Sec Form 13D Filing - Indaba Capital Management L.P. filing for ON24 INC. (ONTF) - 2022-12-20

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. )¹

ON24, Inc.

(Name of Issuer)

Common Stock, par value $0.0001 per share

(Title of Class of Securities)

68339B104

(CUSIP Number)

Zac Rosenberg

Chief Compliance Officer

Indaba Capital Management, L.P.

One Letterman Drive, Building D, Suite DM 700

San Francisco, CA 94129

(415) 680-1030

 

with copies to:

Elizabeth Gonzalez-Sussman, Esq.

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

December 13, 2022

(Date of Event Which Requires Filing of This Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ☒.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

 

 

1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

	1		NAME OF REPORTING PERSON
				Indaba Capital Management, L.P.
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☒
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				Delaware
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							0
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							4,240,256
PERSON WITH				9		SOLE DISPOSITIVE POWER
							0
				10		SHARED DISPOSITIVE POWER
							4,240,256
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				4,240,256
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				8.8% (1)
	14		TYPE OF REPORTING PERSON
				IA, PN

  

(1)	Based on 48,047,496 shares of common stock of ON24, Inc. (the “Issuer”) outstanding as of November 4, 2022, as reported in the Issuer’s Form 10-Q filed with the Securities and Exchange Commission (the “SEC”) on November 14, 2022.

	1		NAME OF REPORTING PERSON
				IC GP, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☒
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				Delaware
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							0
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							4,240,256
PERSON WITH				9		SOLE DISPOSITIVE POWER
							0
				10		SHARED DISPOSITIVE POWER
							4,240,256
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				4,240,256
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				8.8% (1)
	14		TYPE OF REPORTING PERSON
				OO, HC

  

(1)	Based on 48,047,496 shares of common stock of the Issuer outstanding as of November 4, 2022, as reported in the Issuer’s Form 10-Q filed with the SEC on November 14, 2022.

 

	1		NAME OF REPORTING PERSON
				Derek C. Schrier
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☒
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				United States of America
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							0
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							4,240,256
PERSON WITH				9		SOLE DISPOSITIVE POWER
							0
				10		SHARED DISPOSITIVE POWER
							4,240,256
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				4,240,256
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				8.8% (1)
	14		TYPE OF REPORTING PERSON
				IN, HC

  

(1)	Based on 48,047,496 shares of common stock of the Issuer outstanding as of November 4, 2022, as reported in the Issuer’s Form 10-Q filed with the SEC on November 14, 2022.

 

SCHEDULE 13D

Item 1.

Security and Issuer

 

This statement on Schedule 13D (this “Schedule 13D”) relates to the common stock, $0.0001 par value (the “Common Stock”), of ON24, Inc., a Delaware corporation (the “Issuer”). The address of the Issuer’s principal executive office is 50 Beale Street, 8^th Floor, San Francisco, California 94105.

 

Information given in response to each item shall be deemed incorporated by reference in all other items, as applicable.

 

Item 2.

Identity and Background

 

(a) This Schedule 13D is being filed by and on behalf of (i) Indaba Capital Management, L.P., a Delaware limited partnership (the “Investment Manager”), (ii) IC GP, LLC, a Delaware limited liability company (“IC GP”), and (iii) Derek C. Schrier, a citizen of the United States of America and the Managing Member of IC GP (“Mr. Schrier”).  The Investment Manager, IC GP and Mr. Schrier are herein sometimes referred to each as a “Reporting Person” and collectively as “Reporting Persons”.

 

(b) The principal business address of the Reporting Persons is One Letterman Drive, Building D, Suite DM700, San Francisco, California 94129.

 

(c) The Investment Manager is principally involved in the business of providing investment advisory and investment management services to certain clients, including Indaba Capital Fund, L.P. (the “Fund”). IC GP is principally involved in the business of serving as the general partner of the Investment Manager. Mr. Schrier is the Managing Member of IC GP.

 

(d) During the last five years, none of the Reporting Persons nor, to the best of their knowledge, any of their officers and directors, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

 

(e) During the last five years, none of the Reporting Persons, nor, to the best of their knowledge, any of their officers and directors, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceedings was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

(f) The Investment Manager is a Delaware limited partnership. IC GP is a Delaware limited liability company. Mr. Schrier is a citizen of the United States.

 

Item 3.

Source and Amount of Funds or Other Consideration

 

The Reporting Persons used approximately $81,721,315 (including brokerage commissions) in the aggregate to purchase the shares of Common Stock reported in this Schedule 13D.

 

The source of the funds used to acquire the shares of Common Stock reported herein is the working capital of the Fund, which at any given time may include funds borrowed on margin in the ordinary course of business and on customary terms.

 

Item 4.

Purpose of Transaction

 

The shares of Common Stock directly held by the Fund and beneficially owned by the Reporting Persons reported herein were purchased for investment purposes in the ordinary course of business. The Reporting Persons purchased the shares of Common Stock based on the Reporting Persons’ belief that the shares of Common Stock, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of shares of Common Stock at prices that would make the purchase or sale of shares of Common Stock desirable, the Reporting Persons may endeavor to increase or decrease their position in the Issuer through, among other things, the purchase or sale of shares of Common Stock on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable.

 

The Reporting Persons believe that the Board of Directors of the Issuer (the “Board”) needs to urgently take proactive measures to improve the Issuer’s stock price, balance sheet and valuation, including by exploring bold capital allocation decisions, and intends to actively engage with the Board regarding ways to unlock shareholder value. The Reporting Persons urge the independent directors of the Board to improve their oversight of management, engage directly with the stockholder base and demonstrate greater responsiveness to stockholder input.

 

No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the shares of Common Stock, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in communications with management and the Board, engaging in discussions with stockholders of the Issuer and others about the Issuer and the Reporting Persons’ investment, making other proposals to the Issuer concerning changes to the capitalization, ownership structure, board structure (including board composition) or operations of the Issuer, purchasing additional shares of Common Stock, selling some or all of their shares of Common Stock, engaging in short selling of or any hedging or similar transaction with respect to the shares of Common Stock, or changing their intention with respect to any and all matters referred to in Item 4.

 

Item 5.

Interest in Securities of the Issuer

 

(a) – (b) The responses of the Reporting Persons to Rows (7) through (13) of the cover pages of this Schedule 13D are incorporated herein by reference. As of the date hereof, the Reporting Persons beneficially own an aggregate of 4,240,256 shares of Common Stock, which shares of Common Stock may be deemed to be beneficially owned by each of the Investment Manager, IC GP and Mr. Schrier, and which represent approximately 8.8% of the outstanding Common Stock. All percentages set forth herein are based on 48,047,496 shares of Common Stock of the Issuer outstanding as of November 4, 2022, as reported in the Issuer’s Form 10-Q filed with the SEC on November 14, 2022.

 

Pursuant to an Investment Management Agreement, the Fund and its general partner have delegated all voting and investment power over the securities of the Issuer directly held by the Fund to the Investment Manager. As a result, each of the Investment Manager, IC GP, as the general partner of the Investment Manager, and Mr. Schrier, as Managing Member of IC GP, may be deemed to exercise voting and investment power over the securities of the Issuer directly held by the Fund. The Fund specifically disclaims beneficial ownership of the securities of the Issuer directly held by it by virtue of its inability to vote or dispose of such securities as a result of such delegation to the Investment Manager.

 

(c) There have been no transactions in the securities of the Issuer by the Reporting Persons dur ing the past sixty days.

 

(d) Not applicable.

 

(e) Not applicable.

 

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

On December 20, 2022, the Reporting Persons entered into a Joint Filing Agreement in which the Reporting Persons agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Except as set forth herein, there are no contracts, understandings or relationships among the Reporting Persons or between the Reporting Persons and any other person with respect to the shares of Common Stock.

 

Item 7.

Material to Be Filed As Exhibits

 

Exhibit	Description
99.1	Joint Filing Agreement, dated December 20, 2022, by and among the Investment Manager, IC GP and Mr. Schrier.

 

SIGNATURES

After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: December 20, 2022

 

	INDABA CAPITAL MANAGEMENT, L.P.
	By:	IC GP, LLC, its general partner
	By:	/s/ Derek C. Schrier
		Name:	Derek C. Schrier
		Title:	Managing Member

 

 

	IC GP, LLC
	By:	/s/ Derek C. Schrier
		Name:	Derek C. Schrier
		Title:	Managing Member
	/s/ Derek C. Schrier
	DEREK C. SCHRIER