Report of Foreign Issuer (6-k)
January 11 2017 - 7:46AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16 OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the month of January 2017
Commission
File Number 001-36903
KORNIT
DIGITAL LTD.
(Translation
of Registrant’s name into English)
12
Ha’Amal Street
Park
Afek
Rosh
Ha’Ayin 4824096 Israel
(Address
of Principal Executive Office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
CONTENTS
Master
Purchase Agreement
On
January 10, 2017, Kornit Digital Ltd. (“Kornit” or the “Company”) entered into a Master Purchase Agreement
(the “Purchase Agreement”) with Amazon Corporate LLC, a subsidiary of Amazon.com, Inc. (“Amazon”). Under
the Purchase Agreement, Amazon may purchase and Kornit has committed to supply Avalanche 1000 digital direct-to-garment printers
and NeoPigment ink and other consumables at agreed upon prices which are subject to volume. The Company also agreed to provide
maintenance services and extended warranties to Amazon at agreed prices
The
Purchase Agreement provides for an “end of life” program. Kornit is required to notify Amazon 12 months in advance
if it intends to stop supporting one of the products or services supplied by Kornit and to continue to manufacture the product
or provide such service during the applicable period. Subject to certain exceptions, Kornit is required to continue to supply
ink in such quantities as Amazon requires for at least 36 months after the earlier of (1) the end of the term of the Purchase
Agreement or (2) 18 months following the purchase of the last product sold pursuant to the Purchase Agreement. The Purchase Agreement
requires Kornit to make arrangements to ensure continuity of Kornit’s supply of products if Kornit does not comply with
its requirements to supply the products or the services under the agreement or becomes insolvent. The Purchase Agreement also
provides for penalties on a sliding scale in the case of late delivery or if Kornit’s systems are unavailable for certain
specific periods. There are no minimum spending commitments under the Purchase Agreement. The term of the Purchase Agreement is
five years beginning on May 1, 2016 and extends automatically for additional one year periods unless terminated by Amazon.
Transaction
Agreement and Warrant
Concurrently
with the Purchase Agreement, Kornit and Amazon entered into a Transaction Agreement (the “Transaction Agreement”), pursuant
to which Kornit agreed to issue to an affiliate of Amazon a warrant (the “Warrant”) to acquire up to 2,932,176 ordinary
shares of Kornit (“Warrant Shares”) at a purchase price of $13.03 per share which is based on the preceding 30 trading
day VWAP. The Warrant also provides for cashless exercise.
Under
the terms of the Warrant, the ordinary shares underlying the Warrant are subject to vesting as a function of payments for purchased
products and services of up to $150 million over a five year period with the shares vesting incrementally each time Amazon (which
includes its affiliates for purposes of the vesting determination) makes a payment totaling $5 million to Kornit. Warrant Shares
vest in increments of 85,521 shares until such time as Amazon has paid an aggregate of $75 million to the Company and thereafter
the remaining Warrant Shares vest in additional increments of 109,956 shares each. Based on payments made by Amazon prior to the
date of the Warrant, some of the Warrant Shares have vested at the time of the execution of the Purchase Agreement
The
Warrant is exercisable through January 10, 2022. Upon the consummation of a change of control transaction (as defined in the Warrant),
subject to certain exceptions, the unvested portion of the Warrant will vest in full and become fully exercisable
The
exercise price and the number of Warrant Shares issuable upon exercise of the Warrant are subject to customary anti-dilution adjustments.
The
Transaction Agreement includes customary representations, warranties and covenants of Kornit and Amazon. The Transaction Agreement
restricts any transfer of the Warrant except to a wholly owned subsidiary of Amazon and contains certain restrictions on Amazon’s
ability to transfer the Warrant Shares, including to a beneficial owner of more than 5% of Kornit’s outstanding ordinary
shares, subject to customary exceptions. The Transaction Agreement also contains certain customary standstill restrictions with
respect to an acquisition of Kornit shares (other than an acquisition of the Warrant Shares), solicitation of proxies and other
actions that seek to influence the control of Kornit. These standstill restrictions remain in effect until such time as the Warrant
Shares held by Amazon or that remain unexercised under the Warrant represent less than 2% of Kornit’s outstanding shares.
Under
the Transaction Agreement, Amazon is entitled to certain registration rights. At any time after the one year anniversary of the
Transaction Agreement (1) Amazon may request up to two times in any 12-month period that Kornit file a shelf registration statement
on Form F-3 or S-3 and Kornit is required to keep the shelf registration effective for four 90-day periods, (2) if Kornit is ineligible
to file a registration statement on Form F-3 or Form S-3, Amazon may request up to four times that Kornit file a long form registration
statement to facilitate the sale of its shares, and (3) Amazon is entitled to piggyback registration rights on underwritten offerings
effected by Kornit. Kornit is subject to customary obligations upon Amazon’s request for registration, including cooperation
in case of an underwritten offering.
On
January 11, 2017, Kornit issued a press release entitled “Kornit Digital Signs Agreement with Amazon.” A copy of this
press release is furnished as Exhibit 99.1 hereto.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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KORNIT
DIGITAL LTD.
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|
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Date:
January 11, 2017
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By:
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/s/
Guy Avidan
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Name:
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Guy
Avidan
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Title:
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Chief
Financial Officer
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Exhibit
Index
Exhibit No.
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Description
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99.1
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Press release dated January 11, 2017 entitled “Kornit Digital Signs Agreement with Amazon”
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