Daily News 19

Tag: Bitcoin financing

  • Mid-Tier Bitcoin Treasury Bets Entire BTC Reserve on a Single 30-Day Reset Price

    Mid-Tier Bitcoin Treasury Bets Entire BTC Reserve on a Single 30-Day Reset Price

    PowerCompute, a Bitcoin treasury and mining company, has added $3.765 million to its debt following an early Bitcoin collar reset involving 307 $BTC. The executed reset schedule records the unwind cost as additional principal rather than as a cash or $USDC payment.

    In a filing dated Aug. 28, the company disclosed a replacement 30-day collar balance of $21,892,131.88 with Arch Lending, up from $18,127,131.88. The facility remains secured by 307 $BTC, while its annual interest rate has increased from 2% to 6.5%.

    How PowerCompute’s Bitcoin collar reset increased principal

    PowerCompute’s borrowing subsidiary, US Digital Mining and Hosting Co., elected to add the unwind cost to the loan balance. The annex states that the cost was agreed in place of a separate excess-appreciation settlement for the terminated period.

    The previous collar began on Aug. 3 and was scheduled to reset on Sept. 2. PowerCompute terminated it on Aug. 25, 22 days into the period, when the reference price was $78,500. That price was above the company’s always-on $66,370 ceiling, according to the previous reset confirmation. The original loan filing reported an $18.13 million balance and a 2% interest rate.

    Under the contract’s 30/360 calculation, the replacement loan’s full interest charge for the period from Aug. 25 to Sept. 24 is $118,582.38. The annex sets out the collar’s 30-day mechanics, while the reset schedule provides the commercial figures despite the longer-form provisions in the master agreement.

    New Bitcoin collar terms run through Sept. 24

    The new collar moves the next decision date to Sept. 24. It establishes a $71,112 floor, a $75,000 ceiling and a $93,500 knock-in barrier. Arch will test the reference price once, at 8:00 a.m. EST.

    If the reference price remains below $93,500, the ceiling has no effect. PowerCompute retains all Bitcoin appreciation, including any appreciation above $75,000. If the reference price reaches or exceeds $93,500, however, the ceiling applies to the entire period.

    Excess appreciation arises only if the Sept. 24 reference price reaches at least $93,500. At the barrier exactly, the settlement formula is:

    307 × ($93,500 − $75,000) = $5,679,500

    This is conditional settlement arithmetic before interest, not an amount that PowerCompute already owes. The company can settle the amount using retained $BTC or USD/$USDC. If it rolls the loan forward, it can instead add the amount to principal or incorporate it into the next ceiling and rate quote.

    The $93,500 barrier is not an intraday liquidation threshold. The annex bars ordinary margin calls and liquidations during the rolling period, limits ordinary recourse to the pledged Bitcoin subject to stated carve-outs, and tests the collar only at reset. A voluntary exit before the end of the period would bring the test forward.

    Bitcoin price context after the reset

    At 2:23 a.m. UTC on Aug. 29, CryptoSlate’s live Bitcoin page displayed a price of $77,808.23, placing the barrier approximately 20.2% above that snapshot. The comparison provides context and is not a forecast for Bitcoin’s price on Sept. 24.

    CryptoSlate previously covered PowerCompute’s initial collar after tracking the company’s earlier bridge-loan chain. The Aug. 28 filing turns the first structure’s modeled trade-off into a realized financing cost and begins a new 30-day test.

  • Capital B’s €21 Million Bitcoin Raise Carries Heavy Warrant Dilution Risk

    Capital B’s €21 Million Bitcoin Raise Carries Heavy Warrant Dilution Risk

    Bitcoin treasury company Capital B plans to raise €21.01 million through a private share placement and use the proceeds, together with operating funds, to purchase up to 270 additional Bitcoin.

    The proposed transaction would leave Capital B’s reported Bitcoin backing per diluted share virtually unchanged immediately after completion. However, the warrants attached to the new shares could create substantial additional dilution if exercised.

    Capital B plans €21 million Bitcoin financing

    Capital B announced a private placement of 36,219,070 shares with attached warrants at €0.58 per unit. The financing is expected to generate €21.01 million in gross proceeds, or approximately €19.9 million after fees.

    Closing was expected no earlier than Aug. 31. At the time of the announcement, neither the new shares nor the planned Bitcoin purchase had been completed.

    Capital B said the financing proceeds and operating funds could increase its Bitcoin treasury from 3,145 $BTC, confirmed on Aug. 17, to a potential 3,415 $BTC.

    Immediate Bitcoin-per-share impact is nearly flat

    Based on the diluted shareholder figures in Capital B’s Aug. 28 release, the company held approximately 7.4725 $BTC per million shares before the placement. If Capital B reaches 3,415 $BTC and has 457,096,891 diluted shares after the placement, the resulting figure would be approximately 7.4711 $BTC per million shares.

    That represents a decrease of roughly 0.02%, making the immediate effect of the transaction essentially flat relative to Capital B’s stated objective of increasing Bitcoin per diluted share over time.

    Infographic outlines Capital B’s Bitcoin holdings, diluted share counts, and $BTC per million shares across three dilution scenarios and financing estimates.

    Warrants could increase dilution

    Before the reverse-split adjustment, each new share carries two warrants exercisable at €0.75, €0.98 and €1.27. If all the warrants were exercised, Capital B would issue 144,876,280 additional shares and receive a further €135.82 million.

    If every new warrant were exercised and no additional Bitcoin were attributed to the resulting proceeds, the potential 3,415 $BTC treasury would be spread across 601,973,171 displayed diluted shares. That would equal approximately 5.6730 $BTC per million shares, or 24.1% below the pre-placement ratio.

    The warrants have five-year terms and depend on investors choosing to exercise them. The related shares and cash therefore have not yet been received.

    An investor holding 1% of Capital B before the placement would see that stake fall to 0.9% on the ordinary post-placement basis and to 0.72% on the company’s diluted basis without participating in the financing. Full exercise of the new warrants would reduce those figures to 0.65% and 0.55%, respectively.

    Capital B also says its displayed diluted calculation excludes older BSA families, specified warrants attached to convertible bonds and unissued capacity under a €300 million TOBAM program. Those items are not included in the 24.1% dilution scenario.

    Broader financing capacity

    In June, Capital B shareholders authorized significantly broader financing capacity, including up to €5 billion in capital increases and €100 billion in credit instruments.

    The Aug. 28 placement provides a priced example of the company’s financing strategy. The proposed Bitcoin purchase would broadly match the immediate expansion in shares, while the attached warrants will determine whether Capital B’s longer-term Bitcoin-per-share ratio improves or declines.