Key Information:
- Defi Development Corp is issuing $112.5 million in convertible notes, with an option to extend the offering by $25 million.
- The company intends to allocate $75 million towards a forward stock purchase deal with an interested investor. The remaining funds are earmarked for general corporate purposes, including acquiring more SOL tokens.
- Earlier this year, the firm transitioned to a Solana-focused strategy and has already secured over 600,000 SOL as of May.
On Wednesday, Defi Development Corp (DFDV), a company listed on Nasdaq, announced its plans to issue $112.5 million in convertible notes, seeking capital for a stock buyback initiative and additional SOL acquisitions.
This note offering, upscaled from an earlier target of $100 million, is set to mature in 2030 with an annual interest rate of 5.5%. The debt can be converted into equity at $23.11 per share, which reflects a roughly 10% premium based on Monday’s closing price.
Investors have the opportunity to purchase an additional $25 million worth of notes in this phase, with the close set for July 7.
The company’s shares experienced a decline of 12% during the early session on Wednesday, which is over 60% down from the peak in May. However, their focus on cryptocurrency has led the stock price to soar around 3,500% over time.
They plan to utilize part of the capital raised for a prepaid forward stock transaction that allows initial investors to hedge their convertible note positions via derivatives and short sales.
The rest of the funds will be designated for standard corporate activities, including acquiring additional SOL tokens. Previously known as a real estate tech platform called Janover, the company is among several publicly-traded firms pivoting towards cryptocurrency investment following successful strategies seen with Bitcoin.
The latest fundraising follows a $5 billion equity line of credit deal established with RK Capital Management last month.
