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    KNBE   US49926T1043

KNOWBE4, INC.

(KNBE)
  Report
Real-time Estimate Quote. Real-time Estimate Cboe BZX - 12/03 03:51:21 pm
21.81 USD   -0.95%
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KNOWBE4, INC. : Entry into a Material Definitive Agreement, Unregistered Sale of Equity Securities (form 8-K)

10/21/2021 | 06:10am EST

Item 1.01 Entry into a Material Definitive Agreement.


On October 20, 2021, KnowBe4, Inc. ("KnowBe4" or the "Company") entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Sea Lion Merger Sub
I, Inc. ("Merger Sub I") and Sea Lion Merger Sub II, LLC ("Merger Sub II"),
SecurityAdvisor Technologies, Inc. ("SecurityAdvisor"), and Fortis Advisors,
LLC, as representative of the holders of equity securities of SecurityAdvisor,
pursuant to which KnowBe4 will acquire SecurityAdvisor through the statutory
merger of Merger Sub I with and into SecurityAdvisor, pursuant to which
SecurityAdvisor will become a wholly owned subsidiary of KnowBe4 (the "First
Merger"). As part of the same overall transaction, the surviving entity of the
First Merger will merge with and into Merger Sub II upon the terms and subject
to the conditions set forth in the Merger Agreement and in accordance with the
provisions of the laws of the state of Delaware (the "Acquisition").

This Acquisition will allow KnowBe4 to integrate the SecurityAdvisor technology
with KnowBe4's existing security awareness platform, which the Company believes
will provide customers with the ability to address human layer risks in
real-time.

Under the terms of the Merger Agreement, the aggregate consideration for the
Acquisition will be approximately $80.0 million, subject to post-closing
adjustments based on customary purchase price adjustments for cash, net working
capital and indebtedness, including transaction expenses incurred in conjunction
with the Acquisition. Acquisition consideration consists of approximately $50
million of consideration paid upfront including:
•$22.5 million of cash payable at closing, which KnowBe4 expects to fund with
cash on hand, and
•$27.5 million in shares of KnowBe4 Class A common stock.

Additional consideration of up to approximately $30 million consists of:
•$15 million of potential future earn-out provisions payable with a combination
of equity and cash. These shares of Class A common stock will be issued pursuant
to an exemption from the registration requirements of the Securities Act of
1933, as amended, and not pursuant to KnowBe4's equity incentive plans.
•$15 million of restricted stock units issued to certain employees of
SecurityAdvisor pursuant to KnowBe4's equity incentive plan, which will be
subject to vesting conditions based on the employees' continued employment with
KnowBe4 along with certain future performance targets.

The Acquisition, which is subject to certain customary closing conditions, is
expected to close during the fourth quarter of 2021. The preceding description
of the terms of the Merger Agreement does not purport to be complete and is
qualified in its entirety by reference to the exhibit. A copy of the Merger
Agreement is filed as Exhibit 2.1 to this Current Report on Form 8-K and is
incorporated by reference herein.

KnowBe4 will host a conference call today, October 21, 2021, to discuss the Acquisition at 8:30 AM EDT.

Conference Call: (833) 529-0227 (US/Canada Toll Free) or (236) 738-2273 Conference ID: 4379468 Webcast: https://investors.knowbe4.com/investor-relations


A recorded webcast of the event will also be available shortly after the call
and will be made available for one year on the KnowBe4 Investor Relations
website (https://investors.knowbe4.com). A copy of the slide presentation to be
used during the conference call is filed as Exhibit 99.1 to this Current Report
on Form 8-K and is incorporated by reference herein.

On October 21, 2021, KnowBe4 issued a press release in connection with the Acquisition. A copy of the press release is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.

Item 3.02 Unregistered Sales of Equity Securities

                                       1

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The information disclosed in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 3.02.

(d) Exhibits


Exhibit No.              Description
2.1                        Merger Agreement, dated October 20, 2021, by and 

among KnowBe4, Inc., Merger

                         Sub I, Merger Sub II, SecurityAdvisor and Fortis Advisor, LLC
99.1                       Conference Call Presentation dated October 21, 2021
99.2                       Investor Release issued by KnowBe4, Inc. on October 21, 202    1


                                       2

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