Smarter Web Company shareholders clear path for UK Bitcoin backed preferred shares

The Smarter Web Company has secured shareholder approval for the resolutions needed to create its proposed MORE perpetual preferred shares, clearing a key condition for a possible listing on the London Stock Exchange Main Market.

Summary

• Smarter Web shareholders approved all three resolutions needed to move forward with the proposed MORE preferred shares.
• The company plans to raise between £15 million and £25 million through the potential offering.
• MORE would pay weekly preferential dividends and would not give holders voting rights at general meetings.
• The IPO has not launched and still requires an FCA approved prospectus before a potential LSE Main Market listing.

According to the company's Sept. 28 general meeting results, shareholders approved all three resolutions covering changes to its articles of association, authority to allot preferred shares and permission for the company to make market purchases of the securities.

The vote gives the board the shareholder authorities it sought before proceeding with a possible initial public offering of the preferred shares, which have the reserved ticker MORE. The offering itself has not yet launched and remains subject to other conditions, including approval of a prospectus by the UK Financial Conduct Authority.

Resolution 1, which amended the company's articles of association to accommodate the new share class, received 163.8 million votes in favor, representing 99.86% of votes cast. Another 231,386 votes, or 0.14%, were against the proposal.

Shareholders backed the second resolution, giving directors authority to allot the preferred shares, with 99.84% support. The third proposal allowing the company to buy back preferred shares in the market received 99.86% support.

Following the vote, the amended articles of association took effect immediately. The company had 375.59 million ordinary shares carrying the same number of voting rights when the results were announced.

MORE preferred shares target up to £25 million

The shareholder vote follows The Smarter Web Company's Sept. 11 proposal for a possible IPO of MORE, a new class of perpetual preferred shares intended for admission to the non equity shares and non voting equity shares category of the Official List.

Under the proposed structure, the company plans to seek between £15 million and £25 million in gross proceeds by offering the securities to institutional investors in the UK and eligible UK retail investors through participating brokers, wealth managers and investment platforms.

A minimum of £10 million must be raised for the IPO to proceed. At least three firms must be registered as market makers in MORE when the securities are admitted, while a minimum of 50% of the preferred shares must be held in public hands.

If any of those conditions are not met, the company said the IPO would not proceed.

The preferred shares would carry a cumulative variable rate preferential dividend paid weekly. Investors would have a liquidation preference, while the company would retain the right to redeem the shares. MORE holders would not have voting rights at general meetings.

The company identified recurring operating cash flows, cash reserves, its Bitcoin treasury and continued access to public capital markets as potential sources for meeting dividend obligations attached to the securities.

Final terms have not been set. The Smarter Web Company said details of the securities and arrangements for the retail offering would be provided through a confirmation of intention to float announcement or the prospectus if the transaction proceeds.

CEO Andrew Webley said when the plan was announced that, subject to the required approvals and completion of the offering, the company expects MORE to be the first sterling denominated perpetual preferred share listed on the LSE Main Market by a UK incorporated commercial company pursuing a Bitcoin treasury strategy.

"The proposed Preferred Shares are designed to provide an additional source of long-term capital, broaden the range of investors able to invest in the Company and further diversify our capital structure," Webley said.

Smarter Web sees MORE as another source of capital

The proposed preferred shares would give the company another financing route as it continues operating a balance sheet centered on Bitcoin.

As crypto.news previously reported, TD Cowen analysts said earlier in September that MORE could provide another source of long term capital alongside the financing options already available to the company.

The investment bank raised its Smarter Web price target to £0.73 from £0.64 at the time while maintaining its Buy rating. Analysts led by Lance Vitanza said preferred equity could give the company another financing option as it develops its Bitcoin treasury operation.

Smarter Web has previously used equity sales, convertible financing and Bitcoin backed borrowing to fund its treasury strategy. In May, the company had drawn £18 million through a Coinbase credit facility secured against its Bitcoin holdings, with leverage standing at approximately 12.19%.

Its approach to convertible financing changed in July when the company sold 177.89 BTC to repay its $11.7 million Smarter Convert instrument around two weeks before maturity.

The repayment removed the potential issuance of more than 7.7 million ordinary shares connected to the instrument. Webley said at the time that management no longer viewed convertible instruments as its preferred source of financing given the company's position.

Bitcoin treasury remains part of the funding structure

Smarter Web resumed Bitcoin purchases shortly after repaying the convertible instrument, buying 11.89 BTC in August and taking its treasury to 2,712 BTC. The 11.89 BTC purchase cost £559,493 at an average price of £47,052 per Bitcoin.

A further 35 BTC purchase on Sept. 2 lifted its holdings to 2,747 BTC. The company paid an average £57,494 per Bitcoin for the purchase, spending just over £2 million. Its net average acquisition price stood at £82,562 per BTC following the transaction, while net Bitcoin purchases totaled approximately £226.8 million.

Bitcoin remains the company's primary treasury reserve asset under its long term 10 Year Plan. Management has said the treasury policy is intended to support the company's capital position while seeking to raise Bitcoin per ordinary share over time.

The MORE proposal could sit alongside the company's existing ordinary share At The Market facility. If the preferred share IPO proceeds, Smarter Web plans to establish a separate ATM facility under which Tennyson Capital Partners would be able to sell preferred shares and raise capital over time, subject to market conditions.

The proposed IPO still requires an FCA approved prospectus before the company can seek admission of MORE to the London Stock Exchange Main Market. Smarter Web cautioned in its original proposal that shareholder approval did not guarantee the preferred shares would ultimately be issued or that the IPO and admission would proceed.

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