SCOTTSDALE, Ariz., Dec. 5, 2022
/PRNewswire/ -- Axon Enterprise, Inc. (NASDAQ: AXON) ("Axon") today
announced that it intends to offer, subject to market and other
conditions, $500 million aggregate
principal amount of Convertible Senior Notes due 2027 (the "Notes")
in a private offering to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"). Axon
also expects to grant to the initial purchasers of the Notes an
option to purchase up to an additional $75
million aggregate principal amount of the Notes, for
settlement within a 13-day period beginning on, and including, the
first date on which the Notes are issued.
The Notes will be Axon's senior unsecured obligations. The Notes
will mature on December 15, 2027,
unless earlier converted, redeemed or repurchased.
Axon will satisfy its conversion obligations by paying cash up
to the aggregate principal amount of Notes to be converted and
paying or delivering, as the case may be, cash, shares of its
common stock or a combination of cash and shares of its common
stock, at its election, in respect of the remainder, if any, of its
conversion obligation in excess of the aggregate principal amount
of the Notes being converted, based on the then applicable
conversion rate. The maturity date, the interest rate, the initial
conversion rate and the other terms of Notes will be determined
upon pricing of the offering.
Axon intends to use a portion of the net proceeds from the
offering to pay the cost of certain convertible note hedge
transactions described below (after such cost is partially offset
by the proceeds to Axon from the sale of warrants in certain
warrant transactions described below).
Axon intends to use the remaining net proceeds of the offering
for general corporate purposes, which may include, among other
things, providing capital to support its growth and to acquire or
invest in product lines, products, services or technologies.
However, Axon has no current agreements with respect to any
specific acquisition and has not exercised any outstanding warrants
or call options with respect to its strategic investments since
September 30, 2022.
In connection with the pricing of the Notes, Axon expects to
enter into convertible note hedge transactions with one or more of
the initial purchasers of the Notes or their respective affiliates
and/or other financial institutions (the "option counterparties").
Axon also expects to enter into warrant transactions with the
option counterparties. The convertible note hedge transactions are
expected generally to reduce potential dilution to Axon's common
stock upon any conversion of Notes and/or offset any cash payments
Axon is required to make in excess of the principal amount of
converted Notes, as the case may be. However, the warrant
transactions could separately have a dilutive effect on Axon's
common stock to the extent that the market price per share of
Axon's common stock exceeds the strike price of the warrants. If
the initial purchasers exercise their option to purchase additional
Notes, Axon expects to sell additional warrants to the option
counterparties and expects to use a portion of the net proceeds
from the sale of additional Notes, together with the proceeds from
the additional warrants, to enter into additional convertible note
hedge transactions with the option counterparties.
In connection with establishing their initial hedges of the
convertible note hedge and warrant transactions, Axon is advised by
the option counterparties or their respective affiliates that they
expect to enter into various derivative transactions with respect
to Axon's common stock and/or purchase shares of Axon's common
stock concurrently with or shortly after the pricing of the Notes.
This activity could increase (or reduce the size of any decrease
in) the market price of Axon's common stock or the Notes at that
time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Axon's common stock
and/or purchasing or selling Axon's common stock or other
securities of Axon in secondary market transactions following the
pricing of the Notes and prior to the maturity of the Notes (and
are likely to do so in connection with any conversion of the Notes
or redemption or repurchase of the Notes). This activity could also
cause or avoid an increase or a decrease in the market price of
Axon's common stock or the Notes, which could affect the ability of
noteholders to convert the Notes and, to the extent the activity
occurs during any observation period related to a conversion of the
Notes, it could affect the number of shares, if any, and value of
the consideration that noteholders will receive upon conversion of
the Notes.
As stated above, the Notes will be offered and sold only to
persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act. The Notes and any
shares of Axon's common stock issuable upon conversion of the Notes
have not been registered under the Securities Act, or any state
securities law, and the Notes and any such shares may not be
offered or sold in the United
States or to any U.S. persons absent registration under, or
pursuant to an exemption from, or in a transaction not subject to,
the Securities Act and applicable state securities laws.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the Notes or any shares of Axon's
common stock issuable upon conversion of the Notes, nor shall there
be any offer, solicitation or sale of any Notes or any such shares
of Axon's common stock issuable upon conversion of the Notes in any
jurisdiction in which such offer, solicitation or sale would be
unlawful.
About Axon
Axon is a technology leader in global public safety. Axon is
building the public safety operating system of the future by
integrating a suite of hardware devices and cloud software
solutions that lead modern policing. Axon's suite includes TASER
energy devices, body-worn cameras, in-car cameras, cloud-hosted
digital evidence management solutions, productivity software and
real-time operations capabilities. Axon's growing global customer
base includes first responders across international, federal, state
and local law enforcement, fire, corrections and emergency medical
services, as well as the justice sector, commercial enterprises and
consumers.
Forward-Looking
Statements
Forward-looking statements in this press release include, but
are not limited to, statements regarding the completion, timing and
size of the proposed offering, the intended use of proceeds, the
terms of the Notes being offered, the anticipated terms of, and the
effects of entering into, the convertible note hedge and warrant
transactions and the actions of the option counterparties and their
respective affiliates. Words such as "may," "will," "should,"
"could," "would," "predict," "potential," "continue," "expect,"
"anticipate," "future," "intend," "plan," "believe," "estimate,"
and similar expressions, as well as statements in future tense,
identify forward-looking statements. However, not all
forward-looking statements contain these words.
We cannot guarantee that any forward-looking statement will be
realized, although we believe we have been prudent in our plans and
assumptions. Achievement of future results is subject to risks,
uncertainties and potentially inaccurate assumptions. The following
important factors could cause actual results to differ materially
from those in the forward-looking statements: market conditions,
including market interest rates, the trading price and volatility
of Axon's common stock; the potential global impacts of the
COVID-19 pandemic; our exposure to cancellations of government
contracts due to appropriation clauses, exercise of a cancellation
clause, or non-exercise of contractually optional periods; our
ability to design, introduce and sell new products or features; our
ability to defend against litigation and protect our intellectual
property, and the resulting costs of this activity; our ability to
manage our supply chain and avoid production delays, shortages, and
impacts to expected gross margins; the impact of stock-based
compensation expense, impairment expense, and income tax expense on
our financial results; customer purchase behavior, including
adoption of our software as a service delivery model; negative
media publicity regarding our products; the impact of product mix
on projected gross margins; defects in our products; changes in the
costs of product components and labor; loss of customer data, a
breach of security, or an extended outage, including by our third
party cloud-based storage providers; exposure to international
operational risks; delayed cash collections and possible credit
losses due to our subscription model; changes in government
regulations in the U.S. and in foreign markets, especially related
to the classification of our products by the United States Bureau
of Alcohol, Tobacco, Firearms and Explosives; our ability to
integrate acquired businesses; our ability to attract and retain
key personnel; and counter-party risks relating to cash balances
held in excess of FDIC insurance limits. Many events beyond our
control may determine whether results we anticipate will be
achieved. Should known or unknown risks or uncertainties
materialize, or should underlying assumptions prove inaccurate,
actual results could differ materially from past results and those
anticipated, estimated or projected. You should bear this in mind
as you consider forward-looking statements. The Annual Report on
Form 10–K that we filed with the Securities and Exchange Commission
("SEC") on February 25, 2022 lists
various important factors that could cause actual results to differ
materially from expected and historical results. These factors are
intended as cautionary statements for investors within the meaning
of Section 21E of the Exchange Act and Section 27A of the
Securities Act. Readers can find them under the heading "Risk
Factors" in the Report on Form 10–K, and investors should refer to
them, as well as the Company's subsequent filings with the Exchange
Act where such risk factors have been amended or supplemented since
such filing. You should understand that it is not possible to
predict or identify all such factors. Consequently, you should not
consider any such list to be a complete set of all potential risks
or uncertainties.
Except as required by law, we undertake no obligation to
publicly update forward-looking statements, whether as a result of
new information, future events or otherwise. You are advised,
however, to consult any further disclosures we make on related
subjects in our Form 10-Q, 8-K and 10-K reports to the SEC.
Axon may not consummate the proposed offering described in this
press release and, if the proposed offering is consummated, cannot
provide any assurances regarding the final terms of the offer or
the Notes or its ability to effectively apply the net proceeds as
described above.
Investor
Contact:
|
Media
Contact:
|
Investor
Relations
|
Corinne
Clark
|
Axon Enterprise,
Inc.
|
Public Relations
Manager
|
IR@axon.com
|
Press@Axon.com
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/axon-announces-proposed-convertible-senior-notes-offering-301695121.html
SOURCE Axon