Authorization

The RealReal Announces Proposed Offering of Convertible Senior Notes Due 2028

SAN FRANCISCO, March 02, 2021 (GLOBE NEWSWIRE) -- The RealReal, Inc. (Nasdaq: REAL)a??the worlda??s largest online marketplace for authenticated, cosigned luxury goodsa??today announced that it intends to offer $250.0 million in aggregate principal amount of its Convertible Senior Notes due 2028 (the a??notesa??) in a private offering (the a??offeringa??) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the a??Securities Acta??). In connection with the offering, the Company expects to grant the initial purchasers a 13-day option to purchase up to an additional $37.5 million in aggregate principal amount of notes. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.
The notes will be convertible into cash, shares of the Companya??s common stock, par value $0.0001 per share (the a??common stocka??), or a combination of cash and shares of common stock, at the Companya??s election. The notes will be the senior unsecured obligations of the Company and rank equally with the Companya??s other unsecured and unsubordinated debt. The interest rate, initial conversion rate, offering price and other terms of the notes will be determined at the time of pricing of the offering.In connection with the pricing of the notes, the Company expects to enter into privately negotiated capped call transactions with one or more financial institutions, which may include one or more of the initial purchasers or their affiliates (the a??hedge counterpartiesa??). The capped call transactions will cover, subject to anti-dilution adjustments, the number of shares of common stock underlying the notes sold in the offering. The capped call transactions are generally expected to reduce potential dilution to the Companya??s common stock upon any conversion of notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.In connection with establishing their initial hedge positions with respect to the capped call transactions, the Company expects that the hedge counterparties or their respective affiliates will enter into various derivative transactions with respect to the Companya??s common stock concurrently with or shortly after the pricing of the notes, including with certain investors in the notes. This activity could increase (or reduce the size of any decrease in) the market price of the Companya??s common stock or the trading price of the notes at the time.In addition, the counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Companya??s common stock and/or purchasing or selling the Companya??s common stock or other securities of the Company in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so on each exercise date of the capped call transactions, which are scheduled to occur during the observation period relating to any conversion of the notes on or after December 1, 2027, or following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversions of the notes or otherwise). This activity could also cause or prevent an increase or decrease in the market price of the Companya??s common stock or the trading price of the notes, which could affect note holdersa?? ability to convert the notes, and, to the extent the activity occurs during the observation period related to a conversion of notes, this could affect the number of shares and value of the consideration that note holders will receive upon conversion of the notes.
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