SNAP Snap Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 28, 2020 (April 23, 2020)

(310) 399-3339

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Explanatory Note

Purchase Agreement

On April 23, 2020, we entered into a purchase agreement (the “Purchase Agreement”) with Goldman Sachs & Co. LLC (“GS”) and J.P. Morgan Securities LLC, as representatives of the several purchasers named therein (collectively, the “Initial Purchasers”), relating to the sale by us of an aggregate of $1.0 billion principal amount of our 0.25% Convertible Senior Notes due 2025 (the “Notes”) in a private offering (the “Note Offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), which includes the Initial Purchaser’s option to purchase an additional $150.0 million aggregate principal amount of Notes (the “Notes Option”), which was exercised in full on April 24, 2020. Pursuant to the terms of the Purchase Agreement, the parties have agreed to indemnify each other against certain liabilities, including certain liabilities under the Securities Act.

The Notes are convertible into cash, shares of our Class A common stock, or a combination thereof, at our election, at an initial conversion rate of 46.1233 shares of Class A common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $21.68 per share of Class A common stock subject to adjustment. Prior to February 1, 2025, such conversion is subject to the satisfaction of certain conditions set forth below.

Holders of the Notes who convert their Notes in connection with a make-whole fundamental change (as defined in the Indenture) or in connection with a redemption are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change (as defined in the Indenture), holders of the Notes may require us to repurchase all or a portion of their Notes at a price equal to 100% of the principal amount of Notes, plus any accrued and unpaid interest, including any additional interest, to, but excluding, the repurchase date.

Holders of the Notes may convert all or a portion of their Notes at their option prior to February 1, 2025, in multiples of $1,000 principal amount, only under the following circumstances:

A copy of the Indenture and form of Note are filed as Exhibit 4.1 and Exhibit 4.2, respectively, to this Current Report on Form 8-K and are incorporated by reference. The foregoing description of the Indenture and Notes does not purport to be complete and is qualified in its entirety by reference to such exhibits.

Capped Call Transactions

On April 23, 2020, in connection with the pricing of the Notes, we entered into capped call transactions (the “Base Capped Call Transactions”) with each of GS, JPMorgan Chase Bank, National Association, Morgan Stanley & Co. LLC, Citibank, N.A., Credit Suisse Capital LLC, and Deutsche Bank AG, London Branch (collectively, the “Capped Call Counterparties”). On April 24, 2020, in connection with the Initial Purchasers’ exercise of the Notes Option, we entered into additional capped call transactions with the Capped Call Counterparties (together with the Base Capped Call Transactions, the “Capped Call Transactions”). The Capped Call Transactions cover, subject to customary anti-dilution adjustments, the number of shares of Class A common stock that will initially underlie the Notes. The Capped Call Transactions are expected generally to reduce potential dilution to holders of our Class A common stock on any conversion of the Notes or offset any cash payments we are required to make in excess of the principal amount of such converted Notes, as the case may be, with such reduction or offset subject to a cap. The cap price of the Capped Call Transactions is initially $32.12 per share of Class A common stock, representing a

premium of 100% above the last reported sale price of $16.06 per share of Class A common stock on April 23, 2020, and is subject to certain adjustments under the terms of the Capped Call Transactions.

In connection with establishing their initial hedges of the Capped Call Transactions, the Capped Call Counterparties or their respective affiliates may purchase shares of our Class A common stock or enter into various derivative transactions with respect to our Class A common stock concurrently with, or shortly after, the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of our Class A common stock or the Notes at that time.

In addition, the Capped Call Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our Class A common stock or purchasing or selling our Class A common stock in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so during any observation period related to a conversion of the Notes or following any repurchase of the Notes by us on any fundamental change repurchase date or otherwise). This activity could also cause or avoid an increase or decrease in the market price of our Class A common stock or the Notes, which could affect the holders’ ability to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of the Notes, it could affect the amount and value of the consideration that the holders will receive on conversion of such Notes.

The Capped Call Transactions are separate transactions entered into by us with the Capped Call Counterparties, are not part of the terms of the Notes, and will not affect any holder’s rights under the Notes. Holders of the Notes will not have any rights with respect to the Capped Call Transactions.

The form of the Capped Call Transaction confirmation (the “Capped Call Confirmation”) is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference. The foregoing description of the Capped Call Confirmation does not purport to be complete and is qualified in its entirety by reference to such exhibit.

Amendment of Revolving Credit Facility

On April 23, 2020, we entered into the Third Amendment to Revolving Credit Agreement (the “Amendment”) with Morgan Stanley Senior Funding, Inc., as administrative agent, and the lenders party to the Amendment. The Amendment amends that certain Revolving Credit Agreement, dated July 29, 2016 (as amended or supplemented from time to time), by and among us, Morgan Stanley Senior Funding, Inc., as administrative agent, certain lenders, and the issuing banks pursuant to which we may borrow funds for working capital and general corporate-purpose expenditures to, among other things, revise the covenant that restricts the incurrence of indebtedness to permit the issuance of the Notes.

A copy of the Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to such exhibit.

an offer to buy, any security and will not constitute an offer, solicitation, or sale in any jurisdiction in which such offering would be unlawful.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to, expectations regarding the effect of the Capped Call Transactions and regarding actions of the Capped Call Counterparties and their respective affiliates. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “will,” or similar expressions and the negatives of those words. Forward-looking statements involve substantial risks and uncertainties that may cause actual results to differ materially from those that we expect. These risks and uncertainties include market risks, trends, and conditions. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including in the section titled “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. In light of these risks, you should not place undue reliance on such forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this Current Report on Form 8-K. We disclaim any obligation to update forward-looking statements.