Smarter Web, a UK-listed Bitcoin treasury company, sold 177.89 BTC at an average price of $65,762 per coin on July 23 to repay an $11.7 million convertible instrument maturing August 5. The early repayment eliminated 7.72 million potential shares but paradoxically reduced Bitcoin per share despite the share count decline.
The Smarter Convert instrument began in August 2025 as a one-year interest-free investment. TOBAM, the convertible holder, received settlement options in June interim accounts: convert to shares at £2.0475 per share, take Bitcoin after costs, or collect equivalent value in pounds, dollars, or euros. At the time of repayment, the conversion price was 7.01 times the market price of 29.20p on the London Stock Exchange, making conversion economically unfavorable.
CEO Andrew Webley said: “the conversion price had not been met, management chose to simplify the capital structure, and the company treated the instrument more like debt than equity in its treasury analytics.” Management characterized the early repayment as the company’s own request, fully supported by TOBAM.
The Paradox of Dilution Reduction
Smarter Web originally deployed 100% of the $21 million subscription into Bitcoin, acquiring 177.89 BTC at the subscription’s inception. Rather than transfer those coins to TOBAM in kind, the company sold them and paid cash. This repayment eliminated the 7.72 million shares that would have been issued upon conversion.
Yet Bitcoin per share fell across both measurement methods. On a legal issued-share basis, Bitcoin per share declined from 773.73 sats to 725.90 sats, a 4.17% drop. On management’s fully diluted denominator, the decline was steeper: from 783.05 sats to 750.41 sats, reflecting a -4.35% quarterly gross Bitcoin yield for Q3.
The company’s holdings fell from 2,878 BTC to 2,700.11 BTC, a 6.18% decline. The diluted share count fell 2.10%, meaning the proportional loss of Bitcoin exceeded the proportional reduction in share count. This dynamic reflects the timing of Bitcoin’s price movement relative to the sale and the broader portfolio performance during the quarter.
Capital Structure and Leverage
Smarter Web maintains a $30 million secured lending facility with Coinbase, collateralized against Bitcoin with no fixed maturity. The facility carries material risk: a significant decline in Bitcoin price could require additional collateral or force a balance reduction at short notice.
At the time of repayment, Smarter Web’s legal-share market capitalization stood at £108.61 million. The fully diluted market capitalization was £104.10 million, with a fully diluted enterprise value of £121.71 million. The company’s net asset value was £115.06 million, producing a modified net asset value ratio of 1.06 times. Enterprise value to gross Bitcoin value was 0.92 times.
The original Smarter Convert structure required at least 98% of subscription proceeds deployed into Bitcoin. Smarter Web ultimately deployed 100%, maximizing Bitcoin exposure at the time of the subscription.
