Strive announced today that it intends to raise up to $150 million through a follow-on offering of its Variable Rate Series A Perpetual Preferred Stock, known as SATA Stock, subject to market conditions.
The offering is registered under the Securities Act of 1933 and marks Strive’s latest move to expand its bitcoin holdings while addressing outstanding debt.
Strive plans to use the proceeds from the offering, along with cash on hand and potentially funds from terminating certain derivative contracts tied to convertible debt, to repurchase or redeem all or a portion of the 4.25% Convertible Senior Notes due 2030 issued by its subsidiary Semler Scientific, Inc.
These Semler Convertible Notes, guaranteed by Strive, were originally issued under an indenture with U.S. Bank Trust Company, National Association acting as trustee.
Strive wants to buy more bitcoin The company may also use funds to pay down Semler Scientific’s borrowings under its loan agreements with Coinbase Credit Inc., acquire additional bitcoin and related products, and support general corporate needs.
In addition, Strive is negotiating with some holders of the Semler Convertible Notes to potentially exchange their notes for shares of SATA Stock.
SATA Stock is structured as a variable-rate, cumulative dividend security with a stated value of $100 per share. Dividends are currently set at an annualized rate of 12.25%, payable monthly, though Strive reserves the right to adjust the rate within certain limits.
If a dividend is missed, it accrues additional compounded interest, which can rise up to 20% per year. The company intends to manage the dividend rate to help the stock trade within a target range of $95 to $105 per share.
Strive also retains the right to redeem SATA Stock at $110 per share (or higher at its discretion), plus accrued dividends. Redemption can occur at any time, but the company generally cannot redeem less than $50 million of SATA Stock unless a clean-up or tax-related redemption applies.
The liquidation preference for SATA Stock is $100 per share, adjusted daily to the greater of the stated value, the previous trading day’s closing price, or the 10-day average price.
Strive said that Barclays and Cantor are joint book-running managers for the offering, with Clear Street acting as co-manager.
After SATA briefly hit $100 today, the company’s approach to set a follow-on offering price based on current market conditions is seen as a cleaner alternative to an “at-the-market” (ATM) offering, avoiding dilution and allowing Strive to capitalize on favorable pricing.
The raised funds will help the company retire legacy convertible debt and expand its Bitcoin holdings, signaling continued commitment to its crypto-focused growth strategy.
