SEC Form FWP filed by QXO Inc.

The Issuer expects the net proceeds from (i) the Common Stock Offering to be approximately $776.2 million (or approximately $892.8 million if the underwriters of the Common Stock Offering exercise in full their option to purchase additional common stock) and (ii) the Depositary Shares Offering to be approximately $484.8 million (or approximately $557.6 million if the underwriters of the Depositary Shares Offering exercise in full their over-allotment option to purchase additional Depositary Shares), in each case, after deducting the applicable underwriting discounts and commissions and the Issuer’s estimated offering expenses. The Issuer intends to use the net proceeds from the Common Stock Offering and the Depositary Shares Offering to repay indebtedness under its senior secured term loan facility, which will strengthen the Issuer’s position with respect to future acquisition opportunities. See “Use of Proceeds” in the Common Stock Preliminary Prospectus Supplement and the Depositary Shares Preliminary Prospectus Supplement.

The closing of the Common Stock Offering and the closing of the Depositary Shares Offering are not contingent upon each other.

5.50% of the liquidation preference of $1,000 per share of the Mandatory Convertible Preferred Stock per year. Dividends will accumulate from the Settlement Date for the Depositary Shares Offering and, to the extent that the Issuer is legally permitted to pay dividends and its board of directors, or an authorized committee thereof, declares a dividend payable with respect to the Mandatory Convertible Preferred Stock, the Issuer will pay such dividends in cash or, subject to certain limitations, by delivery of shares of Common Stock or through any combination of cash and shares of Common Stock, as determined by the Issuer’s board of directors in its sole discretion; provided that any unpaid dividends will continue to accumulate.

The expected dividend payable on the first Dividend Payment Date is approximately $11.9167 per share of Mandatory Convertible Preferred Stock (equivalent to approximately $0.5958 per Depositary Share). Each subsequent dividend is expected to be $13.7500 per share of Mandatory Convertible Preferred Stock (equivalent to $0.6875 per Depositary Share).

The conversion rate for each share of Mandatory Convertible Preferred Stock will not be more than 60.6060 shares of Common Stock and not less than 49.4740 shares of Common Stock (respectively, the “Maximum Conversion Rate” and “Minimum Conversion Rate”), depending on the applicable market value (as defined in the Depositary Shares Preliminary Prospectus Supplement) of the Common Stock, as described below and subject to certain anti-dilution adjustments. Correspondingly, the conversion rate per Depositary Share will be not more than 3.0303 shares of Common Stock and not less than 2.4737 shares of Common Stock.

The following table illustrates the conversion rate per share of the Mandatory Convertible Preferred Stock, subject to certain anti-dilution adjustments described in the Depositary Shares Preliminary Prospectus Supplement, based on the applicable market value of the Common Stock:

Applicable Market Value of
the Common Stock

Greater than the Threshold Appreciation Price

Equal to or less than the Threshold Appreciation Price but greater than or equal to the Initial Price

Less than the Initial Price

Conversion Rate per Share of
Mandatory Convertible Preferred
Stock

49.4740 shares of Common Stock

Between 49.4740 and 60.6060 shares of Common Stock, determined by dividing $1,000 by the applicable market value

60.6060 shares of Common Stock

Applicable Market Value of
the Common Stock

Greater than the Threshold Appreciation Price

Equal to or less than the Threshold Appreciation Price but greater than or equal to the Initial Price

Less than the Initial Price

Conversion Rate per Depositary Share

2.4737 shares of Common Stock

Between 2.4737 and 3.0303 shares of Common Stock, determined by dividing $50 by the applicable market value

3.0303 shares of Common Stock

If a fundamental change (as defined in the Depositary Shares Preliminary Prospectus Supplement) occurs on or prior to May 15, 2028, holders of the Mandatory Convertible Preferred Stock will have the right to convert their shares of Mandatory Convertible Preferred Stock, in whole or in part, into shares of Common Stock at the fundamental change conversion rate (as defined in the Depositary Shares Preliminary Prospectus Supplement) during the period beginning on, and including, the effective date (as defined in the Depositary Shares Preliminary Prospectus Supplement) of such fundamental change and ending on, and including, the earlier of (a) the date that is 20 calendar days after such effective date (or, if later, the date that is 20 calendar days after holders receive notice of such fundamental change) and (b) May 15, 2028. For the avoidance of doubt, the period described in the immediately preceding sentence may not end on a date that is later than May 15, 2028.

The following table sets forth the fundamental change conversion rate per share of Mandatory Convertible Preferred Stock (subject to adjustment as described in the Depositary Shares Preliminary Prospectus Supplement) based on the effective date of the fundamental change and the stock price (as defined in the Depositary Shares Preliminary Prospectus Supplement) in the fundamental change:

The exact stock price and effective date may not be set forth in the table, in which case:

·      if the stock price is between two stock prices on the table or the effective date is between two effective dates on the table, the fundamental change conversion rate per share of Mandatory Convertible Preferred Stock will be determined by straight-line interpolation between the fundamental change conversion rates per share of Mandatory Convertible Preferred Stock set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day or 366-day year, as applicable;

·      if the stock price is in excess of $28.00 per share (subject to adjustment in the same manner as the stock prices in the column headings of the table above as described in the Depositary Shares Preliminary Prospectus Supplement), then the fundamental change conversion rate per share of Mandatory Convertible Preferred Stock will be the Minimum Conversion Rate; and

·      if the stock price is less than $8.00 per share (subject to adjustment in the same manner as the stock prices in the column headings of the table above as described in the Depositary Shares Preliminary Prospectus Supplement), then the fundamental change conversion rate per share of Mandatory Convertible Preferred Stock will be the Maximum Conversion Rate.

The exact stock price and effective date may not be set forth in the table, in which case:

·      if the stock price is between two stock prices on the table or the effective date is between two effective dates on the table, the fundamental change conversion rate per Depositary Share will be determined by straight-line interpolation between the fundamental change conversion rates per Depositary Share set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day or 366-day year, as applicable;

·      if the stock price is in excess of $28.00 per share (subject to adjustment in the same manner as the stock prices in the column headings of the table above as described in the Depositary Shares Preliminary Prospectus Supplement), then the fundamental change conversion rate per Depositary Share will be the Minimum Conversion Rate, divided by 20; and

·      if the stock price is less than $8.00 per share (subject to adjustment in the same manner as the stock prices in the column headings of the table above as described in the Depositary Shares Preliminary Prospectus Supplement), then the fundamental change conversion rate per Depositary Share will be the Maximum Conversion Rate, divided by 20.