CleanSpark, Inc. Announces Pricing of $550 Million Convertible Notes Offering

Core Viewpoint - CleanSpark, Inc. has announced a $550 million offering of 0.00% Convertible Senior Notes due 2030, aimed at qualified institutional buyers, with the offering expected to close on December 17, 2024 [1][2]. Group 1: Transaction Details - The offering consists of $550 million in Convertible Senior Notes with a 20.00% conversion premium [2]. - The initial cap price for capped call transactions is set at $24.66 per share, representing a 100% premium to the common stock's closing price of $12.33 on December 12, 2024 [2][8]. - CleanSpark plans to repurchase approximately $145 million of its common stock from investors in the Convertible Notes [2][11]. - The initial purchasers have a 13-day option to buy an additional $100 million in Convertible Notes [2]. Group 2: Use of Proceeds - The net proceeds from the offering are expected to be approximately $535.9 million, or $633.6 million if the additional option is fully exercised [3]. - Approximately $76.5 million will be allocated to the capped call transactions, $145 million for share repurchases, and the remaining funds for repaying amounts under the line of credit with Coinbase, capital expenditures, acquisitions, and general corporate purposes [3]. Group 3: Convertible Notes Characteristics - The Convertible Notes will be senior unsecured obligations, maturing on June 15, 2030, and will not bear regular interest [4]. - The initial conversion rate is set at 67.5858 shares per $1,000 principal amount, equating to an initial conversion price of approximately $14.80 per share [5]. - The Company may redeem the Convertible Notes starting June 20, 2028, under specific conditions [6]. Group 4: Capped Call Transactions - Capped call transactions are designed to reduce potential dilution upon conversion of the Convertible Notes [9]. - The cap price for these transactions is initially set at $24.66 per share, with customary anti-dilution adjustments [8]. - The Company anticipates that the option counterparties may engage in market activities that could influence the stock price around the pricing of the Convertible Notes [10].