What occurred

Enovix (ENVX -0.40%) was a inventory that did not produce a lot electrical energy in the marketplace this week. In line with information compiled by S&P International Market Intelligence, the lithium battery specialist’s share value fell by 8% in the course of the interval. That drop was attributable to a brand new financing effort undertaken by the corporate.

So what

On Tuesday, Enovix introduced it was floating $150 million price of convertible senior notes in a non-public placement. These securities have an annual rate of interest of three%, to be paid bi-annually, and so they mature on Could 1, 2028. The corporate has additionally granted the preliminary consumers of the convertible senior notes the choice to buy as much as an extra $22.5 million price of the securities inside 13 days of the supply’s difficulty. 

The notes are to be convertible on the possibility of their buyers so long as they meet sure situations. The corporate is not going to redeem them earlier than Could 6, 2026. After that point, it has set sure standards for its inventory’s value efficiency for the holders to qualify for redemption.

Enovix mentioned its preliminary conversion charge is 64.08 shares of its widespread inventory for every $1,000 principal quantity of the notes. This equates to $15.61 per share of mentioned inventory; as of Friday’s shut, this traded at $12.59 per share.

Now what

Enovix mentioned that it intends to make use of its anticipated $133.9 million in proceeds from the providing to construct its second battery cell manufacturing manufacturing unit and purchase manufacturing strains for its second-generation manufacturing gear. It should additionally dedicate some monies to working capital and for “common company functions.”

The corporate added that the convertible notes will end in roughly 7% dilution to present shareholders.