Universal Digital arranges $50M debenture financing

Executive Summary

• Universal Digital Inc. has entered into a subscription agreement to raise up to $50 million in aggregate principal amount of senior secured convertible debentures from Helena Global Investment Opportunities 1 Ltd.
• The financing is structured in up to 14 separate tranches, with the first tranche closing around October 31, 2025, and subsequent tranches issued on mutually agreed dates.
• Proceeds are designated primarily for a bitcoin treasury strategy, with 80% of net proceeds required for bitcoin purchases and 20% for general working capital.

Key Details

• Financing Structure: Up to $50 million in aggregate principal amount of senior secured convertible debentures.
• Tranche Breakdown:
  • Initial tranche: $3,336,364 principal amount.
  • 12 separate tranches: $3,636,364 principal amount each.
  • Final tranche: $3,027,268 principal amount.
• Closing Schedule: First tranche expected on or around Oct. 31, 2025; subsequent tranches on mutually agreed dates.
• Term: One year from the closing date of each tranche.
• Interest Rate: 17.5% per annum.
• Interest Payment: Paid in cash upon closing of the first tranche.
• Conversion Terms:
  • Convertible into common shares at Helena's option at any time during the term.
  • Conversion price: 100% of the closing price of common shares on the Canadian Securities Exchange (CSE) on the trading day immediately preceding the conversion notice.
  • Minimum conversion price: $0.05 per share.
• Security: Secured by all bitcoin currently owned by the company and any subsequently purchased bitcoin.
• Facilitation Fee: $100,000 payable to Helena on the closing of the first tranche.
• Warrants:
  • Issued in connection with each tranche closing.
  • Quantity: Up to 25% of the subscription amount of each tranche (capped at 25% of the aggregate subscription amounts of all debentures).
  • Exercise Price: 130% of the closing price of common shares on the trading day immediately preceding issuance.
  • Term: Three years from the closing of each tranche.
• Ownership Restrictions: Conversion 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.
• Use of Proceeds:
  • 80% of net proceeds from each tranche: Purchase of bitcoin.
  • 20% of net proceeds from each tranche: General working capital.
• Custody: Purchased bitcoin held in a custodial account and secured under the security agreement.
• Placement Agent: Joseph Gunnar & Co. LLC (sole placement agent).
• Investor Status: Helena is an accredited investor.
• Hold Period: Statutory hold period of four months and one day from each closing date.
• Conditions Precedent: Closing is subject to conditions including approval of the CSE.

Notable Quotes

• "This financing framework provides Universal Digital with a flexible, scalable capital structure to support our bitcoin treasury strategy and future digital-asset initiatives," said Chris Yeung, chief executive officer of the company. "We appreciate Helena's confidence in our vision as we continue building a globally relevant investment platform bridging traditional capital markets and the digital asset economy."