Item 1.01 Entry into a Material Definitive Agreement.
On January 31, 2023, Offerpad Solutions Inc. (the "Company") entered into a
pre-funded warrants subscription agreement (the "Subscription Agreement") with
the investors named therein (the "Investors") pursuant to which the Company
agreed to sell and issue to the Investors an aggregate of 160,742,959 pre-funded
warrants (the "Warrants") to purchase shares (the "Warrant Shares") of the
Company's Class A common stock, par value $0.0001 per share (the "Class A Common
Stock"). Each Warrant was sold at a price of $0.5599 per Warrant and has an
initial exercise price of $0.0001 per Warrant, subject to certain customary
anti-dilution adjustment provisions. The exercise price for the Warrants can be
paid in cash or on a cashless basis, and the Warrants have no expiration date.
The aggregate gross proceeds to the Company of the Transaction, which closed on
January 31, 2023 (the "Closing"), were approximately $90.0 million. The
Investors included Brian Bair, the Company's founder, chief executive officer
and chairman of the Company's board of directors (the "Board"); Roberto Sella, a
member of the Board; First American Financial Corporation ("First American"), a
holder of more than 10% of the Company's outstanding Class A Common Stock; and
Kenneth DeGiorgio, a member of the Board and chief executive officer of First
American.
The issuance of the Warrant Shares upon exercise of the Warrants has been
approved by the Company's stockholders holding stock representing more than a
majority of the voting power of the Company's common stock, and the Company will
prepare and file a related information statement with the Securities and
Exchange Commission ("SEC"). The Warrants will not be exercisable until at least
21 days after the definitive information statement is filed with the SEC or such
later time as is necessary to comply with the listing requirements of the New
York Stock Exchange. Furthermore, under the terms of the Subscription Agreement,
the Investors have agreed not to transact in or transfer any of the Company's
securities, without the Company's prior written consent, for the period of time
from the Closing until two trading days following the filing with the SEC of the
Company's quarterly report on Form 10-Q for the three months ending March 31,
2023.
The Company intends to use the net proceeds from the Transaction for general
corporate purposes, including working capital.
Under the terms of the Subscription Agreement, the Company has agreed to file a
registration statement covering the resale of the Warrant Shares within ninety
(90) calendar days after the Closing (the "Filing Deadline") and to use
reasonable best efforts to cause the registration statement to be declared
effective (A) in the event that the SEC does not review the registration
statement, thirty (30) days after the Filing Deadline, or (ii) in the event that
the SEC reviews the registration statement, seventy-five (75) days after the
Filing Deadline (but in any event, no later than four (4) business days
following the SEC indicating that it has no further comments on the registration
statement). Pursuant to the terms of the Company's amended and restated
registration rights agreement, dated September 1, 2021 (the "RRA"), any Warrant
Shares acquired by Investors who are party to the RRA will be considered
"registrable securities" for purposes of the RRA.
The Subscription Agreement and form of Warrant described above include customary
representations, warranties and covenants by the Company and the Investors,
which 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
descriptions of the Subscription Agreement and form of Warrant do not purport to
be complete and are qualified by reference to the full text of such agreements,
which are attached to this Current Report on Form 8-K as Exhibits 10.1 and 4.1,
respectively, and are incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
Pursuant to the terms of the Subscription Agreement and in connection with the
Transaction, the Company issued the Pre-Funded Warrants to the Investors. The
number of securities issued, the nature of the transaction and the nature and
amount of consideration received by the Company are described in Item 1.01 of
this Form 8-K, which is incorporated by reference into this Item 3.02. The
Transaction was not registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance on the exemption from registration provided by
Section 4(a)(2) of the Securities Act. Any issuance of Warrant Shares upon
exercise of the Warrants pursuant to a cashless exercise will be made pursuant
to Section 3(a)(9) of Securities Act as exchanges exclusively with existing
security holders. Any other issuance of Warrant Shares upon exercise of the
Warrants will be made pursuant to Section 4(a)(2) of the Securities Act. The
initial maximum number of shares of Class A Common Stock issuable upon exercise
of the Warrants is 160,742,959 shares, subject to customary anti-dilution
adjustments.
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Item 7.01 Regulation FD Disclosure.
On February 1, 2023, the Company issued a press release regarding the
Transaction. A copy of the press release is attached hereto as Exhibit 99.1 and
is incorporated herein by reference.
Item 8.01 Other Events.
In connection with the consummation of the Transaction, Mr. Bair notified the
Board that he will convert all shares of the Company's Class B common stock, par
value $0.0001 per share (the "Class B Common Stock"), beneficially owned by him
to shares of Class A Common Stock immediately following the conclusion of the
Company's 2023 annual meeting of stockholders. Mr. Bair is the sole beneficial
owner of the 14,816,236 shares of the Company's outstanding Class B Common
Stock, which currently entitle him to 10 votes per share on matters presented to
the Company's stockholders.
Additionally, in connection with the consummation of the Transaction, the
Company, Mr. Bair, First American and LL Capital Partners I, L.P. and SIF V, LLC
entered into a voting agreement, dated January 31, 2023 (the "Voting
Agreement"). Pursuant to the terms of the Voting Agreement, the parties thereto
agreed with the Company, severally and not jointly, to vote their shares in
support of the Transaction, until the earlier of (a) a termination of the
Subscription Agreement, (b) 11:59 p.m., eastern time, on the second trading day
after the Company files its Form 10-Q for the period ending March 31, 2023 and
(c) 11:59 p.m., eastern time, on May 12, 2023. Promptly following the execution
of the Subscription Agreement, the stockholders who are party to the Voting
Agreement and other stockholders of the Company representing more than a
majority of the voting power of the Company's common stock delivered a written
consent approving the Transaction.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
4.1 Form of Pre-Funded Warrant.
10.1 Pre-Funded Warrants Subscription Agreement, dated January 31, 2023,
by and among Offerpad Solutions Inc. and the purchasers named therein.
99.1 Press Release, dated February 1, 2023, regarding the Transaction.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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