SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 31, 2019
(Exact Name of Registrant as Specified in Charter)
(State or other jurisdiction
2479 E. Bayshore Rd., Suite 200
Palo Alto, CA
|(Address of Principal Executive Offices)||(Zip Code)|
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange
on which registered
|Common Stock, par value $0.0001 per share||GIG||The NYSE Stock Market LLC|
|Warrants to receive one share of Common Stock||GIG.WS||The NYSE Stock Market LLC|
|Right to receive one-tenth of one share of Common Stock||GIG.RT||The NYSE Stock Market LLC|
|Units, each consisting of one share of Common Stock, one right and three-fourths of one warrant||GIG.U|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed on the Current Report on Form 8-K filed by GigCapital, Inc., a Delaware corporation (GigCapital or, the Company), with the Securities and Exchange Commission on October 9, 2019, GigCapital entered into a non-binding letter of intent (the LOI) with an affiliate of Nomura Securities International, Inc. (Nomura) pursuant to which Nomura would use best efforts to purchase up to 2,000,000 shares of common stock of GigCapital, par value $0.0001 per share, at an aggregate price of approximately $21 million prior to the closing of GigCapitals business combination (the Business Combination) with Kaleyra, S.p.A. (Kaleyra, which term also refers to the post-combination Delaware corporation, as GigCapital intends to change its name to Kaleyra, Inc., upon the closing of the Business Combination).
On October 31, 2019, GigCapital and Nomura Global Financial Products, Inc. (NGFP), an affiliate of Nomura, entered into an agreement (the Confirmation) for an OTC Equity Prepaid Forward Transaction (the Transaction). The Confirmation confirms the terms and conditions of the Transaction entered into between NGFP and GigCapital.
Pursuant to the terms of the Confirmation, NGFP agreed to waive any redemption right that would require the redemption of the Subject Shares (as defined below) in exchange for a pro rata amount of the funds held in GigCapitals trust account (the Trust) provided that the closing of the Business Combination occurs prior to December 12, 2019.
Immediately following the closing of the Business Combination, Kaleyra will transfer from the Trust an amount equal to (a) the aggregate number of such Subject Shares, multiplied by (b) the per share redemption price for shares of common stock out of the Trust (the Forward Price)) (such actual aggregate cash amount, the Prepayment Amount), as a partial prepayment to NGFP of the amount to be paid to NGFP in settlement of the Transaction upon the Valuation Date (as defined below) for the number of shares owned by NGFP at the closing of the Business Combination (the Subject Shares), which shall be no more than 2,000,000 shares.
After the closing of the Business Combination, NGFP may sell the Subject Shares at its sole discretion in one or more transactions, publicly or privately, at any time prior to the Original Valuation Date or Extended Valuation Date (each as defined below, and each a Valuation Date) at a price per Subject Share not less than the Forward Price. Any Subject Shares sold by NGFP during the term of the Transaction will cease to be Subject Shares. NGFP will give written notice to Kaleyra of any sale of Subject Shares by NGFP within two business days of the date of such sale, such notice to include the date of the sale, the number of Subject Shares sold, and confirmation that the sale price per Subject Share was not less than the Forward Price.
After the closing of the Business Combination, NGFP may also buy and sell additional shares for its own account or on behalf of third parties, and the pricing limitation set forth in the prior paragraph will not apply to any shares purchased after the closing of the Business Combination.
On each quarterly anniversary of the closing of the Business Combination (any such date, a Cash Settlement Date), NGFP will terminate the Transaction in whole or in part by reducing the number of Subject Shares for the Transaction (the reduction being Terminated Shares). The number of Terminated Shares with respect to any Cash Settlement Date will equal the number of Subject Shares sold by NGFP since the prior Cash Settlement Date (or with respect to the first Cash Settlement Date, the closing of the Business Combination). NGFP will notify Kaleyra of the expected number of Terminated Shares not less than ten days prior to the applicable Cash Settlement Date. On each Cash Settlement Date, NGFP will pay Kaleyra an amount equal to the product of (A) the number of Terminated Shares and (B) the Forward Price. With effect from the Cash Settlement Date, the remaining number of Subject Shares for the Transaction will be reduced by the Terminated Shares.
The Original Valuation Date for the Transaction will be the first anniversary of the closing of the Business Combination, provided that NGFP and Kaleyra may, not later than ten days prior to the Original Valuation Date, agree, each in their sole discretion, to extend the Valuation Date to the second anniversary of the Business Combination (the Extended Valuation Date). At the Original Valuation Date or Extended Valuation Date, the Transaction will be settled by NGFP delivering the remaining Subject Shares to Kaleyra, and Kaleyra paying NGFP an amount equal to the product of (x) the Forward Price, (y) the applicable Accrual Percentage (as defined below), and (z) the number of remaining Subject Shares. The Accrual Percentage is the product of (a) with respect to any settlement occurring on or before the Original Valuation Date, 2.75% per annum, and with respect to any settlement occurring after the Original Valuation Date, 3.50% per annum, and (b) the number of actual days divided by the number of days in a year beginning on the date of the closing of the Business Combination and ending on the applicable day of the settlement.
The Confirmation contains standard and customary representations and warranties for an agreement of this nature.
An affiliate of Nomura, Nomura Holdings, Inc., is providing a guarantee of the due and punctual payment or delivery of all monetary obligations of NGFP owing to Kaleyra promptly upon written demand by Kaleyra.
The foregoing description is only a summary of the Confirmation and is qualified in its entirety by reference to the full text of the Confirmation, which is filed as Exhibit 10.1 hereto and incorporated by reference herein. The Confirmation is included as an exhibit to this Current Report on Form 8-K in order to provide investors and security holders with material information regarding its terms and the transaction. It is not intended to provide any other factual information about GigCapital or Nomura and its affiliates, including NGFP. The representations, warranties and covenants contained in the Confirmation were made only for purposes of that agreement; are solely for the benefit of the parties to the Confirmation; may have been made for the purposes of allocating contractual risk between the parties to the Confirmation instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors. Investors should not rely on the representations, warranties or covenants or any description thereof as characterizations of the actual state of facts or condition of GigCapital or Nomura and its affiliates, including NGFP.
This Current Report on Form 8-K may include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding the Transaction, the Business Combination, the Company and Kaleyra. All statements, other than statements of historical facts, that address activities, events or developments that the Company and/or Kaleyra expects or anticipates will or may occur in the future are forward-looking statements and are identified with, but not limited to, words such as believe and expect. Such forward-looking statements include, but are not limited to, statements regarding the closing of the Transaction, closing of the Business Combination, potential capital alternatives or changes to the capital structure of the Company, and the expectations, hopes, beliefs, intentions, plans, prospects or strategies regarding the Business Combination and future business plans of the Company and Kaleyra management teams. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are based on certain assumptions and analyses made by the management of the Company and/or Kaleyra in light of their respective experience and their perception of historical trends, current conditions and expected future developments and their potential effects on the Company and Kaleyra as well as other factors they believe are appropriate in the circumstances. There can be no assurance that future developments affecting the Company or Kaleyra will be those anticipated and actual results may differ materially from those expressed in this press release due to many factors such as, but not limited to, the ability to satisfy closing conditions for the Business Combination, including that the Company stockholders will approve the Business Combination, the ability of the combined company to meet the NYSEs listing standards, and that the Company will have sufficient capital upon the approval of the Business Combination to operate as anticipated. Should one or more of these risks or uncertainties materialize, or should any of the assumptions being made prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. These statements speak only as of the date they are made and none of the Company and/or Kaleyra undertakes any obligation to update any forward-looking statements contained in this press release to reflect events or circumstances which arise after the date of this Current Report on Form 8-K.
No Offer or Solicitation
This Current Report on Form 8-K shall neither constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
Item 9.01 Financial Statements and Exhibits.
|10.1||OTC Equity Prepaid Forward Transaction Confirmation, dated October 31, 2019, by and among GigCapital, Nomura Global Financial Products, Inc., and Nomura Holdings, Inc.|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 1, 2019
|Name:||Dr. Avi S. Katz|
|Title:||Chief Executive Officer, President and Executive Chairman of the GigCapital, Inc. Board|