Key Facts
- ✓ Strive ($ASST) plans to raise up to $150 million through a follow-on offering of its Variable Rate Series A Perpetual Preferred Stock (SATA Stock).
- ✓ The proceeds are intended to repurchase or redeem the 4.25% Convertible Senior Notes due 2030 issued by subsidiary Semler Scientific, Inc.
- ✓ SATA Stock features a variable dividend rate currently set at an annualized 12.25%, payable monthly, with a stated value of $100 per share.
- ✓ Barclays and Cantor are serving as joint book-running managers for the offering, with Clear Street acting as co-manager.
- ✓ Strive is negotiating with certain note holders to potentially exchange their Semler Convertible Notes for shares of SATA Stock.
Quick Summary
Strive ($ASST) has announced a significant capital raise aimed at expanding its cryptocurrency portfolio. The company intends to offer up to $150 million in a follow-on offering of its Variable Rate Series A Perpetual Preferred Stock, commonly referred to as SATA Stock.
This strategic move is designed to bolster the company's Bitcoin holdings while simultaneously addressing outstanding debt obligations. The offering is registered under the Securities Act of 1933 and remains subject to prevailing market conditions.
Capital Structure & Debt Management
The primary allocation of the raised capital involves addressing specific liabilities within Strive's corporate structure. The company plans to utilize the net proceeds, alongside existing cash reserves and potential funds from terminating derivative contracts, to repurchase or redeem its 4.25% Convertible Senior Notes due 2030.
These notes were originally issued by Semler Scientific, Inc., a subsidiary of Strive, and are guaranteed by the parent company. The indenture governing these notes lists U.S. Bank Trust Company, National Association as the trustee.
In addition to retiring the convertible debt, Strive may allocate funds to:
- Pay down Semler Scientific’s borrowings under its loan agreements with Coinbase Credit Inc.
- Acquire additional bitcoin and related cryptocurrency products
- Support general corporate working capital needs
SATA Stock Mechanics
The Variable Rate Series A Perpetual Preferred Stock is a sophisticated financial instrument designed with specific investor protections and yield features. The stock carries a stated value of $100 per share, with dividends currently set at an annualized rate of 12.25%, payable monthly.
Strive retains the flexibility to adjust the dividend rate within defined limits. However, should a dividend payment be missed, the rate accrues additional compounded interest, which can escalate up to 20% per year. The company aims to manage the dividend rate to keep the stock trading within a target range of $95 to $105 per share.
The security includes a liquidation preference of $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 also holds the right to redeem the stock at $110 per share (or higher at its discretion), plus accrued dividends, though generally cannot redeem less than $50 million unless for specific clean-up or tax-related reasons.
Negotiations & Market Strategy
Beyond the public offering, Strive is actively engaging with specific holders of the Semler Convertible Notes. The company is negotiating potential exchanges where these debt instruments could be swapped for shares of the new SATA Stock, effectively converting debt into equity.
The offering is being managed by a consortium of financial institutions. Barclays and Cantor are serving as joint book-running managers, while Clear Street acts as the co-manager.
Strive's approach to pricing the follow-on offering based on current market conditions is viewed as a cleaner alternative to an "at-the-market" (ATM) offering. This strategy is designed to avoid dilution and allows the company to capitalize on favorable pricing, particularly after SATA briefly hit the $100 mark.
Strategic Outlook
This capital raise underscores Strive's continued commitment to a crypto-focused growth strategy. By retiring legacy convertible debt, the company aims to simplify its balance sheet while positioning itself to capitalize on Bitcoin's market movements.
The ability to acquire more bitcoin and related products through these proceeds signals a bullish stance on the asset class. The move allows Strive to leverage its capital structure to support its long-term vision of integrating cryptocurrency into its core treasury strategy.
Key Takeaways
Strive's announcement represents a calculated financial maneuver to optimize its balance sheet and expand its digital asset exposure. The $150 million offering serves a dual purpose: eliminating the complexity of convertible debt and increasing direct exposure to Bitcoin.
Investors and market watchers will be closely monitoring the execution of this offering and the subsequent deployment of capital. The success of the SATA Stock offering and the company's ability to secure favorable terms for debt conversion will be critical indicators of market confidence in Strive's strategy.
