ETHZilla Announces $350 Million Add-On Convertible Debenture Investment and Provides Business Update (Form 8-K)

ETHZilla Announces $350 Million Add-On Convertible Debenture Investment and Provides Business Update

Palm Beach, FL - September 22, 2025 - ETHZilla Corporation (Nasdaq: ETHZ) ("ETHZilla" or the "Company"), today announced a $350 million convertible debenture by an institutional investment partner.

Convertible Debenture Investment Details

ETHZilla partnered with the existing convertible debenture investor to amend the terms of the existing convertible debenture and to raise an additional $350 million through the issuance of new convertible debentures (the "New Debentures").

The previously issued $156.5 million convertible debentures will remain at 0% interest until February 6, 2026 and will have a 2% annual interest rate thereafter (compared to the original 4% annual interest rate). The New Debentures will bear a 2% annual interest rate and ETHZilla will receive the excess interest income on the total approximately $500 million portfolio of interest-bearing securities. The conversion price of the New Debentures is $3.05 per share which is 1.05x Market Net Asset Value (mNAV)* and is above the Nasdaq Minimum Price on the date the New Debentures were issued.

"ETHZilla, is committed to being a responsible steward of our shareholders' capital," said McAndrew Rudisill, Chairman and Chief Executive Officer of ETHZilla. "We are a DeFi technology company focused on building our capital reserves to deploy ETH into cash flowing assets. As we pursue our strategy of deploying ETH into Layer 2 protocols and tokenizing real-world assets to generate free cash flow on the Ethereum network, we are providing transparency into ETHZilla's mNAV and the methodology behind the calculation*. We believe our business model is highly scalable, with significant fixed operating leverage and recurring positive cash flow. We plan to provide guidance for the remainder of 2025 in our Q3 earnings release. We believe that ETHZilla is well positioned for continued growth with the support of our institutional shareholders."

Clear Street served as exclusive financial advisor to the Company.

*See "Supplemental Measures" below.

Business Update*

The Company today introduced additional detail and metrics relating to other sources of cash flow and ETH NAV and mNAV calculation. In addition to holding Ether ("ETH"), the Company generates cash flows from ETH deployed to Layer 2 protocols, its cash balance invested in U.S. Treasuries, commercial paper, and is exploring the tokenization of real-world assets.

ETHZilla's mNAV and ETH NAV are calculated as follows¹:

Update on Stock Repurchase Program

The Company repurchased approximately 0.5 million shares at an average price of $2.41, reducing shares outstanding by 0.3% during the week ending September 20, 2025. This brings the total repurchased shares in the month of September to approximately 6.45 million shares.

ETH Deployment and Accumulation Update

A summary of ETHZilla's current ETH position and key metrics as of September 19, 2025:

ETHZilla continues to actively deploy capital across the Ethereum ecosystem, strategically supporting a diverse range of protocols that drive innovation, long-term network growth, and differentiated yield.

Weekly ETH and Capital Summary

The Company will continue to provide updates to its treasury and on-chain yield generation strategies through press releases and regulatory filings as available and expects to transition to an ETH dashboard in the coming weeks.

Supplemental Measures

The Company uses ETH NAV and mNAV, to help assess the performance of its strategy of acquiring and deploying ETH and ETH Equivalents in a manner the Company believes is accretive to shareholders. The Company believes that ETH NAV and mNAV can assist investors in understanding how the Company chooses to fund purchases of and deploy ETH and ETH Equivalents and the value created by such purchases. These metrics have inherent limitations including not taking into account that our assets are subject to all existing and future liabilities. These metrics are not, and should not be understood as, financial performance, valuation, or liquidity measures. These metrics may not be comparable to similarly titled measures of other companies. Other companies, including other companies with digital asset treasuries, may calculate these or similarly titled metrics differently, limiting the usefulness of those measures for comparative purposes.

As used by the Company:

These measures are not, and should not be understood as, financial performance, valuation or liquidity measures. Specifically, although each of these measures incorporates the label "NAV," they are not equivalent to "net asset value" or "NAV" or any similar metric in the traditional financial context. Additionally, each of these measures is not a measure of the amount by which the enterprise value exceeds net asset value in the traditional financial sense of those terms. 

The trading price of the Company's common stock is informed by numerous factors in addition to Company's ETH holdings and its actual or potential shares of common stock outstanding, and as a result, the trading price of the Company's securities can deviate significantly from the market value of the Company's ETH, and neither ETH NAV nor mNAV, are indicative or predictive of the trading price of the Company's securities.

Investors should rely on the financial statements and other disclosures contained in the Company's SEC filings. In particular, the Company has adopted Accounting Standards Update No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08"), which requires that the Company measure its ETH holdings at fair value in its statement of financial position as of the end of a reported period, and recognize gains losses from changes in the fair value in net income for the reported period. As a result, the Company recognizes gains and losses from changes in the fair value of our ETH holdings in net income each reporting period, which may create significant volatility in our reported earnings and decrease the carrying value of our digital assets, which in turn could have a material adverse effect on the market price of the Company's common stock. Conversely, any sale of ETH at prices above our carrying value for such assets creates a gain for financial reporting purposes even if the Company would otherwise incur an economic or tax loss with respect to such transaction, which also may result in significant volatility in the Company's reported earnings.

As noted above, these metrics are narrow in their purpose and are used by management to assist it in assessing whether the Company is raising and deploying capital in a manner accretive to shareholders solely as it pertains to its ETH holdings.

These metrics are merely supplements, not substitutes to the financial statements and other disclosures contained in the Company's SEC filings. They should be used only by sophisticated investors who understand their limited purpose and many limitations. 

About ETHZilla

ETHZilla Corporation is a technology company in the decentralized finance industry. ETHZilla seeks to connect financial institutions, businesses and organizations worldwide by enabling secure, accessible blockchain transactions through Ethereum Network protocol implementations. It generates recurring revenues through various decentralized finance ("DeFi") protocols that improve Ethereum network integrity and security. ETHZilla believes it has the unique capability to bring traditional assets on-chain via tokenization. Through its proprietary protocol implementations, ETHZilla facilitates DeFi transactions and asset digitization across multiple Layer 2 Ethereum networks. ETHZilla is working to offer tokenization solutions, DeFi protocol integration, blockchain analytics, traditional-to-digital asset conversion gateways, and other decentralized finance services.