LIGHTNING EMOTORS, INC. Item 8.01 Other Events.
As previously disclosed byGigCapital3, Inc. (the "Company" or "GigCapital3") under Item 1.01 of its Current Report on Form 8-K filed onDecember 11, 2020 , the Company,Project Power Merger Sub, Inc. , aDelaware corporation and a wholly-owned subsidiary ofGigCapital3 ("Merger Sub"), andLightning Systems, Inc. , aDelaware corporation ("Lightning Systems"), entered into a Business Combination Agreement, pursuant to which Merger Sub will be merged with and into Lightning Systems (the "Business Combination"), with Lightning Systems surviving the Business Combination as a wholly owned subsidiary ofGigCapital3 . On each ofJanuary 7, 2021 ,January 12, 2021 ,January 18, 2021 ,January 22, 2021 ,January 25, 2021 andFebruary 8, 2021 , the Company received letters (the "Stockholder Letters") from purported stockholders ofGigCapital3 claiming certain allegedly material omissions in the registration statement on Form S-4 (No. 33-251862), originally filed onDecember 31, 2020 , and subsequently amended onFebruary 4, 2021 ,March 1, 2021 andMarch 22, 2021 (as amended, the "Proxy Statement"). The registration statement was declared effective by theSecurities and Exchange Commission (the "SEC") onMarch 26, 2021 , andGigCapital3 also commenced mailing the Proxy Statement onMarch 26, 2021 . While the Company believes that the disclosures set forth in the Proxy Statement comply fully with applicable law, in order to resolve the plaintiffs' disclosure claims in the Stockholder Letters so as to avoid nuisance, cost and distraction, and to preclude any efforts to delay the closing of the Business Combination, the Company has determined to voluntarily supplement the Proxy Statement with the supplemental disclosures set forth below (the "Supplemental Disclosures"). Nothing in the Supplemental Disclosures shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, the Company specifically denies all allegations in the Stockholder Letters that any additional disclosure was or is required. The Company believes the Stockholder Letters are without merit. The Supplemental Disclosures will not affect the timing ofGigCapital3's special meeting of stockholders scheduled to be held online via live webcast onApril 21, 2021 at10:00 a.m., PDT , at www.virtualshareholdermeeting.com/GIK2021SM (the "Special Meeting"). The board of directors of the Company continues to recommend that you vote "FOR" each of the proposals being considered at the Special Meeting.
Supplemental Disclosures to Proxy Statement
The following information should be read in conjunction with the Proxy Statement. All page references in the information below are to pages in the Proxy Statement, and capitalized terms used in this Current Report on Form 8-K shall have the meanings set forth in the Proxy Statement, unless otherwise defined herein.
The following disclosure is added on page 157 of the Proxy Statement/Prospectus at the end of the section entitled "Background of the Business Combination".
As disclosed in the proxy statement/prospectus and the audited financial statements included and incorporated therein,Oppenheimer & Co. Inc. ("Oppenheimer") andNomura Securities International, Inc. ("Nomura") served as two of the three underwriters in its IPO, and in conjunction with the IPO,GigCapital3 upon successful completion of a business combination agreed to pay Oppenheimer and Nomura their portion of deferred underwriting commissions of$0.40 per Unit, which for the 20 million Units sold in the IPO, equals$8.0 million in the aggregate, of which Oppenheimer will receive 34%, or$2.72 million , and Nomura will receive 51%, or$4.08 million . As also disclosed in the proxy statement/prospectus, the Company engaged Oppenheimer and Nomura to act as (1) joint placement agents (together withBofA Securities, Inc. ) in connection with the PIPE financing and convertible note financing, and (2) exclusive joint financial advisors to the Company in connection with the proposed Business Combination, and the fees for the services to be paid for these services, plus the above-noted deferred underwriting commissions, are included in the estimated transaction and other costs disclosed in the Pro Forma Condensed Combined Balance Sheet as ofDecember 31, 2020 included as part of the proxy statement/prospectus. All of the activities of Oppenheimer and Nomura with regard to their respective roles as joint financial advisors and joint placement agents (together withBofA Securities, Inc. ) to the Company are described in this section. Neither Oppenheimer nor Nomura prepared any financial analyses for the Company's Board. -------------------------------------------------------------------------------- The following disclosure is added on page 148 of the Proxy Statement/Prospectus following the penultimate sentence in the paragraph that starts with, "After our IPO…" in the section entitled "Background of the Business Combination". Such non-disclosure agreements contained customary terms for a special purpose acquisition company and a private company target, including confidentiality provisions and use restrictions for information provided by the target and exceptions to such provisions. Further, such non-disclosure agreements did not contain any standstill or "don't ask, don't waive" provisions.
The following disclosure is added on page 155 of the Proxy Statement/Prospectus
prior to the end of the first sentence in the paragraph that starts with,
"During the period between
as a result of Lightning Systems determining that it was projecting fewer delivery of vehicles during the then-current quarter than previously projected which would result in less revenue.
The following disclosure is added on page 155 of the Proxy Statement/Prospectus following the first sentence in the paragraph that starts with, "During the period betweenNovember 13 , 2020…" in the section entitled "Background of the Business Combination". The reduced total enterprise value of Lightning Systems of$631 million with no earnout structure involving shares of the Company's Sponsor that was communicated byDr. Dinu onNovember 17, 2020 , was in part a response to the need by Lightning Systems to undertake a downward reduction of projected revenues, gross profit and EBITDA as a result of the projection that it would be delivering fewer vehicles during the then-current quarter.
The following disclosure is added in lieu of the "Lightning Systems Key Financials" table on page 164 of the Proxy Statement/Prospectus under the heading "Unaudited Prospective Financial Information".
Lightning Systems Key Financials
($ in million, unless otherwise noted) 2020 2021 2022
2023 2024 2025
Revenue $ 9 $ 63 $ 354 $ 640 $ 1,165 $ 2,012
Gross Growth NM NM 462 % 81 % 82 % 73 %
Gross Profit $ 0 $ 9 $ 68 $ 140 $ 296 $ 528
Gross Margin 3 % 14 % 19 % 22 % 25 % 26 %
Adjusted EBITDA ($ 11 ) ($ 17 ) $ 15 $ 50 $ 155 $ 315
Adjusted EBITDA Margin (122 %) (27 %) 4 % 8 % 13 % 16 %
Free Cash Flow ($ 16 ) ($ 43 ) ($ 71 ) ($ 55 ) ($ 18 ) $ 50 Source: Lightning Systems' Management Projections
The following disclosure is added after the section entitled "Management and Board of Directors" commencing on page 276 of the Proxy Statement/Prospectus.
At the completion of the Business Combination, none of the officers of
Additional Information About the Proposed Business Combination and Where to Find It
The business combination will be submitted to stockholders ofGigCapital3 for their consideration.GigCapital3 has filed a registration statement on Form S-4 (File No. 333-251862) with theSEC containing a preliminary proxy statement and a preliminary prospectus ofGigCapital3 . After the registration statement was declared effective,GigCapital3 mailed a definitive proxy statement/prospectus relating to the proposed business -------------------------------------------------------------------------------- combination to its stockholders. This Current Report on Form 8-K does not contain all the information that should be considered concerning the proposed business combination and is not intended to form the basis of any investment decision or any other decision in respect of the business combination.GigCapital3's stockholders and other interested persons are advised to read the definitive proxy statement/prospectus, as well as other documents filed with theSEC , because these documents will contain important information about the business combination. The definitive proxy statement/consent solicitation statement/prospectus and other relevant materials for the proposed business combination were mailed to stockholders ofGigCapital3 as ofMarch 15, 2021 , the record date for voting on the proposed business combination.
Stockholders may also obtain a copy of the preliminary proxy
statement/prospectus as well as other documents filed with the
Participants in the Solicitation
Lightning eMotors,GigCapital3 and their respective directors and executive officers and other persons may be deemed to be participants in the solicitations of proxies fromGigCapital3's stockholders in respect of the proposed business combination and related transactions. Information regardingGigCapital3's directors and executive officers is available in its final prospectus filed with theSEC under Rule 424(b)(4) onMay 15, 2020 . Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests will be contained in the preliminary and definitive proxy statements/prospectus related to the proposed business combination and related transactions when it becomes available, and which can be obtained free of charge from the sources indicated above.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, statements regarding the business combination betweenGigCapital3 and Lightning eMotors and its closing, and the expectations, hopes, beliefs, intentions, plans, prospects or strategies regarding the business combination, the future business plans of the Lightning eMotors andGigCapital3 management teams, and Lightning eMotors' revenue growth and financial performance, facilities, product expansion, services and product shipments and capabilities. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this Current Report on Form 8-K are based on certain assumptions and analyses made by the management ofGigCapital3 and/or Lightning eMotors in light of their respective experience and their perception of historical trends, current conditions and expected future developments and their potential effects on Lightning eMotors andGigCapital3 as well as other factors they believe are appropriate in the circumstances. There can be no assurance that future developments affecting Lightning eMotors orGigCapital3 will be those that the parties have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the parties) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including that theGigCapital3 stockholders will approve the transaction, the ability of the post-combination company to meet the NYSE listing standards, product and service acceptance and that Lightning eMotors will have sufficient capital upon the approval of the transaction to operate as anticipated. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Additional factors that could cause actual results to differ are discussed under the heading "Risk Factors" and in other sections ofGigCapital3's filings with theSEC , and inGigCapital3's current and periodic reports filed or furnished from time to time with theSEC . All forward-looking statements in this Current Report on Form 8-K are made as of the date hereof, based on information available toGigCapital3 and/or Lightning eMotors as of the date hereof, andGigCapital3 and Lightning eMotors assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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