Item 1.01.Entry into a Material Definitive Agreement.
Convertible Notes and the Indenture
On May 21, 2021, Coinbase Global, Inc. (the "Company") priced its private
offering of $1.25 billion in aggregate principal amount of 0.50% Convertible
Senior Notes due 2026 (the "Notes"). The Notes are senior unsecured obligations
of the Company. The Notes were issued pursuant to an Indenture, dated May 21,
2021 (the "Indenture"), between the Company and U.S. Bank National Association,
as trustee (the "Trustee"). The Indenture include customary covenants and sets
forth certain events of default after which the Notes may be declared
immediately due and payable and sets forth certain types of bankruptcy or
insolvency events of default involving the Company after which the Notes become
automatically due and payable. Pursuant to the purchase agreement between the
Company and the Initial Purchasers (as defined below), the Company also granted
the Initial Purchasers of the Notes a 30-day option to purchase up to an
additional $187.5 million principal amount of Notes, solely to cover
over-allotments (the "Additional Notes").
The Notes will mature on June 1, 2026, unless earlier repurchased, redeemed or
converted. The Notes accrue interest of 0.50% per year payable semi-annually in
arrears. The Notes will be convertible at the option of the holders at any time
prior to the close of business on the business day immediately preceding
December 1, 2025, only under the following circumstances: (1) during any
calendar quarter commencing after the calendar quarter ending on September 30,
2021, if the last reported sale price of the Company's Class A common stock, par
value $0.00001 per share (the "Class A Common Stock") exceeds 130% of the
conversion price for each of at least 20 trading days during a period of 30
consecutive trading days ending on, and including, the last trading day of the
immediately preceding calendar quarter; (2) during the five consecutive business
day period immediately after any ten consecutive trading day period (the
"measurement period") in which the trading price (as defined in the Indenture)
per $1,000 principal amount of Notes for each trading day of the measurement
period was less than 98% of the product of the last reported sale price per
share of the Class A Common Stock and the conversion rate on each such trading
day; (3) if the Company calls such Notes for redemption; and (4) upon the
occurrence of specified corporate events or distributions on the Class A Common
Stock. On or after December 1, 2025, until the close of business on the second
scheduled trading day immediately preceding the maturity date, holders may
convert all or any portion of their Notes, in multiples of $1,000 principal
amount, at the option of the holder regardless of the foregoing circumstances.
Upon conversion, the Company may satisfy its conversion obligation by paying
and/or delivering, as the case may be, cash, shares of the Class A Common Stock
or a combination of cash and shares of the Class A Common Stock, at the
Company's election, in the manner and subject to the terms and conditions
provided in the Indenture. The conversion rate for the Notes will initially be
2.6994 shares of the Class A Common Stock per $1,000 principal amount of the
Notes, which is equivalent to an initial conversion price of approximately
$370.45 per share of the Class A Common Stock. The initial conversion price of
the Notes represents a premium of approximately 55% to the $239.00 per share
last reported sale price of the Class A Common Stock on May 18, 2021. The
conversion rate is subject to customary adjustments under certain circumstances
in accordance with the terms of the Indenture. In addition, if certain corporate
events that constitute a "Make-Whole Fundamental Change" (as defined in the
Indenture) occur, then the conversion rate will, in certain circumstances, be
increased for a specified period of time.
The Company may not redeem the Notes prior to June 5, 2024. The Company may
redeem all or any portion of the Notes, at its option, on or after June 5, 2024,
and on or before the 20th scheduled trading day immediately before the maturity
date, if the last reported sale price per share of the Class A Common Stock
exceeds 130% of the conversion price then in effect on (1) at least 20 trading
days (whether or not consecutive) during the 30 consecutive trading days ending
on, and including, the trading day immediately before the date the Company sends
the related redemption notice and (2) the trading day immediately before the
date the Company sends such notice, at a redemption price equal to 100% of the
principal amount of the Notes to be redeemed, plus any accrued and unpaid
interest, to, but excluding, the redemption date. No sinking fund is provided
for the Notes, which means that the Company is not required to redeem or retire
the Notes periodically.
Upon the occurrence of a fundamental change (as defined in the Indenture),
subject to certain conditions, holders may require the Company to repurchase all
or a portion of the Notes for cash at a price equal to 100% of the principal
amount of the Notes to be repurchased, plus any accrued and unpaid interest, to,
but excluding, the fundamental change repurchase date.
The notes will be the Company's senior, unsecured obligations and will be equal
in right of payment with the Company's existing and future senior, unsecured
indebtedness, senior in right of payment to our existing and future

--------------------------------------------------------------------------------

indebtedness that is expressly subordinated to the notes and effectively
subordinated to our existing and future secured indebtedness, to the extent of
the value of the collateral securing that indebtedness. The notes will be
structurally subordinated to all existing and future indebtedness and other
liabilities, including trade payables, and (to the extent we are not a holder
thereof) preferred equity, if any, of the Company's subsidiaries.
The following events are considered "events of default" with respect to the
Notes, which may result in the acceleration of the maturity of the Notes:
(1)a default by the Company in the payment when due (whether at maturity, upon
redemption or repurchase upon fundamental change or otherwise) of the principal
of, or the redemption price or fundamental change repurchase price for, any
Note;
(2)a default by the Company for 30 days in the payment when due of interest on
any Note;
(3)failure by the Company to deliver, when required by the Indenture, a
fundamental change notice or a notice of specified corporate events with respect
to the Notes, and such failure continues for one business day;
(4)a default by the Company in its obligation to convert a Note in accordance
with the Indenture upon the exercise of the conversion right with respect
thereto, if such default is not cured within three business days after its
occurrence;
(5)a default by the Company of any of its obligations with respect to
consolidation, merger, sale, lease, and transfer, in one transaction or a series
of transactions, of all or substantially all of the assets of the Company and
its subsidiaries, taken as a whole;
(6)a default by the Company in any of its obligations or agreements under the
Indenture or the Notes (other than a default set forth in paragraphs (1), (2),
(3), (4) or (5) above) where such default is not cured or waived within 60 days
after notice to the Company by the Trustee, or to the Company and the Trustee by
holders of at least 25% of the aggregate principal amount of the Notes then
outstanding, which notice must specify such default, demand that it be remedied
and state that such notice is a "notice of default";
(7)a default by the Company or any of its significant subsidiaries (as defined
in the Indenture) with respect to any one or more mortgages, agreements or other
instruments under which there is outstanding, or by which there is secured or
evidenced, any indebtedness for money borrowed (other than non-recourse
indebtedness) of at least $150,000,000 million (or its foreign currency
equivalent) in the aggregate of the Company or any of ]subsidiaries, whether
such indebtedness exists as of the date the Company first issued the Notes or is
thereafter created, where such default (i) constitutes a failure to pay the
principal of, or premium or interest on, any of such indebtedness when due and
payable at its stated maturity, upon required repurchase, upon declaration of
acceleration or otherwise or (ii) results in such indebtedness becoming or being
declared due and payable before its stated maturity; and in each case of either
clause (i) or (ii) above, where such default is not cured or waived within 30
days after notice to the Company by the Trustee or to the Company and the
Trustee by holders of at least 25% of the aggregate principal amount of the
Notes then outstanding; and
(8)certain events of bankruptcy, insolvency and reorganization with respect to
the Company or any significant subsidiary.
If an event of default (other than an event of default described in paragraph
(8) above with respect to the Company and not solely with respect to a
significant subsidiary of the Company) occurs and is continuing, then, except
with respect to situations involving special interest as the sole remedy for
certain reporting defaults, the Trustee, by notice to the Company, or holders of
at least 25% of the aggregate principal amount of notes then outstanding, by
notice to the Company and the Trustee, may declare the principal amount of, and
all accrued and unpaid interest, on, all of the Notes then outstanding to become
due and payable immediately. If an event of default described in paragraph (8)
above occurs with respect to the Company (and not solely with respect to a
significant subsidiary of the Company), then the principal amount of, and all
accrued and unpaid interest, on, all of the Notes then outstanding will
immediately become due and payable without any further action or notice by any
person.
A copy of the Indenture and the form of Note are attached as Exhibits 4.1 and
4.2, respectively, to this Current Report on Form 8-K and are incorporated
herein by reference. The foregoing description of the Indenture and Notes do not
purport to be complete and is qualified in its entirety by reference to the full
text in such exhibits.

--------------------------------------------------------------------------------

The net proceeds from this offering were approximately $1.22 billion, after
deducting the Initial Purchasers' discounts and commissions and the Company's
estimated offering expenses related to the offering. The Company used
approximately $78.4 million of the net proceeds from the offering to pay the
cost of the Capped Call Transactions (as defined below). The Company intends to
use the remainder of the net proceeds from the offering for general corporate
purposes, which may include working capital, capital expenditures, and
investments in and acquisitions of other companies, products or technologies
that the Company may identify in the future.
Capped Call Transactions
On May 18, 2021, in connection with the pricing of the Notes, the Company
entered into privately negotiated capped call transactions (the " Base Capped
Call Transactions") with each of Bank of America, N.A., Bank of Montreal,
Citibank, N.A., JPMorgan Chase Bank, National Association, Goldman Sachs & Co.
LLC and Mizuho Markets Americas LLC (the "Option Counterparties"). The Capped
Call Transactions have an initial strike price of approximately $370.45 per
share, subject to adjustments, which corresponds to the approximate initial
conversion price of the Notes. The Capped Call Transactions will cover, subject
to anti-dilution adjustments substantially similar to those applicable to the
Notes, the number of shares of Class A Common Stock underlying the Notes sold in
the offering. The Capped Call Transactions are expected generally to reduce
potential dilution to the Class A Common Stock upon any conversion of Notes
and/or offset any potential cash payments the Company would be required to make
in excess of the principal amount of converted Notes, as the case may be, with
such reduction and/or offset subject to a cap based on the cap price. If,
however, the market price per share of Class A Common Stock, as measured under
the terms of the Capped Call Transactions, exceeds the cap price of the Capped
Call Transactions, there would be dilution and/or there would not be an offset
of such potential cash payments, in each case, to the extent that the
then-market price per share of the Class A Common Stock exceeds the cap price of
the Capped Call Transactions. The cap price of the Capped Call Transactions will
initially be approximately $478.00 per share, which represents a premium of
approximately 100% over the last reported sale price of the Class A Common Stock
of $239.00 per share on May 18, 2021, and is subject to certain adjustments
under the terms of the Capped Call Transactions. The Capped Call Transactions
are subject to either adjustment or termination upon the occurrence of specified
extraordinary events affecting the Company, including a merger; a tender offer;
and a nationalization, insolvency, or delisting involving the Company. In
addition, the Capped Call Transactions are subject to certain specified
additional disruption events that may give rise to a termination of the Capped
Call Transactions, including changes in law; insolvency filings and hedging
disruptions.
The Capped Call Transactions are separate transactions entered into by the
Company with the Option Counterparties and are not part of the terms of the
Notes and will not affect any holder's rights under the Notes. Holders of the
Notes will not have any rights with respect to the Capped Call Transactions.
A copy of the form of the Capped Call Transaction confirmation is attached as
Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by
reference. The foregoing description of the Capped Call Transaction confirmation
does not purport to be complete and is qualified in its entirety by reference to
the full text in such exhibit.
Item 2.03.Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report
on Form 8-K is incorporated herein by reference.
Item 3.02.Unregistered Sales of Equity Securities.
The information set forth under Items 1.01 and 8.01 of this Current Report
on Form 8-K is incorporated herein by reference.
The Company offered and sold the Notes to the Initial Purchasers (as defined
below) in reliance on the exemption from the registration requirements provided
by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities
Act"), and for resale by the Initial Purchasers to persons reasonably believed
to be "qualified institutional buyers," as defined in and pursuant to the
exemption from registration requirements provided by Rule 144A under the
Securities Act. The Company relied on these exemptions from registration based
in part on representations made by the Initial Purchasers in the Purchase
Agreement (as defined below) pursuant to which the Company sold the Notes to the
Initial Purchasers. The shares of the Class A Common Stock issuable upon
conversion of the

--------------------------------------------------------------------------------

Notes, if any, have not been registered under the Securities Act and may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements.
Assuming the Initial Purchasers fully exercise their option to purchase
additional Notes, initially, a maximum of 6,014,643 shares of the Class A common
stock may be issued upon conversion of the Notes, based on the initial maximum
conversion rate of 4.1841 shares of Class A common stock per $1,000 principal
amount of Notes, which is subject to customary anti-dilution adjustment
provisions.
To the extent that any shares of the Class A Common Stock are issued upon
conversion of the Notes, they will be issued in transactions anticipated to be
exempt from registration under the Securities Act by virtue of Section 3(a)(9)
thereof, because no commission or other remuneration is expected to be paid in
connection with conversion of the Notes and any resulting issuance of shares of
the Class A Common Stock.
Item 8.01.Other Events
Purchase Agreement
On May 18, 2021, the Company entered into a purchase agreement (the "Purchase
Agreement") with Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, as
representatives of the several initial purchasers named therein (collectively,
the "Initial Purchasers"), to issue and sell the Notes. In addition, pursuant to
the terms of the Purchase Agreement, the Company granted the Initial Purchasers
of the Notes a 30-day option to purchase up to an additional $187.5 million
principal amount of Additional Notes on the same terms and conditions. The
Purchase Agreement includes customary representations, warranties, and covenants
by the Company and customary closing conditions. Under the terms of the Purchase
Agreement, the Company has agreed to indemnify the Initial Purchasers against
certain liabilities.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits
Exhibit            Description

4.1                  Indenture, dated as of     May 21,     2021, between

Coinbase Global, Inc. and U.S.


                   Bank National Association, as trustee.

4.2                  Form of     0.50    % Convertible Senior Notes due

2026 (included in Exhibit


                   4.1)    .

10.1                 F    orm of Capped Call Transaction Confirmation    .

104                The cover page from this Current Report on Form 8-K,

formatted in Inline XBRL.

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses