TAO Alpha Seeks £100 Million to Boost Bitcoin Treasury

TAO Alpha PLC, a publicly traded company in the UK, has announced its intention to raise a minimum of £100 million through a second secured convertible loan note. This fundraising effort is part of the company's strategy to support its Bitcoin treasury policy, which was announced last week. The company has already received significant demand from investors, both through its lead broker, Fortified Securities, and directly.

The board of TAO Alpha has appointed Dawson James Securities (DJS), a US-focused broker, to work alongside Fortified Securities. This collaboration aims to manage the high demand and navigate the regulatory and legal requirements associated with US-based investors. Together, Fortified Securities and DJS are in the process of securing commitments for the second secured convertible loan note from leading global digital asset investment firm ParaFi Capital and other investors. Initial commitments total £20 million, in addition to the previously announced £5 million raise.

The terms of the new notes are anticipated to include a first-ranking debenture, no interest or fees on the balance advanced to the company (except for customary default interest if applicable), and automatic conversion upon the approval of shareholder authorities and a secondary prospectus. The conversion price is fixed at £0.01 per ordinary share, with a maturity date of 90 days from the longstop date if an automatic conversion has not been triggered by then. The definitive terms of the new notes are to be finalised following the closing of the raise and will be dependent on various conditions, including macro impacts and global conditions.

The fundraising for the new notes will be open for 20 trading days from the date of the announcement but may be adjusted depending on demand and the composition of the book. The board will provide relevant updates, including confirmation of the execution of definitive documentation for the initial commitments and other participants in the new notes.

Subject to the completion of the issue of the new notes, the syndicate of investors in the initial raise will receive seed warrants to counteract the increased dilution from the follow-on raise arising from the new notes. For every £1 million over £100 million raised, the syndicate will be granted 1% warrant coverage on their investment, exercisable at the same price as the fixed price conversion price for the initial raise. The seed warrants will have a 5-year term from grant and will not be exercisable until the new notes have automatically converted.

Matthew Lodge, CEO of TAO Alpha, expressed his enthusiasm about the unprecedented demand and enquiries received, stating that the follow-on raise led by some of the world's best crypto investors will enable TAO Alpha to take its ambitious plans to a global level once closed. Following the closing of the round, the company will work quickly with its advisors to ensure that the prospectus is advanced with the FCA to conclude the conversion of these funding rounds into shares at their respective fixed prices as soon as practicable.

TAO Alpha has established a subsidiary in Singapore, Tao Alpha PTE. LTD, to hold its reserve assets. Under the new policy, the company can hold up to two-thirds of its cash in the form of Bitcoin and stablecoins. The latest fundraising terms are expected to be finalized in mid-July.