Nextdoor Holdings, Inc. current report, 06 July 2021

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SEC Form 8-K Summary

Business Context and Reporting Period

On July 6, 2021, Khosla Ventures Acquisition Co. II (KVSB), a special purpose acquisition company, entered into a merger agreement with Nextdoor, Inc. and Lorelei Merger Sub Inc. The transaction would combine KVSB and Nextdoor, with Nextdoor surviving as a wholly owned subsidiary until the closing and KVSB subsequently being renamed. This filing reports transaction-related events rather than a fiscal-period operating update for Nextdoor.

Transaction and Key Financial Terms

  • Nextdoor equityholders are to receive an aggregate of 350.0 million shares of the post-closing high-vote Class B common stock, subject to adjustment for equity awards and the treasury stock method.
  • KVSB’s existing Class B shares would convert into 7,347,249 shares of KVSB Class A common stock and be exchanged for post-closing Class B shares.
  • KVSB’s Class K shares would be reclassified as 3,061,354 post-closing Class B shares.
  • KVSB’s sponsor and related holders agreed to convert or exchange specified securities into an aggregate of 10,408,603 post-closing Class B shares. An additional 1,132,688 private placement shares held by the sponsor would be exchanged on a one-for-one basis.
  • PIPE investors subscribed for 27.0 million KVSB Class A shares at an aggregate purchase price of $270 million. The shares are to be issued in an unregistered private placement under Section 4(a)(2) of the Securities Act.
  • A closing condition requires at least $400 million of combined available cash, consisting of the Trust Amount, PIPE proceeds and specified forward-purchase funding, after redemptions, deferred underwriting commissions and transaction expenses.
  • KVSB must have at least $5,000,001 of net tangible assets at closing.

The filing does not provide Nextdoor’s revenue, profitability, cash flow, margins, debt, or standalone liquidity metrics.

Material Changes Versus the Prior Comparable Period

The filing does not present comparable-period financial statements or operating results. The material development is KVSB’s execution of the proposed business combination and related $270 million PIPE financing.

Governance, Restrictions, Outlook, and Risks

  • Subject to stockholder approval, post-closing Class B shares will have 10 votes per share and Class A shares will have one vote per share. Former Nextdoor stockholders, the sponsor and certain equity-award holders are expected to control a majority of voting power for up to ten years or until an earlier specified event.
  • Nextdoor holders generally will be subject to a 180-day lock-up after closing. Sponsor holders generally will be subject to a one-year lock-up.
  • Closing remains subject to stockholder approvals, effectiveness of an SEC Form S-4 registration statement, antitrust clearance, exchange-listing approval, minimum cash and net tangible asset requirements, and other customary conditions.
  • The agreement may be terminated in specified circumstances, including failure to obtain required approvals, uncured breaches, legal prohibitions, or failure to close by April 6, 2022. The PIPE subscriptions may terminate if the transaction does not close by April 2, 2022.
  • KVSB and Nextdoor identified risks including transaction failure or delay, redemptions reducing available cash, failure to complete the PIPE, regulatory or litigation issues, exchange delisting, volatility, employee-retention challenges, disruption to business relationships, and difficulty executing post-closing plans.
  • The filing contains forward-looking statements and states that investors should rely on the future Form S-4, proxy statement/prospectus and other SEC filings for additional transaction information.

Important Facts for Investors to Verify

  • Whether KVSB and Nextdoor stockholders approve the transaction and whether all other closing conditions are satisfied.
  • The final Trust Amount, redemption levels, PIPE funding and total cash available at closing.
  • The final capitalization, including shares issued to Nextdoor holders, sponsors, PIPE investors and equity-award holders.
  • The extent of post-closing voting control held by Class B stockholders and the effect of the 10-to-one voting structure.
  • Nextdoor’s historical and projected revenue, profitability, cash flow, liquidity, debt and operating metrics in the forthcoming Form S-4 and proxy statement.
  • The final exchange listing, registration rights, lock-up terms and any material changes to the merger agreement before closing.