BitNile obtains $52.2 million secured debt financing

By Rebecca Melvin

Concord, N.H., Dec. 31 – BitNile Holdings Inc. said it obtained $52.2 million of secured debt financing for $58.4 million principal amount of 10% original issuance discount promissory notes due March 31, 2022, according to a company release on Friday.

The notes accrue interest at a rate of 8% per year and are secured by a majority of the assets of the company and a pledge of the equity interests in the company’s subsidiaries.

Investors who participated in the financing received warrants to purchase about 12.4 million shares of company common stock, exercisable for five years at $2.50 per share on a cashless basis, subject to adjustment.

Investors also received a different kind of warrant that entitles them to purchase about 1.7 million shares of common stock, exercisable for five years at $2.50 per share on a cashless basis, subject to adjustment with certain Black-Scholes valuation terms including at $1.25 floor price on the closing bid price of the company’s stock.

Repayment terms provide that if the company raises additional funds from future transactions or the sale of any bitcoin, it will make a payment on the outstanding notes equal to 65% of the proceeds from those transactions.

The notes are guaranteed by the company’s founder and executive chairman, Milton “Todd” Ault, III and by Ault & Co. Inc., a related party.

Proceeds will be used to purchase commercial real estate and bitcoin mining equipment and for general working capital purposes.

Bitnile is a diversified holding company based in Las Vegas that acquires undervalued businesses and disruptive technologies and owns and operates a bitcoin mining data center, provides products that support industries such as defense and automotive, and extends credit to select businesses through a licensed lending subsidiary.

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