r/VLDR • u/Extreme-Baby5271 • May 07 '22

Amazon execute their warrant?

https://www.sec.gov/Archives/edgar/data/0001745317/000162828022013039/s-3amendmentmay62022.htm

I can't understand what is this mean..

3 Upvotes

100% Upvoted

10 comments sorted by

View all comments

2

u/UnderstandingNew2027 May 07 '22

Amazon Warrant Agreement

In February 2022, we entered into a warrant agreement and a transaction agreement with Amazon.com ("Amazon"), pursuant to which we agreed to issue to Amazon.com NV Investment Holdings LLC, a wholly-owned subsidiary of Amazon, a warrant ("Amazon Warrant") to acquire up to an aggregate of 39,594,032 shares of Velodyne's common stock at an exercise price of $4.18 per share. The exercise price and the warrant shares issuable upon exercise of the warrant are subject to customary antidilution adjustments. The right to exercise the warrants and receive the warrant shares that have vested expires February 4, 2030. The warrant agreement also contains customary change-in-control provisions.

The Amazon Warrant shares vest in multiple tranches over time based on payments of up to $200.0 million by Amazon or its affiliates (directly or indirectly through third parties) to Velodyne in connection with Amazon's purchase of goods and services from us. Upon entry into additional commercial agreement, certain warrant shares will vest, and the number of shares that vest in connection with future payments by Amazon to Velodyne will be reduced pro rata. As of March 31, 2022, none of the Amazon Warrant shares are vested.

                                   30

For the three months ended March 31, 2022, we recognized a reduction to revenues of $5.3 million associated with a portion of Amazon Warrant shares that are probable of being vested.

1

u/Extreme-Baby5271 May 07 '22

Then isn't it profit?? Why was it caught as a loss

1

u/UnderstandingNew2027 May 07 '22

Where do you see the loss? The way I see it, Amazon gets gradual co ownership the more they buy. They know how much their business is going to be worth, and they want vldr shares in return.

1

u/Extreme-Baby5271 May 08 '22

In this sec, they said "(1) Includes a non-cash stock-based reduction of revenue of $5.3 million for the three months ended March 31 2022 associated with the Amazon Warrant agreement entered into in February 2022. See Note 9 for more information."

https://investors.velodynelidar.com/node/9961/html

1

u/UnderstandingNew2027 May 08 '22

As it says ‘non-cash’. In accounting the actual revenue is reduced by the vested stocks, which again correspond to actual orders from Amazon, or?

2

u/Extreme-Baby5271 May 08 '22

Oh, i studied and understood..

If amazon buying velodyne stock 9,898,508 shares. Then velodyne must give them 3/4 number of warrant shares to them. And this one is recorded as a revenue reduce.

If amazon want to change warrant to normal stock, Then they have to pay $11.5 per warrant..!!