Capital B’s €21 million Bitcoin raise comes with heavy warrant dilution risk

Bitcoin treasury company Capital B plans to raise €21 million and use the proceeds, along with operating funds, to buy another 270 Bitcoin.

The immediate deal would leave the company’s stated measure of Bitcoin backing per diluted share almost unchanged, while four warrants attached to each new share create a larger layer of contingent dilution.

The company announced a private placement of 36,219,070 shares with attached warrants at €0.58 per unit. That would produce €21.01 million in gross proceeds and an estimated €19.9 million after fees.

Closing was expected on Aug. 31 at the earliest, meaning neither the shares nor the planned Bitcoin purchase was complete when the deal was announced. Capital B said the proceeds and operating funds could lift its treasury from the 3,145 BTC confirmed on Aug. 17 to a potential 3,415 BTC.

On the diluted shareholder bases displayed in Capital B’s Aug. 28 release, the company had about 7.4725 BTC per million shares before the placement. Combining the proposed 3,415 BTC with the post-placement diluted count of 457,096,891 shares produces about 7.4711 BTC per million shares.

That is a decrease of roughly 0.02%, making the immediate transaction effectively flat against the company’s stated objective of increasing Bitcoin per diluted share over time.

Before the reverse-split adjustment, each new share carries two warrants exercisable at €0.75, €0.98, and €1.27. Full exercise would create 144,876,280 more shares and provide another €135.82 million.

If every new warrant were exercised and no additional Bitcoin were attributed to those proceeds, Capital B’s potential 3,415 BTC would be spread across 601,973,171 displayed diluted shares. That equals about 5.6730 BTC per million shares, 24.1% below the pre-placement ratio.

The five-year warrants are contingent on investors choosing to exercise them, so the associated shares and cash have not been received.

An investor holding 1% before the placement would fall to 0.9% on the ordinary post-placement basis and 0.72% on the company’s diluted basis without participating. Full exercise of the new warrants would reduce those figures to 0.65% and 0.55%, respectively.

The issuer also says its displayed diluted calculation excludes older BSA families, specified warrants attached to convertible bonds and unissued capacity under a €300 million TOBAM program. Those items sit outside the 24.1% scenario.

In June, shareholders had authorized much broader financing capacity, including up to €5 billion of capital increases and €100 billion of credit instruments.

The Aug. 28 placement is a priced example that the proposed Bitcoin only matches the immediate share expansion, while the attached warrants determine whether the longer-term ratio improves or falls.

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