Item 2. Unregistered Sales of Equity Securities
Item 2. Unregistered Sales of Equit y Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
On July 27, 2021, XPO, Inc. issued and sold 200,000 shares of Convertible Preferred for aggregate cash proceeds of $200 million, before deduction of offering costs. Holders of Convertible Preferred shares are entitled to quarterly coupon payments at the rate of 6.50% of the fixed liquidation preference per share, initially $1,000 per share. In the event the quarterly preferential coupon is not paid in cash, the fixed liquidation preference automatically increases at the PIK rate of 7.50%. The Convertible Preferred has an initial conversion price equal to $14.40 per share and is mandatorily convertible under certain circumstances and redeemable at the option of the holder beginning on the date that is eight years from the IPO or upon change of control.
Use of Proceeds
On July 27, 2021, the Company completed its IPO of 10,000,000 shares of Class A common stock at a price to the public of $12.00 per share. After underwriter discounts and commissions, XPO, Inc. received net proceeds from the IPO of approximately $111.9 million, before deduction for offering expenses. The issuance of Convertible Preferred shares and Class A common stock by XPO, Inc. and the related net proceeds will be recorded in the consolidated financial statements on July 27, 2021, the closing date of the IPO.
In August 2021, the Company sold 904,000 shares of Class A common stock to the underwriters pursuant to the underwriter’s option to purchase additional shares. After underwriter discounts and commissions, we received net proceeds of approximately $10.1 million on August 24, 2021, and we expect to use (i) $9.0 million to purchase 750,000 LLC Units from our Chief Executive Officer and (ii) $1.1 million for working capital.
There has been no material change in the expected use of the net proceeds from our IPO and issuance of Convertible Preferred, as described in our final prospectus filed with the SEC on July 26, 2021 pursuant to Rule 424(b).
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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