Blue Apron (APRN) Files Registration Statement for Previously-Announced Rights Offering

September 21, 2021 6:16 AM EDT

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Blue Apron Holdings, Inc. (NYSE: APRN) today filed a registration statement with the Securities and Exchange Commission (“SEC”) for its previously announced proposed fully backstopped equity rights offering, which represents $45.0 million of its planned $78.0 million capital raise.

As part of the $78.0 million capital raise, the company previously disclosed a planned $30.0 million investment by RJB Partners LLC, an affiliate of Joseph N. Sanberg, and a $3.0 million investment by Matthew B. Salzberg, Blue Apron’s co-founder and former board chair, on the same terms as the rights offering. RJB Partners LLC is also the backstop provider in the rights offering.

Each of the transactions included in the capital raise is structured to include a combination of shares of Class A common stock and associated warrants, and is priced at an effective purchase price of $10.00 for one share of Class A common stock plus the associated warrants, as described below. As of September 14, 2021, the date prior to the announcement of the transactions, the closing price of the Class A common stock on the New York Stock Exchange was $3.88 per share.

Blue Apron intends to use the net proceeds of the full capital raise for working capital and general corporate purposes, including to accelerate its growth strategy to drive new customers and associated revenue growth. The company is also permitted by the terms of the purchase agreement to repay up to $5.0 million of outstanding indebtedness with capital raise proceeds.

In addition, the company has committed to establishing and implementing certain new initiatives to build on its ESG program, including plans to achieve carbon neutrality targets by early 2022. The company also plans to increase wages, benefits and training for its hourly employees.

Further, under the terms of the purchase agreement, Blue Apron agreed to use reasonable best efforts to implement a number of corporate governance reforms. In connection with the transactions, effective as of September 15, 2021, Blue Apron’s dual-class capital structure was eliminated. Other governance reforms include using reasonable best efforts to have the board of directors composed of at least 50% women and at least 50% persons of color following the company’s 2022 annual stockholders meeting. These planned governance initiatives follow the declassification of the board of directors that was approved earlier this year.

Matthew B. Salzberg’s investment closed on September 15, 2021, and the other transactions are expected to close in the fourth quarter of 2021.

Proposed Rights Offering

The public $45.0 million proposed rights offering consists of subscription rights to purchase Class A common stock and associated warrants offered to all existing shareholders on a pro rata basis as of a yet to be determined record date. The company has included the rights offering as part of its planned capital raise to enable stockholders to participate pro rata in $45.0 million of the capital raise on the same terms as RJB Partners LLC. Certain directors, including Linda Findley Kozlowski and Elizabeth Huebner, have indicated that they intend to exercise the subscription rights they receive in the rights offering in full. The proposed offering is fully backstopped by RJB Partners LLC under a purchase agreement, which commits RJB Partners LLC to purchase any and all unsubscribed shares of Class A common stock and warrants in the rights offering, subject to certain customary closing conditions, including completion of the proposed rights offering. This purchase agreement also governs the RJB Partners LLC and Salzberg private placements.

The subscription rights will entitle eligible holders to purchase for an effective purchase price of $10.00 (i) one share of Class A common stock, (ii) one seven-year warrant to purchase 0.8 of one additional share of Class A Common Stock at an exercise price of $15.00 per share, (iii) one seven-year warrant to purchase 0.4 of one additional share of Class A Common Stock at an exercise price of $18.00 per share, and (iv) one seven-year warrant to purchase 0.2 of one additional share of Class A Common Stock at an exercise price of $20.00 per share.

The subscription price for the proposed rights offering was unanimously approved by the company’s board of directors based on several considerations, including negotiations with RJB Partners LLC regarding the backstop and the company’s financing needs.

Other Important Information

A registration statement relating to the proposed rights offering has been filed with the SEC but has not yet become effective. The proposed rights offering will be made pursuant to such registration statement and a prospectus to be filed with the SEC prior to the commencement of the proposed rights offering. The securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

The information herein, including the expected terms of the proposed rights offering, is not complete and is subject to change. The company reserves the right to cancel or terminate the planned rights offering at any time with the consent of RJB Partners LLC. This press release does not constitute an offer to sell or the solicitation of an offer to buy any subscription rights or any other securities to be issued in the proposed rights offering or any related transactions, nor shall there be any offer, solicitation or sale of subscription rights or any other securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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