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These notes, which are a type of debt instrument that can be converted into company equity at a future date, offer holders a higher claim on assets than common stockholders in cases of bankruptcy or liquidation.
The company aims to allocate the net proceeds from this financing towards purchasing additional Bitcoin (BTC) and “for general corporate purposes,” the business intelligence firm said in the press release.
Furthermore, MicroStrategy is considering offering an option for the initial buyers of these notes to acquire an extra $90 million in principal amount.
“If MicroStrategy redeems fewer than all the outstanding notes, at least $90 million aggregate principal amount of notes must be outstanding and not subject to redemption as of the relevant redemption notice date,” the press release states.
“Holders of the notes will have the right to require MicroStrategy to repurchase for cash all or any portion of their notes on September 15, 2028.”
The maturity date for these notes is set for March 15, 2030, subject to conditions for early repurchase, redemption, or conversion.
