Item 1.01. Entry into a Material Definitive Agreement.
On June 20, 2022, Chavant Capital Acquisition Corp. (the "Company") issued an
unsecured convertible note (the "Promissory Note") in the aggregate principal
amount of $360,000 to its sponsor, Chavant Capital Partners LLC (the "Sponsor").
The Promissory Note does not bear any interest, and outstanding loans under the
Promissory Note may be converted into private placement warrants (the "New
Private Placement Warrants") at a price of $1.00 per warrant, at the option of
the Sponsor, upon the consummation of the Company's initial business
combination, with such New Private Placement Warrants having the same terms as
the private placement warrants issued in connection with the Company's initial
public offering ("IPO"). In the aggregate, up to $1,500,000 of the loans under
the Promissory Note, together with any loans under other notes that may be
issued in the future to the Sponsor or its affiliates or certain of the
Company's officers and directors to finance the Company's transaction costs in
connection with an initial business combination, may be convertible into the New
Private Placement Warrants. The Company issued the Promissory Note in
consideration for a loan from the Sponsor to fund the Company's ongoing working
capital requirements and to fund a portion of the amounts that the Company has
agreed to deposit (the "Deposit") into the Company's trust account established
in connection with its IPO (the "Trust Account") if the Extension Amendment
Proposal (as defined in the Company's preliminary Proxy Statement filed with the
Securities and Exchange Commission on June 9, 2022) is approved. Amounts that
the Company receives under the Promissory Note that are not used for the Deposit
will be used for ongoing working capital and will not be deposited into the
Trust Account. Funds will be provided to the Sponsor for purposes of the loan by
the Chairman of the board of directors of the Company or an entity affiliated
with him and by an existing investor in the Sponsor and/or persons affiliated
with such investor. If the Company completes a business combination, it may
repay such loaned amounts out of the proceeds of the Trust Account. In the event
that a business combination does not close, the Company may use its working
capital held outside of the Trust Account to repay such loaned amounts, but no
proceeds from the Trust Account would be used for such repayment. Except to the
extent converted at the option of the Sponsor into New Private Placement
Warrants, the Company must repay the outstanding principal amount at the earlier
of (i) five business days after the closing of the initial business combination
and (ii) December 31, 2023, which is the maturity date of the Promissory Note.
On or after July 22, 2022, the Company is not entitled to initiate further
drawdowns under the Promissory Note, unless, at such time, either (i) the
Company has filed with the Securities and Exchange Commission an announcement on
Form 8-K disclosing, among other things, the signing of the definitive agreement
relating to its initial business combination and the issuance of the Promissory
Note or (ii) the Company has attained the necessary shareholder approval to
extend the period to close its initial business combination beyond July 22,
2022.
The foregoing description of the Promissory Note is qualified in its entirety by
reference to the full text of the Promissory Note, a copy of which is filed as
Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by
reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
regarding the issuance of the Promissory Note is incorporated by reference
herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Promissory Note, dated June 20, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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