Bit Brother Limited made a significant announcement today, revealing its foray into a securities purchase agreement with specific accredited investors. The company disclosed the sale of $12.0 million worth of its Class A ordinary shares, Class D warrants, and Class E warrants in a registered direct offering.
The company’s stock witnessed a sudden and sharp decline, closing Monday’s trading session at $0.069—a notable decrease from its opening value of $0.032.
At the time of this publication, Bit Brother Ltd stock (BETS) has witnessed a decline.
Bit Brother Ltd
Current Price: $0.03
Change : -0.04
Change (%): (-53.60%)
Volume: 696.5M
Source: Tomorrow Events Market Data
According to the terms outlined in the securities purchase agreement, Bit Brother is set to offload 184,615,385 Class A ordinary shares. Additionally, the offering includes Class D warrants enabling the purchase of an equivalent number of Class A ordinary shares and Class E warrants allowing the acquisition of the same number of Class A ordinary shares. The combined purchase price for these securities is fixed at $0.065 per Class A ordinary share and the associated warrants.
The Class D warrants boast immediate exercisability upon issuance and come with a five-year term, featuring an initial exercise price of $0.06. However, this price is subject to a reset clause 30 trading days after the closing of the agreement. Meanwhile, the Class E warrants are also exercisable immediately upon issuance, but for a shorter term of two years, and carry an initial exercise price of $0.13. Notably, in addition to customary cashless exercise rights in both warrant classes, the Class E warrants provide an alternative cashless exercise option, allowing holders to exercise at any time on a cashless basis under specific conditions for a larger number of Class A ordinary shares.
As part of the agreement, Bit Brother has committed to implementing a reverse split if the closing bid price of the Class A ordinary shares falls below $0.01 for five consecutive trading days. Moreover, the warrant holders have agreed not to exercise cashlessly below $1.50 during the initial 20 trading days following the reverse split.
The gross proceeds anticipated from this transaction are estimated to reach $12.0 million, with this figure excluding placement agent fees and other estimated offering expenses. The completion of the registered direct offering is anticipated around December 8, 2023, contingent upon the fulfillment of customary closing conditions.
Maxim Group LLC played a pivotal role as the exclusive placement agent for this offering, facilitating the transaction on behalf of Bit Brother.
Importantly, the sale of Class A ordinary shares, Class D warrants, and Class E warrants is being conducted in accordance with a shelf registration statement on Form F-3 (File No. 333-256628). This statement was previously submitted to the Securities and Exchange Commission (SEC) on May 28, 2021, subsequently amended on June 3, 2021, and declared effective on June 8, 2021, providing regulatory authorization for the offering.
