Summary
Salesforce.com, Inc. (CRM) filed an 8-K on June 14, 2018, to disclose material definitive agreements related to the early settlement of outstanding warrants. On June 12, 2018, the Company entered into agreements with BNP Paribas, Bank of America, N.A., and Morgan Stanley & Co. International plc to amend and settle warrants originally issued on March 12, 2013, and March 15, 2013. The primary impact for investors is the settlement of approximately 17.3 million shares worth of warrants. The settlement will be on a net share basis, meaning the number of shares issued will be determined by the daily average of the volume-weighted average prices (VWAP) of Salesforce's common stock during a specified averaging period, which was expected to conclude in July 2018. This early settlement proactively manages potential future share dilution and financial obligations associated with these warrants.
Key Highlights
- 1Early settlement of outstanding warrants for approximately 17.3 million shares of common stock.
- 2Agreements entered into on June 12, 2018, with major financial institutions: BNP Paribas, Bank of America, N.A., and Morgan Stanley & Co. International plc.
- 3Warrants were originally issued in March 2013 with a strike price of $90.395 per share (adjusted for stock split).
- 4Settlement will occur on a net share basis, reducing the number of shares issued compared to a cash settlement.
- 5Number of shares issued will be based on the average daily volume-weighted average price (VWAP) during a defined averaging period.
- 6The averaging period was expected to conclude in July 2018, with settlement shortly thereafter.
- 7This action is a proactive measure to manage potential future equity dilution and financial commitments.