SAN FRANCISCO, June 02, 2025 – Family safety app Life360 (NASDAQ: LIF, ASX: 360) is making a move to bolster its financial position, announcing plans for a $250 million convertible senior notes offering due in 2030. The company, which has become a household name for its location-sharing and safety features, is targeting qualified institutional buyers for this private offering, subject to market conditions. Adding to the potential, the initial purchasers have an option to buy an additional $37.5 million in notes.
**Breaking Down the Deal**
The notes themselves are set to be senior, unsecured obligations of Life360, paying interest semi-annually and maturing on June 1, 2030, unless redeemed, repurchased, or converted earlier.
Noteholders will have the option to convert their holdings under certain circumstances and within specific periods. Life360 retains the discretion to settle conversions with cash or a combination of cash and shares of its common stock.
Starting June 5, 2028, or later, and up to the 40th trading day before maturity, Life360 has the option to redeem the notes, either partially or in full. This can only happen if Life360’s stock price exceeds 130% of the conversion price for a set length of time.
Additionally, in the event of a “fundamental change” at the company, noteholders could trigger a repurchase of their notes for cash. The repurchase price in both scenarios would be the principal amount plus any accrued and unpaid interest.
The specific interest rate, the initial conversion rate, and other key terms will be finalized when the offering is priced.
**Where the Proceeds Will Go**
Life360 plans to earmark a portion of the net proceeds to fund capped call transactions, a common risk-mitigation strategy used by companies issuing convertible debt. The remaining funds will be used for general corporate purposes. This could include strategic moves such as acquisitions or investments in companies that complement their existing business, or expansion into new products, services, or technologies. If the initial purchasers exercise their option to buy more notes, Life360 intends to allocate a portion of the extra revenue to additional capped call transactions.
**Capped Call Transactions: A Closer Look**
Life360 intends to enter into privately negotiated capped call transactions with financial institutions. These transactions are designed to reduce the potential dilution to Life360’s common stock should the notes be converted. They also aim to offset any potential cash payments Life360 might have to make above the principal amount of the converted notes.
However, there’s a caveat: If the market price of Life360’s stock exceeds the cap price of these transactions, shareholders could still experience dilution, and the company may not fully offset the potential cash payments.
It’s worth noting that the counterparties involved in these capped call transactions, or their affiliates, are likely to engage in derivative transactions and/or buy and sell Life360’s stock, which could impact the company’s share price.
**Important Disclaimers**
The notes and any shares of common stock issued upon conversion will not be registered under the Securities Act of 1933, and therefore cannot be offered or sold without an exemption. This announcement is not an offer to sell or a solicitation of an offer to buy.
Life360 delivers peace of mind and enhances everyday family life in all the moments that matter, big and small.
Original article, Author: Jam. If you wish to reprint this article, please indicate the source:https://aicnbc.com/1525.html
