On October 9, 2019, GigCapital, Inc., a Delaware corporation (“GigCapital” or the “Company”), entered into anon-binding letter of intent (the “LOI”) with an affiliate of Nomura Securities International, Inc. (“Nomura”). Upon negotiation and execution of definitive purchase agreement between the parties with respect to the proposed transaction, Nomura will use best efforts to purchase 2,000,000 shares of common stock of GigCapital (the “Shares”) at an aggregate price of approximately $21 million prior to 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). Nomura will agree to waive any redemption right that would require the redemption of the Shares in exchange for a pro rata amount of the funds held in GigCapital’s trust account (the “Trust”).
Immediately following the closing of the Business Combination, Kaleyra will transfer from the Trust to Nomura for the number of Shares owned by Nomura at the closing of the Business Combination approximately $21 million in cash (such cash amount will be equal to (a) the aggregate number of such Shares multiplied by (b) the per share redemption price for shares of GigCapital common stock out of the Trust (the “Initial Forward Price”)) (such actual aggregate cash amount, the “Prepaid Forward Amount”).
After the closing of the Business Combination, Nomura may sell the Shares at its sole discretion in one or more transactions, publicly or privately, at any time prior to the Maturity Date or Extended Maturity Date (each as defined below) at prices per share not less than approximately $10.50 per Share. For the avoidance of doubt, Nomura may also buy and sell shares of GigCapital common stock that will not be subject to the terms of the LOI for its own account or on behalf of third parties without restriction as part of Nomura’s regular business activities as a broker-dealer.
On each quarterly anniversary of the closing of the Business Combination, the proposed transaction will be partially terminated to the extent that Nomura has sold Shares, and Nomura will transfer to Kaleyra cash equal to the pro rata portion of the Prepaid Forward Amount with respect to the Shares sold in the past quarter by Nomura. At the Maturity Date or Extended Maturity Date, in exchange for delivery of the remaining Shares to Kaleyra from Nomura, Kaleyra will transfer to Nomura the difference between the Prepaid Forward Amount and the amount equal to the number of remaining Shares held by Nomura multiplied by the Forward Purchase Price, or Nomura will transfer to Kaleyra the pro rata portion of the Prepaid Forward Amount with respect to the Shares that may have been sold by Nomura in the prior quarter. Nomura shall notify Kaleyra not less than ten (10) days prior to the Maturity Date or Extended Maturity Date of the number of remaining Shares held by Nomura.
The maturity date (the “Maturity Date”) for the proposed transaction is twelve (12) months from the closing of the Business Combination. On the Maturity Date, Kaleyra and Nomura will have the option to mutually extend the maturity to twenty four (24) months from the closing of the Business Combination (the “Extended Maturity Date”). On the Maturity Date, the Forward Purchase Price will be equal to the Initial Forward Price per Share accruing at a fixed rate of 275 bps per annum from the date of the closing of the Business Combination. On the Extended Maturity Date, the Forward Purchase Price will be equal to Initial Forward Price accruing at a fixed rate of 350 bps per annum from the date of the closing of the Business Combination.
The parties intend to negotiate and execute a definitive purchase agreement to reflect the above terms; however, until the purchase agreement is signed by all the parties, no party will have any liability to any other party with respect to the proposed transaction.
Forward-Looking Statements
This Current Report on Form8-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 proposed 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 entry by the Company into a definitive purchase agreement with Nomura or its closing, 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
