CEPTON, INC. Item 1.01 Entry into a Material Definitive Agreement.
Investor Rights Agreement Board and Committee Rights
On the Closing Date, the Company and the Investor entered into an Investor
Rights Agreement, pursuant to which, among other things, immediately following
the Closing, the Company is obligated to take all necessary action to ensure
that the Board will consist of a total of seven directors: two designees of the
Investor (inclusive of Mr.
Under the Investor Rights Agreement, the Company is obligated to take all necessary action (to the extent not prohibited by law) to cause the Board to nominate for election that number of individuals designated by the Investor that is proportional to the Investor's beneficial ownership interest in the Company (on an as-converted basis), provided, however, that the Investor will not be entitled to nominate for election a number of individuals that would constitute a majority of the Board. In addition, the Investor's designation rights will be reduced to one director at such time as the Investor ceases to beneficially own at least 10% of the outstanding shares of Common Stock (on an as-converted basis) and the Investor will no longer have any rights to designate a nominee to serve on the Board at such time as the Investor ceases to beneficially own at least 5% of the outstanding shares of Common Stock (on an as-converted basis).
Transfer Restrictions
Pursuant to the Investor Rights Agreement and subject to certain exceptions, the
Investor agreed not to Transfer (as defined in the Investor Rights Agreement)
any shares of Series A Preferred Stock held by such Investor, including any
shares of Common Stock issued or issuable upon conversion of such shares of
Series A Preferred Stock, prior to
Investor Consent Rights
Pursuant to the terms of the Investor Rights Agreement, the prior written consent of the Investor (the "Investor Consent Rights") is required for the Company to effect or validate certain enumerated actions in the Investor Rights Agreement for so long as such Investor beneficially owns a number of shares of Common Stock representing at least 75% of the number of shares of Common Stock held by the Investor as of the Closing Date after giving effect to the Transaction and including the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, including, but not limited to: (i) issuing securities that are senior or pari passu to the Series A Preferred Stock, (ii) declaring or paying dividends, (iii) acquiring, redeeming or repurchasing . . .
Item 1.02 Termination of a Material Definitive Agreement.
On
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth below in Item 5.03 of this Current Report related to the Certificate of Designations is incorporated by reference herein.
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Item 3.02. Unregistered Sales of
The disclosure set forth above in the "Introductory Note" and below in Item 5.03 of this Current Report related to the issuance of the Series A Preferred Stock is incorporated into this Item 3.02 by reference. The Series A Preferred Stock will not initially be 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.
Item 3.03. Material Modification to Rights of Security Holders.
The disclosure set forth above in Item 1.01 of this Current Report related to the Investor Rights Agreement and below in Item 5.03 of this Current Report related to the Certificate of Designations is incorporated by reference herein.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The disclosure set forth above in Item 1.01 of this Current Report related to the Investor Rights Agreement is incorporated by reference herein.
Effective as of the Closing Date, pursuant to the terms of the Investor Rights
Agreement and as approved by the Board, Mr.
Mr.
In connection with his appointment, Mr.
The Company is not aware of any related transactions or relationships between
Mr.
Item 5.03. Amendment to Articles of Incorporation or Bylaws, Change in Fiscal Year.
Certificate of Designations Designating the Series A Preferred Stock
On
Ranking; Dividends
The Series A Preferred Stock ranks senior to the shares of the Common Stock,
with respect to dividend rights and rights on the distribution of assets on any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company and ranks junior to all secured and unsecured indebtedness. The
Series A Preferred Stock has a liquidation preference equal to the initial
purchase price of
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Conversion Rights
Subject to certain anti-dilution adjustments, including with respect to certain
issuances with an effective price below the then current Conversion Price (as
defined in the Certificate of Designations), and customary provisions related to
partial dividend periods, the Series A Preferred Stock is convertible at the
option of the holders thereof at any time following
Solely with respect to shares of Series A Preferred Stock held by the Investor
or an Affiliate of the Investor that is a Permitted Transferee (as defined in
the Certificate of Designations) (such shares, the "Investor Shares"), any time
after the Company having recorded positive net income pursuant to GAAP in its
audited financial statements for any fiscal year the end date of which falls
after
Solely with respect to shares of Series A Preferred Stock that are not Investor
Shares (such shares, the "Non-Investor Shares"), if the Market Price Condition
is satisfied at any time after
Pursuant to the provisions described in the preceding two paragraphs, each share of Series A Preferred Stock then outstanding shall be converted into (A) a number of shares of Common Stock equal to the Liquidation Preference for such share of Series A Preferred Stock divided by the Conversion Price then in effect plus (B) cash in lieu of fractional shares as set out in the Certificate of Designations.
The actual conversion date of any shares of Series A Preferred Stock may be subject to delay in order to satisfy any regulatory approvals that may be necessary in connection therewith, subject to certain Company repurchase rights with respect to shares of Series A Preferred Stock that are not promptly converted following receipt of applicable regulatory approvals.
Company Repurchase Option
The Company has the option, upon thirty (30) days' advance notice, to (A)
repurchase all (but not less than all) of the outstanding Investor Shares on or
after the second anniversary of the Closing occurring after the end of the
applicable fiscal year for which the Company has recorded positive net income,
if the Company has recorded positive net income pursuant to GAAP in its audited
financial statements for any fiscal year the end date of which falls after
Fundamental Change Put Right
If the Company undergoes a Fundamental Change (as defined in the Certificate of
Designations), each holder of outstanding shares of Series A Preferred Stock
will have the option to require the Company to purchase any or all of its shares
of Series A Preferred Stock at a purchase price per share of Series A Preferred
Stock equal to the Liquidation Preference of such share of Series A Preferred
Stock as of the applicable date ("Fundamental Change Repurchase"). In lieu of
electing a Fundamental Change Repurchase, such holder may elect to convert such
shares of Series A Preferred Stock, at 110% of the then current Conversion Rate.
A "Fundamental Change" will occur upon, among other things, (A) any person or
group of persons other than the Investor Parties (as defined in the Certificate
of Designations) owning, directly or indirectly, more than 50% of the total
voting power of the Company's voting stock, (B) consummation of any
recapitalization, reclassification, share exchange, consolidation, merger, sale
of all or substantially all of the Company's assets or similar transactions, (C)
approval by the Company stockholders of any liquidation or dissolution of the
Company, (D) the Common Stock ceasing to be listed on the
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Voting Rights
. . .
Item 7.01. Regulation FD Disclosure.
On
The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
3.1 Certificate of Designations of Series A Convertible Preferred Stock,
par value $0.00001 , of Cepton, Inc. , dated January 18, 2023 .
10.1 Investor Rights Agreement, dated January 19, 2023 , by and between
Cepton, Inc. and Koito Manufacturing Co., Ltd.
99.1 Press release, dated January 20, 2023 .
104.1 Cover Page Interactive Data File (embedded within the inline XBRL
document).
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