Item 8.01 Other Events.
On May 15, 2019, DASAN Zhone Solutions, Inc. (the “
Company
”) entered into an underwriting agreement (the “
Underwriting Agreement
”) with B. Riley FBR, Inc. and Craig-Hallum Capital Group LLC as representatives of the several underwriters named therein (collectively, the “
Underwriters
”), relating to the issuance and sale of 4,102,565 shares of the Company’s common stock, par value $0.001 per share (the “
Common Stock
”). The price to the public in this offering is $9.75 per share. The Underwriters have agreed to purchase the shares from the Company pursuant to the Underwriting Agreement at a price of $9.165 per share. In addition, under the terms of the Underwriting Agreement, the Company has granted the Underwriters a 30-day option to purchase up to an additional 615,384 shares of Common Stock.
The offering is expected to close on or about May 20, 2019, subject to customary closing conditions. The net proceeds to the Company from the offering are expected to be approximately $37.0 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
The Company intends to use the net proceeds from the offering for general corporate purposes, which may include research and development, the development of its products, sales and marketing initiatives, expansion of its U.S. and global commercial organizations, and general administrative expenses, working capital and capital expenditures.
The offering is being made pursuant to a shelf registration statement on Form S-3 (Registration Statement No. 333-230476) filed by the Company with the Securities and Exchange Commission (the “
SEC
”) that was declared effective on April 11, 2019, a preliminary prospectus supplement, a final prospectus supplement and the accompanying prospectus, each filed with the SEC.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification and contribution obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
The foregoing description of the Underwriting Agreement is not complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, a copy of which is filed as Exhibit 1.1 to this report and is incorporated by reference herein. A copy of the opinion of Latham & Watkins LLP relating to the legality of the issuance and sale of Common Stock in the offering is attached as Exhibit 5.1 to this report.
On May 15, 2019, the Company issued a press release announcing the proposed offering and on May 16, 2019, the Company issued a press release announcing the pricing of the offering. Copies of the press releases are attached as Exhibits 99.1 and 99.2, respectively, to this report.
Cautionary Note Regarding 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. The Company uses words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words, and similar expressions to identify forward-looking statements. Forward-looking statements include, among others, statements regarding the completion of the offering and the anticipated use of proceeds and expected net proceeds therefrom. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict, including, among others, risks and uncertainties associated with market conditions and the satisfaction of customary closing conditions related to the offering, as well as risks and uncertainties associated with the Company’s business and finances in general. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. For information about the factors that could cause such differences, please refer to the Company’s SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2018 and subsequent Quarterly Report on Form 10-Q and Current Reports on Form 8-K. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this Current Report on Form 8-K speak only as of the date of this report and the Company assumes no obligation to update any forward-looking statements for any reason.
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