Strive today announced 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, together with cash on hand and potentially funds from the termination of certain derivative contracts linked 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 agreement with US Bank Trust Company, National Association, acting as trustee.
Strive wants to buy more bitcoin
The Company may also use funds to pay off 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 certain holders of Semler Convertible Notes to potentially exchange their notes for shares of SATA Stock.
SATA shares are structured as a variable rate, cumulative dividend security with a stated value of $100 per share. Dividends are currently set at an annual rate of 12.25% paid monthly, although Strive reserves the right to adjust the rate within certain limits.
If a dividend is missed, additional interest adjustment is incurred, 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 shares at $110 per share. share (or higher at own discretion) plus accrued dividends. Redemption may occur at any time, but the Company generally may not redeem less than $50 million of SATA common stock unless a liquidation or tax-related redemption applies.
The liquidation preference for SATA shares is $100 per share. share, adjusted daily to the greater of the stated value, the previous trading day’s closing price or 10-day average price.
Strive said 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 of setting a follow-on offer price based on current market conditions is seen as a cleaner alternative to an “at-the-market” (ATM) offer that avoids dilution and allows Strive to take advantage of favorable pricing.
The funds raised will help the company retire old convertible debt and expand its Bitcoin holdings, signaling continued commitment to its crypto-focused growth strategy.