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Item 7.01
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Regulation FD Disclosure
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On February 19, 2021, Kaleyra, Inc. (“Kaleyra”) announced the acquisition of mGage (“mGage”), a leading global mobile messaging provider, for $215 million (subject to certain customary adjustments). As previously disclosed in a Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 19, 2021, Kaleyra will acquire mGage for a total purchase price of approximately $215 million, subject to adjustments. The consideration to mGage shareholders will consist of cash in the amount of $195 million and 1,600,000 shares of Kaleyra common stock.
Kaleyra will fund the cash consideration to mGage shareholders and related transaction costs with a combination of $200 million in senior unsecured convertible notes and the sale of 8,400,000 shares of common stock in a Private Investment in Public Equity (PIPE) offering, for a total share issuance of 10,000,000 shares of common stock at a price of $125 million. The convertible notes will be convertible into shares of the Company’s common stock based on an initial conversion rate of 59.2593 shares of common stock per $1,000 principal amount of the Notes (which is equal to an initial conversion price of $16.875 per share), in each case subject to customary anti-dilution and other adjustments as a result of certain extraordinary transactions.
Attached hereto as Exhibit 99.1 is the transcript of an investor conference call held on February 19, 2021, by Kaleyra in connection with the announcement of its entry into the Agreement and Plan of Merger with mGage.
Furnished as Exhibit 99.2 hereto is the investor presentation that was used by Kaleyra in connection with the common stock PIPE offering.
The foregoing exhibits and the information set forth therein shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
Cautionary Statement Regarding Forward Looking Statements
This Current Report on Form 8-K contains certain 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 with respect to the proposed transaction between mGage and the Company, including statements regarding the anticipated benefits of the transaction, the anticipated timing of the transaction, expansion plans, projected future results and market opportunities of mGage. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of the Company’s securities, (ii) the failure to satisfy the conditions to the consummation of the transaction, including the approval by the stockholders of the Company of the issuance of shares as merger consideration and for the PIPE and Convertible Note investments by the Company and the receipt of certain governmental and regulatory approvals, (iii) the inability to complete the PIPE and Convertible Note investments in connection with the transaction, (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement, (v) the effect of the announcement or pendency of the transaction on mGage’s business relationships, operating results and business generally, (vi) risks that the proposed transaction disrupts current plans and operations of mGage and potential difficulties in mGage employee retention as a result of the transaction, (vii) the outcome of any legal proceedings that may be instituted against mGage or against the Company related to the merger agreement or the transaction, (vii) the ability to maintain the listing of the Company’s securities on a national securities exchange, (ix) the price of the Company’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which the Company plans to operate or mGage operates, variations in operating performance across competitors, changes in laws and regulations affecting the Company’s or mGage’s business and changes in the combined capital structure, (x) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed transaction, and identify and realize additional opportunities, (xi) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry and (xii) the size and growth of the market in which mGage operates. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the