Enovix Corporation (“Enovix”) (NASDAQ: ENVX), an
advanced silicon battery company, today announced the pricing of
$150.0 million aggregate principal amount of 3.00% Convertible
Senior Notes due 2028 (the “Notes”) in a private placement to
persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”) (the “Offering”) and in a concurrent private
placement under Section 4(a)(2) of the Securities Act.
An entity affiliated with Thurman J. Rodgers, Chairman of
Enovix, has agreed to purchase $10.0 million aggregate principal
amount of the Notes in the concurrent private placement. The Notes
purchased in the concurrent private placement are referred to as
the “Affiliate Notes.” In addition, an entity affiliated with John
Doerr, Chairman of Kleiner Perkins, has agreed to purchase $10.0
million aggregate principal amount of the Notes in the Offering.
Mr. Rodgers and Mr. Doerr have previously co-invested in various
companies, including Enphase Energy, Inc.
“We are thrilled with the sale of these notes,” said Dr. Raj
Talluri, President and CEO of Enovix. “We believe the proceeds from
these notes, together with the previously announced $70 million
non-dilutive financing we are seeking to fund our planned
next-generation manufacturing line in Malaysia, will enable us to
build four production lines, all at approximately 7% dilution to
our stockholders. With these lines, we expect to be able to
manufacture between 38 million to 75 million batteries a year,
depending on the size of the battery, to meet the strong customer
demand we are seeing in the IoT, Mobile and Computing markets.”
In connection with the Offering, Enovix granted the initial
purchasers of the Notes an option to purchase, within a 13-day
period beginning on, and including, the date on which the Notes are
first issued, up to an additional $22.5 million aggregate principal
amount of Notes. The Offering and sale of Affiliate Notes are
expected to close on April 20, 2023, subject to customary closing
conditions.
The Notes will be general unsecured obligations of Enovix and
will accrue interest payable semiannually in arrears on May 1 and
November 1 of each year, beginning on November 1, 2023, at a rate
of 3.00% per year. The Notes will mature on May 1, 2028, unless
earlier converted, redeemed or repurchased.
Enovix estimates that the net proceeds from the Offering will be
approximately $133.9 million (or approximately $155.7 million if
the initial purchasers exercise their option to purchase additional
Notes in full) to Enovix after deducting the initial purchasers’
discounts and commissions and estimated Offering expenses payable
by Enovix. If consummated, Enovix expects that it will receive net
proceeds from the sale of the Affiliate Notes of approximately $9.7
million. Enovix expects to use a portion of the net proceeds from
the Offering and the sale of the Affiliate Notes to pay the cost of
the capped call transactions described below. Enovix expects to use
the remaining net proceeds to build out a second battery cell
manufacturing facility and fund the acquisition of production lines
of its second generation (“Gen2”) manufacturing equipment, and for
working capital and general corporate purposes. If the initial
purchasers exercise their option to purchase additional Notes,
Enovix expects to use a portion of the net proceeds from the sale
of the additional Notes to enter into additional capped call
transactions with the Option Counterparties (as defined below).
The Notes will be convertible at the option of the holders in
certain circumstances. The Notes will be convertible into cash,
shares of Enovix’s common stock or a combination of cash and shares
of Enovix’s common stock, at Enovix’s election. The initial
conversion rate is 64.08 shares of Enovix’s common stock per $1,000
principal amount of Notes (equivalent to an initial conversion
price of approximately $15.61 per share of Enovix’s common stock,
which represents a conversion premium of approximately 15% to the
last reported sale price of Enovix’s common stock on the Nasdaq
Global Select Market on April 17, 2023), and will be subject to
customary anti-dilution adjustments.
Enovix may not redeem the Notes prior to May 6, 2026. Enovix may
redeem for cash all or any portion of the Notes (subject to certain
limitations), at its option, on or after May 6, 2026, if a certain
liquidity condition has been satisfied and the last reported sale
price of Enovix’s common stock has been at least 130% of the
conversion price then in effect for at least 20 trading days
(whether or not consecutive) during any 30 consecutive trading day
period (including the last trading day of such period) ending on,
and including, the trading day immediately preceding the date on
which Enovix provides notice of redemption at a redemption price
equal to 100% of the principal amount of the Notes to be redeemed,
plus accrued and unpaid interest to, but excluding, the redemption
date. If Enovix redeems less than all of the outstanding Notes, at
least $100 million aggregate principal amount of Notes must be
outstanding and not subject to redemption as of, and after giving
effect to, delivery of the relevant redemption notice.
If Enovix undergoes a “fundamental change,” then, subject to
certain conditions and limited exceptions, holders may require
Enovix to repurchase for cash all or any portion of their Notes in
principal amounts of $1,000 or an integral multiple thereof at a
repurchase price equal to 100% of the principal amount of the Notes
to be repurchased, plus accrued and unpaid interest to, but
excluding, the fundamental change repurchase date. In addition,
following certain corporate events that occur prior to the maturity
date of the Notes or if Enovix delivers a notice of redemption,
Enovix will, in certain circumstances, increase the conversion rate
of the Notes for a holder who elects to convert its Notes in
connection with such a corporate event or convert its Notes called
(or deemed called) for redemption during the related redemption
period, as the case may be.
In connection with the pricing of the Notes, Enovix entered into
capped call transactions with certain of the initial purchasers or
affiliates thereof and other financial institutions (the “Option
Counterparties”). The capped call transactions cover, subject to
customary adjustments, the number of shares of Enovix’s common
stock initially underlying the Notes (including the Affiliate
Notes). The capped call transactions are expected generally to
reduce the potential dilution to Enovix’s common stock upon any
conversion of Notes and/or offset any cash payments Enovix is
required to make in excess of the principal amount of converted
Notes, as the case may be, with such reduction and/or offset
subject to a cap.
The cap price of the capped call transactions relating to the
Notes will initially be approximately $21.17, which represents a
premium of approximately 56% over the last reported sale price of
Enovix’s common stock on the Nasdaq Global Select Market on April
17, 2023, and is subject to certain adjustments under the terms of
the capped call transactions.
In connection with establishing their initial hedges of the
capped call transactions, Enovix expects the Option Counterparties
or their respective affiliates will enter into various derivative
transactions with respect to Enovix’s common stock and/or purchase
shares of Enovix’s common stock concurrently with or shortly after
the pricing of the Notes, including with, or from, as the case may
be, certain investors in the Notes. This activity could increase
(or reduce the size of any decrease in) the market price of
Enovix’s common stock or the trading price of 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 Enovix’s common stock
and/or purchasing or selling Enovix’s common stock or other
securities of Enovix in secondary market transactions following the
pricing of the Notes and prior to the maturity of the Notes (and
are likely to do so during the 40 trading day period beginning on
the 41st scheduled trading day prior to the maturity date of the
Notes, or, to the extent Enovix exercises the relevant election
under the capped call transactions, following any repurchase,
redemption or conversion of the Notes). This activity could also
cause or avoid an increase or a decrease in the market price of
Enovix’s common stock or the Notes which could affect a
noteholder’s ability to convert the Notes and, to the extent the
activity occurs during any observation period related to a
conversion of Notes, this could affect the number of shares, if
any, and value of the consideration that a noteholder will receive
upon conversion of its Notes.
The Notes sold in the Offering were only offered to persons
reasonably believed to be qualified institutional buyers pursuant
to Rule 144A promulgated under the Securities Act by means of a
private offering memorandum. The Notes and any shares of Enovix’s
common stock potentially issuable upon conversion of the Notes have
not been and will not be registered under the Securities Act, any
state securities laws or the securities laws of any other
jurisdiction, and unless so registered, may not be offered or sold
in the United States absent registration or an applicable exemption
from, or in a transaction not subject to, the registration
requirements of the Securities Act and other applicable securities
laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any of these securities nor shall
there be any sale of these securities in any state or jurisdiction
in which such an offer, solicitation or sale would be unlawful
prior to the registration or qualification thereof under the
securities laws of any such state or jurisdiction.
Forward-Looking StatementsThis press release
contains forward-looking statements including statements concerning
the timing and completion of the Offering of the Notes and the sale
of the Affiliate Notes and the capped call transactions; the
anticipated use of proceeds from the Offering and sale of the
Affiliate Notes; the size, terms, timing and ability to consummate
the $70 million financing sought by Enovix in connection with its
planned next-generation manufacturing line in Malaysia; the
dilutive impact of the above-mentioned financing, the Offering, and
the Affiliate Notes to Enovix stockholders; and Enovix’s ability to
manufacture between 38 million to 75 million batteries a year,
depending on the size of the battery. The words “believe,” “may,”
“will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,”
“seek,” “plan,” “project,” “target,” “looking ahead,” “look to,”
“move into,” and similar expressions are intended to identify
forward-looking statements. Forward-looking statements represent
Enovix’s current beliefs, estimates and assumptions only as of the
date of this press release and information contained in this press
release should not be relied upon as representing Enovix’s
estimates as of any subsequent date. These forward-looking
statements are subject to risks, uncertainties, and assumptions. If
the risks materialize or assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements. Risks include, but are not limited to
market risks, trends and conditions. These risks are not
exhaustive. Further information on these and other risks that could
affect Enovix’s results is included in its filings with the
Securities and Exchange Commission (“SEC”), including its Annual
Report on Form 10-K for the fiscal year ended January 1, 2023, and
the future reports that it may file from time to time with the SEC.
Enovix assumes no obligation to, and does not currently intend to,
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
About EnovixEnovix is on a mission to power the
technologies of the future. Everything from IoT, mobile and
computing devices, to the vehicle you drive, needs a better
battery. The company’s disruptive architecture enables a battery
with high energy density and capacity without compromising safety.
Enovix is scaling its silicon-anode, lithium-ion battery
manufacturing capabilities to meet customer demand.
For investor and media inquiries, please
contact:
Enovix CorporationCharles AndersonPhone: +1 (612) 229-9729Email:
canderson@enovix.com
Or
The Blueshirt GroupGary Dvorchak, CFAPhone: (323) 240-5796Email:
gary@blueshirtgroup.com
For media inquiries, please contact:
Enovix CorporationKristin AtkinsPhone: +1 (650) 815-6934Email:
katkins@enovix.com
Source: Enovix Corporation
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