In a pioneering move that underscores the growing intersection of digital assets and traditional finance, UK-based Smarter Web Company (AQSE:SWC) has successfully raised $21 million through a Bitcoin-denominated convertible bond. This innovative financial instrument, dubbed "Smarter Convert," marks a first for the UK capital markets and signals increasing institutional acceptance of Bitcoin as a legitimate tool for corporate fundraising.

The bond, fully subscribed by Paris-based asset manager TOBAM through three of its managed funds, offers investors a unique opportunity to gain exposure to the potential upside of Smarter Web Company while providing downside protection. The structure of the bond is designed to benefit both the company and its investors. It allows Smarter Web Company to raise capital at a premium without incurring interest or immediate dilution of shares. For investors, the bond provides an option to convert their holdings into equity at a 5% premium to the company's share price on August 5, 2025, which was £1.95. This sets the conversion price at approximately £2.05 per share, or $2.73 based on a reference exchange rate of 1.3288 GBP/USD.

Several key terms define the mechanics of the "Smarter Convert" bond:

• Conversion Option: Bondholders have the option to convert their bonds into equity after a six-month lock-up period. If all bonds convert, Smarter Web Company will issue just over 7.7 million new shares.
• Forced Conversion: The company can force conversion if the share price rises by 50% above the conversion price for 10 consecutive trading days.
• Principal Repayment: If no conversion occurs after 12 months, Smarter Web Company will repay 98% of the bond's principal, adjusted to reflect the prevailing Bitcoin price at the time.
• Bitcoin Denomination: The bond is denominated in Bitcoin, meaning repayment amounts will fluctuate with the cryptocurrency's value, exposing both parties to Bitcoin price movements. The company has mitigated this risk by capping the total amount of Bitcoin acquired through this program at 30% of its unencumbered treasury holdings.

Andrew Webley, CEO of The Smarter Web Company, emphasized the groundbreaking nature of this bond structure, stating that it marks "yet another first for the UK capital markets". He believes this innovative approach will unlock a new segment of capital for the company and complement its existing funding strategies. Yves Choueifaty, CEO of TOBAM, highlighted the structure's appeal, citing its "prudent downside protection, premium equity participation, and a Bitcoin-denominated structure".

Smarter Web Company's foray into Bitcoin-denominated bonds reflects a broader trend of digital assets gaining traction in corporate finance. The company, which provides web design, development, and online marketing services, has been accepting Bitcoin as payment since 2023 and has integrated a Bitcoin treasury policy into its overall strategy. This move aligns its capital-raising approach with its core business in web development and technology.

The successful launch of the "Smarter Convert" bond may encourage other companies, particularly those in the tech and innovation sectors, to explore similar instruments. As the line between traditional finance and digital assets continues to blur, Smarter Web Company's $21 million bond represents a significant step toward the mainstream adoption of Bitcoin in corporate capital markets. Furthermore, Smarter Web Company hinted that more such bonds could be issued in the future, potentially again with TOBAM or other investors, as the firm continues to experiment with alternative capital-raising tools that leverage blockchain-era flexibility.