Item 1.01 Entry Into A Material Definitive Agreement.
Business Combination Agreement
On December 19, 2021 (the "Effective Date"), Globis Acquisition Corp., a
Delaware corporation ("Globis"), entered into a Securities Purchase Agreement
(as it may be amended, supplemented or otherwise modified from time to time, the
"Business Combination Agreement"), by and among Globis, Forafric Agro Holdings
Limited, a Gibraltar private company limited by shares ("FAHL"), and Lighthouse
Capital Limited, a Gibraltar private company limited by shares (the "Seller").
The Business Combination Agreement and the transactions contemplated thereby
were unanimously approved by the board of directors of Globis and the boards of
managers of FAHL and the Seller.
The Business Combination
The Business Combination Agreement provides for the consummation of the
following transactions (collectively, the "Business Combination"): (a) Globis
will form under the laws of the State of Nevada a wholly-owned subsidiary of
Globis (the "New Subsidiary"), change its jurisdiction of incorporation to
Nevada by merging with and into the New Subsidiary such that the New Subsidiary
will survive the merger (the "Surviving Company") (the "Pre-Closing Merger"),
and change its jurisdiction of incorporation again by transferring by way of a
redomiciliation and domesticating the New Subsidiary as a Gibraltar public
company limited by shares (the "Redomiciliation"); and (b) immediately following
the effectiveness of the Redomiciliation, the Surviving Company will acquire
100% of the equity interests in FAHL from the Seller. Upon consummation of the
transactions contemplated by the Business Combination, FAHL will become a wholly
owned subsidiary of the Surviving Company, which will be renamed "Forafric
Global PLC" and is referred to herein as "Company" both as of the time of the
reincorporation and following such name change.
Immediately prior to the consummation of the Business Combination (the
"Closing"), Globis will effect the Pre-Closing Merger and the Redomiciliation
pursuant to which (i) the issued and outstanding shares of common stock of
Globis, par value $0.0001 per share (the " Common Stock"), will, following the
Pre-Closing Merger and pursuant to the Redomiciliation, convert automatically by
operation of law, on a one-for-one basis, into ordinary shares, nominal value
$0.001 per share, of the Company ("Ordinary Shares"); (ii) the issued and
outstanding redeemable warrants of Globis will automatically become redeemable
warrants to acquire Ordinary Shares and (iii) each issued and outstanding unit
of Globis that has not been previously separated into the underlying Common
Stock and underlying warrant upon the request of the holder thereof, will be
cancelled and will entitle the holder thereof to one Ordinary Share and one
redeemable warrant to acquire one Ordinary Share. No other changes will be made
to the terms of any issued and outstanding warrants as a result of the
Pre-Closing Merger and Redomiciliation.
The total consideration to be paid by the Company to the Seller in the Business
Combination will be (i) 15,100,000 Ordinary Shares, subject to reduction to the
extent that the Closing Payment (as defined below) is less than $0, provided
that Seller may be issued up to 1,904,762 additional Ordinary Shares determined
based on the amount of Remaining Cash (as defined in the Business Combination
Agreement) at the Closing; plus (ii) an amount (the "Closing Payment") equal to
$20,000,000 minus the outstanding amount of all Funded Debt (as defined in the
Business Combination Agreement) as of the Closing (other than Permitted Debt);
provided that Seller may receive up to an additional $20,000,000 determined
based on the amount of Remaining Cash (as defined in the Business Combination
Agreement) at the Closing. The Closing Payment shall be funded by remaining
funds in the trust account after giving effect to any Buyer Share Redemptions
(as defined in the Business Combination Agreement) and the proceeds of any
potential private placement financing.
In addition to the foregoing consideration, the Seller shall be entitled to
receive, as additional consideration, and without any action on behalf of the
Company or the Company's stockholders, additional Ordinary Shares (the "Earnout
Shares"), to be issued as follows during the period from and after the Closing
until the end of calendar year 2024 (A) 500,000 Earnout Shares, if, during
calendar year 2022, Adjusted EBITDA (as defined in the Business Combination
Agreement) of the Company is equal to or greater than $27,000,000, (B) 500,000
Earnout Shares, if, during calendar year 2023, Adjusted EBITDA of the Company is
equal to or greater than $33,000,000, and (C) 1,000,000 Earnout Shares, if,
during calendar year 2024, the Buyer Trading Price (as defined in the Business
Combination Agreement) during the standard market trading hours of a trading day
is greater than or equal to $16.50 for any 20 trading days within any period of
30 consecutive trading days. The Seller will also be entitled to receive, as
additional consideration, and without any action on behalf of the Company or the
Company's stockholders, 20% of any cash proceeds received by the Company from
the exercise of the Company's outstanding warrants.
Representations and Warranties; Covenants; Indemnities
Under the Business Combination Agreement, the parties to the agreement made
customary representations and warranties for transactions of this type regarding
themselves. The representations and warranties made under the Business
Combination Agreement generally will survive the Closing for a period of 12
months while certain representations and warranties made under the Business
Combination Agreement will survive for a period of 48 months. In addition, the
parties to the Business Combination Agreement agreed to be bound by certain
covenants as specified in the Business Combination Agreement. The covenants made
under the Business Combination generally will survive the Closing for a period
of 12 months, subject to certain exceptions, including certain covenants and
agreements that by their terms are to be performed in whole or in part after the
Closing and will survive until the end of the period of applicable performance
or otherwise fully performed (or waived). Under the Business Combination
Agreement, from and after the Closing, the Seller will hold harmless and
indemnify the Company from and against any damages directly or indirectly
suffered by the Company relating to (i) breaches of representations and
warranties of FAHL and the Seller, (ii) breaches of covenants, obligations and
agreements of FAHL and the Seller, and (iii) any unpaid indebtedness (other than
Permitted Debt, as defined in the Business Combination Agreement) or transaction
expenses of FAHL and the Seller. Other than certain limited exceptions, such
indemnification obligations are subject to a general cap of $20,000,000, a
threshold value of such aggregate claims of $500,000, and a minimum claim
threshold of $50,000. At the Closing, 755,000 Ordinary Shares otherwise issuable
to the Seller shall be placed in escrow in order to secure the Seller's
indemnification obligations under the Business Combination Agreement. In
addition, the Seller may also elect to satisfy such indemnification obligations
by offsetting against any Earnout Shares, forfeiting additional Ordinary Shares
issued to the Seller at the Closing, or paying such indemnification obligations
in cash.
Conditions to Each Party's Obligations
The consummation of the Business Combination is subject to the satisfaction or
waiver of certain customary closing conditions of the respective parties,
including: (a) the approval and adoption by Globis' stockholders of the Business
Combination Agreement and transactions contemplated thereby; (b) the expiration
or termination of any applicable waiting period under any applicable antitrust
laws; (c) since the Effective Date, no Material Adverse Effect (as defined in
the Business Combination Agreement) shall have occurred that is continuing; (d)
the Company having at least $5,000,001 in net tangible assets as of the Closing,
after giving effect to the completion of the Buyer Share Redemption (as defined
in the Business Combination Agreement) and any private placement financing; (e)
the Redomiciliation shall have been completed; (f) the memorandum of association
and articles of association of the Company shall have been adopted and filed
under the Companies Act 2014 of the Laws of Gibraltar and shall be in effect at
the Closing; and (g) the Registration Statement (as defined below) shall have
been declared effective under the Securities Act of 1933, as amended, no stop
order suspending the effectiveness of the Registration Statement shall have been
issued by the SEC (as defined below) that remains in effect, and no legal
proceeding seeking such a stop order shall have been initiated by the SEC that
remains pending.
Termination
The Business Combination Agreement may be terminated at any time prior to the
Closing under certain circumstances, including, among others, (i) by mutual
written consent of Globis and the Seller, or (ii) by either Globis or the Seller
if the Closing has not occurred on or before March 15, 2022 (or until June 15,
2022, if Globis's Board of Directors (in its sole discretion) has extended the
period of time to consummate a business combination in accordance with its
organizational documents, or such later date as Globis and the Seller may
mutually agree), provided that such right to terminate is not available to
Globis or the Seller if such party's breach of the Business Combination
. . .
Item 7.01 Regulation FD Disclosure.
On December 20, 2021, Globis issued a press release announcing the execution of
the Business Combination Agreement. The press release is attached hereto as
Exhibit 99.1 and incorporated by reference herein.
The foregoing (including Exhibit 99.1) is being furnished pursuant to Item 7.01
and will not be deemed to be filed for purposes of Section 18 of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise be
subject to the liabilities of that section, nor will it be deemed to be
incorporated by reference in any filing under the Securities Act or the Exchange
Act.
Additional Information
In connection with the Business Combination, Globis intends to file with the
U.S. Securities and Exchange Commission's ("SEC") a Registration Statement on
Form S-4 (the "Registration Statement"), which will include a preliminary
prospectus and preliminary proxy statement. Globis will mail a definitive proxy
statement/final prospectus and other relevant documents to its shareholders.
This communication is not a substitute for the Registration Statement, the
definitive proxy statement/final prospectus or any other document that Globis
will send to its shareholders in connection with the Business Combination.
Investors and security holders of Globis are advised to read, when available,
the proxy statement/prospectus in connection with Globis' solicitation of
proxies for its extraordinary general meeting of shareholders to be held to
approve the Business Combination (and related matters) because the proxy
statement/prospectus will contain important information about the Business
Combination and the parties to the Business Combination. The definitive proxy
statement/final prospectus will be mailed to shareholders of Globis as of a
record date to be established for voting on the Business Combination.
Shareholders will also be able to obtain copies of the proxy
statement/prospectus, without charge, once available, at the SEC's website at
www.sec.gov or by directing a request to: 7100 W. Camino Real, Suite 302-48,
Boca Raton, Florida.
Participants in the Solicitation
Globis, the Seller, FAHL and their respective directors, executive officers,
other members of management, and employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies of Globis' shareholders in
connection with the Business Combination. Investors and security holders may
obtain more detailed information regarding the names and interests in the
Business Combination of Globis' directors and officers in Globis' filings with
the SEC, including the Registration Statement to be filed with the SEC by
Globis, which will include the proxy statement of Globis for the Business
Combination, and such information and names of FAHL's managers and executive
officers will also be in the Registration Statement to be filed with the SEC by
Globis, which will include the proxy statement of Globis for the Business
Combination.
Forward Looking Statements
Certain statements made herein are not historical facts but are forward-looking
statements for purposes of the safe harbor provisions under The Private
Securities Litigation Reform Act of 1995. Forward-looking statements generally
are accompanied by words such as "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "should," "would," "plan,"
"predict," "potential," "seem," "seek," "future," "outlook" and similar
expressions that predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements include, but
are not limited to, statements regarding future events, the Business Combination
between Globis, the Seller and FAHL, the estimated or anticipated future results
and benefits of the combined company following the Business Combination,
including the likelihood and ability of the parties to successfully consummate
the Business Combination, future opportunities for the combined company, and
other statements that are not historical facts.
These statements are based on the current expectations of Globis' management and
are not predictions of actual performance. These forward-looking statements are
provided for illustrative purposes only and are not intended to serve as, and
must not be relied on, by any investor as a guarantee, an assurance, a
prediction or a definitive statement of fact or probability. Actual events and
circumstances are difficult or impossible to predict and will differ from
assumptions. Many actual events and circumstances are beyond the control of
Globis and Seller. These statements are subject to a number of risks and
uncertainties regarding Globis' businesses and the Business Combination, and
actual results may differ materially. These risks and uncertainties include, but
are not limited to, general economic, political and business conditions; the
inability of the parties to consummate the Business Combination or the
occurrence of any event, change or other circumstances that could give rise to
the termination of the Business Combination Agreement; the outcome of any legal
proceedings that may be instituted against the parties following the
announcement of the Business Combination; the receipt of an unsolicited offer
from another party for an alternative business transaction that could interfere
with the Business Combination; the risk that the approval of the shareholders of
Globis or FAHL for the potential transaction is not obtained; failure to realize
the anticipated benefits of the Business Combination, including as a result of a
delay in consummating the potential transaction or difficulty in integrating the
businesses of Globis and FAHL; the risk that the Business Combination disrupts
current plans and operations as a result of the announcement and consummation of
the Business Combination; the ability of the combined company to grow and manage
growth profitably and retain its key employees; the amount of redemption
requests made by Globis' shareholders; the inability to obtain or maintain the
listing of the post-acquisition company's securities on The Nasdaq Stock Market
LLC following the Business Combination; costs related to the Business
Combination; and those factors discussed in Globis' final prospectus relating to
its initial public offering, dated December 10, 2020, and other filings with the
SEC. There may be additional risks that Globis presently does not know or that
Globis currently believes are immaterial that could also cause actual results to
differ from those contained in the forward-looking statements. In addition,
forward-looking statements provide Globis' expectations, plans or forecasts of
future events and views as of the date of this communication. Globis anticipates
that subsequent events and developments will cause Globis' assessments to
change. However, while Globis may elect to update these forward-looking
statements at some point in the future, Globis specifically disclaims any
obligation to do so. These forward-looking statements should not be relied upon
as representing Globis' assessments as of any date subsequent to the date of
this communication. Accordingly, undue reliance should not be placed upon the
forward-looking statements.
Disclaimer
This Current Report is for informational purposes only and is neither an offer
to purchase, nor a solicitation of an offer to sell, subscribe for or buy any
securities or the solicitation of any vote in any jurisdiction pursuant to the
Business Combination or otherwise, nor shall there be any sale, issuance or
transfer or securities in any jurisdiction in contravention of applicable law.
No offer of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
2.1† Business Combination Agreement, dated as of December 19, 2021, by
and among Globis Acquisition Corp., Forafric Agro Holdings Limited,
and Lighthouse Capital Limited.
99.1 Press Release, dated December 20.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
† Certain of the exhibits and schedules to this exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to
furnish supplementally a copy of all omitted exhibits and schedules to the SEC
upon its request.
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