Kratos DefenseInc. (NASDAQ:KTOS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Underwriting Agreement
On March2, 2017, Kratos Defense Security Solutions,Inc. (the
Company) entered into an underwriting agreement (the Underwriting
Agreement) with Canaccord Genuity Inc. and B. Riley Co., LLC, as
representatives of the several underwriters named therein (the
Underwriters), relating to the sale and issuance by the Company
of shares of the Companys common stock to the Underwriters in a
firm commitment underwritten public offering. Subject to the
terms and conditions contained in the Underwriting Agreement, the
Underwriters have agreed to purchase, and the Company has agreed
to sell, an aggregate of 10,350,000 shares of the Companys common
stock at the public offering price, less certain underwriting
discounts and commissions (the Offering). The Company has also
agreed to reimburse the Underwriters for certain of their
out-of-pocket expenses. The Underwriters propose to offer the
Companys common stock directly to the public at the offering
price of $7.25 per share.
The shares of the Companys common stock are being offered and
sold to a base prospectus, dated September17, 2014, and a
prospectus supplement, dated March2, 2017 (the Prospectus
Supplement), to the Companys registration statement on FormS-3
(File No.333-198266), which was declared effective by the
Securities and Exchange Commission (SEC) on September17, 2014.
Subject to the terms and conditions of the Underwriting
Agreement, the Underwriters are committed to purchase and pay for
all shares of the Companys common stock offered by the Prospectus
Supplement, if any such shares are taken. However, the
Underwriters are not obligated to take or pay for the shares of
the Companys common stock covered by the Underwriters
over-allotment option described below, unless and until such
option is exercised.
The Company has granted the Underwriters an option, exercisable
no later than 30 calendar days after the date of the Underwriting
Agreement, to purchase up to an aggregate of 1,552,500 additional
shares of the Companys common stock at the public offering price,
less certain underwriting discounts and commissions. The Company
will be obligated to sell these shares of common stock to the
Underwriters to the extent the over-allotment option is
exercised. The Underwriters may exercise this option only to
cover over-allotments, if any, made in connection with the sale
of the Companys common stock offered by the Prospectus
Supplement.
The Company intends to use the net proceeds from the Offering to
reduce overall Company indebtedness in order to facilitate the
Companys long-term strategy and for general corporate purposes,
including the funding of certain new growth opportunities in the
Companys Unmanned Systems and Satellite Communications,
Technology and Training businesses.
The Underwriters and their affiliates have provided, and in the
future may continue to provide, various financial advisory, cash
management, investment banking, commercial banking and other
financial services to the Company in the ordinary course of
business for which they have received and will continue to
receive customary compensation.
The foregoing description of the Underwriting Agreement and the
transactions contemplated thereby does not purport to be complete
and is subject to, and qualified in its entirety by, the full
text of the Underwriting Agreement, a copy of which is attached
hereto as Exhibit1.1 and the terms of which are incorporated
herein by reference. The Underwriting Agreement contains
customary representations, warranties and agreements by the
Company, customary conditions to closing, indemnification
obligations of the Company and the Underwriters, including for
liabilities under the Securities Act of 1933, as amended, other
obligations of the parties and termination provisions. The
representations, warranties and covenants contained in the
Underwriting Agreement are solely for the benefit of the parties
to such agreement, and may be subject to limitations agreed upon
by the contracting parties.
A copy of the opinion of Paul Hastings LLP relating to the
legality of the issuance and sale of the Companys common stock in
the Offering is attached as Exhibit5.1 hereto.
Additional Information and Where to Find It
No statement in this document or the attached exhibits is an
offer to purchase or a solicitation of an offer to sell
securities. The Company has filed a registration statement
(including a prospectus) and a preliminary prospectus
supplement with the SEC and will file a final prospectus
supplement with the SEC. Before you invest in the Offering, you
should read the Prospectus Supplement, including the
registration statement (and accompanying base prospectus), and
other documents the issuer has filed with the SEC for more
complete information about the issuer and the Offering. Copies
of the Prospectus Supplement and accompanying base prospectus
may be obtained (when available), from Canaccord Genuity,
Attention: Syndicate Department, 99 High Street, 12th Floor,
Boston, Massachusetts 02110, by telephone at (617) 371-3900, or
by email at prospectus@canaccordgenuity.com; or from B. Riley
Co., c/o The Compliance Department, 11100 Santa Monica Blvd.,
Suite800, Los Angeles, California 90025, by telephone at (888)
295-0155, or by email at compliance@brileyco.com. Electronic
copies of the Prospectus Supplement and accompanying base
prospectus will also be available on the SECs website at
www.sec.gov.
Forward-Looking Statements
Certain statements in this Current Report on Form8-K may
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such
statements relate to a variety of matters, including, without
limitation, the Underwriters exercise of the over-allotment
option, the Companys intended use of the net proceeds from the
Offering and other statements that are not purely statements of
historical fact. These forward-looking statements are made on
the basis of the current beliefs, expectations and assumptions
of the management of the Company and are subject to significant
risks and uncertainty. Investors are cautioned not to place
undue reliance on any such forward-looking statements. All such
forward-looking statements speak only as of the date they are
made, and the Company undertakes no obligation to update or
revise these statements, whether as a result of new
information, future events or otherwise.
Item 8.01 Other Events.
On March2, 2017, the Company issued a press release announcing
the pricing of the Offering. A copy of the press release is
attached hereto as Exhibit99.1 and is hereby incorporated by
reference herein.
Item 9.01 Financial Statements and Exhibits.
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(d) |
Exhibits. |
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1.1 |
Underwriting Agreement, dated March2, 2017, by and among |
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5.1 23.1 |
Opinion of Paul Hastings LLP. Consent of Paul Hastings |
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99.1 |
Press release, dated March2, 2017. |
About Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
Kratos Defense & Security Solutions, Inc. offers various technologies, products and solutions focused on the United States and its allies’ national security. The Company’s segments include Kratos Government Solutions (KGS), Unmanned Systems (US) and Public Safety & Security (PSS). The KGS segment includes the operations of Defense Rocket Support Services (DRSS), Microwave Electronics Division (ME), Technical and Training Solutions (TTS), and Modular Systems (MS), which provide technology-based defense solutions, involving products and services, primarily for the United States National Security priorities. The US segment includes its unmanned aerial, ground, seaborne and command, control and communications system business. The PSS segment provides independent integrated solutions for homeland security, public safety, critical infrastructure, and security and surveillance systems for government and commercial applications. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) Recent Trading Information
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) closed its last trading session down -0.61 at 7.42 with 2,493,274 shares trading hands.