Item 1.01 Entry into a Material Agreement.
On January 20, 2021, Alarm.com Holdings, Inc. (the "Company") completed its
previously announced private offering (the "Offering") of $500 million aggregate
principal amount of 0% Convertible Senior Notes due 2026 (the "Notes"),
including the exercise in full of the initial purchasers' option to purchase up
to an additional $65 million principal amount of the Notes. The Notes were
issued pursuant to an indenture, dated January 20, 2021 (the "Indenture"),
between the Company and U.S. Bank National Association, as trustee.
The Notes are general senior, unsecured obligations of the Company and will
mature on January 15, 2026, unless earlier redeemed, repurchased or converted.
The Notes will not bear regular interest, and the principal amount of the Notes
will not accrete. Special interest, if any, will be payable semiannually in
arrears on January 15 and July 15 of each year, beginning on July 15, 2021 (if
and to the extent that special interest is then payable on the Notes). The Notes
are convertible at the option of the holders at any time prior to the close of
business on the business day immediately preceding August 15, 2025, only under
the following circumstances: (1) during any calendar quarter commencing after
the calendar quarter ending on June 30, 2021 (and only during such calendar
quarter), if the last reported sale price of the Company's common stock, par
value $0.01 per share (the "Common Stock"), for at least 20 trading days
(whether or not consecutive) during a period of 30 consecutive trading days
ending on, and including, the last trading day of the immediately preceding
calendar quarter is greater than or equal to 130% of the conversion price for
the Notes on each applicable trading day; (2) during the five business day
period after any ten consecutive trading day period (the "measurement period")
in which the trading price (as defined in the Indenture) per $1,000 principal
amount of the Notes for each trading day of the measurement period was less than
98% of the product of the last reported sale price of Common Stock and the
conversion rate for the Notes on each such trading day; (3) if the Company calls
such Notes for redemption, at any time prior to the close of business on the
scheduled trading day immediately preceding the redemption date, but only with
respect to the Notes called (or deemed called) for redemption; and (4) upon the
occurrence of specified corporate events as set forth in the Indenture. On or
after August 15, 2025, until the close of business on the second scheduled
trading day immediately preceding the maturity date, holders of the Notes may
convert all or any portion of their Notes at any time, regardless of the
foregoing conditions. Upon conversion, the Company may satisfy its conversion
obligation by paying or delivering, as the case may be, cash, shares of Common
Stock or a combination of cash and shares of Common Stock, at the Company's
election, in the manner and subject to the terms and conditions provided in the
Indenture.
The conversion rate for the Notes will initially be 6.7939 shares of Common
Stock per $1,000 principal amount of Notes, which is equivalent to an initial
conversion price of approximately $147.19 per share of Common Stock. The initial
conversion price of the Notes represents a premium of approximately 47.5% to the
last reported sale price of the Common Stock on the Nasdaq Global Select Market
on January 14, 2021. The conversion rate for the Notes is subject to adjustment
under certain circumstances in accordance with the terms of the Indenture. In
addition, following certain corporate events that occur prior to the maturity
date of the Notes or if the Company delivers a notice of redemption in respect
of the Notes, the Company will, under certain circumstances, increase the
conversion rate of the Notes for a holder who elects to convert its Notes (or
any portion thereof) in connection with such a corporate event or convert its
Notes called (or deemed called) for redemption during the related redemption
period (as defined in the Indenture), as the case may be.
The Company may not redeem the Notes prior to January 20, 2024. The Company may
redeem for cash all or any portion of the Notes, at its option, on or after
January 20, 2024, if the last reported sale price of the Common Stock has been
at least 130% of the conversion price for the Notes then in effect for at least
20 trading days (whether or not consecutive) during any 30 consecutive trading
day period (including the last trading day of such period) ending on, and
including, the trading day immediately preceding the date on which the Company
provides notice of redemption at a redemption price equal to 100% of the
principal amount of the Notes to be redeemed, plus accrued and unpaid special
. . .
Item 1.02 Termination of Material Agreement.
On January 20, 2021, the Company repaid all amounts due and owing under the
Credit Agreement dated as of October 6, 2017, as amended by the First Amendment
to Credit Agreement, dated as of November 30, 2018, as modified by the Consent
to Credit Agreement, dated as of January 13, 2021 (as the same may from time to
time be further amended, restated, or otherwise modified the "Credit Agreement")
by and among the Company, Alarm.com Holdings, Inc., the lenders party thereto,
and Silicon Valley Bank, as administrative agent. The payoff amount of
approximately $110.1 million was comprised of (1) $110.0 million of principal,
(2) accrued interest of approximately $0.1 million, and (3) fees and expenses
(including a commitment fee) of approximately $18,700. Upon such repayment, the
Credit Agreement was terminated effective January 20, 2021.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 3.02 Unregistered Sale of Equity Securities.
The information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
The Company offered and sold the Notes to the initial purchasers in reliance on
the exemption from registration provided by Section 4(a)(2) of the Securities
Act of 1933, as amended (the "Securities Act"), and for resale by the initial
purchasers to qualified institutional buyers pursuant to the exemption from
registration provided by Section 4(a)(2) and Rule 144A under the Securities Act.
The Company relied on these exemptions from registration based in part on
representations made by the initial purchasers in the purchase agreement dated
January 14, 2021 by and among the Company and the initial purchasers.
The Notes and the shares of Common Stock issuable upon conversion of the Notes,
if any, have not been registered under the Securities Act and may not be offered
or sold in the United States absent registration or an applicable exemption from
registration requirements.
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To the extent that any shares of Common Stock are issued upon conversion of the
Notes, they will be issued in transactions anticipated to be exempt from
registration under the Securities Act by virtue of Section 3(a)(9) thereof
because no commission or other remuneration is expected to be paid in connection
with conversion of the Notes and any resulting issuance of shares of Common
Stock.
Item 8.01 Other Events.
On January 13, 2021, the Company issued a press release announcing the proposed
Offering. A copy of the press release is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
On January 14, 2021, the Company issued a press release announcing the pricing
of the Notes. A copy of the press release is attached hereto as Exhibit 99.2 and
is incorporated herein by reference.
Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking" statements, as that
term is defined under the federal securities laws, including but not limited to
statements regarding the Offering and the Company's expectations regarding the
use of net proceeds from the Offering. These forward-looking statements are
based on the Company's current assumptions, expectations and beliefs and are
subject to substantial risks, uncertainties, assumptions and changes in
circumstances that may cause the Company's plans to differ materially from those
expressed or implied in any forward-looking statement. These risks include, but
are not limited to, market risks, trends and conditions, and those risks
described in the Company's filings with the Securities and Exchange Commission
("SEC") from time to time, particularly under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," including the Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2020. Copies of these documents may be obtained by visiting
the SEC's website at www.sec.gov. These forward-looking statements represent the
Company's estimates and assumptions only as of the date of this Current Report
on Form 8-K. The Company assumes no obligation and does not intend to update
these forward-looking statements, except as required by law.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
4.1 Indenture, dated as of January 20, 2021, by and between Alarm.com
Holdings, Inc. and U.S. Bank National Association, as Trustee
4.2 Form of Global Note, representing Alarm.com Holdings, Inc.'s 0%
Convertible Senior Notes due 2026 (included as Exhibit A to the
Indenture filed as Exhibit 4.1)
99.1 Press release entitled "Alarm.com Announces Proposed Private Placement
of $350.0 Million of Convertible Senior Notes", dated January 13, 2021
99.2 Press release entitled "Alarm.com Prices $435.0 Million 0% Convertible
Senior Notes Offering (up 47.5% Conversion Premium)", dated January 14,
2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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ALARM.COM HOLDINGS, INC. 
