What happened

Shares of SOS Limited (SOS -5.98%) tanked today, down by 12% as of 11:30 a.m. EST, after the company announced the exercise of warrants. The corporate action will be dilutive to existing investors but allow SOS to raise more capital.

So what

Certain investors have agreed to exercise warrants to purchase up to 23.9 million American depository shares (ADSes) at an exercise price of $4.05. The gross proceeds from the exercise are expected to be approximately $96.7 million, and SOS has agreed to give the exercising warrant holders new unregistered warrants to purchase ADSes at an exercise price of $7 per ADS. Those new warrants will be good for five years before expiration and represent an additional 23.9 million ADSes.

A 3D Bitcoin symbol rises from turbulent digitized waters.

Image source: Getty Images.

Now what

SOS intends to use the proceeds from the deal to invest in cryptocurrency mining equipment as well as for general corporate purposes. Separately, the company said that it has started construction of a new mining facility in Hejiang County, Luzhou, Sichuan, after reaching an agreement with the Leibodong Hydropower Station to provide electricity and physical space.

"The Leibodong Cloud Crypto Mining Center based in Hejiang County, Luzhou, Sichuan sets an example and standard on how SOS will continue to secure cheap electricity in regions with rich renewable energy resources, such as Sichuan China," SOS chairman Yandai Wang said in a statement. "We will continue to search for cheap and sustainable power plant [sic] to execute our aspiring strategy of cloud crypto mining."