Cardlytics Announces Proposed Convertible Senior Notes Offering - Seite 2

The terms of each note repurchase transaction will depend on a variety of factors. No assurance can be given as to how much, if any, of the 2025 Notes will be repurchased or the terms on which they will be repurchased. This press release is not an offer to repurchase the 2025 Notes, and the offering of the notes is not contingent upon the repurchase of the 2025 Notes.

In connection with any note repurchase transaction, Cardlytics expects that holders of the 2025 Notes who agree to have their 2025 Notes repurchased and who have hedged their equity price risk with respect to such notes (the “hedged holders”) will unwind all or part of their hedge positions by buying Cardlytics’ common stock and/or entering into or unwinding various derivative transactions with respect to Cardlytics’ common stock. The amount of Cardlytics’ common stock to be purchased by the hedged holders or in connection with such derivative transactions may be substantial in relation to the historic average daily trading volume of Cardlytics’ common stock. This activity by the hedged holders could increase (or reduce the size of any decrease in) the market price of Cardlytics’ common stock, including concurrently with the pricing of the notes, which could result in a higher effective conversion price of the notes. Cardlytics cannot predict the magnitude of such market activity or the overall effect it will have on the price of the notes offered or Cardlytics’ common stock.

Additionally, Cardlytics entered into capped call transactions (the “existing capped call transactions”) with certain financial institutions (the “existing option counterparties”) in connection with issuing the 2025 Notes. If Cardlytics repurchases any of its 2025 Notes, it may enter into agreements with the option counterparties to terminate a portion of the existing capped call transactions in a notional amount corresponding to the amount of 2025 Notes repurchased (such terminations, the “unwind transactions”). In connection with any such terminations of the existing capped call transactions, Cardlytics expects such existing option counterparties and/or their respective affiliates will unwind various derivatives with respect to Cardlytics’ common stock and/or sell shares of Cardlytics’ common stock concurrently with or shortly after pricing of the notes. This activity could decrease (or reduce the size of any increase in) the market price of Cardlytics’ common stock at that time and could decrease (or reduce the size of any increase in) the market value of the notes.