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id: 1095

Kaleyra Warrants Have STILL Not Been Paid Out According To SEC Filing Terms and Acquisition Agreement, The Acquiring Company REFUSES To Engage

Both TATA and Kaleyra have still not paid out warrant holders after their acquisiton and refusing to pay for several months now. This has cost me greatly in time, interest, oppurtunity cost, stress, and my entire investment in the comapny based on the SEC filings that said warrant holders would be paid out. They have still not paid out warrant holders and I have full documentation since the merger was announced of me being told they will not pay. They are making a mockery of SEC filings, due process, and legal agreements in public markets.

Here are some details explaining why they must - this data is based on my social research and a resposne I got from a warrent expert that I have case:

According to the terms of the warrant agreement warrant holders are absolutely correct that they iare entitled to the black scholes value of the warrants, which is definitely not zero as the company is claiming. They still have not paid out any warrant holders and "refuse to engage."

In terms of the language in the warrant agreement
In case of the occurrence of any Corporate Event in which 100% of the consideration receivable by the holders of the Common Stock in the Corporate Event is payable in cash, then immediately prior to the consummation of such Corporate Event, (i) the Exercise Price shall be reduced by an amount (in dollars) (but in no event less than zero) equal to the difference of (A) the Exercise Price in effect prior to such reduction minus (B) (I) the Per Share Consideration minus (II) the Black-Scholes Warrant Value and (ii) immediately following (and after giving effect to) the reduction of the Exercise Price as set forth in the immediately preceding clause (i), and upon consummation of the Corporate Event, and without any action on the part of the Company or the Registered Holder, each Warrant that is outstanding and unexercised immediately prior to the consummation of such Corporate Event shall automatically be cancelled and converted into the right to receive (without interest) an amount in cash equal to the product of (A) the total number of shares of Common Stock underlying such Warrant multiplied by (B) the excess, if any of (I) the Per Share Consideration over (II) the Exercise Price.

This is a fancy way of saying in an all cash merger you get paid out the black scholes value of your warrants.

Let X = old exercise price, Y = new exercise price, Z = black scholes value, and A = buyout amount
Y = X - (X - ( A - Z)
Y = X - X + A - Z
Y = A - Z

So the new exercise price is whatever the cash buyout consideration per share is less the black scholes value. Given warrant holders are entitled to a cash payout equal to the difference between the cash buyout and new exercise price, warrant holders are entitled to:

A - Y or A - (A - Z) which is Z (the black scholes value).

This is why Berkshire Grey warrant holders got paid out around 38c per warrant even though they were bought out for $1.40 which is way under the $11.50 exercise price of the warrants. Berkshire Grey even specified this in their 8K that warrant holders are entitled to the Black Scholes value and their warrant agreement had exactly the same language as the Kaleyra one.

Provided that if a holder of such warrant properly exercises such warrant within thirty (30) days following the public disclosure of the consummation of the Merger, the holder of such warrant will be entitled to the Black-Scholes Warrant Value (as defined in the Warrant Agreement) with respect to such warrant, which would have been equal to approximately $0.38 per warrant as of the close of trading on March 23, 2023.

Now Kaleyra had undergone a 3.5 to 1 reverse split so effectively this was a buyout at around $2.07. Kaleyra warrants also had less time remaining on them and I haven't done the 90 day HV calculation to determine the volatility input however I'd imagine warrant holders would've received around 10-15ish cents per warrant.
Case Status
Attorney Investigation
Alleged Offence
Misleading Statements
Financial Misrepresentation
Breach of Fiduciary duty
Suspected Party
Security Type
Trade Direction
Shock Event Date
28 June 2023
Collecting participants…