BitNile Holdings Launches Bitcoin Lending Platform

BitNile Holdings, Inc. (NYSE American: NILE), a diversified holding company (“BitNile” or the “Company”) today announced that it plans to fund up to $100 million in commercial loans to small, publicly traded companies, secured by Bitcoin, through its subsidiary, Digital Power Lending, LLC (“DP Lending” California Financing Law License 60 DBO77905).

BitNile intends to increase its Bitcoin mining production by increasing its number to 20,600. This will result in a mining production rate of 2.24 exahashes per seconds. The Company plans to hold up to $100 million of self-mined Bitcoin in reserve to back the expansion of commercial loans to be offered through a new lending platform known as Ault Lending (the “Platform”), powered by DP Lending. Funding for the Platform is expected over a period of approximately two years. The Company reported revenue from trading activities and lending at DP Lending of approximately $17 Million for the year ended on December 31, 2021. DP Lending ended that year with approximately $100 million of total assets.

The Platform will lend to publicly traded companies with a market capitalization below $250 million. The Platform is designed to use Bitcoin layer three technology to offer “smart contracts” to participating companies and is also expected to allow participating companies to borrow against their Bitcoin holdings. Layer three protocols, also known as application layers are the protocols that allow applications run on blockchains. Smart contracts are programs that are stored on a blockchain and run when certain conditions are met.

DP Lending plans to partner with Earnity Inc. (“Earnity”) to build out layer three technologies. “We look forward to partnering with DP Lending to enable businesses to secure a variety of liquidity opportunities with crypto and fiat assets,” said Dan Schatt, co‑founder and CEO of Earnity. “Businesses have a variety of treasury, cash management and custody needs that can be met with virtual currencies and decentralized finance platforms, and we look forward to providing a roadmap that can successfully support these institutions.”

The company anticipates that the loan amount will be between $1 million and $25,000,000. The Company expects the loans to range from $1 million to $25 million. Borrowers in small and micro-cap markets typically have limited access for capital funding from traditional fiat currency sources. The Company’s goal is to provide a Bitcoin-backed lender to fund these public companies in a unique way by leveraging today’s DeFi technology and the growing acceptance of Bitcoin worldwide. The borrower can repay the loan using cash, bitcoin, or in the case convertible promissory note cases, their common stock. The Platform expects to announce additional partners, such as financial lenders and banks. Initial funding will be provided by Bitcoin mined at BitNile. The Company will deposit the Bitcoin and anticipates expanding incrementally this opportunity to other Bitcoin-owners by depositing their Bitcoins with DP Lending. This will greatly increase funding for the micro-cap or small-cap markets. The Company anticipates that the program will start in May 2022. The Company points out that its current lending platform is in operation for more than four years.

Traditional banks are required by law to have a minimum amount of cash reserves. DP Lending isn’t a bank, but a licensed lending institution. However, it plans on using Bitcoin as a reserve to its balance sheet. The Company’s objective is to allocate a total of $250 million in capital to DP Lending, including the $100 million in Bitcoin. The Company’s plans to hold Bitcoin provide a potential benefit if the long-term value of Bitcoin increases.

The Company’s Founder and Executive Chairman, Milton “Todd” Ault, III said, “This is the Company’s first opportunity to expand the lending program around Bitcoin and I am pleased that the lending platform of our licensed financial lender will be offering Bitcoin-backed loans to small public companies. We believe the Platform is truly innovative and believe DP Lending is the first financial company, lender or institution that we know of to provide Bitcoin-backed lending on a commercial basis or leverage DeFi technology to uniquely target capitalization assistance to small public companies.” Ault explained, “From my many years of financing companies, I know all too well the challenges faced by these aspiring entrepreneurs and employers. It strikes me as a natural progression of the Company and its subsidiaries to join to provide a new unique source of capitalization and to assist in their growth while creating a new revenue stream in a very positive and mutually beneficial way.”

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