PLANO,
Texas, March 10, 2025 /PRNewswire/ -- Alkami
Technology, Inc. (Nasdaq: ALKT) ("Alkami"), a leading cloud-based
digital banking solutions provider for financial institutions in
the U.S., today announced the pricing of its offering of
$300,000,000 aggregate principal
amount of 1.50% convertible senior notes due 2030 (the "notes") in
a private offering (the "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"). The
issuance and sale of the notes are scheduled to settle on
March 13, 2025, subject to customary
closing conditions. Alkami also granted the initial purchasers of
the notes an option to purchase, for settlement within a period of
13 days from, and including, the date the notes are first issued,
up to an additional $45,000,000
aggregate principal amount of the notes.
The notes will be senior, unsecured obligations of Alkami and
will accrue interest at a rate of 1.50% per annum, payable
semi-annually in arrears on March 15
and September 15 of each year,
beginning on September 15, 2025. The
notes will mature on March 15, 2030,
unless earlier repurchased, redeemed or converted. Before
November 15, 2029, noteholders will
have the right to convert their notes only upon the occurrence of
certain events. From and after November 15,
2029, noteholders may convert their notes at any time at
their election until the close of business on the second scheduled
trading day immediately before the maturity date. Alkami will
settle conversions by paying or delivering, as applicable, cash,
shares of its common stock or a combination of cash and shares of
its common stock, at Alkami's election. The initial conversion rate
is 30.4681 shares of common stock per $1,000 principal amount of notes, which
represents an initial conversion price of approximately
$32.82 per share of common stock. The
initial conversion price represents a premium of approximately
37.5% over the last reported sale price of $23.87 per share of Alkami's common stock on
March 10, 2025. The conversion rate
and conversion price will be subject to adjustment upon the
occurrence of certain events.
The notes will be redeemable, in whole or in part (subject to
certain limitations), for cash at Alkami's option at any time, and
from time to time, on or after March 20,
2028 and on or before the 62nd scheduled trading day
immediately before the maturity date, but only if the last reported
sale price per share of Alkami's common stock exceeds 130% of the
conversion price for a specified period of time and certain other
conditions are satisfied. The redemption price will be equal to the
principal amount of the notes to be redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption
date.
If a "fundamental change" (as defined in the indenture for the
notes) occurs, then, subject to a limited exception, noteholders
may require Alkami to repurchase their notes for cash. The
repurchase price will be equal to the principal amount of the notes
to be repurchased, plus accrued and unpaid interest, if any, to,
but excluding, the applicable repurchase date.
Alkami estimates that the net proceeds from the Offering will be
approximately $290.3 million (or
approximately $334.0 million if the
initial purchasers exercise in full their option to purchase
additional notes), after deducting the initial purchasers'
discounts and commissions and Alkami's estimated offering expenses.
Alkami expects to use approximately $29.5
million of the net proceeds from the Offering to fund the
cost of entering into the capped call transactions described below,
and the remainder, together with cash on hand, which may include
proceeds from drawing on Alkami's existing credit facility, and
restricted stock units issued to continuing employees of Fin
Technologies, Inc. dba MANTL ("MANTL"), to fund the previously
announced pending acquisition of MANTL. Alkami expects to use any
remaining net proceeds from the Offering for general corporate
purposes. If the initial purchasers exercise their option to
purchase additional notes, then Alkami intends to use up to
approximately $4.4 million of the
additional net proceeds to fund the cost of entering into
additional capped call transactions as described below. The
completion of the Offering is not contingent on the closing of the
MANTL acquisition. There can be no assurance that the MANTL
acquisition will be completed in a timely manner or at all. If the
MANTL acquisition does not close, Alkami intends to the use the net
proceeds from the Offering to fund the capped call transactions and
for general corporate purposes.
In connection with the pricing of the notes, Alkami entered into
privately negotiated capped call transactions with certain of the
initial purchasers or their affiliates and certain other financial
institutions (the "option counterparties"). The capped call
transactions cover, subject to anti-dilution adjustments
substantially similar to those applicable to the notes, the number
of shares of Alkami's common stock that initially underlie the
notes. If the initial purchasers exercise their option to purchase
additional notes, then Alkami expects to enter into additional
capped call transactions with the option counterparties. The cap
price of the capped call transactions is initially $47.74 per share, which represents a premium of
100% over the last reported sale price of Alkami's common stock of
$23.87 per share on March 10, 2025, and is subject to certain
adjustments under the terms of the capped call transactions.
The capped call transactions are expected generally to reduce
the potential dilution to Alkami's common stock upon any conversion
of the notes and/or offset any potential cash payments Alkami is
required to make in excess of the principal amount of converted
notes, as the case may be. If, however, the market price per share
of Alkami's common stock, as measured under the terms of the capped
call transactions, exceeds the cap price of the capped call
transactions, there would nevertheless be dilution and/or there
would not be an offset of such potential cash payments, in each
case, to the extent that such market price exceeds the cap price of
the capped call transactions.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties or their
respective affiliates expect to enter into various derivative
transactions with respect to Alkami's common stock and/or purchase
shares of Alkami'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 Alkami's common
stock or the market value 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 Alkami's common stock
and/or purchasing or selling Alkami's common stock or other
securities of Alkami in secondary market transactions following the
pricing of the notes and prior to the maturity of the notes (and
are likely to do so (x) during any observation period related to a
conversion of notes or following any repurchase of the notes by
Alkami in connection with any redemption or fundamental change, (y)
following any repurchase of the notes by Alkami other than in
connection with any redemption or fundamental change if Alkami
elects to unwind a corresponding portion of the capped call
transactions in connection with such repurchase and (z) if Alkami
otherwise unwinds all or a portion of the capped call
transactions). This activity could also cause or avoid an increase
or decrease in the market price of Alkami's common stock or the
notes, which could affect noteholders' ability to convert the notes
and, to the extent the activity occurs during any observation
period related to a conversion of notes, it could affect the amount
and value of the consideration that noteholders will receive upon
conversion of the notes.
The offer and sale of the notes and any shares of common stock
issuable upon conversion of the notes have not been, and will not
be, registered under the Securities Act or any other securities
laws, and the notes and any such shares cannot be offered or sold
except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and
any other applicable securities laws.
This press release is for informational purposes only and shall
not constitute an offer to sell or a solicitation of an offer to
buy the notes or any shares of common stock issuable upon
conversion of the notes, nor shall there be any sale of the notes
or any such shares, in any state or jurisdiction in which such an
offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking" statements
relating to the Offering, the expected closing date and the
satisfaction of customary closing conditions with respect to the
Offering, Alkami's anticipated use of the net proceeds, the effects
of entering into the capped call transactions, and the closing of
Alkami's acquisition of MANTL. These forward-looking statements are
based on management's beliefs and assumptions and on information
currently available to management. Forward-looking statements
include all statements that are not historical facts and may be
identified by terms such as "expects," "believes," "plans," or
similar expressions and the negatives of those terms. These
forward-looking statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements, expressed or implied
by the forward-looking statements. Factors that may materially
affect such forward-looking statements include: our limited
operating history and history of operating losses; our ability to
manage future growth; our ability to attract new clients and retain
and expand existing clients' use of our solutions; the
unpredictable and time-consuming nature of our sales cycles; our
ability to maintain, protect and enhance our brand; our ability to
accurately predict the long-term rate of client subscription
renewals or adoption of our solutions; our reliance on third-party
software, content and services; our ability to effectively
integrate our solutions with other systems used by our clients;
intense competition in our industry; any downturn, consolidation or
decrease in technology spend in the financial services industry,
including as a result of recent closures of certain financial
institutions and liquidity concerns at other financial
institutions; our ability and the ability of third parties on which
we rely to prevent and identify breaches of security measures
(including cybersecurity) and resulting disruptions of our systems
or operations and unauthorized access to client customer and other
data; our ability to successfully integrate acquired companies or
businesses; our ability to successfully close the acquisition of
MANTL; our ability to comply with regulatory and legal requirements
and developments; our ability to attract and retain key employees;
the political, economic and competitive conditions in the markets
and jurisdictions where we operate; our ability to maintain,
develop and protect our intellectual property; our ability to
respond to evolving technological requirements to develop or
acquire new and enhanced products that achieve market acceptance in
a timely manner; our ability to estimate our expenses, future
revenues, capital requirements, our needs for additional financing
and our ability to obtain additional capital; our ability to
complete the Offering; the satisfaction of customary closing
conditions related to the Offering; and other factors described in
our filings with the Securities and Exchange Commission, including
our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on
February 28, 2025. We undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by applicable law.
Investor Relations Contact
Steve Calk
ir@alkami.com
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SOURCE Alkami Technology, Inc.
