Cleanspark, Inc. (NASDAQ: CLSK) has announced the pricing of its offering of $550 million aggregate principal amount of 0.00% convertible senior notes due 2030 (the “convertible notes”). The company also disclosed key details of the transaction, including the use of proceeds and additional information related to the convertible notes.
The company anticipates that the aggregate net proceeds from the offering of convertible notes will be approximately $535.9 million (or approximately $633.6 million if the initial purchasers exercise in full their option to purchase additional convertible notes), after deducting the initial purchasers’ discounts and estimated expenses payable by the company. Of the net proceeds, approximately $76.5 million will be used to pay the cost of the capped call transactions, approximately $145 million to repurchase shares of its common stock from investors in the convertible notes, and the remaining net proceeds for the repayment in full of amounts outstanding under the company’s line of credit with Coinbase, capital expenditures, acquisitions, and general corporate purposes.
The convertible notes will be senior unsecured obligations of the company, and they will not bear regular interest. The principal amount of the convertible notes will not accrete, and they will mature on June 15, 2030, unless earlier repurchased, redeemed, or converted in accordance with their terms. The conversion rate will initially be 67.5858 shares of common stock per $1,000 principal amount of convertible notes, equivalent to an initial conversion price of approximately $14.80 per share of the common stock. This represents a premium of about 20.00% to the $12.33 closing price per share of the common stock on the NASDAQ Capital Market on December 12, 2024.
In connection with the pricing of the convertible notes, the company entered into privately negotiated capped call transactions with certain financial institutions, with the initial cap price of the capped call transactions set at $24.66 per share of common stock. The capped call transactions are expected to reduce potential dilution to the common stock upon conversion of any convertible notes and/or offset any cash payments the company is required to make in excess of the principal amount of converted convertible notes, subject to a cap.
Cleanspark, Inc. has also agreed to repurchase shares of its common stock from certain investors in the convertible notes in privately negotiated transactions, at a purchase price per share equal to the $12.33 closing price per share of the common stock on the NASDAQ Capital Market on December 12, 2024.
The company has stated that the convertible notes and any shares of common stock issuable upon conversion, if any, have not been registered under the securities act or the securities laws of any other jurisdiction. Consequently, they may not be offered or sold in the United States absent registration or an applicable exemption from registration under the securities act and any applicable state securities laws.
Cleanspark, Inc. (NASDAQ: CLSK) is a market-leading, pure play bitcoin miner with a proven track record of success. The company owns and operates a portfolio of mining facilities across the United States powered by globally competitive energy prices. They are positioned to prosper in an ever-changing world by monetizing low-cost, high reliability energy through securing the most important finite, global asset – bitcoin. Following these announcements, the company's shares moved -3.1%, and are now trading at a price of $11.95. If you want to know more, read the company's complete 8-K report here.