Silvaco Group Announces $10M Convertible Note Purchase by Micron

What Happened
Silvaco Group, Inc. announced it entered into a Convertible Note Purchase Agreement with customer Micron Technology and issued a $10.0 million Senior Convertible Promissory Note on August 6, 2026. The unsecured Note bears simple interest at 8.0% per year (accruing and added to principal rather than paid periodically) and will automatically convert into Silvaco common stock on August 7, 2028 or immediately prior to a defined Change of Control. The conversion price is the lower of (i) 90% of the fair market value of the common stock on the conversion date and (ii) 115% of the Nasdaq closing price on the trading day immediately preceding the date of the Note. The filing was made by Silvaco in an 8-K dated August 6, 2026.

Key Details

• Principal amount: $10.0 million; interest rate: 8.0% simple interest (accrues and is added to principal for conversion).
• Conversion timing: automatic on August 7, 2028, or immediately prior to a Change of Control.
• Conversion price mechanics: lower of 90% of fair market value on conversion date or 115% of Nasdaq closing price on the trading day immediately before the Note date.
• Nasdaq Cap: conversion is limited by Nasdaq Listing Rule 5635(d); if conversion would exceed that cap, Silvaco must seek stockholder approval. If approval is not obtained, conversion up to the cap occurs and remaining principal/interest is paid in cash equal to the gross proceeds Micron would have received if those shares had been converted and sold at fair market value (any excess cash over remaining debt is treated as a prepayment penalty).
• Deal restrictions: customary default events; while outstanding, the Purchase Agreement restricts incurring additional indebtedness except up to $50.0 million of permitted consolidated indebtedness that must be subordinated to Micron’s Note.

Why It Matters
This transaction provides Silvaco with near‑term financing (a $10M cash infusion) while structuring repayment as convertible debt rather than immediate equity or scheduled cash interest payments. For investors, the Note creates potential future dilution when conversion occurs (or a cash settlement if Nasdaq conversion limits apply), and it places limits on Silvaco’s ability to take on higher‑priority debt while the Note remains outstanding. The exact dilution or cash outcome depends on future stock price, the Nasdaq cap at conversion, and whether shareholder approval is obtained.