Metaplanet Inc. has declared that it issued its 5th Series of Ordinary Bonds via private placement with EVO FUND for ¥5 billion to buy more Bitcoin.
In a notice released on Dec. 20, today, the company has announced the issuance of its 5th Series of Ordinary Bonds for raising approximately $31.91 million through EVO FUND. This news closely follows the company’s previously disclosed intent to issue up to ¥5 billion in ordinary bonds.
The proceeds from this issuance will be allocated towards purchasing Bitcoin (BTC), as detailed in the company’s Nov. 28, 2024, announcement concerning the issuance of the 12th Series Stock Acquisition Rights with an Exercise Price Adjustment Provision and the accompanying Stock Acquisition Rights Purchase Agreement.
In the case of the 5th Series Bonds, there is no interest, and when the principal is redeemed, it is equivalent to 100 yen for every 100 yen of the bond amount. Each bond is valued at $1.59 million (¥250 million), and the full payment is due on Dec. 20, 2024. The bonds will mature on Jun. 16, 2025, but they may be redeemed early at the request of EVO FUND by providing written notice to Metaplanet Inc. The bonds can also be redeemed early when the proceeds from the exercise of the 12th Series Stock Acquisition Rights are multiple times integral multiples of the bond principal amount.
They will not be guaranteed or collateralized and will only be made available to EVO FUND. Pursuant to Article 702 of the Companies Act and Article 169 of the Regulations for Enforcement of the Companies Act, no bond trustee will be appointed. Metaplanet Inc. will pay all principal and interest from its office in Roppongi, Minato-ku, Tokyo.
Metaplanet Inc. pointed out the issuance would not have a material effect on the consolidated financial results of Metaplanet Inc. for the fiscal year ending Dec. 31, 2024. Nonetheless, the company has promised to make timely disclosure of any material change or material impact on its financial outlook as a result of this deal.
Metaplanet is borrowing funds to buy Bitcoin
Metaplanet’s strategy of issuing bonds for BTC purchases is not the same process as buying BTC directly. The company is now borrowing and selling bonds to investors like EVO FUND rather than using its own money. That means they’ll have to repay the money they borrowed later, whether or not BTC performs well. Although this allows them to invest in BTC without spending their own cash reserves, it also adds some financial obligations and risks if the value of BTC falls. It is the company’s way of investing in BTC in borrowed time, but it is bound to repay that debt in the future.
