LAS
VEGAS, Dec. 13, 2024 /PRNewswire/ -- CleanSpark,
Inc. (Nasdaq: CLSK), America's Bitcoin Miner®
("CleanSpark" or the "Company"), today announced the pricing of its
offering of $550 million aggregate
principal amount of 0.00% Convertible Senior Notes due 2030 (the
"Convertible Notes"). The Convertible Notes will be sold to the
initial purchasers for resale in a private offering to persons
reasonably believed to be qualified institutional buyers in
reliance on Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act").
Key Elements of the Transaction:
- $550 million 0.00% Convertible
Senior Notes offering (20.00% conversion premium)
- Capped call transactions entered into in connection with the
Convertible Notes with an initial cap price of $24.66 per share of the Company's common stock
(the "common stock"), which represents a 100% premium to the
closing sale price of the common stock on December 12, 2024
- The repurchase of approximately $145
million of the common stock from investors in the
Convertible Notes
CleanSpark has granted the initial purchasers of the Convertible
Notes a 13-day option to purchase up to an additional $100 million aggregate principal amount of the
Convertible Notes. The offering is expected to close on
December 17, 2024, subject to
satisfaction of customary closing conditions.
Use of Proceeds:
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. The Company intends to use approximately $76.5 million of the net proceeds from the
offering (assuming no exercise of the initial purchasers' option to
purchase additional Convertible Notes) to pay the cost of the
capped call transactions (as described below), to use approximately
$145.0 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 Company's line of credit with
Coinbase, capital expenditures, acquisitions and
general corporate purposes.
Additional Details of the Convertible Notes:
The
Convertible Notes will be senior unsecured obligations of the
Company. The Convertible Notes will not bear regular interest, and
the principal amount of the Convertible Notes will not accrete. The
Convertible Notes will mature on June 15,
2030, unless earlier repurchased, redeemed or converted in
accordance with their terms. Prior to December 15, 2029, the Convertible Notes will be
convertible only upon satisfaction of certain conditions and during
certain periods, and thereafter, the Convertible Notes will be
convertible at any time until the close of business on the second
scheduled trading day immediately preceding the maturity date.
The Convertible Notes will be convertible into cash, shares of
the common stock or a combination of cash and shares of the common
stock, at the Company's election. 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). The initial conversion price of the Convertible Notes
represents a premium of approximately 20.00% to the $12.33 closing price per share of the common
stock on The Nasdaq Capital Market on December 12, 2024. The conversion rate will be
subject to adjustment in certain circumstances. In addition, upon
conversion in connection with certain corporate events or a notice
of redemption, the conversion rate will increase.
The Company may not redeem the Convertible Notes prior to
June 20, 2028. The Company may redeem
for cash all or any portion of the Convertible Notes, at its
option, on or after June 20, 2028, if
the last reported sale price of the common stock has been at least
130% of the conversion price then in effect on each of at least 20
trading days (whether or not consecutive) during any 30 consecutive
trading day period (including the last trading day of such period)
ending on, and including, the trading day immediately preceding the
date on which the Company provides notice of redemption to holders
at a redemption price equal to 100% of the principal amount of the
Convertible Notes to be redeemed, plus accrued and unpaid special
interest, if any, to, but excluding, the redemption date. In
connection with certain corporate events or if the Company calls
any note for redemption, it will, under certain circumstances, be
required to increase the conversion rate for holders that elect to
convert their notes in connection with such corporate event or
notice of redemption.
Holders of the Convertible Notes will have the right to require
the Company to repurchase all or a portion of their Convertible
Notes on June 15, 2028, and holders
of the Convertible Notes will have the right to require the Company
to purchase all or a portion their Convertible Notes upon the
occurrence of a fundamental change (as defined in the indenture
governing the Convertible Notes) at a repurchase price equal to
100% of the principal amount of their Convertible Notes, plus any
accrued and unpaid special interest, if any.
Capped Call Transactions:
In connection with the
pricing of the Convertible Notes, the Company entered into
privately negotiated capped call transactions with certain
financial institutions (the "option counterparties"). The cap price
of the capped call transactions will initially be $24.66 per share of common stock, which
represents a premium of 100% over the last reported sale price of
the common stock of $12.33 per share
on The Nasdaq Capital Market on December 12,
2024 and will be subject to customary anti-dilution
adjustments. If the initial purchasers of the Convertible Notes
exercise their option to purchase additional Convertible Notes, the
Company expects to use a portion of the net proceeds from the sale
of the additional Convertible Notes to enter into additional capped
call transactions with the option counterparties.
The capped call transactions are expected generally 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, as the case may be, with such reduction and/or
offset subject to a cap.
In connection with establishing their initial hedges of the
capped call transactions, the Company expects the option
counterparties or their respective affiliates to purchase shares of
the common stock and/or enter into various derivative transactions
with respect to the common stock concurrently with, or shortly
after, the pricing of the Convertible Notes. This activity could
increase (or reduce the size of any decrease in) the market price
of the common stock or the Convertible Notes at that time. In
addition, the option counterparties or their respective affiliates
may modify their hedge positions by entering into or unwinding
various derivatives with respect to the common stock and/or
purchasing or selling shares of the common stock or other
securities of the Company in secondary market transactions
following the pricing of the Convertible Notes and prior to the
maturity of the Convertible Notes (and are likely to do so on each
exercise date for the capped call transactions or following any
termination of any portion of the capped call transactions in
connection with any repurchase, redemption or early conversion of
the Convertible Notes). This activity could also cause or avoid an
increase or decrease in the market price of the common stock or the
Convertible Notes, which could affect holders of the Convertible
Notes' ability to convert the Convertible Notes and, to the extent
the activity occurs following conversion of the Convertible Notes
or during any observation period related to a conversion of the
Convertible Notes, it could affect the amount and value of the
consideration that holders of the Convertible Notes will receive
upon conversion of such Convertible Notes.
Share Repurchases:
The Company has agreed to
repurchase shares of its common stock from certain of the 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 Convertible Notes and any shares of common stock issuable
upon conversion of the Convertible Notes, if any, have not been
registered under the Securities Act, securities laws of any other
jurisdiction, and the Convertible Notes and such shares of common
stock 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. The Convertible Notes will be offered by the
initial purchasers only to persons reasonably believed to be
qualified institutional buyers under Rule 144A under the Securities
Act.
This press release shall not constitute an offer to sell, or
a solicitation of an offer to buy the Convertible Notes, nor shall
there be any sale of the Convertible Notes or common stock 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 CleanSpark
CleanSpark, Inc. (Nasdaq: CLSK),
America's Bitcoin Miner®, is a market-leading, pure
play Bitcoin miner with a proven track record of
success. We own and operate a portfolio of mining facilities across
the United States powered by
globally competitive energy prices. Sitting at the intersection of
Bitcoin, energy, operational excellence and capital
stewardship, we optimize our mining facilities to deliver superior
returns to our shareholders. Monetizing low-cost, high reliability
energy by securing the most important finite, global asset –
Bitcoin – positions us to prosper in an ever-changing
world. Visit our website at www.cleanspark.com.
Forward-Looking Statements
This press release contains
forward-looking statements within the meaning of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995,
as amended. Such forward-looking statements include statements
concerning anticipated future events and expectations that are not
historical facts, such as statements concerning the estimated net
proceeds of the offering, the anticipated use of such net proceeds
and expectations regarding the closing of the offering. All
statements, other than statements of historical fact, are
statements that could be deemed forward-looking statements. In
addition, forward-looking statements are typically identified by
words such as "plan," "believe," "goal," "target," "aim," "expect,"
"anticipate," "intend," "outlook," "estimate," "forecast,"
"project," "continue," "could," "may," "might," "possible,"
"potential," "predict," "should," "would," "will" and other similar
words and expressions, although the absence of these words or
expressions does not mean that a statement is not forward-looking.
Forward-looking statements are based on the current expectations
and beliefs of CleanSpark's management and are inherently subject
to a number of factors, risks, uncertainties and assumptions and
their potential effects. There can be no assurance that future
developments will be those that have been anticipated. Actual
results may vary materially from those expressed or implied by
forward-looking statements based on a number of factors, risks,
uncertainties and assumptions, including, among others,
uncertainties related to the completion of the offering and related
transactions, including risks related to the satisfaction of the
closing conditions for the sale of the Convertible Notes, and other
risks described in the Company's prior press releases and in the
Company's filings with the Securities and Exchange Commission (the
"SEC"), including under the heading "Risk Factors" in those
filings, and other risks the Company may identify from time to
time. Forward-looking statements contained herein are made only as
to the date of this press release, and the Company assumes no
obligation to update or revise any forward-looking statements as a
result of any new information, changed circumstances or future
events or otherwise, except as required by applicable law.
Investors:
Harry
Sudock, SVP
702-989-7693
ir@cleanspark.com
Media:
Eleni
Stylianou
702-989-7694
pr@cleanspark.com
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SOURCE CleanSpark, Inc.
