GoPro Inc (NASDAQ:GPRO) announced that it plans to offer $150 million of convertible senior notes due 2022.

The notes will be offered and sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, the company said in a statement.

Maturing April 15, 2022, the notes will be senior, unsecured obligations of GoPro, and interest will be payable semi-annually in arrears.

Prior to January 15, 2022, the notes will be convertible at the option of holders only upon satisfaction of certain conditions and during certain periods.

Upon conversion, the notes may be settled in shares of GoPro’s Class A common stock, cash or a combination of cash and shares of Class A common stock, at the election of GoPro.

Holders of the notes will have the right to require GoPro to repurchase for cash all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change.

GoPro Inc (NASDAQ:GPRO) will also be required to increase the conversion rate for holders who convert their notes in connection with certain fundamental changes occurring prior to the maturity date.

The interest rate, conversion rate, offering price and other terms are to be determined upon pricing of the notes.

GoPro intends to use a portion of the net proceeds to pay the aggregate prepayment of the prepaid forward and to use the remaining proceeds for general corporate purposes.

Prepaid Forward Stock Purchase Transaction

In connection with the issuance of the notes, GoPro said it expects to enter into a privately negotiated prepaid forward stock purchase transaction with an affiliate of an initial purchaser in the offering.

Pursuant to the transaction, GoPro will purchase shares of Class A common stock, for settlement on or around April 15, 2022, subject to any early settlement, in whole or in part, of each prepaid forward. In the event that the company pays any cash dividends on the Class A common stock, the forward counterparty will pay an equivalent amount to GoPro.

The prepaid forward is intended to facilitate privately negotiated derivative transactions by which investors in the notes will be able to hedge their investment in the notes.

In connection with establishing its initial hedge of the prepaid forward, the forward counterparty expects to enter into one or more derivative transactions with respect to the Class A common stock with purchasers of the notes concurrently with or after the pricing of the notes.

“The prepaid forward is intended to reduce the dilution to our stockholders from the issuance of the notes and to allow certain investors to establish short positions that generally correspond to commercially reasonable initial hedges of their investment in the notes,” GoPro said.

Facilitating investors’ hedge positions by entering into the prepaid forward, particularly if investors purchase the Class A common stock on the pricing date, could increase the market price of the Class A common stock or the notes and effectively raise the initial conversion price of the notes.

Furthermore, the forward counterparty may modify its hedge position by entering into or unwinding one or more derivative transactions with respect to the Class A common stock and/or purchasing or selling the Class A common stock or other securities of the company in secondary market transactions at any time.

Shares of GoPro Inc (NASDAQ:GPRO) are down more than 3% year-to-date. The stock has plummeted more than 28% during the last 12 months.