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Rezolve AI Limited's $1 Billion Convertible Notes: A Game-Changer for Bitcoin Investments

$RZLV
Form 6-K
Filed on: 2025-02-25
Source
Rezolve AI Limited's $1 Billion Convertible Notes: A Game-Changer for Bitcoin Investments

Key Information Extracted from the Financial Report (Form 6-K)

  1. Company Name: Rezolve AI Limited
  2. Effective Date of Agreement: February 21, 2025
  3. Type of Agreement: Securities Purchase Agreement (SPA)
  4. Funding Amount: The company plans to sell up to $1 billion in Convertible Notes to the Buyers.
  5. Purpose of Proceeds: The proceeds from the sale will be used to purchase and hold Bitcoin through a newly formed subsidiary (New SPV Subsidiary).
  6. Initial Sale Details:
  • Initial Notes: $100 million worth of Convertible Notes will be sold initially.
  • Ordinary Shares Issuance: The company will issue Closing Commitment Shares at a price of £0.0001 per share.
  1. Additional Financing: The Lead Buyer has the option to participate in additional closings for up to $900 million in Convertible Notes until February 21, 2028, subject to certain conditions.
  2. Interest Rate: Convertible Notes will accrue interest at the Effective Federal Funds Rate, with an increase of 5.0% in case of default.
  3. Conversion Terms:
  • Initial Notes Conversion Price: $3 per share.
  • Additional Notes Conversion Price: Based on the 20-day Volume Weighted Average Price (VWAP) at the time of closing.
  1. Maturity: Convertible Notes will mature on the fifth anniversary of issuance.
  2. Security for Notes: The Convertible Notes will be secured by a first priority interest in all Bitcoin held by the New SPV Subsidiary and cash proceeds from the sale of the notes.
  3. Events of Default: The Convertible Notes contain customary events of default, with limited recourse to the company's other assets.
  4. Registration Rights: The company will enter into a Registration Rights Agreement to register the resale of all Ordinary Shares issued upon conversion of the Convertible Notes.
  5. Historical Context: Certain Buyers may have provided investment banking services to the company in the past and may continue to do so in the future.

Insights:

  • Rezolve AI Limited is significantly increasing its exposure to Bitcoin through this financing structure, which could provide substantial capital for its operations or initiatives.
  • The issuance of Convertible Notes reflects a strategy to leverage the interest in cryptocurrencies while potentially diluting existing shareholders through the issuance of additional shares.
  • The financial health and market conditions for Bitcoin will play a critical role in the company's future performance, given the heavy reliance on cryptocurrency values in this financing agreement.