Item 1.01. Entry into a Material Definitive Agreement.
Purchase Agreement
On January 11, 2021, Box, Inc. (the "Company") entered into a purchase agreement
(the "Purchase Agreement") with Morgan Stanley & Co. LLC and Credit Suisse
Securities (USA) LLC, as representatives of the several initial purchasers named
in Schedule I thereto (the "Initial Purchasers"), to issue and sell $315 million
aggregate principal amount of 0% Convertible Senior Notes due 2026 (the
"Notes"). In addition, the Company granted the Initial Purchasers an option to
purchase, during a 13-day period beginning on, and including, the date on which
the Notes were first issued, up to an additional $30 million aggregate principal
amount of Notes on the same terms and conditions. The Initial Purchasers
exercised their option in full on January 12, 2021, bringing the total aggregate
principal amount of the Notes to $345 million.
The Purchase Agreement includes customary representations, warranties and
covenants by the Company and customary closing conditions. Under the terms of
the Purchase Agreement, the Company has agreed to indemnify the Initial
Purchasers against certain liabilities.
The foregoing description of the Purchase Agreement is qualified in its entirety
by reference to the Purchase Agreement attached as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.
Convertible Notes and the Indenture
On January 11, 2021, the Company priced the Notes. The Notes are senior
unsecured obligations of the Company. The Notes were issued pursuant to an
Indenture, dated January 14, 2021 (the "Indenture"), between the Company and
U.S. Bank National Association, as trustee (the "Trustee").
The Notes will mature on January 15, 2026, unless earlier redeemed, repurchased
or converted. The Notes do not bear regular interest, and the principal amount
of the notes does not accrete. The Notes may bear special interest under
specified circumstances relating to the Company's failure to comply with its
reporting obligations under the Indenture or if the Notes are not freely
tradeable as required by the Indenture. The Notes will be convertible at the
option of the holders of the Notes at any time prior to the close of business on
the business day immediately preceding October 15, 2025, only under the
following circumstances: (1) during any fiscal quarter commencing after the
fiscal quarter ending on April 30, 2021 (and only during such fiscal quarter),
if the last reported sale price of the Company's Class A common stock, par value
$0.0001 per share (hereinafter referred to as "common stock"), for at least 20
trading days (whether or not consecutive) during a period of 30 consecutive
trading days ending on and including, the last trading day of the immediately
preceding fiscal quarter is greater than or equal to 130% of the conversion
price on each applicable trading day; (2) during the five-business day period
after any five consecutive trading day period (the "measurement period") in
which the trading price per $1,000 principal amount of Notes for each trading
day of the measurement period was less than 98% of the product of the last
reported sale price of the Company's common stock and the conversion rate for
the Notes on each such trading day; (3) if the Company calls such Notes for
redemption, at any time prior to the close of business on the second scheduled
trading day immediately preceding the redemption date; or (4) upon the
occurrence of specified corporate events. On or after October 15, 2025, holders
may convert all or any portion of their Notes at any time prior to the close of
business on the second scheduled trading day immediately preceding the maturity
date regardless of the foregoing conditions. Upon conversion, the Company will
satisfy its conversion obligation by paying or delivering, as the case may be,
cash, shares of common stock or a combination of cash and shares of common
stock, at the Company's election. The conversion rate for the Notes will
initially be 38.7665 shares of the common stock per $1,000 principal amount of
Notes, which is equivalent to an initial conversion price of approximately
$25.80 per share of the common stock. The initial conversion price of the Notes
represents a premium of 45.0% to the $17.79 per share last reported sale price
of the common stock on January 11, 2021. The conversion rate is subject to
adjustment under certain circumstances in accordance with the terms of the
Indenture.
The Company may not redeem the Notes prior to January 20, 2024. The Company may
redeem for cash all or any portion of the Notes, at its option, on or after
January 20, 2024, if the last reported sale price of the common stock has been
at least 130% of the conversion price then in effect for at least 20 trading
days (whether or not consecutive) during any 30 consecutive trading day period
(including the last trading day of such period) ending on and including, the
trading day immediately preceding the date on which the Company provides notice
of redemption at a redemption price equal to 100% of the principal amount of the
Notes to be redeemed, plus any accrued and unpaid special interest to, but
excluding, the redemption date. No sinking fund is provided for the Notes, which
means that the Company is not required to redeem or retire the Notes
periodically.
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Upon the occurrence of a fundamental change (as defined in the Indenture) prior
to the maturity date, subject to certain conditions, holders of the Notes may
require the Company to repurchase all or a portion of the Notes for cash at a
repurchase price equal to 100% of the principal amount of the Notes to be
repurchased, plus any accrued and unpaid special interest to, but excluding, the
fundamental change repurchase date.
. . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Items 1.01 and 8.01 of this Current Report on
Form 8-K is incorporated herein by reference.
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The Company offered and sold the Notes to the Initial Purchasers (as defined
below) in reliance on the exemption from the registration requirements provided
by Section 4(a)(2) of the Securities Act, and for resale by the Initial
Purchasers to qualified institutional buyers pursuant to the exemption from
registration requirements provided by Rule 144A under the Securities Act. The
Company relied on these exemptions from registration based in part on
representations made by the Initial Purchasers in the Purchase Agreement (as
defined below) pursuant to which the Company sold the Notes to the Initial
Purchasers. The shares of the common stock issuable upon conversion of the
Notes, if any, have not been registered under the Securities Act and may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements.
To the extent that any shares of the common stock are issued upon conversion of
the Notes, they will be issued in transactions anticipated to be exempt from
registration under the Securities Act by virtue of Section 3(a)(9) thereof,
because no commission or other remuneration is expected to be paid in connection
with conversion of the Notes and any resulting issuance of shares of the common
stock.
Item 8.01. Other Events.
Press Releases
On January 11, 2021, the Company issued a press release announcing its intention
to offer the Notes in a private placement to qualified institutional buyers
pursuant to Rule 144A under the Securities Act. A copy of the press release is
attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
On January 12, 2021, the Company issued a press release announcing the pricing
of its offering of the Notes in a private placement to qualified institutional
buyers pursuant to Rule 144A under the Securities Act. A copy of the press
release is attached as Exhibit 99.2 to this Current Report on Form 8-K and is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
4.1 Indenture, dated as of January 14, 2021, between Box, Inc. and U.S.
Bank National Association, as trustee.
4.2 Form of 0% Convertible Senior Notes due 2026 (included in Exhibit
4.1) .
10.1 Purchase Agreement, dated January 11, 2021, by and among Box, Inc.
and Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC,
as representatives of the several initial purchasers named in Schedule
I thereto.
10.2 Form of Capped Call Transaction Confirmation.
99.1 Press Release issued by Box, Inc., dated January 11, 2021.
99.2 Press Release issued by Box, Inc., dated January 12, 2021.
104 Cover Page Interactive Data File (formatted as inline XBRL).
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