Veritone, Inc. (NASDAQ: VERI) declared the upsize and pricing of $175 million aggregate principal amount of 1.75% convertible senior notes due 2026 in a private placement to eligible institutional buyers following Rule 144A under the Securities Act of 1933, as modified. It signifies a surge of $25 million aggregate principal amount from the earlier stated intended offering size.
The notes will be senior, unsecured commitments of the company, and will accrue interest payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2022, at a rate of 1.75% per year. The maturity date of the notes is November 15, 2026, if not earlier transferred, converted, or buyback by the company.
Furthermore, the initial conversion rate will be 27.2068 shares of the company’s common stock per $1,000 principal amount of notes. The initial conversion price of the notes signifies a premium of nearly 32.5% over the last reported sale price of the company’s common stock of $27.74 per share on November 16, 2021.
In addition, the company also awarded the initial buyers of the notes an option to buy, for settlement within 13 days from, and including, the date notes are first issued, up to an additional $26.25 million aggregate principal amount of the notes. The sale of the notes is anticipated to execute on November 19, 2021, dependent on customary closing conditions.
Moreover, in connection with the pricing of the notes, the company signed capped call transactions with one or more of the initial buyers or their corresponding partners and another financial institution. The capped call transactions are likely to cut the potential dilution to the company’s common stock upon any conversion of the notes and/or compensate some or all of any cash payments the company is needed to make more than the principal amount of converted notes.