Item 1.01 Entry into a Material Definitive Agreement.
Khosla Ventures Acquisition Co. (“KVSA”) is a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On June 9, 2021, KVSA entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Valo Health, Inc., a Delaware corporation (“Valo”), Valo Health, LLC, a Delaware limited liability company (“Valo Holdco” and, together with Valo, the “Valo Parties”) and Killington Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of KVSA (“Merger Sub”).
On June 9, 2021, concurrently with the execution of the Merger Agreement, KVSA entered into subscription agreements (the “PIPE I Subscription Agreements”) with certain investors (collectively, the “PIPE I Investors”), pursuant to, and on the terms and subject to the conditions of which, the PIPE I Investors have collectively subscribed for 16,855,000 shares of KVSA Class A common stock, par value $0.0001 per share (“KVSA Common Stock”), for an aggregate purchase price equal to $168,550,000 (the “PIPE I Investment”). The PIPE I Investment will be consummated substantially concurrently with the closing of the Merger Agreement (the “Closing”).
On July 30, 2021, KVSA entered into additional subscription agreements (the “PIPE II Subscription Agreements”) with certain investors (collectively, the “PIPE II Investors”), pursuant to, and on the terms and subject to the conditions of which, the PIPE II Investors have collectively subscribed for an additional 3,231,250 shares of KVSA Common Stock for an aggregate purchase price equal to $32,312,500 (the “PIPE II Investment”). The PIPE II Investment will be consummated substantially concurrently with the Closing.
On November 8, 2021, KVSA entered into additional subscription agreements (the “PIPE III Subscription Agreements”) with certain investors (collectively, the “PIPE III Investors”), pursuant to, and on the terms and subject to the conditions of which, the PIPE III Investors have collectively subscribed for an additional 112,500 shares of KVSA Common Stock for an aggregate purchase price equal to $1,125,000 (the “PIPE III Investment”). The PIPE III Investment will be consummated substantially concurrently with the Closing.
The PIPE III Subscription Agreements for the PIPE III Investors are substantially the same as the PIPE I Subcription Agreements and PIPE II Subscription Agreements, including with respect to certain registration rights. In particular, KVSA is required to no later than 30 calendar days following the Closing, submit to or file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement registering the resale of such shares. Additionally, KVSA is required to use its commercially reasonable efforts to have the registration statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 90th calendar day following the Closing if the SEC notifies the Company that it will “review” the registration statement and (ii) the fifth business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review. The Company must use commercially reasonable efforts to keep the registration statement effective until the earliest of: (a) the date the PIPE II Investors no longer hold any registrable shares, (b) the date all registrable shares held by the PIPE II Investors may be sold without restriction under Rule 144 and (c) two years from the date of effectiveness of the registration statement. The KVSA Common Stock acquired pursuant to the PIPE III Investment will be subject to a lock-up for 180 days following the Closing, subject to early release in certain circumstances.
The PIPE III Subscription Agreements will terminate with no further force and effect upon the earliest to occur of: (i) such date and time as the Merger Agreement is terminated in accordance with its terms; (ii) the mutual written agreement of the parties to such PIPE III Subscription Agreement; (iii) if any of the conditions to closing set forth in such PIPE III Subscription Agreements are not satisfied on or prior to the Closing and, as a result thereof, the transactions contemplated by the PIPE III Subscription Agreements fail to occur; and (iv) at the election of the investor, May 3, 2022, if the Closing has not occurred on or before such date.
The foregoing description of the PIPE III Subscription Agreements does not purport to be complete and is qualified in its entirety by reference to the form of subscription agreement filed as Exhibit 10.1 to KVSA’s Current Report on Form 8-K filed on June 9, 2021, which is incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K with respect to the PIPE III Investment is incorporated by reference in this Item 3.02. The shares of KVSA Common Stock to be issued in connection with the PIPE III Investment will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act.
