Dave plans $150 million convertible notes offering to fund share buybacks

Dave Inc. (NASDAQ: DAVE) announced plans to offer $150 million in convertible senior notes due 2031 through a private placement to qualified institutional buyers. The company expects to grant initial purchasers an option to buy up to an additional $22.5 million in notes.

The notes will be senior unsecured obligations with interest payable semi-annually on April 1 and October 1, beginning October 1, 2026. The notes mature April 1, 2031, unless converted, redeemed or repurchased earlier. Under certain circumstances, the notes may be converted into cash up to the principal amount and cash, shares or a combination thereof for any remainder.

Dave intends to use proceeds to fund capped call transactions, repurchase common stock and for general corporate purposes including additional share repurchases under its existing program.

The company expects to enter into capped call transactions with initial purchasers or affiliates to reduce potential dilution from note conversions and offset cash payments exceeding principal amounts upon conversion. These transactions will cover shares initially underlying the notes, subject to anti-dilution adjustments.

Concurrently with pricing, Dave expects to repurchase shares from note purchasers in privately negotiated transactions at the closing price on the pricing date. The company stated these repurchases could increase or prevent decreases in stock price.

The capped call counterparties advised they expect to enter derivative transactions and may purchase shares in open market transactions around the pricing, which could affect stock and note prices. They may also modify hedge positions through various derivatives and trading activities during the notes' term.

The notes and potential conversion shares are not registered under the Securities Act and may not be offered or sold without registration or applicable exemptions.

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