Item 1.01 Entry into a Material Definitive Agreement.
As previously reported on a Current Report on Form 8-K of GigCapital2, Inc.
("GigCapital2"), filed with the Securities and Exchange Commission (the "SEC")
on November 23, 2020, GigCapital2 announced that it executed a Business
Combination Agreement, dated as of November 20, 2020, with UpHealth Holdings,
Inc., a Delaware corporation ("UpHealth"), and UpHealth Merger Sub, Inc., a
Delaware corporation (such business combination agreement, the "UpHealth BCA,"
and such business combination, the "UpHealth Combination").
As also previously reported on a Current Report on Form 8-K of GigCapital2,
filed with the SEC on November 23, 2020, GigCapital2 announced that it executed
a Business Combination Agreement, dated as of November 20, 2020, with Cloudbreak
Health, LLC, a Delaware limited liability company ("Cloudbreak"), Cloudbreak
Merger Sub, LLC, a Delaware limited liability company, solely with respect to
Section 7.15 thereof, Chirinjeev Kathuria and Mariya Pylypiv and UpHealth, and
Shareholder Representative Services LLC, a Colorado limited liability company,
solely in its capacity as the representative, agent and attorney-in-fact of the
Cloudbreak members (such business combination agreement, the "Cloudbreak BCA,"
and, together with the UpHealth BCA, the "BCAs" and such business combination,
the "Cloudbreak Combination" and, together with the UpHealth Combination, the
"Business Combinations").
This Current Report on Form 8-K provides a summary of other agreements entered
into (and certain agreements to be entered into) in connection with the
aforementioned Business Combinations. The descriptions of these agreements do
not purport to be complete and are qualified in their entirety by the terms and
conditions of such agreements or the forms thereof, as applicable, copies of
which are filed as Exhibits 10.1 and 10.2 hereto and are incorporated by
reference herein.
PIPE Subscription Agreement
On January 20, 2021, GigCapital2 entered into subscription agreements (the "PIPE
Subscription Agreements"), each dated January 20, 2021, with certain
institutional investors (the "PIPE Investors"), including Oppenheimer & Co.
Inc., the placement agent for the private placements under the PIPE Subscription
Agreements, pursuant to which, among other things, GigCapital2 agreed to issue
and sell, in private placements to close immediately prior to the closing of the
Business Combinations, an aggregate of 3,000,000 shares (the "PIPE Shares") of
GigCapital2's common stock (the "Common Stock") to the PIPE Investors at $10.00
per share.
The obligations to consummate the subscriptions are conditioned upon, among
other things, all conditions precedent to the closing of the transactions
contemplated by the Note Subscription Agreements (as defined below) having been
satisfied or waived, and the closing of the transaction contemplated by the PIPE
Subscription Agreements occurring concurrently with the closing of the
transactions contemplated by the Note Subscription Agreements.
Pursuant to the PIPE Subscription Agreements, GigCapital2 agreed that, prior to
the closing of the Business Combinations, GigCapital2 will file with the SEC (at
GigCapital2's sole cost and expense) a registration statement registering the
resale of the PIPE Shares (the "Resale Registration Statement"), and GigCapital2
will use its commercially reasonable efforts to have
the Resale Registration Statement declared effective upon the closing of the
Business Combinations, but no later than 60 calendar days (or 90 calendar days
if the SEC notifies GigCapital2 that it will not review
the Resale Registration Statement) after the closing of the Business
Combinations, subject to customary conditions and covenants.
The foregoing description of the PIPE Subscription Agreements and the
transactions contemplated thereby is not complete and is subject to, and
qualified in its entirety by reference to, the agreed upon form of PIPE
Subscription Agreements, a copy of which is filed with this Current Report on
Form 8-K as Exhibit 10.1, and the terms of which are incorporated herein by
reference.
Notes Subscription Agreements and Indenture
On January 20, 2021, GigCapital2 also entered into convertible note subscription
agreements (the "Note Subscription Agreements"), each dated January 20, 2021,
with certain institutional investors (the "Note Investors"), pursuant to which
GigCapital2 agreed to issue and sell, in a private placements to close
immediately prior to the closing of the Business Combinations, $255,000,000
aggregate principal amount of unsecured convertible notes (the "Notes").
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The Notes are to be issued under an indenture to be entered into in connection
with the closing of the Business Combinations, between UpHealth, Inc. (formerly
GigCapital2) and Wilmington Trust, National Association, a national banking
association, in its capacity as trustee thereunder (the "Indenture").
The Notes will bear interest at a rate of 6.25% per annum, payable
semi-annually, and be convertible into shares of Common Stock at a conversion
price of $11.50 per share of Common Stock in accordance with the terms of the
Indenture, and will mature five years after their issuance.
GigCapital2 may, at its election, force conversion of the Notes after the first
anniversary of the issuance of the Notes, subject to a holder's prior right to
convert, if the last reported sale price of the Common Stock exceeds 130% of the
conversion price for at least 20 trading days during the period of 30
consecutive trading days ending on, and including, the last trading day of the
immediately preceding calendar quarter, and the 30-day average daily trading
volume of the Common Stock ending on, and including, the last trading day of the
applicable exercise period is greater than or equal to $2,000,000. Following
certain corporate events that occur prior to the maturity date or if GigCapital2
forces a mandatory conversion, GigCapital2 will, in certain circumstances,
increase the conversion rate for a holder who elects to convert its notes in
connection with such a corporate event or has its notes mandatorily converted,
as the case may be. In addition, in the event that a holder of the Notes elects
to convert its Notes prior to the second anniversary of the issuance of the
Notes, GigCapital2 will be obligated to pay an amount equal to twelve months of
interest, or if on or after such second anniversary of the issuance of the
Notes, any remaining amounts that would be owed to, but excluding, the third
anniversary of the issuance of the Notes (the "Interest Make-Whole Payment").
The Interest Make-Whole Payment will be payable in cash or shares of the Common
Stock as set forth in the Indenture.
GigCapital2 will be obligated to register the shares issuable upon conversion of
the Notes. GigCapital2 agreed that, within 45 days after the consummation of the
Business Combinations (the "Convertible Note Resale Registration Filing
Deadline"), GigCapital2 will file with the SEC a registration statement (the
"Convertible Note Resale Registration Statement") registering the resale of the
shares of Common Stock issuable upon conversion of the Notes (the "Convertible
. . .
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
(this "Current Report") is incorporated by reference herein. The shares of
Common Stock and the Notes to be issued in connection with the PIPE Subscription
Agreements and the Note Subscription Agreements, respectively, and the
transactions contemplated thereby 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 as a transaction by an issuer not
involving a public offering.
Item 7.01 Regulation FD Disclosure.
On January 21, 2021, GigCapital2, UpHealth and Cloudbreak issued a joint press
release announcing the PIPE Subscriptin Agreements, the Note Subscription
Agreements and the Indenture. The press release is attached hereto as Exhibit
99.1 and incorporated by reference herein.
The foregoing (including Exhibits 99.1) is being furnished pursuant to Item 7.01
and shall not be deemed to be filed for purposes of Section 18 of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject
to the liabilities of that section, and shall not be deemed to be incorporated
by reference into the filings of GigCapital2 under the Securities Act or the
Exchange Act, regardless of any general incorporation language in such filings.
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Additional Information and Where to Find It
In connection with the proposed business combinations, GigCapital2 intends to
file with the SEC a registration statement on Form S-4 containing a preliminary
proxy statement and a preliminary prospectus of GigCapital2, and after the
registration statement is declared effective, GigCapital2 will mail a definitive
proxy statement/prospectus relating to the proposed business combinations to its
stockholders. This Current Report on Form 8-K does not contain all the
information that should be considered concerning the proposed business
combinations and is not intended to form the basis of any investment decision or
any other decision in respect of the business combinations. Additional
information about the proposed business combinations and related transactions
will be described in GigCapital2's combined proxy statement/prospectus relating
to the proposed business combinations and the respective businesses of
GigCapital2, UpHealth and Cloudbreak, which GigCapital2 will file with the SEC.
The proposed business combinations and related transactions will be submitted to
stockholders of GigCapital2 for their consideration. GigCapital2's stockholders
and other interested persons are advised to read, when available, the
preliminary proxy statement/prospectus and the amendments thereto and the
definitive proxy statement/prospectus and other documents filed in connection
with GigCapital2's solicitation of proxies for its special meeting of
stockholders to be held to approve, among other things, the proposed business
combinations and related transactions, because these materials will contain
important information about UpHealth, Cloudbreak, GigCapital2 and the proposed
business combinations and related transactions. When available, the definitive
proxy statement/prospectus and other relevant materials for the proposed
business combinations will be mailed to stockholders of GigCapital2 as of a
record date to be established for voting on the proposed business combinations
and related transactions.
Stockholders may also obtain a copy of the preliminary or definitive proxy
statement/prospectus, once available, as well as other documents filed with the
SEC by GigCapital2, without charge, at the SEC's website located at www.sec.gov
or by directing a request to Brad Weightman, Vice President and Chief Financial
Officer, GigCapital2, Inc., 1731 Embarcadero Rd., Suite 200, Palo Alto, CA
94303, or by telephone at (650) 276-7040.
Participants in the Solicitation
UpHealth, Cloudbreak and GigCapital2 and their respective directors and
executive officers and other persons may be deemed to be participants in the
solicitations of proxies from GigCapital2's stockholders in respect of the
proposed business combinations and related transactions. Information regarding
GigCapital2's directors and executive officers is available in its final
prospectus filed with the SEC under Rule 424(b)(4) on May 15, 2020. Additional
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests will be contained in the
preliminary and definitive proxy statements/prospectus related to the proposed
business combinations and related transactions when it becomes available, and
which can be obtained free of charge from the sources indicated above.
Forward-Looking Statements:
This Current Report on Form 8-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, including statements
regarding GigCapital2 or GigCapital2's management team's expectations, hopes,
beliefs, intentions, plans, prospects or strategies regarding the future,
including possible business combinations. Any statements contained herein that
are not statements of historical fact may be deemed to be forward-looking
statements. In addition, any statements that refer to projections, forecasts or
other characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. The words "anticipate,"
"believe," "continue," "could," "estimate," "expect," "intends," "may," "might,"
"plan," "possible," "potential," "predict," "project," "should," "would" and
similar expressions may identify forward-looking statements, but the absence of
these words does not mean that a statement is not forward-looking. The
forward-looking statements contained in this press release are based on our
current expectations and beliefs made by the management of GigCapital2, UpHealth
and/or Cloudbreak in light of their respective experience and their perception
of historical trends, current conditions and expected future developments and
their potential effects on UpHealth , Cloudbreak and GigCapital2 as well as
other factors they believe are appropriate in the circumstances. There can be no
assurance that future developments affecting UpHealth, Cloudbreak or GigCapital2
will be those that we have anticipated. These forward-looking statements involve
a number of risks, uncertainties (some of which are beyond the control of the
parties) or other assumptions that may cause actual results or performance to be
materially different from those expressed or implied by these forward-looking
statements, including that the GigCapital2 stockholders will approve the
transaction, regulatory approvals, the ability of the post-combination company
to meet the NYSE listing standards, product and service acceptance, and that
UpHealth will have sufficient capital upon the approval of the transaction to
operate as anticipated. Should one or
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more of these risks or uncertainties materialize, or should any of our
assumptions prove incorrect, actual results may vary in material respects from
those projected in these forward-looking statements. Additional factors that
could cause actual results to differ are discussed under the heading "Risk
Factors" and in other sections of GigCapital2's filings with the SEC, and in
GigCapital2's current and periodic reports filed or furnished from time to time
with the SEC. All forward-looking statements in this press release are made as
of the date hereof, based on information available to GigCapital2, UpHealth
and/or Cloudbreak as of the date hereof, and GigCapital2, UpHealth and/or
Cloudbreak assumes no obligation to update any forward-looking statement,
whether as a result of new information, future events or otherwise, except as
may be required under applicable securities laws.
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute a solicitation of a proxy,
consent or authorization with respect to any securities or in respect of the
UpHealth Combination or Cloudbreak Combination. This Current Report on Form 8-K
shall also not constitute an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in any states or
jurisdictions in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Description
10.1 Form of PIPE Subscription Agreement.
10.2 Form of Convertible Note Subscription Agreement.
10.3 Form of Indenture (included as Exhibit A to Exhibit 10.2).
99.1 Press Release dated January 21, 2021
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