Item 1.03 Bankruptcy or Receivership
On April 4, 2023, Kalera, Inc. ("Kalera" or the "Debtor") an indirect wholly
owned subsidiary of Kalera Public Limited Company ("Kalera PLC" or the
"Company") filed a voluntary petition (the "Chapter 11 Case") in the United
States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy
Court") seeking relief under Chapter 11 of Title 11 of the United States Code
(the "Bankruptcy Code"). The Chapter 11 Case is being administered under the
caption In re Kalera, Inc., Case No. 23-90290, Kalera will continue to operate
its business as "debtor-in-possession" under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code
and orders of the Bankruptcy Court. To assure ordinary course operations, Kalera
is seeking approval from the Bankruptcy Court of a variety of "first day"
motions, including authority to maintain bank accounts, debtor in possession
financing and other customary relief.
Cautionary Statements
Kalera is our main operating subsidiary. We caution our equity holders that
trading in our securities during the pendency of the Chapter 11 Case will be
highly speculative and will pose additional, substantial risks in addition to
the various risks that we have previously disclosed in our press releases,
registration statements filed under the Securities Act of 1933, as amended, and
periodic reports and schedules filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Trading prices for our equity securities are
not expected to bear any substantive relationship to any recovery that Kalera
PLC may obtain in the Chapter 11 Case. There is no assurance the Company will be
able to continue operations for the foreseeable future or realize assets and
discharge liabilities. Accordingly, we urge extreme caution with respect to
existing and future investments in our equity or debt securities.
A plan of reorganization, sale of assets, or liquidation of Kalera will likely
result (i) in our receiving little or no distribution in respect of our interest
in Kalera, and (ii) in the cancellation of our existing equity interest in
Kalera. If certain requirements of the Bankruptcy Code are met, a Chapter 11
plan of reorganization could be confirmed notwithstanding its rejection by
Kalera PLC, as the equity holder of Kalera, and notwithstanding the fact that
Kalera PLC does not receive or retain any property on account of its equity
interest under such plan.
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
On April 14, 2022, Kalera entered into a Loan and Security Agreement ("Loan
Agreement") with Farm Credit of Central Florida, ACA ("Farm Credit"), under
which Farm Credit agreed to make (i) revolving loans in an aggregate principal
amount of up to $10 million and (ii) one or more term loans in an aggregate
principal amount up to $20 million (collectively the "Loans"). On March 21,
2023, Farm Credit informed Kalera that as of the close of business on March 17,
2023, Farm Credit had sold its interest under the Loan Agreement to Sandton
Credit Solutions Master Fund V, L.P. ("Sandton").
The commencement of the Chapter 11 Case constituted an Event of Default that
accelerates Kalera's obligations under the Loan Agreement. The Loan Agreement
provides that upon the Chapter 11 Case filing the unpaid principal and interest
due under the Loan Agreement are automatically due and payable. However, any
efforts to enforce such payment obligations under the Loan Agreement are
automatically stayed as a result of the Chapter 11 Case filing, and the
creditors' rights of enforcement in respect of the Loan Agreement are subject to
the applicable provisions of the Bankruptcy Code.
On April 4, 2023, Sandton (in such capacity, the "DIP Provider") has agreed to
provide to the Debtor debtor-in-position financing, pursuant to which, and
subject to the satisfaction of certain customary conditions, including the
approval of the Bankruptcy Court (which has not been obtained at this time), the
DIP Provider agreed to provide loans in an aggregate principal amount of $5.1
million.
Item 5.02 Departure of Directors or Certain Officers? Election of Directors?
Appointment of Certain Officers? Compensatory Arrangements of Certain
Officers.
Effective as of March 29, 2023, Jim Leighton's employment with the Company as
President and Chief Executive Officer ended, so that Mr. Leighton could pursue
other opportunities. Mr. Leighton also resigned as a member of the Company's
Board of Directors.
The Company has appointed Mark Shapiro, Senior Managing Director at B. Riley
Advisory Services, as Chief Restructuring Officer. Mr. Shapiro will oversee the
business and its restructuring process, working to execute on the Company's
business strategy and conduct a value-maximizing sale process. Mr. Shapiro
brings deep experience in managing complex financial and operational
restructurings, including providing interim management services to preserve and
maximize value.
Item 7.01 Regulation FD Disclosure.
On April 4, 2023, the Company issued a press release announcing the filing of
the Chapter 11 Case. A copy of the press release is furnished as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated herein by reference.
The press release furnished as Exhibit 99.1 to this Current Report on Form 8-K
shall not be deemed to be "filed" for purposes of Section 18 of the Exchange
Act, or otherwise subject to the liabilities of that section. The press release
furnished as Exhibit 99.1 to this Current Report on Form 8-K shall not be
incorporated by reference into any filing with the U.S. Securities and Exchange
Commission made by the Company, whether made before or after the date hereof,
regardless of any general incorporation language in such filing.
Item 8.01 Other Events.
Kalera also announced that it has retained the law firm Baker & Hostetler LLP,
as legal advisor, and B. Riley Advisory Services, as financial advisor, to
assist in the Chapter 11 Case filing, its restructuring and review of all
available strategic alternatives. In light of this ongoing review and the
Chapter 11 Case filing, the Company was not able to file its Annual Report on
Form 10-K for the year ended December 31, 2022 by March 31, 2022. At the present
time the Company does not have an estimate of when such filing will be made.
Forward-Looking Statements
This Current Report on Form 8-K release contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995,
including, without limitation, statements concerning the outcome of Kalera's
Chapter 11 Case filing. Any forward-looking statements in this Current Report on
Form 8-K are based on management's current expectations of future events and are
subject to a number of risks and uncertainties that could cause actual results
to differ materially and adversely from those set forth in or implied by such
forward-looking statements. Additional risks and uncertainties include, but are
not limited to: Kalera's Chapter 11 Case strategy? risks and uncertainties
associated with Chapter 11 Case proceedings generally? the negative impacts on
Kalera's business as a result of filing for and operating under Chapter 11 Case
protection? the time, terms and ability to confirm a Chapter 11 Case plan of
reorganization for Kalera ? the adequacy of the capital resources and liquidity
for the Company? the unpredictability of the Company's financial results while
Kalera is in Chapter 11 Case proceedings? Kalera's ability to discharge claims
in Chapter 11 Case proceedings? negotiations with the holders of Kalera's
indebtedness and its trade creditors and other significant creditors? and risks
associated with the Company's ability to identify and consummate financing and
strategic alternatives that yield additional value for shareholders. For a
discussion of other risks and uncertainties, and other important factors, any of
which could cause the Company's actual results to differ from those contained in
the forward-looking statements, see the section entitled "Risk Factors" in the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
2022, as well as discussions of potential risks, uncertainties and other
important factors in the Company's subsequent filings with the Securities and
Exchange Commission. All information in this Current Report on Form 8-K is as of
the date of the release, and the Company undertakes no duty to update this
information unless required by law.
Exhibit Description of Exhibit
99.1 Press Release, dated April 4, 2023 furnished with this Current Report
104 Cover Page Interactive Data Fie (embedded within the Inline XBRL
document)
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