Alkami Announces Launch of Proposed Secondary Offering of Common Stock by Selling Stockholders

Rhea-AI Summary

Alkami Technology (Nasdaq: ALKT) has announced a secondary offering of 5,000,000 shares of common stock by its Selling Stockholders. The offering includes an option for the underwriter to purchase an additional 750,000 shares. J.P. Morgan Securities is acting as the sole underwriter and book-running manager. Importantly, Alkami will not sell any shares or receive any proceeds from this offering. The offering is being made through an automatically effective shelf registration statement on Form S-3, filed with the SEC. A prospectus supplement and accompanying prospectus will be available on the SEC's website.

Positive

• No dilution for existing shareholders as Alkami is not issuing new shares
• Potential for increased liquidity in ALKT stock due to larger float

Negative

• Large shareholders reducing their stake, potentially signaling lack of confidence
• Possible downward pressure on stock price due to increased supply of shares

Insights

Financial Analyst

This secondary offering by Alkami's major shareholders is a significant market event. The sale of 5,000,000 shares (potentially 5,750,000 with the overallotment option) suggests these early investors are looking to monetize their holdings. This could lead to increased stock liquidity but may also put downward pressure on the share price in the short term.

Importantly, Alkami itself isn't raising capital, which means no dilution for current shareholders. However, the large volume being offloaded by insiders might be perceived negatively by the market, potentially signaling a lack of confidence in future growth. Investors should closely monitor the pricing and demand for this offering as indicators of market sentiment towards Alkami's prospects.

Market Research Analyst

This move by Alkami's major shareholders to reduce their stakes could signal a shift in the company's ownership structure. It's important to consider the potential impacts on corporate governance and strategic direction. The involvement of J.P. Morgan as the sole underwriter suggests confidence in the offering's success, but also raises questions about the valuation and timing of the sale.

Investors should analyze how this offering might affect Alkami's market positioning in the competitive cloud-based digital banking solutions sector. The reduction in insider ownership could potentially make Alkami more attractive for institutional investors looking for increased float and liquidity, but it may also remove some of the perceived alignment between major shareholders and other investors.

PLANO, Texas, Aug. 8, 2024 /PRNewswire/ -- Alkami Technology, Inc. (Nasdaq: ALKT) ("Alkami" or the "Company"), a leading cloud-based digital banking solutions provider for financial institutions in the U.S., today announced the launch of an underwritten secondary offering (the "Offering") of an aggregate of 5,000,000 shares of the Company's common stock to be sold by entities affiliated with General Atlantic, L.P., S3 Ventures Fund III, L.P., George B. Kaiser and Brian R. Smith (collectively, the "Selling Stockholders"). The Selling Stockholders also expect to grant to the underwriter an option, exercisable for 30 days, to purchase up to an additional 750,000 shares of the Company's common stock from the Selling Stockholders at the public offering price, less underwriting discounts and commissions. The Offering is subject to market and other conditions, and there can be no assurance as to whether, when or on what terms the Offering may be completed.

The Selling Stockholders will receive all of the net proceeds from the Offering. The Company will not sell any shares of its common stock in the Offering and will not receive any of the proceeds from the sale of shares of the Company's common stock in the Offering.

J.P. Morgan Securities LLC is acting as the underwriter and sole book-running manager for the Offering.

The Offering is being made pursuant to an automatically effective shelf registration statement on Form S-3, which has been filed by the Company with the Securities and Exchange Commission (the "SEC") and became effective on August 8, 2024.The Offering will be made only by means of a prospectus supplement and accompanying prospectus that form a part of the registration statement. A preliminary prospectus supplement and the accompanying prospectus relating to and describing the terms of the Offering will be filed with the SEC and will be available on the SEC's website at http://www.sec.gov. Copies of the prospectus supplement, when available, and accompanying prospectus relating to the Offering may be obtained from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com.

This press release is for informational purposes only and shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, these securities, in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Alkami

Alkami Technology, Inc. is a leading cloud-based digital banking solutions provider for financial institutions in the United States that enables clients to grow confidently, adapt quickly and build thriving digital communities. Alkami helps clients transform through retail and commercial banking, digital account opening, and data and marketing solutions.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking" statements relating to the size and timing of the Offering and the granting of an option to purchase additional shares of the Company's common stock by the Selling Stockholders. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as "expects," "believes," "plans," or similar expressions and the negatives of those terms. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements, expressed or implied by the forward-looking statements. Factors that may materially affect such forward-looking statements include: our limited operating history and history of operating losses; our ability to manage future growth; our ability to attract new clients and retain and expand existing clients' use of our solutions; the unpredictable and time-consuming nature of our sales cycles; our ability to maintain, protect and enhance our brand; our ability to accurately predict the long-term rate of client subscription renewals or adoption of our solutions; our reliance on third-party software, content and services; our ability to effectively integrate our solutions with other systems used by our clients; intense competition in our industry; any downturn, consolidation or decrease in technology spend in the financial services industry, including as a result of recent closures of certain financial institutions and liquidity concerns at other financial institutions; our ability and the ability of third parties on which we rely to prevent and identify breaches of security measures (including cybersecurity) and resulting disruptions of our systems or operations and unauthorized access to client customer and other data; our ability to successfully integrate acquired companies or businesses; our ability to comply with regulatory and legal requirements and developments; our ability to attract and retain key employees; the political, economic and competitive conditions in the markets and jurisdictions where we operate; our ability to maintain, develop and protect our intellectual property; our ability to respond to evolving technological requirements to develop or acquire new and enhanced products that achieve market acceptance in a timely manner; our ability to estimate our expenses, future revenues, capital requirements, our needs for additional financing and our ability to obtain additional capital; statements about the Offering; the Selling Stockholders' intention to grant the Underwriter an option to purchase additional shares; and other factors described in our filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Investor Relations Contact
Steve Calk
ir@alkami.com

Media Relations Contacts
Marla Pieton
marla.pieton@alkami.com

Valerie Kerner
alkami@fullyvested.com

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SOURCE Alkami Technology, Inc.

FAQ

How many shares are being offered in Alkami's (ALKT) secondary offering?

Alkami's (ALKT) secondary offering includes 5,000,000 shares of common stock, with an option for the underwriter to purchase an additional 750,000 shares.

Who are the selling stockholders in Alkami's (ALKT) secondary offering?

The selling stockholders in Alkami's (ALKT) secondary offering are entities affiliated with General Atlantic, L.P., S3 Ventures Fund III, L.P., George B. Kaiser, and Brian R. Smith.

Will Alkami (ALKT) receive any proceeds from this secondary offering?

No, Alkami (ALKT) will not receive any proceeds from this secondary offering. All net proceeds will go to the selling stockholders.

Who is the underwriter for Alkami's (ALKT) secondary offering?

J.P. Morgan Securities is acting as the underwriter and sole book-running manager for Alkami's (ALKT) secondary offering.