Kensington Capital IV (KCA.U) Secures $13.375M PIPE

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Kensington Capital IV (KCA.U) Secures $13.375M PIPE

Kensington Capital Acquisition Corp. IV (NYSE:KCAC) announced that it has entered into a $13.375 million PIPE for its business combination with Amprius Technologies, Inc.

Kensington entered into separate subscription agreements with multiple investors which agreed to purchase an aggregate of 1,337,500 units at $10.00 per unit for a total purchase price of $13.375 million. Each of these units will consist of one share of Kensington common stock and one warrant.

The PIPE warrants will be substantially identical to the existing Kensington public warrants, except that the exercise price of each PIPE Warrant will be $12.50 per share (instead of $11.50 per share, which is the exercise price for the existing Kensington public warrants). Additionally, the average sales price of the New Amprius Common Stock will need to exceed $20.00 per share (instead of $18.00 per share for the existing Kensington public warrants) for Kensington to be able to redeem these PIPE Warrants. Furthermore, the PIPE Warrants will also not be listed on any securities exchange.

The PIPE investors can be segregated into two groups; the first group consists of certain officers and directors of Kensington and other members of the Sponsor who have subscribed for the majority of the PIPE at an aggregate of 1,000,000 PIPE Units, while the second group of PIPE investors consists of persons who currently serve on the board of Amprius and will serve on the New Amprius Board and have subscribed for an aggregate of 337,500 PIPE Units.

The additional PIPE proceeds to bring total funding to $243.375 million, which includes the $230 million held in Kensington’s trust account. As stated in today’s 8-K, today’s announced PIPE arrangements will be used to offset potential redemptions and be used to satisfy the minimum cash closing condition. However, in the originally released slide deck, KCAC anticipated raising additional equity capital in the amount of $200 million and today’s announcement of a $13.375 million PIPE is a long way off. It’s a start, but in today’s capital raising environment, and, in particular, today’s SPAC PIPE market environment, $13.375 million is notable achievement nonetheless.

KCAC priced its initial public offering on March 2, 2022, and quickly found a suitable target after the parties announced their deal just two months later on May 12, 2022. The deal has about two months to complete their business combination with an outside date of November 12, 2022 (with the option to extend an additional three months if certain conditions of the closing have not occurred).

On a separate note, the parties have also announced that they have determined an exchange ratio in which each outstanding share of Amprius’ common stock will be converted into the right to receive approximately 1.45590 shares of New Amprius Common Stock (with each holder’s shares rounded down to the nearest whole number) at the closing.

Amprius, the Freemont, California-based silicon nanowire battery company manufacturers high-energy and high-power lithium-ion batteries.