HIVE Digital Announces Closing of $28.75 Million Bought Deal Private Placement Financing to “HODL” Our Bitcoin Production and Expand Green Mining Footprint
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Insights
The closing of HIVE Digital Technologies Ltd.'s bought-deal private placement, amounting to CAD$28,750,000, is a significant capital infusion for the company. This transaction indicates solid underwriter confidence, particularly with the full exercise of the 15% over-allotment option, suggesting robust investor interest. The capital raised is earmarked for expansion of Bitcoin mining operations and general corporate purposes, which could bolster the company's capacity to generate revenue in the burgeoning cryptocurrency mining sector. However, the inherent volatility of Bitcoin prices poses a risk to the return on investment. Moreover, the 'green' focus of their data centers may attract environmentally conscious investors and could provide a competitive edge in an industry facing scrutiny over energy consumption.
The structure of the Offering, involving Special Warrants convertible into Units, is a strategic choice that provides flexibility for the company and the investors. The statutory hold period of four months and one day aligns with standard regulatory requirements, ensuring compliance while maintaining a lock-up period to stabilize post-offering trading. The Penalty Provision serves as an incentive for the company to expedite the regulatory approval process for the final prospectus, failing which investors receive additional compensation in the form of more Units. This mechanism underscores the importance of timely regulatory engagement in securities offerings. Additionally, the securities not being registered under the U.S. Securities Act limits the offering to qualified institutional buyers or exemptions, which is a common approach for Canadian companies seeking to manage regulatory exposure in cross-border offerings.
With the cryptocurrency sector still in a nascent stage but rapidly evolving, HIVE's move to increase its Bitcoin mining footprint through the Offering represents a strategic investment in its core business. The decision to 'HODL' Bitcoin until the next Halving event reflects a long-term strategy on cryptocurrency value appreciation. This tactic is noteworthy as it aligns with the cyclical nature of Bitcoin's value, which often sees significant price movements around Halving events. The Offering's success and the use of proceeds could position HIVE as a more significant player in the digital asset mining industry, but the strategy's success will heavily depend on future Bitcoin market dynamics and the company's operational efficiency in mining activities.
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This news release constitutes a "designated news release" for the purposes of the Company's prospectus supplement dated May 10, 2023 to its short form base shelf prospectus dated May 1, 2023.
VANCOUVER, British Columbia, Dec. 28, 2023 (GLOBE NEWSWIRE) -- HIVE Digital Technologies Ltd. (TSX.V:HIVE) (Nasdaq:HIVE) (FSE:YO0.F) (the “Company” or “HIVE”) a leading digital asset miner and “green” focused data center builder and operator is pleased to announce that it has closed the previously announced bought-deal private placement (the “Offering”) of 5,000,000 special warrants (“Special Warrants”) at a price of CAD
In connection with the closing of the Offering, the Underwriters elected to fully exercise the option granted to them by the Company to increase the size of the Offering by an additional
Each Special Warrant entitles the holder thereof to receive, subject to adjustment in certain circumstances and the Penalty Provision (as defined below), and without payment of additional consideration, one (1) unit of the Company (each a “Unit”) upon the exercise or deemed exercise of each Special Warrant. Each Unit shall consist of one (1) common share of the Company (a “Unit Share”) and one-half (0.5) of one (1) common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant entitles the holder thereof to purchase one (1) common share of the Company (a “Warrant Share”) at a price of CAD
(i) the second business day following the date on which a final receipt is obtained from the British Columbia Securities Commission (the “BCSC”), as principal regulator and on behalf of the Ontario Securities Commission, for a (final) short form prospectus qualifying the distribution of the Unit Shares and Warrants to be issued upon exercise of the Special Warrants (the “Qualification Date”); and
(ii) 4:59 p.m. (Toronto time) on April 29, 2024, being the date, which is four months and a day following December 28, 2023 (the “Qualification Deadline”).
In the event the Qualification Date has not occurred on or before February 9, 2024 (the “Penalty Date”), each outstanding Special Warrant shall thereafter entitle the holder to receive, upon the exercise or deemed exercise of each Special Warrant, for no additional consideration, 1.1 Units (the “Penalty Provision”).
The Company anticipates the net proceeds of the Offering will be used to support the growth of its Bitcoin mining footprint, as well as for working capital and general corporate purposes. HIVE also anticipates being able to “HODL” all its Bitcoin until the upcoming Halving.
In consideration for their services, the Underwriters received a cash commission equal to
The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation to buy any securities in any jurisdiction.
About HIVE Digital Technologies Ltd.
HIVE Digital Technologies Ltd. went public in 2017 as the first cryptocurrency mining company listed for trading on the TSX Venture Exchange with a sustainable green energy focus.
HIVE is a growth-oriented technology stock in the emergent blockchain industry. As a company whose shares trade on a major stock exchange, we are building a bridge between the digital currency and blockchain sector and traditional capital markets. HIVE owns state-of-the-art, green energy-powered data centre facilities in Canada, Sweden, and Iceland, where we endeavour to source green energy to mine digital assets such as Bitcoin on the cloud. Since the beginning of 2021, HIVE has held in secure storage the majority of its treasury of ETH and BTC derived from mining rewards. Our shares provide investors with exposure to the operating margins of digital currency mining, as well as a portfolio of Bitcoin. Because HIVE also owns hard assets such as data centers and advanced multi-use servers, we believe our shares offer investors an attractive way to gain exposure to the cryptocurrency space.
For further information please contact:
Frank Holmes, Executive Chairman
E-mail: info@hivedigitaltech.com
Tel: 604 664-1078
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release
Forward-Looking Information
Except for the statements of historical fact, this news release contains “forward-looking information” within the meaning of the applicable Canadian securities legislation that is based on expectations, estimates and projections as at the date of this news release. “Forward-looking information” in this news release includes, but is not limited to, statements with respect to information about the Offering and the use of proceeds, potential dilution and application of the Penalty Provision; business goals and objectives of the Company; and other forward-looking information concerning the intentions, plans and future actions of the parties to the transactions described herein and the terms thereon.
Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the volatility of the digital currency market; the Company’s ability to successfully mine digital currency; the Company may not be able to profitably liquidate its current digital currency inventory as required, or at all; a material decline in digital currency prices may have a significant negative impact on the Company’s operations; the volatility of digital currency prices; continued effects of the COVID-19 pandemic may have a material adverse effect on the Company’s performance as supply chains are disrupted and prevent the Company from carrying out its expansion plans or operating its assets; and other related risks as more fully set out in the registration statement of Company and other documents disclosed under the Company’s filings at www.sec.gov/EDGAR and www.sedar.com.
The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this news release, the Company has made assumptions about the Company’s ability to complete the Offering, the timing thereof, the receipt of all necessary approvals, and related matters. The Company has also assumed that no significant events occur outside of the Company's normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
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