Item 1.01. Entry into a Material Definitive Agreement.
The disclosure in Item 8.01 of this Current Report on Form 8-K is incorporated
herein as reference.
Item 2.03. Creation of a Direct Financial Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The disclosure in Item 8.01 of this Current Report on Form 8-K is incorporated
herein as reference.
Item 3.02. Unregistered Sale of Equity Securities.
The disclosure in Item 8.01 of this Current Report on Form 8-K is incorporated
herein as reference.
Item 8.01. Other Events.
On March 12, 2021, The RealReal, Inc. (the "Company") was notified by the
initial purchasers of the 1.00% Convertible Senior Notes due 2028 (the "Notes")
under the previously announced private offering, which closed on March 8, 2021,
of the exercise in full of their option to purchase an additional $37.5 million
in aggregate principal amount of the Notes (the "Option Notes"). On March 16,
2021, the Company closed on the issuance of the Option Notes to the initial
purchasers. With the sale of the Option Notes, the Company expects the net
proceeds from the entire offering to be $278.2 million after deducting the
initial purchasers' discounts and commissions and the estimated offering
expenses payable by the Company. The Company used approximately $4.4 million of
the net proceeds from the offering to pay the cost of Additional Capped Call
Transactions described below.
The Option Notes will have the same terms as the Notes issued on March 8, 2021
and will be issued under the same Indenture as the Notes dated as of March 8,
2021 between the Company and U.S. Bank National Association, as trustee, which
terms are described in the Company's current report on Form 8-K filed on
March 8, 2021.
On March 12, 2021, in connection with the sale of the Option Notes, the Company
entered into privately negotiated capped call transactions (collectively, the
"Additional Capped Call Transactions") with each of Credit Suisse Capital LLC,
Morgan Stanley & Co. LLC and Bank of America, N.A. (the "Capped Call
Counterparties"). The Additional Capped Call Transactions cover, subject to
anti-dilution adjustments, the same number of shares of the Company's common
stock underlying the Option Notes. The Additional Capped Call Transactions are
generally expected to reduce potential dilution to the Company's common stock
upon any conversion of the Option Notes and/or offset any cash payments the
Company is required to make in excess of the principal amount of converted
Option Notes, as the case may be, with such reduction and/or offset subject to a
cap. The cap price of the Additional Capped Call Transactions is initially
$48.00 per share, which represents a premium of 100.0% over the closing price of
the Company's common stock of $24.00 per share on March 3, 2021, and is subject
to certain adjustments under the terms of the Additional Capped Call
Transactions.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Form of Additional Capped Call Confirmation, dated March 12, 2021
between The RealReal, Inc. and each of the Capped Call Counterparties.
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the inline XBRL document).
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