| Item 1.01 |
Entry into a Material Definitive Agreement |
Underwriting Agreement and common warrants
On June 8, 2023, BigBear.ai Holdings, Inc. (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with Cowen and Company, LLC, as representative of the several underwriters listed on Schedule A thereto (collectively, the “Underwriters”), relating to the purchase and sale of an aggregate of 11,848,341 shares (the “Shares”) of its common stock, par value $0.0001 per share (“Common Stock”) and accompanying common warrants in a registered direct offering (the “Offering”). Each share of Common Stock is accompanied by a common warrant to purchase three-quarters of a share of Common Stock at an exercise price of $2.32 per share. The common warrants are initially exercisable for up to 8,886,255 shares of Common Stock at a combined purchase price of $2.11 per share of Common Stock and accompanying common warrant. The aggregate gross proceeds to the Company are expected to be approximately $25 million before deducting underwriting discounts and commissions and offering expenses. The common warrants will become exercisable six months after issuance and have a five-year term and an initial exercise price of $2.32 per share.
To the extent the common warrants are not offered and sold to the initial holder pursuant to an effective registration statement, then in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined according to a formula set forth in the common warrants. The common warrants also include certain rights upon “fundamental transactions” as described in the common warrants, including the right to require the Company or a successor entity to redeem the common warrants for cash in the amount of the Black-Scholes Value (as defined in each common warrant) of the unexercised portion of the common warrants concurrently with or within 30 days following the consummation of a fundamental transaction.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing, obligations of the parties and termination provisions. Additionally, the Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company has also agreed with the Underwriters not to offer or sell any shares of its Common Stock (or securities convertible into or exchangeable for Common Stock), subject to certain exceptions, for a period of 60 days after the date of the Underwriting Agreement without the prior written consent of Cowen and Company, LLC. 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 Company intends to use the proceeds from the Offering primarily for general corporate purposes. The closing of the Offering is expected to occur on June 13, 2023, subject to customary closing conditions.
The Offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-271230) (the “Registration Statement”), declared effective by the Securities and Exchange Commission on April 21, 2023, and a related prospectus included in the Registration Statement, as supplemented by a final prospectus supplement dated June 8, 2023.
The Underwriting Agreement, which is attached to this Current Report on Form 8-K (this “Current Report”) as Exhibit 1.1, is incorporated herein by reference. A copy of the form of common warrant is filed as Exhibit 4.1 hereto. The foregoing descriptions of the terms of the Underwriting Agreement and the common warrants do not purport to be complete and are qualified in its entirety by reference to such exhibits. Kirkland & Ellis LLP, counsel to the Company, delivered an opinion as to the legality of the issuance and sale of the Shares and common warrants in the Offering, a copy of which is attached hereto as Exhibit 5.1 and is incorporated herein by reference.