The Smarter Web Company (AQUIS: SWC) announced the launch of a new capital-raising instrument, Smarter Convert, structured as a convertible bond denominated in Bitcoin and fully subscribed by French asset manager TOBAM for $21 million.
The initiative, developed in partnership with TOBAM, allows for potential equity conversion while offering downside protection for investors. The bond was priced with a reference share price of £1.95 and a GBP/USD exchange rate of 1.3288. Smarter Convert is intended to give the company strategic access to capital without immediate dilution of shareholder equity.
Bond Terms Include Conversion Premium, Downside Buffer
Under the terms of the agreement, investors may convert their holdings into equity at a 5% premium to the reference share price. The company retains the option to force conversion if its share price trades 50% above the conversion price for 10 consecutive trading days following a six-month holding period.
If bonds are not converted within 12 months, Smarter Web is required to repay 98% of the bond’s value, providing investors with partial downside protection. The bond principal is denominated in Bitcoin, meaning repayments are adjusted according to the digital asset’s value at maturity.
However, the conversion share price remains fixed in British pounds. TOBAM, a Paris-based institutional investor known for its early involvement in Bitcoin, subscribed to the bond through three of its managed funds. The firm began its Bitcoin investment activity in 2016.
Equity Impact and Future Issuance Possibility
Should all bonds be converted, Smarter Web estimates 7.7 million new shares will be issued, representing the equivalent of the $21 million investment at the conversion price. This would result in a 5% lower dilution rate compared to a standard equity raise, according to the company.
While this tranche is exclusive to TOBAM, future bonds may be offered under the same structure to other investors, depending on market conditions. The company also stated it would cap the amount of Bitcoin acquired through this mechanism at 30% of its current unencumbered Bitcoin holdings.
The move is part of Smarter Web’s broader strategy to expand its Bitcoin-backed balance sheet while maintaining flexibility in capital sourcing.
Company and Investor Statements
TOBAM CEO Yves Choueifaty said the structure aligns with the firm’s long-term investment philosophy and belief in Bitcoin as a financial asset. Smarter Web CEO Andrew Webley described the launch as part of a strategy to diversify funding channels while managing equity dilution. The company shares closed at £1.95 on August 5.
