| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation underan Off-Balance Sheet Arrangement of a Registrant. |
On June 10, 2019, GigCapital, Inc., a Delaware corporation (the “Company”) issued fournon-convertible unsecured promissory notes (each, an “Extension Note” and collectively the “Extension Notes”) in the aggregate principal amount of $240,000.00, as follows: (i) $174,643.99 issued to GigAcquisitions, LLC, a Delaware limited liability company (our “Sponsor”), (ii) $43,578.25 to Cowen Investments II LLC, a Delaware limited liability company (“Cowen Investments”), (iii) $19,599.94 to Irwin Silverberg, an individual and affiliate of Cowen Investments (“Silverberg”) and (iv) $2,177.82 to Jeffrey Bernstein, an individual and affiliate of Cowen Investments (“Bernstein”, and collectively with Sponsor, Cowen Investments, and Silverberg, our “Founders”). The Founders deposited such funds into the Company’s trust account (the “Trust Account”), as described in the prospectus filed by the Company in connection with the Company’s initial public offering. The Extension Notes were issued in connection with the approval of the Charter Amendment and Extension and constitute the first monthly Contribution as previously disclosed in the Company’s Current Report on Form8-K as filed with the Securities and Exchange commission on May 16, 2019.
On June 10, 2019, the Company also issued an additional four convertible unsecured promissory notes (each, a “Working Capital Note” and collectively the “Working Capital Notes”) in the aggregate principal amount of $91,666.67, as follows: (i) $66,704.30 to our Sponsor, (ii) $16,644.47 issued to Cowen Investments, (iii) $7,486.09 to Silverberg, and (iv) $831.81 to Bernstein. The Working Capital Notes were issued to provide the Company with additional working capital during the Extension, and will not be deposited into the Trust Account. The Company issued the Working Capital Notes in consideration for loans from the payees to fund the Company’s working capital requirements. The convertible notes are convertible at the payee’s election upon the consummation of the Business Combination. Upon such election, the convertible notes will convert, at a price of $10.00 per unit, into units identical to the private placement units issued in connection with the Company’s initial public offering, except that the private placement warrants which comprise a part of the private placement units issued to Cowen Investments, Silverberg, and Bernstein, so long as they are held by Cowen Investments, Silverberg, and Bernstein, respectively, or any of their related persons under FINRA rules, will expire five years from the effective date of the Company’s registration statement, or earlier upon the Company’s liquidation.
The Extension Notes and Working Capital Notes bear no interest and are repayable in full upon the consummation of the Company’s previously announced business combination disclosed in its Current Reporton Form 8-K as filed with the Securities and Exchange Commission on February 26, 2019.
The table below sets forth the breakdown of the Extension Notes and Working Capital Notes issued to each of the payees:
| | | | | | | | | | | | |
| | | Extension Notes
(Non-Convertible
Notes) | | | Working Capital
Notes
(Convertible Notes) | | | Total | |
GigAcquisitions LLC | | $ | 174,643.99 | | | $ | 66,704.30 | | | $ | 241,348.29 | |
Cowen Investments II LLC | | $ | 43,578.25 | | | $ | 16,644.47 | | | $ | 60,222.72 | |
Irwin Silverberg | | $ | 19,599.94 | | | $ | 7,486.09 | | | $ | 27,086.03 | |
Jeffrey Bernstein | | $ | 2,177.82 | | | $ | 831.81 | | | $ | 3,009.63 | |
Total | | $ | 240,000.00 | | | $ | 91,666.67 | | | $ | 331,666.67 | |
Copies of the forms of Extension Note and Working Capital Note note are filed as Exhibits 10.1 and 10.2.
| Item 3.02 | Unregistered Sales of Equity Securities |
The information set forth in Item 2.03 of this Current Report on Form8-K is incorporated by reference into this Item 3.02. An aggregate of 9,166 private placement units of the Company would be issued if the entire principal balance of the convertible notes is converted. The warrants constituting a part of the units would be exercisable, subject to the terms and conditions of the warrant and during the exercise period as provided in the warrant agreement governing the warrants. The rights constituting a part of the units are exchangeable, subject to the terms and conditions of the rights, for common shares as provided in the right agreement governing the rights. The Company has relied upon Section 4(a)(2) of the Securities Act of 1933, as amended, in connection with the issuance and sale of the convertible promissory notes, as they were issued to sophisticated investors without a view to distribution, and were not issued through any general solicitation or advertisement.
