Strive has announced plans to raise up to $150 million through a follow-on offering of its Variable Rate Series A Perpetual Preferred Stock, known as SATA Stock, contingent on market conditions. This offering is registered under the Securities Act of 1933 and represents Strive’s latest initiative to bolster its bitcoin assets while simultaneously addressing its outstanding debt obligations.
The proceeds from this offering are earmarked for several strategic financial maneuvers. In conjunction with available cash and potential funds from the termination of certain derivative contracts related to its convertible debt, Strive aims to repurchase or redeem a portion of the 4.25% Convertible Senior Notes due 2030 issued by its subsidiary, Semler Scientific, Inc. These notes, which carry a guarantee from Strive, were issued under an indenture with U.S. Bank Trust Company, serving as trustee.
Further plans include utilizing the funds to reduce Semler Scientific’s obligations under its loan arrangements with Coinbase Credit Inc., acquire additional bitcoin and related products, and meet general corporate requirements. Strive is also engaged in discussions with some holders of the Semler Convertible Notes about the possibility of exchanging their notes for shares of SATA Stock.
SATA Stock itself is characterized as a variable-rate, cumulative dividend security with a stated value of $100 per share. Currently, dividends are set at an annualized rate of 12.25%, payable on a monthly basis; however, Strive retains the ability to adjust this rate within specified limits. In the event of a missed dividend payment, compounded interest accrues at a maximum rate of 20% per year. To maintain a stable trading price, Strive aims for the stock to trade within a target range of $95 to $105 per share.
Additionally, Strive holds the right to redeem SATA Stock at $110 per share, or higher at its discretion, plus any accrued dividends. The company generally cannot redeem less than $50 million of SATA Stock unless the redemption is for clean-up or tax-related purposes. The liquidation preference for SATA Stock is pegged at $100 per share, which is adjusted daily to reflect the greater of the stated value, the previous trading day’s closing price, or the 10-day average price.
For this offering, Barclays and Cantor are serving as joint book-running managers, with Clear Street acting as co-manager. After SATA briefly reached $100 in trading today, Strive’s decision to set the follow-on offering price based on current market conditions is viewed as a more effective strategy than an “at-the-market” (ATM) offering. This approach minimizes dilution while enabling the company to capitalize on favorable pricing.
The proceeds from this initiative highlight Strive’s ongoing commitment to reducing legacy convertible debt and expanding its investments in the cryptocurrency sector, signalling a determined focus on its crypto-focused growth strategy.
