Item 8.01 Other Events.
On October 3, 2019, GigCapital, Inc., a Delaware corporation (“GigCapital” or the “Company”), entered into anon-binding letter of intent (the “LOI”) with Yakira Capital Management (“Yakira”) for the acquisition of (i) the 408,750 shares of common stock of GigCapital currently held by Yakira (the “Initial Shares”), and (ii) the shares of common stock of GigCapital into which the 419,299 rights (NYSE: GIG.RT) currently held by Yakira (the “Initial Rights”) will convert upon the closing of GigCapital’s business combination (the “Business Combination”) with Kaleyra, S.p.A. (“Kaleyra”, which term also refers to the post-combination company). The date of the closing of the Business Combination is referred to herein as the “Business Combination Closing Date.” The Initial Rights will convert into 41,929 shares of common stock of GigCapital (the “Initial Right Shares”) upon the closing of the Business Combination. Prior to the Business Combination Closing Date, Yakira may, but is not obligated to, acquire an additional 500,000 shares of common stock of GigCapital (the “Additional Shares,” and together with the Initial Shares, the “Shares”) and 500,000 additional rights (the “Additional Rights” and together with the Initial Rights, the “Rights”). The Additional Rights may convert into an additional 50,000 shares of common stock of GigCapital (the “Additional Rights Shares,” and together with the Initial Rights Shares, the “Rights Shares”). The LOI pertains to the Rights, the Shares and the Rights Shares.
Rights and Rights Shares
Yakira will hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge the Rights (including any transactions involving any derivative securities of Kaleyra and any Short Sales (as defined below) involving any of GigCapital and Kaleyra’s securities), and any Rights Shares that the Rights convert into, until the Rights Shares Closing Date (as defined below), including not to tender the Rights to GigCapital in response to any tender offer that GigCapital may commence for the Rights. For purposes of the LOI, “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Securities and Exchange Act of 1934 (the “Exchange Act”), whether or not against the box, and all types of direct and indirect stock pledges, forward sales contracts, options, puts, calls, short sales, swaps, “put equivalent positions” (as defined inRule 16a-1(h) under the Exchange Act) and similar arrangements (including on a total return basis), and sales and other transactionsthrough non-U.S. broker dealers or foreign regulated brokers.
GigCapital will agree not to enter into an agreement (binding or otherwise) with any other holder of the rights of GigCapital (including Greenhaven Road Capital Fund 1, LP, Greenhaven Road Capital Fund 2, LP, and Kepos Alpha Fund L.P.) to grant more favorable rights to such holder of the rights regarding such holder’s ability to offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge the rights of GigCapital (including engaging in any transactions involving any derivative securities of Kaleyra and any Short Sales involving any of GigCapital and Kaleyra’s securities), and any shares of common stock that the rights of GigCapital convert into, until the Rights Shares Closing Date, than those agreed to between GigCapital and Yakira in the LOI. If GigCapital does enter into such an agreement as described in the previous sentence, it will immediately notify Yakira and offer the same terms to Yakira.
Kaleyra will purchase the Rights Shares from Yakira at $1.05 per Right (which reflects $10.50 per Rights Share) (the “Rights Share Purchase Price”) as soon as practicable on or after the later of the sixtieth (60th) day after the Business Combination Closing Date or January 1, 2020 (the “Rights Shares Closing Date”). The Rights Shares Purchase Price is consideration for the purchase of the Rights Shares attributable to Yakira’s Rights and for Yakira’s agreement to the“lock-up”.
Yakira will have the right to terminate the agreement for Kaleyra to purchase the Rights Shares, without penalty, commencing on the thirtieth (30th) day after the Business Combination Closing Date and ending on the day prior to the Rights Shares Closing Date, by giving written notice to Kaleyra, in which case it will not be restricted after such time with respect to its ability to dispose of the Rights Shares (subject to the restrictions against transactions involving any derivative securities of Kaleyra and any Short Sales involving any of GigCapital and Kaleyra’s securities).
Shares
Except as described below, Yakira will also hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of Kaleyra and any Short Sales (as defined below) involving any of GigCapital and Kaleyra’s securities) the Shares prior to the six (6) month anniversary of the Business Combination Closing Date. Yakira will not redeem any of the Shares in conjunction with GigCapital’s stockholders’ approval of the Business Combination.
