The Smarter Web Company holders pass three preferred-share resolutions

A bitcoin treasury company's shareholders passed three enabling resolutions on Sept. 28 for a possible £15 million to £25 million preferred-share IPO. The Smarter Web Company PLC LONSWC OTCMKTSTSWCF, a British web-design and digital-marketing business with more than 500 clients and bitcoin as its primary treasury reserve, said all three resolutions passed at its general meeting.

Shareholders amended the articles, authorized directors to allot preferred shares and authorized market repurchases of that class. The allotment authority won 163,833,811 votes, or 99.84 per cent of votes cast. The articles amendment and repurchase authority each drew 99.86 per cent. The revised articles took effect immediately; the company said 375,590,705 ordinary shares carried voting rights after the meeting.

The articles amendment and repurchase authority were special resolutions, while the allotment authority was an ordinary resolution. The company said withheld votes do not count toward the reported approval percentages. On the articles amendment, 184,569 votes were withheld and 231,386 were cast against. The poll counts approval of those powers; the company's Sept. 11 notice described the IPO as possible.

As of its Sept. 28, 7:55 a.m. BST snapshot, the London Stock Exchange's page labeled 62 pence as the previous close, with the stock in an opening auction call before the meeting. That pre-vote snapshot does not establish how shares traded after the resolutions passed.

A separate Sept. 28 capital update said 2,710,442 ordinary shares sold under an existing subscription agreement for gross proceeds of £1,891,933, or about 70 pence each. The company intends to use some of those proceeds to cut an existing credit-facility balance from about £20.8 million to about £19.0 million after the funds arrive. That planned repayment belongs to the ordinary-share sale, separate from the possible preferred float.

Proposed Preferred Shares Carry Weekly Dividends And Liquidation Rights

The Sept. 11 proposal says the preferred shares, if issued, would carry a cumulative variable-rate weekly dividend and a liquidation preference. They would have no vote at general meetings and could be redeemed by the issuer. Ordinary shares still carry one vote each under the Sept. 28 notice, while a preferred issue would add dividend obligations and a liquidation preference ahead of ordinary holders.

The company targets gross proceeds between £15 million and £25 million from a possible IPO offered to institutions and eligible UK retail investors. Its Sept. 11 notice says the IPO would not proceed unless it raises at least £10 million. Admission also requires three London Stock Exchange market makers and at least half the preferred shares in public hands. Those are conditions for a sale, not results of the shareholder poll.

"If any of these conditions are not satisfied, the Possible IPO will not proceed and Admission will not occur," the company said in its Sept. 11 notice.

Management identified operating cash flow, cash reserves, bitcoin holdings and future share sales as potential sources for dividends on any preferred shares. The notice does not commit those sources in a fixed order. It says final terms and retail participation arrangements would come in a later confirmation or prospectus, with the prospectus subject to approval by the UK Financial Conduct Authority.

The Sept. 11 notice limits its contemplated retail offer to investors resident and physically present in the UK. Participating brokers, wealth managers and investment platforms would distribute it if the offer proceeds. The company has not fixed a preferred-share issue price in the Sept. 28 voting result, so approval alone provides no sale price against which ordinary holders can measure the new class.

The Preferred Prospectus Still Needs FCA Approval

Approval of articles changes, allotment authority and market-repurchase authority leaves the proposed sale subject to the conditions in the Sept. 11 notice. That notice describes a potential source of long-term capital for acquisitions, working capital and the company's broader bitcoin-treasury strategy. It also proposes an at-the-market facility for preferred shares after admission, alongside the existing ordinary-share facility.

The company's existing funding arrangements remain material to that proposal. Its Sept. 28 update said 41,213,788 previously issued subscription shares remained unsold. It also said the variable interest rate on its bitcoin-secured credit facility had risen to 6.25 per cent from 6.00 per cent. The proposed preferred issue would add another potential source of capital while those ordinary-share sales and borrowing remain in place.

The proposed IPO sits within Smarter Web's existing bitcoin-treasury policy, which its Sept. 28 meeting notice describes as holding bitcoin as the primary reserve asset. Mugglehead's recent coverage of a different bitcoin-treasury decision follows the same listed-company sector, while Smarter Web's vote approved articles changes, allotment authority and market repurchases. Its own Sept. 11 proposal leaves final financing terms for a later document.

Read more: Sequans ends bitcoin treasury after sale of last 314 coins

Smarter Web gave no date for an FCA-approved prospectus in its Sept. 11 proposal. Its publication is the next test of final terms, followed by any offer that meets the £10 million minimum described in that notice.