DigitalX raises USD $15.4m with placement & rights issue

DigitalX has successfully secured applications for a private placement, raising USD $10.3 million before costs, and announced a rights issue aiming to amass an additional USD $5.09 million from its existing shareholders.

The capital injection from the private placement and the anticipated rights issue is expected to total around USD $15.4 million. This new funding effort has gained strong support from a mix of existing and new sophisticated investors. Among the investors are Directors of DigitalX, who have pledged USD $611,000, subject to approval at an upcoming shareholders' meeting.

DigitalX will further enhance its capital raise by receiving approximately 41 Bitcoin from Mt Gox administrators over 2025, valued at approximately USD $7 million as of the latest assessment.

To aid its strategic direction in digital asset staking and investment, DigitalX has appointed Tony Guoga as a strategic advisor. "Mr Guoga will play a crucial role in expanding and growing our existing digital asset staking and validation services to increase revenues and asset values," said a company spokesperson. His investment in the placement totals USD $4.7 million, which is subject to a 12-month voluntary escrow period.

For his advisory role, Mr Guoga will receive 25 million options in DigitalX, exercisable at USD 10 cents each within two years from issuance, contingent upon shareholder approval in a forthcoming meeting in January 2025. Guoga's two-year agreement aligns with industry norms for such roles.

Mr Guoga is well-known in the digital assets sector, currently serving as Chair of Solana Strategies, a Canadian listed firm, bringing extensive experience in digital asset investment and business growth.

Following the completion of these financial initiatives, DigitalX anticipates having over USD $18 million in cash reserves. Additionally, it holds around USD $58 million in digital assets. The company also sees increasing demand for its Bitcoin ETF, launched in July 2024, now valued over USD $54 million.

As part of the terms of the placement, DigitalX will issue up to 206.6 million shares under existing placement capacities. A subsequent tranche concerning 13 million shares will be distributed to Directors, pending shareholder approval in January 2025.

DigitalX has put forth resolutions for the upcoming shareholder meeting to issue each of the company executives – Messrs Hicks, Rubinstein, and Dooley – 10 million options, exercisable at 10 cents within two years from issuance, following the expiration of previous incentive options.