Australian cryptomining firm Iris Energy has signed a deal with B. Riley that gives the capital markets firm an option to buy up to 25 million of its shares.
Iris Energy, according to a filing with the United States Securities and Exchange Commission on Friday inked agreement with B. Riley Principal Capital II regarding the “potential offer and sale” of up to 25 million bitcoins (BTC) of the mining company’s common stock valued at $100 million. The filing states that B. Riley has a 24-month window to complete the purchase, beginning “as soon as possible” after the registration statement’s effective date.
As Iris Energy qualifies as a “foreign private issuer” under US securities laws, the firm said it intends to comply with “most of Nasdaq’s corporate governance standards for listings” while complying with Australian law. The company already expected to issue 198,174 shares to B. Riley “as consideration for its irrevocable commitment” to buy additional shares.
According to Iris Energy’s filing, the company planned to use the proceeds from the sale to fund growth initiatives, including purchasing mining hardware and developing data centers:
“As of the date of this prospectus, we cannot specify with certainty all of the specific uses and the respective amounts that we may allocate to those uses for any net proceeds that we receive. Accordingly, we will have broad discretion in how we use these proceeds.”
The shares of the cryptomining company were listed on Nasdaq in November 2021 after a $200 million funding round. B. Riley Securities, the firm’s capital markets arm, also acted as joint account manager with Cowen for the Stronghold Digital Mining plan on a list of roughly 6 million shares on Nasdaq in an initial public offering in October 2021.
Other North American-based mining firms appeared to be experiencing financial difficulties amid the market downturn. Core Scientific and Bitfarms sold some of their BTC holdings in July and Compute North filed for Chapter 11 bankruptcy on Thursday. However, cryptomining firm CleanSpark struck a $33 million deal to buy Mawson’s bitcoin mining rig in September.