Strive ($ASST) Plans $150M Follow-On Offering To Buy Bitcoin
Strive Announces Follow-On Offering to Raise $150 Million
Strive made a significant announcement today regarding its 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, pending market conditions.
This offering, registered under the Securities Act of 1933, represents Strive’s latest strategic move to bolster its bitcoin holdings while addressing existing debt obligations.
The funds generated from this offering, in conjunction with existing cash reserves and potential proceeds from terminating select derivative contracts associated with convertible debt, will primarily be utilized to repurchase or redeem a portion or all of the 4.25% Convertible Senior Notes due 2030 issued by Strive’s subsidiary, Semler Scientific, Inc.
These Semler Convertible Notes, backed by Strive, were originally issued under an indenture with U.S. Bank Trust Company, National Association as the trustee.
Strive’s Strategic Goals
Strive’s overarching objectives include expanding its bitcoin holdings, reducing Semler Scientific’s debt under existing loan agreements with Coinbase Credit Inc., acquiring additional bitcoin assets, and supporting general corporate requirements.
In a bid to streamline its financial structure, Strive is also in talks with certain holders of the Semler Convertible Notes to potentially exchange their notes for shares of SATA Stock.
SATA Stock is designed as a variable-rate, cumulative dividend security with a stated value of $100 per share. Presently, dividends are set at an annualized rate of 12.25%, payable on a monthly basis, with Strive retaining the authority to adjust the rate within specified limits.
In the event of a missed dividend payment, additional compounded interest accrues, potentially reaching up to 20% per annum. Strive aims to manage the dividend rate to maintain the stock’s trading range between $95 and $105 per share.
Furthermore, Strive reserves the right to redeem SATA Stock at $110 per share (or a higher amount at its discretion), along with accrued dividends. While redemption can occur at any time, the company typically cannot redeem less than $50 million of SATA Stock unless specific conditions apply.
The liquidation preference for SATA Stock stands at $100 per share, adjusted daily to the higher value of the stated amount, the previous day’s closing price, or the 10-day average price.
Barclays and Cantor are appointed as joint book-running managers for the offering, with Clear Street serving as the co-manager.
By setting the follow-on offering price based on prevailing market conditions, Strive’s approach aims to avoid dilution and capitalize on favorable pricing, contrasting with a traditional “at-the-market” (ATM) offering. This strategic move will assist the company in retiring existing convertible debt and expanding its bitcoin holdings, underscoring its ongoing commitment to a crypto-centric growth strategy.
