ServiceSource has been advised by the hedge counterparties that in connection with establishing their initial hedge of the convertible note hedge transactions and warrant transactions, the hedge counterparties and/or their respective affiliates may enter into various derivative transactions with respect to ServiceSource’s common stock and/or purchase shares of ServiceSource’s common stock in privately-negotiated transactions and/or open market transactions concurrently with, or shortly after, the pricing of the notes. These activities could have the effect of increasing or preventing a decline in the price of ServiceSource’s common stock at that time. In addition, ServiceSource has been advised by the hedge counterparties that the hedge counterparties and/or their respective affiliates may modify their hedge positions from time to time following the pricing of the notes and prior to the maturity of the notes (and are particularly likely to do so during any observation period relating to a conversion of the notes) by entering into or unwinding derivative transactions with respect to ServiceSource’s common stock and/or by purchasing or selling shares of ServiceSource’s common stock or the notes in secondary market transactions. This activity could also have the effect of increasing, or preventing a decline (or reducing the size of any decline) in, the market price of ServiceSource’s common stock or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, could affect the amount and value of the consideration that noteholders will receive upon conversion of the notes.ServiceSource expects to use a portion of the net proceeds of the offering of the notes for the cost of the convertible note hedge transactions after such cost is partially offset by the proceeds of the warrant transactions described above, and to use the remaining proceeds for general corporate purposes, including working capital, capital expenditures, potential acquisitions and strategic transactions.
The notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Act. Neither the notes nor the shares of ServiceSource’s common stock issuable upon conversion of the notes, if any, have been registered under the Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful.