UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
January 3, 2023
Date of Report (date of earliest event reported)
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WEWORK INC.
(Exact name of registrant as specified in its charter)
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Delaware (State or other jurisdiction of incorporation or organization) | 001-39419 (Commission File Number) | 85-1144904 (I.R.S. Employer Identification Number) |
75 Rockefeller Plaza, 10th Floor New York, NY 10019 |
| (Address of principal executive offices and zip code) |
| (646) 389-3922 |
| (Registrant's telephone number, including area code) |
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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:
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| ☐ | 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)) |
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| Securities registered pursuant to Section 12(b) of the Act: |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Class A common stock, par value $0.0001 per share | WE | The New York Stock Exchange |
| Warrants, each whole warrant exercisable for one share of Class A common stock | WE WS | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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.
Senior Secured Notes Indenture
Overview
On January 3, 2023, WeWork Companies LLC, a Delaware limited liability company (the “Issuer”) and wholly-owned subsidiary of WeWork Inc., a Delaware corporation (the "Company"), WW Co-Obligor Inc., a Delaware corporation and wholly-owned subsidiary of the Issuer (the “Co-Obligor” and, together with the Issuer, the “Issuers”), the guarantors party thereto (collectively, the “Guarantors”) and U.S. Bank Trust Company, National Association, as trustee and collateral agent, entered into a Senior Secured Notes Indenture (the “Indenture”) pursuant to which the Issuers issued $250 million in aggregate principal amount of Senior Secured Notes due 2025 (the “Notes”) to SoftBank Vision Fund II-2 L.P., a limited partnership established in Jersey (“SVF II”) and affiliate of SoftBank Group Corp., a Japanese joint-stock company.
The Notes were sold to SVF II pursuant to the Amended and Restated Master Senior Secured Notes Note Purchase Agreement, dated as of October 20, 2021 (as amended, waived or otherwise modified from time to time, the “Secured NPA”), among the Issuers and SVF II.
The Notes and related Guarantees (as defined below) have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and were issued and sold in reliance on the exemption provided in Section 4(a)(2) of the Securities Act.
As of December 31, 2022, after giving effect to the issuance of the Notes, the Company expects its cash, commitments and access to liquidity to be approximately $1.35 billion, which is in line with management's expectations.
Interest, Security and Guarantees
Unless earlier redeemed or repurchased, the Notes will mature on March 15, 2025 and bear interest at a rate of (i) 7.50% per annum to, but excluding, February 15, 2024, payable semi-annually in cash in arrears, and (ii) 11.00% per annum from and after February 15, 2024 to, but excluding, the maturity date of the Notes, payable semi-annually in the form of PIK Interest (as defined, and in accordance with the terms set forth, in the Indenture).
The Notes are guaranteed (the “Guarantees”) fully and unconditionally, and jointly and severally, on a first lien senior secured basis by each of the Issuer’s wholly-owned restricted subsidiaries that guarantee the Issuer’s obligations under the senior letter of credit facility and junior letter of credit facility under the Credit Agreement, dated as of December 27, 2019 (as amended, waived or otherwise modified from time to time). The Notes and the related Guarantees are senior secured obligations of the Issuers and the Guarantors.
Redemption
The Issuer may redeem the Notes, in whole or in part, at any time at a price equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, during the period from February 15, 2024 to, but excluding, the maturity date of the Notes, if the aggregate principal amount of Notes issued and outstanding, together with any PIK Interest that would accrue from the applicable date of determination to, but excluding, the maturity date of the Notes exceeds $500 million, the Issuer is required to repay, prepay, repurchase, redeem, legally defease or otherwise retire Notes at a price equal to 100% of such Notes in a sufficient aggregate principal amount such that the aggregate principal amount of Notes remaining outstanding following such redemption, together with such PIK Interest, does not exceed $500 million.
Change of Control
If a Change of Control (as defined in the Indenture) occurs, the Issuer is required to make an offer to purchase all of the Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of such purchase.
Covenants and Events of Default
The terms of the Indenture, among other things, limit the ability of the Issuer and its restricted subsidiaries to (i) incur or guarantee additional indebtedness; (ii) create or incur liens; (iii) declare or pay dividends, redeem stock or make certain distributions to stockholders; (iv) make certain investments; (v) consolidate with or merge with or into or wind up into, or
sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of the properties and assets of the Issuer and its restricted subsidiaries; (vi) enter into certain transactions with affiliates; (vii) sell or transfer certain assets; (viii) voluntarily prepay, repurchase, redeem or otherwise defease certain unsecured indebtedness; and (ix) agree to certain restrictions on the ability of restricted subsidiaries to make certain payments to the Issuer and other restricted subsidiaries. These covenants are subject to a number of important conditions, qualifications, limitations and exceptions that are described in the Indenture.
The Indenture provides for customary events of default (subject in certain cases to grace and cure periods), including with respect to payment defaults, failure to pay certain judgments and certain events of bankruptcy and insolvency. These events of default are subject to a number of important conditions, qualifications, limitations and exceptions that are described in the Indenture.
The foregoing summary of the Indenture does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Indenture, which is filed as Exhibit 4.1 hereto, and the form of Notes, which is filed as Exhibit 4.2 hereto, each of which is incorporated by reference into this Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Current Report is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
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| Exhibit Number | | Description |
| 4.1 | | |
| 4.2 | | |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K discusses management's current intentions and expectations for the future, including with respect to the Company's expected cash, commitments and access to liquidity, which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Actual results may differ due to various factors, including those discussed in the Company's latest Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission, and additional procedures the Company will undertake to finalize its results as of and for December 31, 2022 that could result in changes to the Company's estimates described herein. For additional information, please see the Company's filings with the Securities and Exchange Commission. Investors should not place undue reliance on forward-looking statements, which speak only as of the date of this Current Report on Form 8-K. Except as is required by law, the Company expressly disclaims any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this Current Report on Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934 the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
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| WEWORK INC. |
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Date: January 4, 2023 | By: | /s/ Andre Fernandez |
| Name: | Andre Fernandez |
| Title: | Chief Financial Officer & Treasurer |
