Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed on the Current Report on Form 8-K filed by GigCapital, Inc., a Delaware corporation
(“GigCapital” or, the “Company”), with the Securities and Exchange Commission on October 9, 2019, GigCapital entered into a non-binding letter of intent (the “LOI”) with an
affiliate of Nomura Securities International, Inc. (“Nomura”) pursuant to which Nomura would use best efforts to purchase up to 2,000,000 shares of common stock of GigCapital, par value $0.0001 per share, 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 Delaware corporation, as
GigCapital intends to change its name to Kaleyra, Inc., upon the closing of the Business Combination).
On October 31, 2019, GigCapital and Nomura
Global Financial Products, Inc. (“NGFP”), an affiliate of Nomura, entered into an agreement (the “Confirmation”) for an OTC Equity Prepaid Forward Transaction (the “Transaction”). The Confirmation confirms the terms and
conditions of the Transaction entered into between NGFP and GigCapital.
Pursuant to the terms of the Confirmation, NGFP agreed to waive any redemption
right that would require the redemption of the Subject Shares (as defined below) in exchange for a pro rata amount of the funds held in GigCapital’s trust account (the “Trust”) provided that the closing of the Business Combination
occurs prior to December 12, 2019.
Immediately following the closing of the Business Combination, Kaleyra will transfer from the Trust an amount
equal to (a) the aggregate number of such Subject Shares, multiplied by (b) the per share redemption price for shares of common stock out of the Trust (the “Forward Price”)) (such actual aggregate cash amount, the
“Prepayment Amount”), as a partial prepayment to NGFP of the amount to be paid to NGFP in settlement of the Transaction upon the Valuation Date (as defined below) for the number of shares owned by NGFP at the closing of the Business
Combination (the “Subject Shares”), which shall be no more than 2,000,000 shares.
After the closing of the Business Combination, NGFP may sell
the Subject Shares at its sole discretion in one or more transactions, publicly or privately, at any time prior to the Original Valuation Date or Extended Valuation Date (each as defined below, and each a “Valuation Date”) at a price per
Subject Share not less than the Forward Price. Any Subject Shares sold by NGFP during the term of the Transaction will cease to be Subject Shares. NGFP will give written notice to Kaleyra of any sale of Subject Shares by NGFP within two business
days of the date of such sale, such notice to include the date of the sale, the number of Subject Shares sold, and confirmation that the sale price per Subject Share was not less than the Forward Price.
After the closing of the Business Combination, NGFP may also buy and sell additional shares for its own account or on behalf of third parties, and the pricing
limitation set forth in the prior paragraph will not apply to any shares purchased after the closing of the Business Combination.
On each quarterly
anniversary of the closing of the Business Combination (any such date, a “Cash Settlement Date”), NGFP will terminate the Transaction in whole or in part by reducing the number of Subject Shares for the Transaction (the reduction being
“Terminated Shares”). The number of Terminated Shares with respect to any Cash Settlement Date will equal the number of Subject Shares sold by NGFP since the prior Cash Settlement Date (or with respect to the first Cash Settlement Date,
the closing of the Business Combination). NGFP will notify Kaleyra of the expected number of Terminated Shares not less than ten days prior to the applicable Cash Settlement Date. On each Cash Settlement Date, NGFP will pay Kaleyra an amount equal
to the product of (A) the number of Terminated Shares and (B) the Forward Price. With effect from the Cash Settlement Date, the remaining number of Subject Shares for the Transaction will be reduced by the Terminated Shares.
The “Original Valuation Date” for the Transaction will be the first anniversary of the closing of the Business Combination, provided that NGFP and
Kaleyra may, not later than ten days prior to the Original Valuation Date, agree, each in their sole discretion, to extend the Valuation Date to the second anniversary of the Business Combination (the “Extended Valuation Date”). At the
Original Valuation Date or Extended Valuation Date, the Transaction will be settled by NGFP delivering the remaining Subject Shares to Kaleyra, and Kaleyra paying NGFP an amount equal to the product of (x) the Forward Price, (y) the
applicable Accrual Percentage (as defined below), and (z) the number of remaining Subject Shares. The “Accrual Percentage” is the product of (a) with respect to any settlement occurring on or before the Original Valuation Date,
2.75% per annum, and with respect to any settlement occurring after the Original Valuation Date, 3.50% per annum, and (b) the number of actual days divided by the number of days in a year beginning on the date of the closing of the Business
Combination and ending on the applicable day of the settlement.
