DEF: Bolt Projects Seeks Shareholder Approval for Murchinson Funding

Bolt Projects Holdings, Inc. is seeking stockholder approval for a convertible notes and warrants offering to Murchinson Ltd. to address working capital needs and repay debt.

Summary

• A Special Meeting of Stockholders will be held virtually on Wednesday, December 3, 2025, at 11:00 a.m., Eastern Time.
• The primary purpose of the meeting is to approve the issuance of the maximum number of common stock shares upon conversion of convertible notes and exercise of warrants to be issued to Murchinson Ltd. (the "Convertible Notes Proposal").
• A secondary proposal seeks approval for an adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are insufficient votes for the Convertible Notes Proposal.
• The proposed Convertible Notes Offering involves an aggregate principal amount of $30 million with a 10% original issue discount.
• An initial tranche of up to $4 million is available, with subsequent tranches of up to $3 million each, subject to specific conditions including market capitalization exceeding $8 million and 5-day average trading volume over $500,000.
• The convertible notes will bear interest at 2.00% per annum, payable quarterly in cash, and will mature 12 months from issuance.
• The investor, Murchinson Ltd., will receive a second lien on all assets of Bolt Threads, Inc., a subsidiary, which will become a first lien upon repayment of senior debt to Ginkgo Bioworks, Inc.
• Monthly redemptions of 1/12th of the initial balance, plus accrued interest, can be made in cash or, under certain conditions, in shares of common stock at the Company's option.
• The conversion price for shares will be the lower of 115% of the price immediately preceding the Initial Closing or 90% of the lowest VWAP in the five trading days prior to each conversion.
• Warrants will be issued to Murchinson Ltd. to purchase shares equal to 20% of the principal amount of convertible notes purchased, with a 3-year term and an exercise price equal to the initial conversion price.
• The Company will be restricted from issuing other equity or equity-linked securities while the convertible notes are outstanding, with limited exceptions.
• A portion of gross proceeds from future equity sales (30%, or 15% if a registration statement is effective) will be applied to repay the convertible notes; this increases to 80% if stockholder approval is not obtained within 60 days.
• The Company commits to using reasonable efforts to raise $1 million monthly from its existing Equity Line of Credit (ELOC) until stockholder approval and resale registration are achieved.

Sentiment

Score: 3

Explanation: The filing indicates a critical need for capital to address working capital and debt repayment, explicitly mentioning 'going concern' and Nasdaq listing risks if the financing is not secured. While the financing itself is a necessary step towards survival, the terms (e.g., 10% OID, significant dilution, restrictive covenants) reflect a distressed situation, placing existing shareholders at a disadvantage.

Positives

• Secures critical financing of up to $30 million, addressing immediate working capital needs and facilitating the repayment of debt owed to Ginkgo Bioworks.
• Provides a potential pathway to avoid 'going concern' issues and maintain the Company's Nasdaq listing, which are explicitly stated risks if the financing is not secured.

Negatives

• Existing stockholders will suffer significant dilution of their ownership interests upon the conversion of the convertible notes and exercise of the warrants.
• The potential sale of newly issued shares into the public market could materially and adversely affect the market price of common stock.
• The financing terms include a 10% original issue discount, suggesting less favorable conditions for the Company due to its financial position.
• Restrictive covenants limit the Company's ability to issue other equity securities and mandate a significant portion of future equity raise proceeds (up to 80%) be used for debt repayment if stockholder approval is delayed.
• The explicit mention of 'going concern' and Nasdaq listing risks highlights the Company's precarious financial situation.

Risks

• Existing stockholders will suffer dilution in their ownership interests in the future upon the conversion of the Convertible Notes into shares of common stock and upon the exercise of the warrants.
• The sale into the public market of these shares could materially and adversely affect the market price of common stock.
• Inability to consummate the proposed Convertible Notes Offering if stockholder approval is not obtained.
• Impairment of the Company's ability to continue as a going concern if the proceeds from the offering are not procured.
• Potential impact on the Company's ability to remain listed on Nasdaq if the proceeds from the offering are not procured.

Future Outlook

The Company expects to issue and sell convertible notes and warrants to Murchinson Ltd. to support general working capital needs and repay funds owed to its secured creditor, Ginkgo Bioworks. Approval of this proposal is critical, as the inability to procure these proceeds may impair the Company's ability to continue as a going concern and could impact its Nasdaq listing. The Company will also use reasonable efforts to raise $1 million monthly from its existing Equity Line of Credit until stockholder approval and resale registration for the convertible notes shares are obtained.

Management Comments

• "On behalf of the Board of Directors, I cordially invite you to attend a special meeting of stockholders of Bolt Projects Holdings, Inc." Daniel Widmaier, Chief Executive Officer and Director.
• "Your vote is important to us. Please act as soon as possible to vote your shares." Daniel Widmaier, Chief Executive Officer and Director.
• "On behalf of the Board of Directors and management, it is my pleasure to express our appreciation for your continued support." Daniel Widmaier, Chief Executive Officer and Director.
• The Board believes that enabling it to continue seeking additional votes for the Convertible Notes Proposal, if a quorum is present but votes are insufficient, is in the best interests of stockholders.

Industry Context

The need for this type of financing, involving convertible notes and warrants, often indicates a company facing significant liquidity challenges or seeking capital under less favorable market conditions. This structured financing with a specific investor like Murchinson Ltd. suggests a targeted solution to immediate financial pressures, rather than a broad market offering. The explicit mention of Nasdaq listing rules and 'going concern' issues underscores the critical nature of this capital raise for the Company's operational continuity and public market presence, a situation common for companies in distress or undergoing significant strategic shifts.

Stakeholder Impact

• Shareholders: Face significant potential dilution of their ownership interests and a possible adverse impact on the market price of common stock due to the conversion of notes and exercise of warrants. Their vote is crucial for the Company's continued operation.
• Creditors (Ginkgo Bioworks): The offering is intended to repay funds owed to Ginkgo Bioworks, which is currently a senior secured lender, potentially improving their repayment prospects.
• Murchinson Ltd. (Investor): Will become a significant creditor and potential equity holder, gaining a second lien on assets (eventually first lien) and warrants, indicating a strategic investment in a distressed company.
• Employees: The Company's ability to secure this financing directly impacts job security and the continued operation of the business.

Next Steps

• Hold a Special Meeting of Stockholders on December 3, 2025, to vote on the Convertible Notes Proposal and the Adjournment Proposal.
• If the Convertible Notes Proposal is approved, proceed with the issuance and sale of convertible notes and warrants to Murchinson Ltd.
• If the Convertible Notes Proposal is approved, register the resale of shares issuable upon conversion of the notes and exercise of the warrants with the SEC.
• Use reasonable efforts to raise $1 million monthly from the existing Equity Line of Credit (ELOC) until stockholder approval and resale registration are achieved.
• Repay funds owed to the Company's secured creditor, Ginkgo Bioworks.

Key Dates

Recommendation

The Company is in a precarious financial position, as evidenced by the critical need for this emergency financing and the explicit disclosure of 'going concern' risks and potential Nasdaq delisting if the funding is not secured. The proposed convertible notes and warrants offering, while necessary for survival, is highly dilutive to existing shareholders and comes with restrictive covenants. The terms, including a 10% original issue discount and the potential for 80% of future equity raise proceeds to repay the notes if approval is delayed, indicate a distressed situation. For a seasoned investor, these factors point to significant downside risk and a likely erosion of shareholder value, making a 'sell' recommendation appropriate to mitigate further losses.

Keywords

Convertible Notes, Warrants, Equity Financing, Nasdaq Listing Rule 5635(d), Murchinson Ltd., Ginkgo Bioworks, Working Capital, Debt Repayment, Stockholder Meeting, Proxy Statement, Dilution, Going Concern