining farm construction, mining pool and data center operation, and miner accessories business.

Forward-Looking Statements

The foregoing material may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation statements regarding the Company's product development and business prospects, and can be identified by the use of words such as "may," "will," "expect," "project," "estimate," "anticipate," "plan," "believe," "potential," "should," "continue" or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize, or the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

For more information, please visit: https://btct.investorroom.com/

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SOURCE BTC Digital Ltd.

FAQ

What is the size of BTC Digital's (BTCT) December 2024 public offering?

BTC Digital's public offering is expected to raise approximately $20.0 million in gross proceeds through the sale of 2,500,000 Ordinary Shares and Pre-Funded Warrants.

What is the price per share for BTC Digital's (BTCT) December 2024 offering?

The public offering price is $8.00 per Common Share, with Pre-Funded Warrants priced at $7.999 with a $0.001 exercise price.

When will BTC Digital's (BTCT) $20 million public offering close?

The transaction is expected to close on or about December 9, 2024, subject to customary closing conditions.

How will BTC Digital (BTCT) use the proceeds from the December 2024 offering?

The company plans to use the net proceeds for general corporate purposes and working capital.