Universal Digital closes first tranche of financing

Executive Summary

• Universal Digital Inc. has closed the first tranche of its previously announced private placement of senior secured convertible debentures and common share purchase warrants with Helena Global Investment Opportunities 1 Ltd.
• The company issued $3,336,364 in principal amount of convertible debentures and 834,091 warrants, while also amending the subscription agreement to raise the minimum conversion price from five cents to 30 cents.
• Proceeds are designated for bitcoin purchases and working capital, with the debentures secured by the company's bitcoin holdings.

Key Details

• Transaction Structure: Closing of the first tranche of a private placement of senior secured convertible debentures and common share purchase warrants.
• Principal Amount: $3,336,364 of convertible debentures issued.
• Warrants Issued: 834,091 common share purchase warrants.
• Conversion Terms:
  • Debentures are convertible into common shares at Helena's option.
  • Conversion price is 100% of the closing price on the Canadian Securities Exchange (CSE) on the trading day preceding the conversion notice.
  • Minimum conversion price set at 30 cents per share (amended from 5 cents).
  • Term: One year from the date of closing.
• Interest: 17.5% per annum; interest for the term was paid in cash upon closing of the first tranche.
• Security/Collateral: Debentures are secured by all bitcoin presently owned by the company and any subsequently acquired bitcoin ("purchased bitcoin").
• Facilitation Fee: $100,000 paid to Helena on closing.
• Warrant Terms:
  • Exercise Price: 63.7 cents per share.
  • Expiration Date: October 31, 2028.
• Use of Proceeds:
  • 80% of net proceeds from each tranche to be used for the purchase of bitcoin.
  • 20% of net proceeds from each tranche to be used for general working capital purposes.
  • Purchased bitcoin to be held in a custodial account and secured under the security agreement.
• Ownership Restrictions: Conversion, warrant exercise, and further subscriptions are restricted if they cause Helena (plus affiliates) to beneficially own more than 9.9% of outstanding common shares or result in Helena becoming a control person without shareholder approval.
• Placement Agent: Joseph Gunnar & Co. LLC acted as the sole placement agent.
• Regulatory Status: Helena is an accredited investor; securities are subject to a statutory hold period of four months and one day.

Notable Quotes

• No direct quotes from management were included in the provided text.