| Item 1.01. | Entry into a Material Definitive Agreement. |
Private Placement of 3.50% / 5.00% Convertible Senior PIK Toggle Notes due 2027
On April 12, 2022, ChargePoint Holdings, Inc. (the “Company”) completed its previously announced sale to funds managed or advised by Antara Capital LP (collectively, the “Purchaser”) of $300.0 million aggregate principal amount of the Company’s 3.50% / 5.00% Convertible Senior PIK Toggle Notes due 2027 (the “Notes”). The Notes were sold pursuant to an investment agreement (the “Investment Agreement”), dated as of April 4, 2022, entered into by and among the Company, ChargePoint, Inc. and the Purchaser. The Notes are initially guaranteed by ChargePoint, Inc., a wholly owned subsidiary of the Company. The Notes will also be guaranteed by the Company’s future wholly owned material, domestic subsidiaries.
The gross proceeds from the sale of the Notes were approximately $300 million, prior to deducting fees and estimated offering expenses. The Company expects to use the net proceeds for general corporate purposes.
Subject to certain limitations, the Investment Agreement provides the Purchaser with certain registration rights for the shares of the Company’s common stock issuable upon conversion of the Notes. The Investment Agreement requires the Company to prepare and file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) as soon as reasonably practicable after the issuance of the Notes to register the resale of the shares underlying the Notes, including shares underlying potential capitalized PIK Interest (as defined below).
Indenture and Issuance of Convertible Notes
The Notes were issued pursuant to an indenture, dated as of April 12, 2022 (the “Indenture”), by and among the Company, ChargePoint, Inc., as guarantor, and Wilmington Trust National Association, as trustee. The Notes are senior, unsecured obligations of the Company and any guarantor, bearing interest at a rate of 3.50% per annum, to the extent paid in cash (“Cash Interest”), and 5.00% per annum, to the extent paid in kind through an increase in the principal amount of the Notes (“PIK Interest”). The Company can elect to make any interest payment through Cash Interest, PIK Interest or any combination thereof. Interest on the Notes is payable semi-annually in arrears on April 1 and October 1, commencing on October 1, 2022. It is expected that the Notes will mature on April 1, 2027, unless redeemed, repurchased or converted in accordance with their terms prior to such date.
The Notes are convertible at an initial conversion rate of 41.6119 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $24.03 per share of Common Stock, which represents 130% of the average daily per share volume-weighted average price of the Common Stock over the three consecutive trading days starting April 5, 2022 and ending April 7, 2022). Prior to the close of business on the business day immediately preceding January 1, 2027, such conversion will be subject to the satisfaction of certain conditions set forth in the Indenture. On or after January 1, 2027, holders of the Notes will have the right to convert all or a portion of their Notes at any time prior to close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, holders of the Notes will receive cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company’s election.
The Company may not redeem the Notes prior to April 21, 2025. The Company may redeem the Notes in whole or in part, at its option, on or after such date and prior to the 41st scheduled trading day immediately preceding the maturity date, for a cash purchase price equal to the aggregate principal amount of any Notes to be redeemed plus accrued and unpaid interest thereon.
In addition, following certain corporate events that occur prior to the maturity date or following issuance by the Company of a notice of redemption, in each case as provided in the Indenture, in certain circumstances, the Company will increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or who elects to convert any Notes called for redemption during the related redemption period. Additionally, in the event of a fundamental change or a change in control transaction (each such term as defined in the Indenture), holders of the Notes will have the right to require the Company to repurchase all or a portion of their Notes at a price equal to 100% of the capitalized principal amount of Notes, in the case of a fundamental change, or 125% of the capitalized principal amount of Notes, in the case of change in control transactions, in each case plus any accrued and unpaid interest to, but excluding, the repurchase date.
