DeFi Development Corp. has priced its Variable Rate Series C Perpetual Preferred Stock offering at $9 per share, according to an updated prospectus filed with the U.S. Securities and Exchange Commission.
Summary
- 2.2 million CHAD shares priced at $9 each, giving DeFi Development $19.8 million before expenses.
- The underwriter may buy 330,000 additional shares, potentially raising total gross proceeds to $22.77 million.
- CHAD begins with a 13% dividend rate calculated against its $10 stated amount per share.
- Dividend payments start October 1, then become payable each business day when directors declare them.
- Offering proceeds may fund Solana purchases, working capital, strategic transactions and other digital asset investments.
The Solana treasury company plans to sell 2.2 million shares of the preferred security, known as CHAD Stock. The offering would produce $19.8 million in gross proceeds before underwriting commissions and other expenses.
That updates the company’s Aug. 31 announcement, which described a proposed offering of up to $20 million without disclosing the final share count or offering price.
R.F. Lafferty & Co. is the sole book-running manager. The underwriter received a 30-day option to acquire another 330,000 shares at the public offering price, minus commissions.
Full exercise of that option would increase the offering to 2.53 million shares and produce up to $22.77 million in gross proceeds.
CHAD Stock offers a 13% initial dividend
Each CHAD share has a $10 stated amount and an initial liquidation preference of $10. However, investors participating in the offering will pay $9 per share.
The initial annual dividend rate is 13%, calculated against the $10 stated amount. That represents $1.30 in annual dividends per share if the initial rate remains unchanged.
At the $9 offering price, the initial rate corresponds to an effective annual yield of approximately 14.44%. That calculation is based on the starting dividend and does not guarantee investors will receive that yield continuously.
The dividend is variable. DeFi Development’s board may review and adjust the rate at least monthly based on interest rates, CHAD’s trading price, comparable yields, liquidity needs and other factors.
The company can reduce the rate, although the prospectus limits a monthly reduction to 50 basis points from the preceding month. The filing warns that management could eventually set a rate below comparable securities.
The first dividend is scheduled for Oct. 1 and will cover the period from issuance through Sept. 30. After that payment, dividends will become payable on each business day, but only “when, as and if declared” by the board and when legally available funds exist.
A dividend reserve covers the first year at 13%
DeFi Development intends to place $1.30 per issued share into a separate dividend account when the offering closes. For 2.2 million shares, that would create an initial reserve of approximately $2.86 million.
The reserve represents 12 months of payments calculated at the initial 13% rate. DeFi Development said it would fund the account using existing cash, financial instruments or digital assets rather than relying solely on offering proceeds.
However, the prospectus says the company is not contractually required to increase the reserve if the dividend rises above 13% or if more CHAD shares are issued later.
Assets in the account could also remain available to creditors during insolvency or bankruptcy. The reserve therefore provides a designated funding source but does not constitute an independent guarantee.
CHAD is perpetual and has no maturity date. Holders generally cannot demand repayment except after certain qualifying corporate events. The shares also carry limited voting rights and rank below the company’s present and future debt.
DeFi Development can redeem CHAD at $11 per share, plus accumulated unpaid dividends, after the security becomes listed on Nasdaq. Separate redemption provisions apply after a tax event or when outstanding shares fall below 25% of all CHAD shares historically issued.
DeFi Development may use proceeds to acquire SOL
The company intends to use the net proceeds for general corporate purposes. Potential allocations include working capital, Solana purchases, other digital asset investments, acquisitions and strategic initiatives.
No fixed portion has been assigned to SOL. Investors therefore should not treat the full $19.8 million as a confirmed Solana purchase.
DeFi Development recently acquired approximately 19,000 SOL at an average price of $98.14. As previously reported, the purchase expanded its treasury to roughly 2.33 million SOL and SOL-equivalent assets.
The company has not provided a current breakdown separating native SOL from liquid staking tokens and other SOL-denominated positions. It stakes assets through its own and external validators to earn network rewards and fees.
The SEC filing warns that proceeds invested in SOL would remain exposed to price volatility. It also states that management has broad discretion and may allocate the money differently from its current plans.
CHAD seeks a Nasdaq listing as DFDV gains
DeFi Development has applied to list the preferred stock on the Nasdaq Capital Market under the ticker CHAD. Trading is expected to begin after initial issuance, although Nasdaq approval remains pending.
The company also intends to establish an at-the-market program for additional CHAD sales following the listing. Terms have not been finalized, and further issuance could dilute existing holders’ rights or weigh on the security’s market price.
DFDV common stock closed Aug. 31 at approximately $5.38, up 7.8% during the session. The CHAD announcement arrived at 5:45 p.m. Eastern Time, after regular trading ended, so the daytime increase cannot be attributed to the offering.
The stock opened near $4.90 and traded between approximately $4.84 and $5.52. A verified regular-session reaction to the final CHAD terms will only become available after U.S. markets reopen.
The next confirmed events will be the offering’s closing, Nasdaq’s listing decision and the first dividend payment on Oct. 1. Any subsequent SOL acquisition will require a separate company disclosure before it can be treated as completed.
