BigCommerce Holdings Inc

Previous wording

BigCommerce is leading a new era of ecommerce. Our SaaS platform simplifies the creation of online stores by delivering a unique combination of ease-of-use, enterprise functionality, composability and flexibility. We allow merchants to build their ecommerce solution their way with the flexibility to fit their unique business and product offerings. We power both our customers’ branded ecommerce stores and their cross-channel connections to popular online marketplaces, social networks, and offline point of sale systems. Our strategy is to provide the world’s best combination of freedom of choice and flexibility in a multi-tenant SaaS platform. We describe this strategy as “Open SaaS.” As of March 31, 2024 we served 5,970 accounts with at least one unique enterprise plan subscription or an enterprise-level feed management subscription (collectively "enterprise accounts"). These accounts may have more than one Enterprise plan or a combination of Enterprise plans and Essentials plans.

Current wording

BigCommerce is leading a new era of ecommerce. Our SaaS platform simplifies the creation of online stores by delivering a unique combination of ease-of-use, enterprise functionality, composability and flexibility. We allow merchants to build their ecommerce solution their way with the flexibility to fit their unique business and product offerings. We power both our customers’ branded ecommerce stores and their cross-channel connections to popular online marketplaces, social networks, and offline point of sale systems. Our strategy is to provide the world’s best combination of freedom of choice and flexibility in a multi-tenant SaaS platform. We describe this strategy as “Open SaaS.” As of June 30, 2024 we served 5,961 accounts with at least one unique enterprise plan subscription or an enterprise-level feed management subscription (collectively “enterprise accounts”). These accounts may have more than one Enterprise plan or a combination of Enterprise plans and Essentials plans.

Previous wording

We made a commitment to drive revenue growth and we are beginning to see progress in the first quarter since initiating many of the advancements discussed above. First quarter of fiscal 2024 net retention rates improved versus the prior quarter, and we continue to focus on customer success and growth.

Current wording

We are well-positioned to reaccelerate revenue growth, and we are continuing to see progress in the six months since initiating many of the advancements discussed above. We delivered our largest sequential growth in enterprise ARR in the last twelve months. For the first half of the year, our net retention rates continue to improve versus the prior year, and we continue to focus on customer success and growth while improving go-to market spending efficiency.

Previous wording

Sales and marketing expenses consist primarily of: (1) personnel-related expenses (including stock-based compensation expense and associated payroll costs), (2) sales commissions, (3) marketing programs, (4) travel-related expenses, and (5) allocated overhead sales and support costs such as technology and facility costs. We focus our sales and marketing efforts on creating sales leads and establishing and promoting our brand. We plan to increase our investment in sales and marketing by executing our go-to-market strategy globally and building our brand awareness. Incremental sales commissions for new customer contracts are deferred and amortized ratably over the estimated period of our relationship with such customers. We expect our sales and marketing expenses will increase in absolute dollars, but will decrease as a percentage of total revenue over time.

Current wording

Sales and marketing expenses consist primarily of: (1) personnel-related expenses (including stock-based compensation expense and associated payroll costs), (2) sales commissions, (3) marketing programs, (4) travel-related expenses, and (5) allocated overhead sales and support costs such as technology and facility costs. We focus our sales and marketing efforts on creating sales leads and establishing and promoting our brand. We plan to increase our investment in sales and marketing by executing our go-to-market strategy globally and building our brand awareness. Incremental sales commissions for new customer contracts are deferred and amortized ratably over the estimated period of our relationship with such customers. We have seen lower sales and marketing efficiency results in recent quarters as platform investment spending has tightened across our industry.

Previous wording

Other income (expense) primarily consists of loss from share issuance related to the Bundle acquisition and foreign currency translation adjustments.

Current wording

Other expense primarily consists of loss from share issuance related to the Bundle acquisition and foreign currency translation adjustments.

Previous wording

The composition of our revenue by geographic region during the three months ended March 31, 2024 and March 31, 2023 were as follows:

Current wording

The composition of our revenue by geographic region during the three and six months ended June 30, 2024 and June 30, 2023 were as follows:

Previous wording

Comparison of the three months ended March 31, 2024 and March 31, 2023

Current wording

Comparison of the three and six months ended June 30, 2024 and June 30, 2023

Previous wording

Total revenue increased $8.6 million, or 12.0 percent, to $80.4 million for the three months ended March 31, 2024, from $71.8 million for the three months ended March 31, 2023, as a result of increases in both subscription solutions and partner and services revenue. Subscription solutions revenue increased $7.2 million, or 13.3 percent, to $61.0 million for the three months ended March 31, 2024, from $53.8 million for the three months ended March 31, 2023, primarily due to increases in enterprise, mid-market, and Feedonomics activity. Partner and services revenue increased $1.5 million, or 8.1 percent, to $19.4 million for the three months ended March 31, 2024, from $17.9 million for the three months ended March 31, 2023, primarily as a result of increases in revenue share activity offset by decreases in stand ready and integration activity.

Current wording

Total revenue increased $6.4 million, or 8.5 percent, to $81.8 million for the three months ended June 30, 2024, from $75.4 million for the three months ended June 30, 2023, as a result of increases in both subscription solutions and partner and services revenue. Subscription solutions revenue increased $5.7 million, or 10.1 percent, to $61.8 million for the three months ended June 30, 2024, from $56.1 million for the three months ended June 30, 2023, primarily due to increases in enterprise, mid-market, and Feedonomics activity. Partner and services revenue increased $0.7 million, or 3.8 percent, to $20.0 million for the three months ended June 30, 2024, from $19.3 million for the three months ended June 30, 2023, primarily as a result of increases in revenue share activity offset by decreases in stand ready and integration activity.

Previous wording

Cost of revenue increased $1.0 million, or 5.7 percent, to $18.4 million for the three months ended March 31, 2024, from $17.4 million for the three months ended March 31, 2023, primarily as a result of higher software costs and processing fees of $1.1 million and decreased spend of $0.3 million in salaries and shared-based compensation driven by decreases in headcount from the 2023 Restructure. Gross margin increased to 77.1 percent from 75.7 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Current wording

Cost of revenue increased $2.1 million, or 5.7 percent, to $38.3 million for the six months ended June 30, 2024, from $36.2 million for the six months ended June 30, 2023 primarily as a result of higher software costs and credit card processing fees of $2.7 million, and lower salaries and stock-based compensation costs of $0.3 million. Gross margin increased to 76.4 percent from 75.4 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Previous wording

Sales and marketing expenses decreased $1.6 million, or (4.8) percent, to $32.4 million for the three months ended March 31, 2024 from $34.1 million for the three months ended March 31, 2023, primarily due to decreased salaries of $1.8 million and share-based compensation driven by cost cutting measures from the 2023 Restructure. As a percentage of total revenue, sales and marketing expenses decreased to 40.4 percent from 47.5 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Current wording

Sales and marketing expenses decreased $1.2 million, or (3.3) percent, to $34.4 million for the three months ended June 30, 2024 from $35.6 million for the three months ended June 30, 2023, primarily due to decreased variable marketing costs of $1.0 million and decreased salaries and share-based compensation expense of $0.4 million driven by cost cutting measures from the 2023 Restructure. As a percentage of total revenue, sales and marketing expenses decreased to 42.1 percent from 47.2 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Previous wording

Research and development decreased $0.9 million, or (4.1) percent, to $20.0 million for the three months ended March 31, 2024 from $20.8 million for the three months ended March 31, 2023, due to the cost cutting measures from the 2023 Restructure. As a percentage of total revenue, research and development expenses decreased to 24.9 percent from 29.0 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Current wording

Research and development decreased $1.1 million, or (5.2) percent, to $20.3 million for the three months ended June 30, 2024 from $21.4 million for the three months ended June 30, 2023, due to the cost cutting measures from the 2023 Restructure. As a percentage of total revenue, research and development expenses decreased to 24.8 percent from 28.4 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Previous wording

General and administrative expenses decreased $1.6 million, or (9.5)% percent , to $14.9 million for the three months ended March 31, 2024 from $16.5 million for the three months ended March 31, 2023, primarily due to decreased bad debt expense of $0.3 million due to focus on collection efforts, decreased spend of $0.7 million in salaries and share-based compensation driven by cost cutting measures from the 2023 Restructure, and decreased insurance expense of $0.4 million as a result of improved renewal rates. As a percentage of total revenue, general and administrative expenses decreased to 18.6 percent from 23.0 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Current wording

General and administrative expenses increased $1.0 million, or 7.0 percent, to $15.4 million for the three months ended June 30, 2024 from $14.4 million for the three months ended June 30, 2023, primarily due to increased spend of $0.7 million in salaries and share-based compensation driven by increased headcount and increased professional service expenses of $0.4 million. As a percentage of total revenue, general and administrative expenses decreased to 18.9 percent from 19.1 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Previous wording

Acquisition related expense decreased $3.8 million, or (91.9) percent, to $0.3 million for the three months ended March 31, 2024, from $4.1 million for the three months ended March 31, 2023. Acquisition costs related to Feedonomics were recognized through Q3 2023, which was the second anniversary date of the acquisition. The remaining acquisition expenses are recognized on other transactions that occurred, while the prior years balance included costs related to the Feedonomics acquisition.

Current wording

Acquisition related expense decreased $3.8 million, or (91.9) percent, to $0.3 million for the three months ended June 30, 2024, from $4.1 million for the three months ended June 30, 2023, and decreased $7.6 million, or 91.9 percent, to $0.7 million for the six months ended June 30, 2024, from $8.3 million for the six months ended June 30, 2023. Acquisition costs recognized for the three and six months ended June 30, 2024 represent the amortization of deferred compensation for the Makeswift acquisition. Acquisition costs in prior years related to other transactions and acquisition costs for Feedonomics were recognized during the three and six months ended June 30, 2023.

Previous wording

Restructuring charges were $0.0 million for the three months ended March 31, 2024, and $0.4 million for the three months ended March 31, 2023.

Current wording

Restructuring charges were $2.6 million and $0.0 million for the three months ended June 30, 2024 and 2023, respectively, and were $2.6 million and $0.4 million for the six months ended June 30, 2024 and 2023, respectively. The $2.6 million is primarily a result of professional services related to our capital structure and various alternatives associated with inbound inquiries and interest in the Company.

Previous wording

Interest income increased $0.8 million, or 31.0 percent, to $3.2 million for the three months ended March 31, 2024, from $2.4 million for the three months ended March 31, 2023. This increase was primarily a result of investment income reinvested at higher interest rates for our cash, cash equivalents and marketable securities.

Current wording

Interest income increased $0.4 million, or 13.1 percent, to $3.2 million for the three months ended June 30, 2024, from $2.8 million for the three months ended June 30, 2023, and increased $1.1 million, or 21.4 percent to $6.4 million for the six months ended June 30, 2024 from $5.3 million for the six months ended June 30, 2023. This increase was primarily a result of higher cash, cash equivalents and marketable securities balances.

Previous wording

Interest expense was $0.7 million and $0.7 million for the three months ended March 31, 2024 and 2023, respectively, and was related to our outstanding debt.

Current wording

Interest expense was $0.7 million and $0.7 million for the three months ended June 30, 2024 and 2023, respectively, and was $1.4 million and $1.4 million for the six months ended June 30, 2024 and 2023 related to our outstanding debt.

Previous wording

We are committed to healthy cash flow generation and cash management, and continue to evaluate all of our spending to look for opportunities to drive improvements in cash flow. Our improvements in internal systems and controls, together with discipline around accounts receivable and collections has led to improvements in working capital and accounts receivable.

Current wording

We are committed to cash flow generation and cash management by focusing on operational discipline, and we continue to evaluate all of our spending to look for opportunities to drive improvements in cash flow. Our success in transitioning our customer base from legacy month-to-month contracts to more favorable payment terms has continued to result in better cash flow as these efforts have increased the timing of our cash receipts and reduced our overall subscription churn rate.

Previous wording

Our operational short-term liquidity needs primarily include working capital for sales and marketing, research and development, and continued innovation. Our future capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives, the timing of new product introductions, the continued impact of the inflation on the global economy, our business, financial condition, and results of operations.

Current wording

Our operational short-term liquidity needs primarily include working capital for sales and marketing, research and development, and continued innovation. Our future capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives including our efforts in transitioning our customers to annual billings, continued reduction in churn, the timing of new product introductions, the continued impact of the inflation on the global economy, market risk due to elevated interest rates, our business, financial condition, and results of operations.

Previous wording

In the future, we will continue to work with our customer base to move billings from monthly to annually in efforts to better manage cash flow and reduce churn. Additionally, we may attempt to restructure our debt financing. From time to time, we may seek to repurchase, redeem or otherwise retire our convertible notes through cash repurchases and/or exchanges for equity securities, in open market repurchases, privately negotiated transactions, tender offers or otherwise. Such repurchases, redemptions or other transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. We do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.

Current wording

From time to time, we may seek to repurchase, redeem or otherwise retire our convertible notes through cash repurchases and/or exchanges for equity securities, in open market repurchases, privately negotiated transactions, tender offers or otherwise. Such repurchases, redemptions or other transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. We do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.

Previous wording

As of March 31, 2024, we had $62.0 million in cash, cash equivalents, and restricted cash, an increase of $0.2 million compared to $62.2 million as of March 31, 2023. Cash and cash equivalents consist of highly-liquid investments with original maturities of less than three months. Our restricted cash balance of $1.1 million and $1.1 million at March 31, 2024 and 2023 respectively, consists of security deposits for future chargebacks and amounts on deposit with certain financial institutions. Our marketable securities balance of $204.3 million and $221.3 million at March 31, 2024 and 2023 respectively, consists of investments in corporate and US treasury securities . We maintain cash account balances in excess of Federal Deposit Insurance Corporation (FDIC) insured limits.

Current wording

As of June 30, 2024, we had $134.2 million in cash, cash equivalents, and restricted cash, an increase of $58.6 million compared to $75.6 million as of June 30, 2023. Cash and cash equivalents consist of highly-liquid investments with original maturities of less than three months. Our restricted cash balances of $1.1 million at June 30, 2024 and 2023, consists of security deposits for future chargebacks and amounts on deposit with certain financial institutions. Our marketable securities balance of $142.7 million and $222.9 million at June 30, 2024 and 2023 respectively, consists of investments in corporate and US treasury securities. We maintain cash account balances in excess of Federal Deposit Insurance Corporation (FDIC) insured limits.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 and 2023 was $3.4 million and $20.8 million, respectively. This consisted primarily of our net losses adjusted for certain non-cash items including depreciation, stock-based compensation, debt discount amortization, amortization of intangible assets, bad debt expense, and the effect of changes in working capital.

Current wording

Net cash provided by (used in) operating activities for the six months ended June 30, 2024 and 2023 was $8.3 million and ($6.1) million respectively. This consisted primarily of our net losses adjusted for certain non-cash items including depreciation, stock-based compensation, debt discount amortization, amortization of intangible assets, bad debt expense, and the effect of changes in working capital.

Previous wording

Net cash used in investing activities during the three months ended March 31, 2024 and 2023 was $6.9 million and ($9.7) million, respectively. In the three months ended March 31, 2024, this consists primarily of the sale and maturity of marketable securities of $29.4 million offset by the purchase of property and equipment of $0.8 million and the purchase of marketable securities of $35.5 million. In the three months ended March 31, 2023, this consists primarily of the purchases of marketable securities of $48.0 million and the purchases of property and equipment of $1.1 million offset by the maturity of marketable securities of $39.4 million.

Current wording

Net cash provided by (used in) investing activities during the three months ended June 30, 2024 and 2023 was $60.3 million and ($2.7) million, respectively. For the three months ended June 30, 2024, this consisted primarily of the sale and maturity of marketable securities of $62.5 million offset by the purchase of property and equipment of $1.1 million and the purchase of marketable securities of $1.0 million. In the three months ended June 30, 2023, this consists primarily of the purchases of marketable securities of $83.6 million and the purchases of property and equipment of $1.0 million offset by the maturity of marketable securities of $85.3 million.

Previous wording

Net cash used in financing activities during the three months ended March 31, 2024 and 2023 was $0.5 million and $0.3 million, respectively. In the three months ended March 31, 2024, this was attributable to proceeds from exercise of stock options of $0.1 million offset by withholdings from the issuance of shares of common stock pursuant to the exercise of stock options and vesting of restricted stock units of $1.3 million and repayments of debt of $0.1 million. In the three months ended March 31, 2023, this was attributable to withholdings from the issuance of shares of common stock pursuant to the exercise of stock options of $0.3 million

Current wording

Net cash provided by financing activities during the three months ended June 30, 2024 and 2023 was $0.1 million and $1.4 million, respectively. In the three months ended June 30, 2024, this was attributable to proceeds from exercise of stock options of $0.2 million offset by repayments of debt of $0.1 million. In the three months ended June 30, 2023, this was attributable to withholdings from the issuance of shares of common stock pursuant to the exercise of stock options of $1.0 million and proceeds from debt of $1.1 million, offset by withholdings from the issuance of shares of common stock pursuant to the exercise of stock options and vesting of restricted stock units of $0.8 million.

Previous wording

In September 2021, we issued $345.0 million principal amount of 0.25 percent Convertible Senior Notes due 2026 (the “Notes”). The Notes were issued pursuant to, and are governed by, an indenture (the “Convertible Notes Indenture”), dated as of September 14, 2021, between us and U.S. Bank National Association, as trustee.

Current wording

In September 2021, we issued $345.0 million principal amount of 0.25 percent Convertible Senior Notes due 2026 (the “2026 2026 Convertible Notes”). The 2026 Convertible Notes were issued pursuant to, and are governed by, an indenture (the “2026 Convertible Notes Indenture”), dated as of September 14, 2021, between us and U.S. Bank National Association, as trustee.

Previous wording

The Notes are our senior, unsecured obligations and are (i) equal in right of payment with our future senior, unsecured indebtedness; (ii) senior in right of payment to our future indebtedness that is expressly subordinated to the Notes in right of payment; (iii) effectively subordinated to our future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries.

Current wording

The 2026 Convertible Notes are our senior, unsecured obligations and are (i) equal in right of payment with our future senior, unsecured indebtedness; (ii) senior in right of payment to our future indebtedness that is expressly subordinated to the 2026 Convertible Notes in right of payment; (iii) effectively subordinated to our future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries.

Previous wording

The Notes accrue interest at a rate of 0.25 percent per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022. The Notes will mature on October 1, 2026, unless earlier repurchased, redeemed or converted. Before July 1, 2026, noteholders have the right to convert their Notes only upon the occurrence of certain events. From and after July 1, 2026, 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. We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The initial conversion rate was 13.6783 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $73.11 per share of common stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

Current wording

The 2026 Convertible Notes accrue interest at a rate of 0.25 percent per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022. The 2026 Convertible Notes will mature on October 1, 2026, unless earlier repurchased, redeemed or converted. Before July 1, 2026, noteholders have the right to convert their Notes only upon the occurrence of certain events. From and after July 1, 2026, 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. We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The initial conversion rate was 13.6783 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $73.11 per share of common stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2026 Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

Previous wording

We may not redeem the Notes at our option at any time before October 7, 2024. The Notes will be redeemable, in whole or in part (subject to the “Partial Redemption Limitation” (as defined in the Convertible Notes Indenture)), at our option at any time, and from time to time, on or after October 7, 2024 and on or before the 25th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of our common stock exceeds 130 percent of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. Pursuant to the Partial Redemption Limitation, we may not elect to redeem less than all of the outstanding Notes unless at least $150.0 million aggregate principal amount of Notes are outstanding and not subject to redemption as of the time we send the related redemption notice.

Current wording

We may not redeem the 2026 Convertible Notes at our option at any time before October 7, 2024. The 2026 Convertible Notes will be redeemable, in whole or in part (subject to the “Partial Redemption Limitation” (as defined in the 2026 Convertible Notes Indenture)), at our option at any time, and from time to time, on or after October 7, 2024 and on or before the 25th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of our common stock exceeds 130 percent of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. The redemption price will be a cash amount equal to the principal amount of the 2026 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. Pursuant to the Partial Redemption Limitation, we may not elect to redeem less than all of the outstanding Notes unless at least $150.0 million aggregate principal amount of Notes are outstanding and not subject to redemption as of the time we send the related redemption notice.

Previous wording

If certain corporate events that constitute a “Fundamental Change” (as defined in the Convertible Notes Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require us to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving us and certain de-listing events with respect to our common stock.

Current wording

If certain corporate events that constitute a “Fundamental Change” (as defined in the 2026 Convertible Notes Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require us to repurchase their Notes at a cash repurchase price equal to the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving us and certain de-listing events with respect to our common stock.

Previous wording

The Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Convertible Notes Indenture), which include the following: (i) certain payment defaults on the Notes (which, in the case of a default in the payment of interest on the Notes, will be subject to a 30-day cure period); (ii) our failure to send certain notices under the Notes Indenture within specified periods of time; (iii) our failure to comply with certain covenants in the Notes Indenture relating to our ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of us and our subsidiaries, taken as a whole, to another person; (iv) a default by us in our other obligations or agreements under the Convertible Notes Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Convertible Notes Indenture; (v) certain defaults by us or any of our significant subsidiaries with respect to indebtedness for borrowed money of at least $65.0 million; and (vi) certain events of bankruptcy, insolvency and reorganization involving us or any of our significant subsidiaries.

Current wording

The 2026 Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Convertible Notes Indenture), which include the following: (i) certain payment defaults on the 2026 Convertible Notes (which, in the case of a default in the payment of interest on the 2026 Convertible Notes, will be subject to a 30-day cure period); (ii) our failure to send certain notices under the 2026 Convertible Notes Indenture within specified periods of time; (iii) our failure to comply with certain covenants in the 2026 Convertible Notes Indenture relating to our ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of us and our subsidiaries, taken as a whole, to another person; (iv) a default by us in our other obligations or agreements under the 2026 Convertible Notes Indenture or the 2026 Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the 2026 Convertible Notes Indenture; (v) certain defaults by us or any of our significant subsidiaries with respect to indebtedness for borrowed money of at least $65.0 million; and (vi) certain events of bankruptcy, insolvency and reorganization involving us or any of our significant subsidiaries.

Previous wording

If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to us (and not solely with respect to a significant subsidiary of us) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then, the trustee, by notice to us, or noteholders of at least 25 percent of the aggregate principal amount of Notes then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, we may elect, at our option, that the sole remedy for an Event of Default relating to certain failures by us to comply with certain reporting covenants in the Notes Indenture consists exclusively of the right of the noteholders to receive special interest on the Notes for up to 180 days at a specified rate per annum not exceeding 0.50 percent on the principal amount of the Notes.

Current wording

If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to us (and not solely with respect to a significant subsidiary of us) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the 2026 Convertible Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then, the trustee, by notice to us, or noteholders of at least 25 percent of the aggregate principal amount of 2026 Convertible Notes then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2026 Convertible Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, we may elect, at our option, that the sole remedy for an Event of Default relating to certain failures by us to comply with certain reporting covenants in the 2026 Convertible Notes Indenture consists exclusively of the right of the noteholders to receive special interest on the 2026 Convertible Notes for up to 180 days at a specified rate per annum not exceeding 0.50 percent on the principal amount of the 2026 Notes.