InterDigital Announces Convertibility of 3.50% Senior Convertible Notes Due 2027

Rhea-AI Summary

InterDigital (Nasdaq: IDCC) announced that its 3.50% Senior Convertible Notes due 2027 are now convertible for the calendar quarter ending September 30, 2024. The current conversion rate is 12.9041 shares of common stock per $1,000 of the note's principal. Upon conversion, InterDigital will pay cash up to the principal amount and may use cash, stock, or a mix for any excess. Call spread transactions were entered to economically increase the conversion price from $77.49 to $106.35 per share, reducing the net shares issued on conversion. More information can be found in Footnote 5 of InterDigital's Form 10-Q for Q1 2024.

Positive

• InterDigital's strategic use of call spread transactions increases the effective conversion price from $77.49 to $106.35, reducing the net shares issued upon conversion.

Negative

• Conversion of the notes could result in shareholder dilution depending on the mix of cash and stock used by InterDigital.

WILMINGTON, Del., July 03, 2024 (GLOBE NEWSWIRE) -- InterDigital, Inc. (Nasdaq: IDCC), a mobile, video and AI technology research and development company, announced today that, pursuant to the terms of the Indenture governing its 3.50% Senior Convertible Notes due 2027 (the “Notes”), the Notes are convertible during its calendar quarter ending September 30, 2024. The current conversion rate of the Notes is 12.9041 shares of InterDigital’s Common Stock per $1,000 principal amount of the Notes.

Upon the conversion of any Notes, InterDigital will pay cash up to the aggregate principal amount of the Notes to be converted, and will pay cash, shares of its Common Stock or a combination of cash and shares of its Common Stock for any conversion obligation in excess of the aggregate principal amount being converted, if any, at InterDigital’s election, as set forth in the Indenture governing the Notes.

At the time InterDigital issued the Notes, InterDigital entered into call spread transactions that together were designed to have the economic effect of reducing the net number of shares that will be issued in the event of conversion of the Notes by, in effect, increasing the conversion price of the Notes from InterDigital’s economic standpoint from $77.49 to $106.35. Refer to Footnote 5 of the Financial Statements from InterDigital’s Form 10-Q for the quarter ended March 31, 2024 for more information.

About InterDigital

InterDigital is a global research and development company focused primarily on wireless, video, artificial intelligence (“AI”), and related technologies. We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. We license our innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, IoT devices, cars and other motor vehicles, and providers of cloud-based services such as video streaming. As a leader in wireless technology, our engineers have designed and developed a wide range of innovations that are used in wireless products and networks, from the earliest digital cellular systems to 5G and today’s most advanced Wi-Fi technologies. We are also a leader in video processing and video encoding/decoding technology, with a significant AI research effort that intersects with both wireless and video technologies. Founded in 1972, InterDigital is listed on Nasdaq.

InterDigital is a registered trademark of InterDigital, Inc.

For more information, visit: www.interdigital.com.

CONTACT:	InterDigital, Inc.
	Email: investor.relations@interdigital.com
	+1 (302) 300-1857

FAQ

What are the key details of InterDigital's convertible notes due 2027?

The 3.50% Senior Convertible Notes are convertible in the calendar quarter ending September 30, 2024, with a conversion rate of 12.9041 shares per $1,000 principal. InterDigital will pay cash up to the principal amount and may use cash, stock, or a mix for any excess.

How does the call spread transaction affect InterDigital's convertible notes?

The call spread transaction increases the effective conversion price from $77.49 to $106.35 per share, reducing the net number of shares issued upon conversion.

When can InterDigital's convertible notes be converted?

The notes are convertible during the calendar quarter ending September 30, 2024.

What is the conversion rate for InterDigital's convertible notes?

The conversion rate is 12.9041 shares of common stock per $1,000 principal amount of the notes.

What options does InterDigital have for settling the conversion obligation?

InterDigital can settle the conversion obligation with cash up to the principal amount, and either cash, stock, or a combination for any excess.