Avid Bioservices, Inc. Announces Pricing of $160 Million Convertible Senior Notes Offering

Photo of author
Written By Faith Boluwatife

Avid Bioservices, Inc. (NASDAQ: CDMO), a renowned biologics contract development and manufacturing organization (CDMO), has unveiled plans for a significant financial move with the pricing of $160 million aggregate principal amount of 7.00% Convertible Senior Notes due 2029 (the “2029 Notes”). 

This announcement came on March 12, 2024, through private placement purchase agreements with several purchasers, each classified as a “qualified institutional buyer” under the Securities Act of 1933, as amended (the “Securities Act”). 

The closing of this offering is subject to customary closing conditions and is expected to finalize soon.

Key Features of the 2029 Notes

Senior Unsecured Obligations: The 2029 Notes will represent senior unsecured obligations of Avid Bioservices, Inc.

Interest Payment Schedule: These notes will accrue interest payable semiannually on March 1 and September 1 of each year, starting from September 1, 2024.

Credit: DepositPhotos

Maturity Date: The maturity date for the 2029 Notes is March 1, 2029, unless earlier converted or repurchased.

Conversion Rights: Holders will have the right to convert their 2029 Notes before September 1, 2028, upon the satisfaction of specified conditions and during certain periods. From September 1, 2028, until the second scheduled trading day before the maturity date, holders may convert all or any portion of their notes at any time.

Upon conversion, Avid Bioservices, Inc. will pay or deliver cash, shares of its common stock, or a combination of both at its discretion.

Conversion Rate: The initial conversion rate for the 2029 Notes will be 101.1250 shares of the company’s common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $9.89 per share of common stock. 

This represents a premium of approximately 12.5% over the last reported sale price of the company’s common stock on March 6, 2024. The conversion rate may be subject to adjustment in certain events but will not be adjusted for any accrued or unpaid interest.

Redemption and Sinking Fund: The 2029 Notes are not redeemable, and no sinking fund is provided. However, in the event of a “fundamental change,” holders may require the company to repurchase their notes at a fundamental change repurchase price.

Use of Proceeds: Avid Bioservices, Inc. intends to utilize the net proceeds from the offering to repurchase a portion of its 1.250% Exchangeable Senior Notes due 2026 and to repay any remaining outstanding 2026 Notes.

Read More: Vita Coco: Navigating the Evolving Landscape of Functional Beverages

Regulatory Compliance and Offer Restrictions

It’s important to note that the 2029 Notes and any shares of the company’s common stock issuable upon conversion have not been and will not be registered under the Securities Act or any state securities laws. 

As a result, these securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. 

This offering announcement does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor does it authorize any sale of these securities in jurisdictions where such actions would be unlawful.

Additionally, it’s clarified that this press release is not an offer to repurchase the 2026 Notes, as detailed in the company’s recent filings. All outstanding 2026 Notes have been accelerated and became due and payable pursuant to an acceleration notice received by the company on February 29, 2024.

Also Read: Newly Merged Arcadium Lithium Slows Pace of Expansion Aiming to Capitalize on Cost-Saving Opportunities 

Strategic Financial Move

The pricing of $160 million convertible senior notes offering represents a strategic financial move for Avid Bioservices, Inc. 

Credit: DepositPhotos

It provides the company with additional capital to address its financial obligations, pursue growth opportunities, and strengthen its position in the biologics contract development and manufacturing sector. 

However, investors should carefully consider the terms and conditions of the offering and its potential impact on the company’s financial position and future prospects.

Read Next: Will SoFi Technologies Make a Comeback After Achieving a Faster-Than-Expected Path to Profitability? 


You should read and understand this disclaimer in its entirety before joining or viewing the website or email/blog list of SmallCapStocks.com (the “Publisher”). The information (collectively the “Advertisement”) disseminated by email, text or other method by the Publisher including this publication is a paid commercial advertisement and should not be relied upon for making an investment decision or any other purpose. The Publisher is engaged in the business of marketing and advertising the securities of publicly traded companies in exchange for compensation. The track record, gains, upside, and/or losses mentioned in the Advertisement, if any, should not be considered as true or accurate or be the basis for an investment. The Publisher does not verify the accuracy or completeness of any information included in the Advertisement. While the Publisher does not charge for the SMS service, standard carrier message and data rates may apply. To unsubscribe from receiving promotional text messages to your phone sent via an autodialer, using your phone reply to the sender’s phone number with the word STOP or HELP for help.

The Advertisement is not a solicitation or recommendation to buy securities of the advertised company. An offer to buy or sell securities can be made only by a disclosure document that complies with applicable securities laws and only in the states or other jurisdictions in which the security is eligible for sale. The Advertisement is not a disclosure document. The Advertisement is only a favorable snapshot of unverified information about the advertised company. An investor considering purchasing the securities, should always do so only with the assistance of his legal, tax and investment advisors. Investors should review with his or her investment advisor, tax advisor or attorney, if and to the extent available, any information concerning a potential investment at the web sites of the U.S. Securities and Exchange Commission (the "SEC") at www.sec.gov; the Financial Industry Regulatory Authority (the "FINRA") at www.FINRA.org, and relevant State Securities Administrator website and the OTC Markets website at www.otcmarkets.com. The Publisher cautions investors to read the SEC advisory to investors concerning Internet Stock Fraud at www.sec.gov/consumer/cyberfr.htm, as well as related information published by the FINRA on how to invest carefully. Investors are responsible for verifying all information in the Advertisement. As an advertiser, we do not verify any information we publish. The Advertisement should not be considered true or complete.

The Publisher does not offer investment advice or analysis, and the Publisher further urges you to consult your own independent tax, business, financial and investment advisors concerning any investment you make in securities particularly those quoted on the OTC Markets. Investing in securities is highly speculative and carries an extremely high degree of risk. You could lose your entire investment if you invest in any company mentioned in the Advertisement. You acknowledge that we are not an investment advisory service, a broker-dealer or an investment adviser and we are not qualified to act as such. You acknowledge that you will consult with your own independent, tax, financial and/or legal advisers regarding any decisions as to any company mentioned here. We have not determined if the Advertisement is accurate, correct or truthful. The Advertisement is compiled from publicly available information, which include, but are not limited to, no cost online research, magazines, newspapers, reports filed with the SEC or information furnished by way of press releases. Because all information relied upon by us in preparing an advertisement about an issuer comes from a public source, it is not reliable, and you should not assume it is accurate or complete.

By your subscription to our profiles, the viewing of this profile and/or use of our website, you have agreed and acknowledged the terms of our full disclaimer and privacy policy which can be viewed at the following link: www.SmallCapStocks.com/Disclaimer and www.SmallCapStocks.com/Privacy-Policy

By accepting the Advertisement, you agree and acknowledge that any hyperlinks to the website of (1) a client company, (2) the party issuing or preparing the information for the company, or (3) other information contained in the Advertisement is provided only for your reference and convenience. The advertiser is not responsible for the accuracy or reliability of these external sites, nor is it responsible for the content, opinions, products or other materials on external sites or information sources. If you use, act upon or make decisions in reliance on information contained in any disseminated report/release or any hyperlink, you do so at your own risk and agree to hold us, our officers, directors, shareholders, affiliates and agents harmless. You acknowledge that you are not relying on the Publisher, and we are not liable for, any actions taken by you based on any information contained in any disseminated email or hyperlink.