01—Abstract
Summary
Summary of the 8-K filed June 15, 2018. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- Early settlement of outstanding warrants for approximately 17.3 million shares of common stock.
- Agreements entered into on June 12, 2018, with major financial institutions: BNP Paribas, Bank of America, N.A., and Morgan Stanley & Co. International plc.
- Warrants were originally issued in March 2013 with a strike price of $90.395 per share (adjusted for stock split).
- Settlement will occur on a net share basis, reducing the number of shares issued compared to a cash settlement.
- Number of shares issued will be based on the average daily volume-weighted average price (VWAP) during a defined averaging period.
- The averaging period was expected to conclude in July 2018, with settlement shortly thereafter.
- This action is a proactive measure to manage potential future equity dilution and financial commitments.
03—Questions
Frequently Asked Questions
What is the main purpose of this 8-K filing?
The main purpose of this 8-K filing is to disclose that Salesforce.com, Inc. has entered into agreements to amend and early settle outstanding warrants with several financial institutions. This action aims to resolve these financial obligations ahead of their original maturity date.
How many shares are affected by this warrant settlement?
Approximately 17.3 million shares of Salesforce's common stock are affected by these warrant settlement agreements. This figure accounts for a previous 4-for-1 stock split.
What does 'net share basis' settlement mean for investors?
Settlement on a 'net share basis' means that instead of Salesforce paying cash to the warrant holders, it will issue a certain number of its own shares. The exact number of shares to be issued will be determined by the average trading price of Salesforce's stock over a specific period, which helps to reduce the total number of shares issued compared to a gross settlement.
When was this settlement expected to be completed?
The averaging period for determining the settlement price was expected to be completed in July 2018, with the actual settlement of shares occurring shortly thereafter.
04—Continue