Reset Provisions. (a) On the date that is 180 days after the Issuance Date, and each 180th day thereafter during the Exercise Period, and on the Expiration Date (each, a “Reset Date”), the Exercise Price of the Warrant shall be reset as follows: (i) The Exercise Price of the Tranche I Warrant Shares shall be reset to the higher of (A) the lower of (x) the volume-weighted average price per share of the Common Stock during the 30-day period ending on the Reset Date, as reported on the relevant Bloomberg Screen “NKGN <Equity> AQR SEC” (or any successor thereto), and (y) the Exercise Price on the previous Reset Date (or, on the first Reset Date after the Issuance Date, the original Exercise Price) (the lower of (x) and (y), the “Test Price”) and (B) $5.00 (the “Downside Protection Threshold Price”) (the higher of (A) and (B), the “Reset Price”); (ii) The Exercise Price of the Tranche II Warrant Shares shall be reset to a price that is the greater of (x) the Downside Protection Threshold Price and (y) 125% of the Test Price; and (iii) The Exercise Price of the Tranche III Warrant Shares shall be reset to a price that is the greater of (x) the Downside Protection Threshold Price and (y) 150% of the Test Price. (b) Beginning on the date that is 180 days after the Issuance Date of the Warrants, to the extent the Company closes a sale and issuance of shares of Common Stock or securities of the Company that are convertible into or exercisable for shares of Common Stock at an effective price per share less than the then existing Reset Price (a “Dilutive Offering”), then the Exercise Price of the Warrant shall be reset (a “Dilutive Offering Reset”) upon the consummation of such Dilutive Offering (such date on which a Dilutive Offering occurs, a “Dilutive Offering Reset Date”) as follows; provided that, without limiting the foregoing, a Dilutive Offering Reset (for the avoidance of doubt) shall exclude (i) any equity line of credit, at the market offering or other similar financing, (ii) the grant, issuance, exercise or settlement of stock options or other equity awards under the Company’s equity compensation plans in effect immediately after the closing of the Business Combination or shares of Common Stock underlying warrants outstanding immediately after the closing of the Business Combination and (iii) Common Stock issued in connection with the Business Combination pursuant to the Agreement and Plan of Merger, dated as of April 14, 2023, by and among ▇▇▇▇ Acquisition Corp. IV, a Delaware corporation (“GFOR”), Austria Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of GFOR (“Merger Sub”), and the Company (the “BCA”) and any other securities issued prior to or in connection with the Business Combination pursuant to any other financing: (i) The Exercise Price of the Tranche I Warrant Shares shall be reset to the higher of (A) the price of such shares of Common Stock sold in the Dilutive Offering or the initial conversion price or initial exercise price of the securities sold in the Dilutive Offering that are convertible or exercisable into shares of Common Stock, as applicable, and (B) the Downside Protection Threshold Price (the higher of (A) and (B), the “Dilutive Offering Reset Price”); (ii) The Exercise Price of the Tranche II Warrant Shares shall be reset to a price that is the greater of (x) the Downside Protection Threshold Price and (y) 125% of the Dilutive Offering Reset Price; and (iii) The Exercise Price of the Tranche III Warrant Shares shall be reset to a price that is the greater of (x) the Downside Protection Threshold Price and (y) 150% of the Dilutive Offering Reset Price. (c) The Exercise Price on each Reset Date, or, if applicable, on each Dilutive Offering Reset Date, shall never exceed the Exercise Price on any prior Reset Date, or, if applicable, on any prior Dilutive Offering Reset Date. In no event will the Reset Price, or, if applicable, the Dilutive Offering Reset Price, be lower than the Downside Protection Threshold Price. (d) In the event that the Test Price calculated pursuant to Section 2(a)(i), or, if applicable, the Dilutive Offering Reset Price calculated pursuant to Section 2(b)(i), is less than the Downside Protection Threshold Price, the Holder may, in its sole option, upon delivery of the Exercise Notice to the Company demand a cashless exchange in lieu of an exercise for cash at the then Exercise Price, of any singular Tranche of Warrant Shares for which such Holder has remaining Warrant Shares with respect to which the Warrant has not yet been exercised and such Warrant Shares issued, in whole or in part (the “Downside Protection”, and such Warrant Shares, the “Downside Protection Shares”) pursuant to which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing (A) by [(B) / (C)], where: A = the number of Warrant Shares to be issued upon exercise of unexercised Warrants; B = the Test Price or Dilutive Offering Reset Price pursuant to Section 2(a) or Section 2(b), as applicable (provided, however, (B) shall not be lower than $1.50); and C = $1.50 Demand of the Downside Protection shall be irrevocable. The Downside Protection is available for only one Tranche of Warrant Shares per Reset Date and, if applicable, one Tranche of Warrant Shares per Dilutive Offering Reset Date, and shall not affect the application of Section 2(a) or Section 2(b) (as applicable) with respect to applicable Exercise Price of the other Tranches of Warrant Shares. Downside Protection for the other Tranches of Warrant Shares shall be triggered only if, at the next Reset Date (x) with respect to the Tranche I Warrants, the Exercise Price is lower than the Downside Protection Threshold Price, (y) with respect to the Tranche II Warrants, 125% of the Test Price is lower than the Downside Protection Threshold Price, or (z) with respect to the Tranche III Warrants, 150% of the Test Price is lower than the Downside Protection Threshold Price. For the avoidance of doubt, to the extent a Holder exercises the Downside Protection with respect to a Tranche of Warrant Shares in full, the Holder shall have no other right to exercise this Warrant to purchase or receive Warrant Shares with respect to that particular Tranche of Warrant Shares. Further, in the event that (B) in the formula above would be less than $1.50 but for the limitation set forth in the parenthetical in (B), then in addition to issuing the Downside Protection Shares, the Company shall pay the Holder in cash, by wire transfer of immediately available funds to the account specified by the Holder in the Exercise Notice, an amount equal to the product of (x) the difference between the Exercise Price and $1.50 multiplied by (y) the number of Warrant Shares for which the Holder has demanded Downside Protection (the “Downside Protection Cash”). By way of example and not limitation, if the Holder demands Downside Protection with respect to 3,300,000 Tranche I Warrant Shares at a time when the Test Price is $4.50, the Company will issue to the Holder a number of Downside Protection Shares equal to 3,300,000 / ($4.50/$1.50) = 1,100,000 Downside Protection Shares. In such example, the Reset Price for the Tranche II Warrant Shares will be 125% of $4.50, or $5.63, and the Reset Price for the Tranche III Warrant Shares will be 150% of $4.50, or $6.75, and therefore, Downside Protection would not be available for such Tranches of Warrants. As another example, if the Holder demands Downside Protection with respect to 3,300,000 Tranche I Warrant Shares when the Test Price is $2.50, the Company would be required to issue to the Holder a number of Downside Protection Shares equal to 3,300,000 / ($2.50/$1.50) = 1,980,000 Downside Protection Shares. In such example, the Exercise Price for the Tranche II Warrant Shares will be 125% of $2.50 or $3.25, which is less than the Downside Protection Threshold Price and therefore the Exercise Price for the Tranche II Warrant Shares will be set at the Downside Protection Threshold Price, and the Exercise Price for the Tranche III Warrant Shares will be 150% of $2.50 or $3.75, which is less than the Downside Protection Threshold Price and therefore the Exercise Price for the Tranche III Warrant Shares will be set at the Downside Protection Threshold Price. As a third example, if the Holder demands Downside Protection with respect to 3,300,000 Tranche I Warrant Shares at a time when the Reset Price would be $0.50, the Company will issue to the Holder a number of Downside Protection Shares equal to 3,300,000 / ($1.50/$1.50) = 3,300,000 Downside Protection Shares plus an amount of Downside Protection Cash equal to 3,300,000 * ($1.50 - $0.50) = $3,300,000. In such example, the Exercise Price for the Tranche II Warrant Shares will be 125% of $0.50 or $0.63, which is less than the Downside Protection Threshold Price and therefore the Exercise Price for the Tranche II Warrant Shares will be set at the Downside Protection Threshold Price, and the Exercise Price for the Tranche III Warrant Shares will be 150% of $0.50 or $0.75, which is less than the Downside Protection Threshold Price and therefore the Exercise Price for the Tranche III Warrant Shares will be set at the Downside Protection Threshold Price. (e) Within two (2) Business Days after each Reset Date or Dilutive Offering Reset Date, as applicable, the Company shall deliver to each Holder a written notice setting forth the Company’s calculation of (i) the Test Price, Reset Price, and Exercise Price of each Tranche of Warrant Shares calculated pursuant to Section 2(a), or (ii) the Dilutive Offering Reset Price and Exercise Price of each Tranche of Warrant Shares calculated pursuant to Section 2(b), as applicable (such notice, the “Reset Notice”); provided, that, in no event will the Company include any material non-public information in the Reset Notice and the Holder shall be entitled to presume that the information contained in the Reset Notice does not constitute material, non-public information relating to the Company. If the holders of a majority in interest of all Warrants issued pursuant to the Subscription Agreement then outstanding (the “Majority Holders”) wish to object to the information set forth in the Reset Notice, the Majority Holders shall deliver to the Company a written notice setting forth such objection in reasonable detail (the “Holder Objection Notice”) within two (2) Business Days after its receipt of the Reset Notice (such date, the “Holder Objection Deadline”), and the Company and the Majority Holders shall resolve such dispute in accordance with Section 7 hereof. If the Majority Holders have not delivered a Holder Objection Notice to the Company by the Holder Objection Deadline, then the prices and calculations as set forth in the Reset Notice shall be deemed to be irrevocably accepted by each Holder. If the Company objects to the arithmetic calculation of the Warrant Shares, Downside Protection Shares, and/or Downside Protection Cash set forth in the Exercise Notice, the Company shall deliver to each Holder a written notice setting forth the Company’s objection in reasonable detail (the “Company Objection Notice”) on or before the first (1st) Trading Day following the date on which the Company has received the Exercise Notice (such date, the “Company Objection Deadline”), and the Company and the Majority Holders shall resolve such dispute in accordance with Section 7 hereof. If the Company has not delivered a Company Objection Notice to each Holder on or before the Company Objection Deadline, then the arithmetic calculation as set forth in the Exercise Notice shall be deemed to be irrevocably accepted by the Company. (f) Within two (2) Business Days of the Company’s receipt of notice from the Holder that the Holder has demanded the Downside Protection, the Company shall have the right, but not the obligation, to notify the Holder of the Company’s intent to repurchase all such Warrant Shares for which the Holder has demanded Downside Protection for cash at a repurchase price of $1.75 per share (the “Redemption Price”) in lieu of issuing the Downside Protection Shares and Downside Protection Cash, if applicable (the “Redemption Right”). If the Company exercises the Redemption Right, the Company shall within five (5) Business Days of the applicable Reset Date or Dilutive Offering Reset Date (as applicable) deliver to the Holder the Redemption Price in cash and a countersigned Warrant for the remaining number of shares of Common Stock as to which such Warrant shall not have been so redeemed.
Appears in 1 contract
Reset Provisions. (a) On the date that is 180 days after the Issuance Date, and each 180th day thereafter during the Exercise Period, and on the Expiration Date (each, a “Reset Date”), the Exercise Price of the Warrant shall be reset as follows:
(i) The Exercise Price of the Tranche I Warrant Shares shall be reset to the higher of (A) the lower of (x) the volume-weighted average price per share of the Common Stock during the 30-day period ending on the Reset Date, as reported on the relevant Bloomberg Screen “NKGN <Equity> AQR SEC” (or any successor thereto), and (y) the Exercise Price on the previous Reset Date (or, on the first Reset Date after the Issuance Date, the original Exercise Price) (the lower of (x) and (y), the “Test Price”) and (B) $5.00 (the “Downside Protection Threshold Price”) (the higher of (A) and (B), the “Reset Price”);
(ii) The Exercise Price of the Tranche II Warrant Shares shall be reset to a price that is the greater of (x) the Downside Protection Threshold Price and (y) 125% of the Test Reset Price; and
(iii) The Exercise Price of the Tranche III Warrant Shares shall be reset to a price that is the greater of (x) the Downside Protection Threshold Price and (y) 150% of the Test Reset Price.
(b) Beginning on the date that is 180 days after the Issuance Date of the Warrants, to the extent the Company closes a sale and issuance of shares of Common Stock or securities of the Company that are convertible into or exercisable for shares of Common Stock at an effective price per share less than the then existing Reset Price (a “Dilutive Offering”), then the Exercise Price of the Warrant shall be reset (a “Dilutive Offering Reset”) upon the consummation of such Dilutive Offering (such date on which a Dilutive Offering occurs, a “Dilutive Offering Reset Date”) as follows; provided that, without limiting the foregoing, a Dilutive Offering Reset (for the avoidance of doubt) shall exclude (i) any equity line of credit, at the market offering or other similar financing, (ii) the grant, issuance, exercise or settlement of stock options or other equity awards under the Company’s equity compensation plans in effect immediately after the closing of the Business Combination or shares of Common Stock underlying warrants outstanding immediately after the closing of the Business Combination and (iii) Common Stock issued in connection with the Business Combination pursuant to the Agreement and Plan of Merger, dated as of April 14, 2023, by and among ▇▇▇▇ Acquisition Corp. IV, a Delaware corporation (“GFOR”), Austria Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of GFOR (“Merger Sub”), and the Company (the “BCA”) and any other securities issued prior to or in connection with the Business Combination pursuant to any other financing:
(i) The Exercise Price of the Tranche I Warrant Shares shall be reset to the higher of (A) the price of such shares of Common Stock sold in the Dilutive Offering or the initial conversion price or initial exercise price of the securities sold in the Dilutive Offering that are convertible or exercisable into shares of Common Stock, as applicable, and (B) the Downside Protection Threshold Price (the higher of (A) and (B), the “Dilutive Offering Reset Price”);
(ii) The Exercise Price of the Tranche II Warrant Shares shall be reset to a price that is the greater of (x) the Downside Protection Threshold Price and (y) 125% of the Dilutive Offering Reset Price; and
(iii) The Exercise Price of the Tranche III Warrant Shares shall be reset to a price that is the greater of (x) the Downside Protection Threshold Price and (y) 150% of the Dilutive Offering Reset Price.
(c) The Exercise Price on each Reset Date, or, if applicable, on each Dilutive Offering Reset Date, shall never exceed the Exercise Price on any prior Reset Date, or, if applicable, on any prior Dilutive Offering Reset Date. In no event will the Reset Price, or, if applicable, the Dilutive Offering Reset Price, be lower than the Downside Protection Threshold Price.
(d) In the event that the Test Price calculated pursuant to Section 2(a)(i), or, if applicable, the Dilutive Offering Reset Price calculated pursuant to Section 2(b)(i), is less than the Downside Protection Threshold Price, the Holder may, in its sole option, upon delivery of the Exercise Notice to the Company demand a cashless exchange in lieu of an exercise for cash at the then Exercise Price, of any singular Tranche of Warrant Shares for which such Holder has remaining Warrant Shares with respect to which the Warrant has not yet been exercised and such Warrant Shares issued, in whole or in part (the “Downside Protection”, and such Warrant Shares, the “Downside Protection Shares”) pursuant to which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing (A) by [(B) / (C)], where:
A = the number of Warrant Shares to be issued upon exercise of unexercised Warrants;
B = the Test Price or Dilutive Offering Reset Price pursuant to Section 2(a) or Section 2(b), as applicable (provided, however, (B) shall not be lower than $1.50); and C = $1.50 Demand of the Downside Protection shall be irrevocable. The Downside Protection is available for only one Tranche of Warrant Shares per Reset Date and, if applicable, one Tranche of Warrant Shares per Dilutive Offering Reset Date, and shall not affect the application of Section 2(a) or Section 2(b) (as applicable) with respect to applicable Exercise Price of the other Tranches of Warrant SharesShares so long as such Exercise Price is greater than the Downside Protection Threshold Price. If the application of Section 2(a) or Section 2(b) would cause the Exercise Price of one or more Tranches of Warrant Shares for which Downside Protection is not available to be less than the Downside Protection Threshold Price, then the Exercise Price of each so-affected Tranche of Warrant Shares for which Downside Protection is not available, will be equal to the Downside Protection Threshold Price. Downside Protection for the other Tranches of Warrant Shares shall be triggered only if, at the next Reset Date (x) with respect to the Tranche I Warrants, if the Exercise Price is remains lower than the Downside Protection Threshold Price, (y) with respect to Price at the Tranche II Warrants, 125% of the Test Price is lower than the Downside Protection Threshold Price, or (z) with respect to the Tranche III Warrants, 150% of the Test Price is lower than the Downside Protection Threshold Pricenext Reset Date. For the avoidance of doubt, to the extent a Holder exercises the Downside Protection with respect to a Tranche of Warrant Shares in full, the Holder shall have no other right to exercise this Warrant to purchase or receive Warrant Shares with respect to that particular Tranche of Warrant Shares. Further, in the event that (B) in the formula above would be less than $1.50 but for the limitation set forth in the parenthetical in (B), then in addition to issuing the Downside Protection Shares, the Company shall pay the Holder in cash, by wire transfer of immediately available funds to the account specified by the Holder in the Exercise Notice, an amount equal to the product of (x) the difference between the Exercise Price and $1.50 multiplied by (y) the number of Warrant Shares for which the Holder has demanded Downside Protection (the “Downside Protection Cash”). By way of example and not limitation, if the Holder demands Downside Protection with respect to 3,300,000 Tranche I Warrant Shares at a time when the Test Price is $4.50, the Company will issue to the Holder a number of Downside Protection Shares equal to 3,300,000 / ($4.50/$1.50) = 1,100,000 Downside Protection Shares. In such example, the Reset Price for the Tranche II Warrant Shares will be 125% of $4.50, or $5.63, and the Reset Price for the Tranche III Warrant Shares will be 150% of $4.50, or $6.75, and therefore, Downside Protection would not be available for such Tranches of Warrants. As another example, if the Holder demands Downside Protection with respect to 3,300,000 Tranche I Warrant Shares when the Test Price is $2.50, the Company would be required to issue to the Holder a number of Downside Protection Shares equal to 3,300,000 / ($2.50/$1.50) = 1,980,000 Downside Protection Shares. In such example, the Exercise Price for the Tranche II Warrant Shares will be 125% of $2.50 or $3.25, which is less than the Downside Protection Threshold Price and therefore the Exercise Price for the Tranche II Warrant Shares will be set at the Downside Protection Threshold Price, and the Exercise Price for the Tranche III Warrant Shares will be 150% of $2.50 or $3.75, which is less than the Downside Protection Threshold Price and therefore the Exercise Price for the Tranche III Warrant Shares will be set at the Downside Protection Threshold Price. As a third example, if the Holder demands Downside Protection with respect to 3,300,000 Tranche I Warrant Shares at a time when the Reset Price would be $0.50, the Company will issue to the Holder a number of Downside Protection Shares equal to 3,300,000 / ($1.50/$1.50) = 3,300,000 Downside Protection Shares plus an amount of Downside Protection Cash equal to 3,300,000 * ($1.50 - $0.50) = $3,300,000. In such example, the Exercise Price for the Tranche II Warrant Shares will be 125% of $0.50 or $0.63, which is less than the Downside Protection Threshold Price and therefore the Exercise Price for the Tranche II Warrant Shares will be set at the Downside Protection Threshold Price, and the Exercise Price for the Tranche III Warrant Shares will be 150% of $0.50 or $0.75, which is less than the Downside Protection Threshold Price and therefore the Exercise Price for the Tranche III Warrant Shares will be set at the Downside Protection Threshold Price.
(e) Within two (2) Business Days after each Reset Date or Dilutive Offering Reset Date, as applicable, the Company shall deliver to each Holder a written notice setting forth the Company’s calculation of (i) the Test Price, Reset Price, and Exercise Price of each Tranche of Warrant Shares calculated pursuant to Section 2(a), or (ii) the Dilutive Offering Reset Price and Exercise Price of each Tranche of Warrant Shares calculated pursuant to Section 2(b), as applicable (such notice, the “Reset Notice”); provided, that, in no event will the Company include any material non-public information in the Reset Notice and the Holder shall be entitled to presume that the information contained in the Reset Notice does not constitute material, non-public information relating to the Company. If the holders of a majority in interest of all Warrants issued pursuant to the Subscription Agreement then outstanding (the “Majority Holders”) wish to object to the information set forth in the Reset Notice, the Majority Holders shall deliver to the Company a written notice setting forth such objection in reasonable detail (the “Holder Objection Notice”) within two (2) Business Days after its receipt of the Reset Notice (such date, the “Holder Objection Deadline”), and the Company and the Majority Holders shall resolve such dispute in accordance with Section 7 hereof. If the Majority Holders have not delivered a Holder Objection Notice to the Company by the Holder Objection Deadline, then the prices and calculations as set forth in the Reset Notice shall be deemed to be irrevocably accepted by each Holder. If the Company objects to the arithmetic calculation of the Warrant Shares, Downside Protection Shares, and/or Downside Protection Cash set forth in the Exercise Notice, the Company shall deliver to each Holder a written notice setting forth the Company’s objection in reasonable detail (the “Company Objection Notice”) on or before the first (1st) Trading Day following the date on which the Company has received the Exercise Notice (such date, the “Company Objection Deadline”), and the Company and the Majority Holders shall resolve such dispute in accordance with Section 7 hereof. If the Company has not delivered a Company Objection Notice to each Holder on or before the Company Objection Deadline, then the arithmetic calculation as set forth in the Exercise Notice shall be deemed to be irrevocably accepted by the Company.
(f) Within two (2) Business Days of the Company’s receipt of notice from the Holder that the Holder has demanded the Downside Protection, the Company shall have the right, but not the obligation, to notify the Holder of the Company’s intent to repurchase all such Warrant Shares for which the Holder has demanded Downside Protection for cash at a repurchase price of $1.75 per share (the “Redemption Price”) in lieu of issuing the Downside Protection Shares and Downside Protection Cash, if applicable (the “Redemption Right”). If the Company exercises the Redemption Right, the Company shall within five (5) Business Days of the applicable Reset Date or Dilutive Offering Reset Date (as applicable) deliver to the Holder the Redemption Price in cash and a countersigned Warrant for the remaining number of shares of Common Stock as to which such Warrant shall not have been so redeemed.
Appears in 1 contract