Item 1.01 Entry into a Material Definitive Agreement.
On May 9, 2022, Lionheart Acquisition Corporation II (the "Company" or "LCAP")
entered into the First Amendment to Warrant Agreement (the "Warrant Agreement
Amendment") with Continental Stock Transfer & Trust Company (the "Warrant
Agent"), amending the Warrant Agreement, dated as of August 13, 2020, by and
between the Company and the Warrant Agent (the "Existing Warrant Agreement" and
the warrants issued thereunder, the "Existing Warrants"). The Warrant Agreement
Amendment permits holders of Existing Warrants to exercise the Existing Warrants
beginning 10 days following the closing of the Company's initial business
combination (rather than the current 30 days) and on a cashless basis at the
holder's preference.
The foregoing description of the Warrant Agreement Amendment is not complete and
is qualified in its entirety by reference to the full text of the Warrant
Agreement Amendment, a copy of which is attached as Exhibit 4.1 of this Current
Report on Form 8-K.
Item 8.01 Other Events
On May 10, 2022, the Company issued a press release (the "Press Release")
announcing the Warrant Agreement Amendment and that the Company's Board of
Directors has declared a warrant dividend (the "Dividend") as contemplated by
the previously disclosed Membership Interest Purchase Agreement, dated as of
July 11, 2021 (as amended, the "MIPA" and the transactions contemplated thereby,
the "Business Combination"), by and among the Company, Lionheart II Holdings,
LLC, a wholly owned subsidiary of the Company, each limited liability company
set forth on Schedule 2.1(a) to the MIPA (the "MSP Purchased Companies"), the
members of the MSP Purchased Companies listed on Schedule 2.1(b) to the MIPA
(the "Members"), and John H. Ruiz, as the representative of the Members. The
Dividend is comprised of approximately 1,029,000,000 newly issued warrants, each
to purchase one share of Class A Common Stock for an exercise price of $11.50
per share (the "New Warrants"), conditioned upon the consummation of any
redemptions by the Company's stockholders and the closing of the Business
Combination (the "Closing"), to the holders of record of the Company's Class A
common stock, par value $0.0001, as of the close of business on the date of
Closing (such date, the "Closing Date"), after giving effect to the waiver of
the right to participate in the Dividend by the Members, on behalf of themselves
and any of their designees. Pursuant to the anti-dilution adjustment terms of
the Existing Warrant Agreement, the Dividend is expected to cause the exercise
price of the Existing Warrants to decrease to $0.0001 after giving effect to the
issuance of the New Warrants.
The Company has set the record date for the determination of the holders of
record of the outstanding shares of Class A Common Stock entitled to receive the
Dividend as the close of business on the Closing Date. The Dividend is expected
to be issued on the 10th day following the Closing, or on the earliest date
reasonably practicable thereafter, and will be exercisable 30 days following the
Closing Date until their expiration date, which will be the fifth anniversary of
the Closing Date or earlier redemption.
The Company intends for the New Warrants to be listed and traded on The Nasdaq
Capital Market ("Nasdaq") under the symbol "MSPRW" on or around 10 days
following the Closing Date, subject to Nasdaq approval. The New Warrants and the
shares of Class A Common Stock underlying such New Warrants, were registered on
a registration statement on Form S-4 (File No. 333-260969) that was filed with
the Securities and Exchange Commission and declared effective on May 2, 2022
(the "Registration Statement").
A copy of the Press Release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Important Information About the Business Combination and Where to Find It
In connection with the Business Combination, LCAP has filed the Registration
Statement with the SEC, which includes a preliminary proxy statement/prospectus
of LCAP. This document does not contain all the information that should be
considered concerning the Business Combination and is not intended to form the
basis of any investment decision or any other decision in respect of the
Business Combination. The Registration Statement was declared effective by the
SEC on May 2, 2022, the definitive proxy statement/prospectus was filed with the
SEC on May 3, 2022, and a definitive proxy statement/prospectus has been mailed
to the stockholders of LCAP as of April 18, 2022, the record date established
for voting on the Business Combination. SECURITYHOLDERS OF LCAP ARE URGED TO
READ THE REGISTRATION STATEMENT, THE DEFINITIVE PROXY STATEMENT/PROSPECTUS
(INCLUDING ALL EXHIBITS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS AND
RELEVANT MATERIALS RELATING TO THE BUSINESS COMBINATION FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING ANY VOTING DECISION WITH RESPECT
TO THE BUSINESS COMBINATION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE
BUSINESS COMBINATION AND THE PARTIES TO THE PROPOSED BUSINESS COMBINATION.
LCAP's stockholders are able to obtain copies of such documents, without charge,
at the SEC's website at www.sec.gov, or by directing a request to: Lionheart
Acquisition Corporation II, 4218 NE 2nd Avenue, Miami, Florida 33137.
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INVESTMENT IN ANY SECURITIES DESCRIBED HEREIN HAS NOT BEEN APPROVED OR
DISAPPROVED BY THE SEC OR ANY OTHER REGULATORY AUTHORITY NOR HAS ANY AUTHORITY
PASSED UPON OR ENDORSED THE MERITS OF THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED THEREIN.
Participants in the Solicitation of Proxies
This communication is not a solicitation of a proxy from any investor or
securityholder. LCAP, MSP Recovery, LLC ("MSP"), and their respective directors,
executive officers and other members of their management and employees,
including Ophir Sternberg, John Ruiz and Frank Quesada, may, under SEC rules, be
deemed to be participants in the solicitation of proxies of LCAP's stockholders
in connection with the Business Combination. Investors and securityholders may
obtain more detailed information regarding the names, affiliations and interests
of LCAP's directors and executive officers in LCAP's Annual Report on Form
10-K/A filed with the SEC on April 7, 2022, as amended, the proxy
statement/prospectus, other relevant materials filed with the SEC in connection
with the Business Combination when they become available, and other reports
filed with the SEC. These documents can be obtained free of charge from the
sources indicated above.
No Offer or Solicitation
No offer or offering of equity interests or securities of any kind is being
made, conducted or extended at this time. This communication is for
informational purposes only and does not constitute or include an offer to sell,
or a solicitation of an offer to purchase or subscribe for, equity interests or
securities of any kind or a solicitation of any vote of approval, nor shall
there be any sale, issuance or transfer of any such securities in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
Any such offer or solicitation will be made only in connection with the delivery
of a prospectus meeting the requirements of the Securities Act of 1933, as
amended ("Securities Act"), or exemptions therefrom.
Cautionary Note Regarding Forward Looking Statements
This communication includes forward looking statements within the meaning of the
safe harbor from civil liability provided for such statements by the Private
Securities Litigation Reform Act of 1995 (set forth in Section 21E of the
Securities Exchange Act of 1934, as amended ("Exchange Act") and Section 27A of
the Securities Act), which include information relating to future events, future
financial performance, strategies, expectations, competitive environment,
regulation and availability of resources and involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performances
or achievements expressed or implied by the forward-looking statements. These
statements are often accompanied with or by words such as "expects," "plans,"
"projects," "forecasts," "estimates," "intends," "expects," "anticipates,"
"seeks," "targets," "continues," "believes," "opinion," "will," "could,"
"future," "growth," or "may" (or the negatives thereof) or other 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 MSP's plans, goals and objectives,
forecasts, budgets or projections and any related assumptions, statements and
projections regarding projected MSP claims by paid amounts, projected recovery
percentages, forecasts relating to key revenue drivers, earnings growth, gross
and cumulative recoveries and the implied enterprise value and LCAP's and MSP's
expectations with respect to future performance and anticipated financial
impacts of the Business Combination, the satisfaction or waiver of the closing
conditions to the Business Combination, and the timing of the completion of the
Business Combination. There is no guarantee that prospects or results or the
timing of events included or referred to in this communication will be achieved
or that MSP will be able to implement successfully its investment strategy or
achieve its investment objectives or return targets. Accordingly, we caution you
against relying on forward-looking statements. Forward looking statements also
are subject to a number of significant risks and uncertainties that could cause
the actual results to differ materially, and potentially adversely, from those
express or implied in the forward-looking statements. These statements are based
on various assumptions, whether or not identified in this communication, and on
the current expectations of management and are not predictions of actual
performance. Actual events and circumstances are difficult or impossible to
predict and may differ from assumptions, and such differences may be material.
Many actual events and circumstances are inherently subject to significant
business, economic and competitive uncertainties and contingencies, and are
beyond the control of MSP and LCAP and are difficult to predict.
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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. Factors that may cause such differences include, but are not
limited to, the occurrence of any event, change, or other circumstances that
could give rise to the termination of the MIPA; the outcome of any legal
proceedings that may be instituted against LCAP or MSP or affiliated companies
following the announcement of the Business Combination; the inability to
complete the Business Combination on the expected time frame or at all,
including due to failure to obtain approval of LCAP's stockholders, certain
regulatory approvals, or the satisfaction of other conditions to closing in the
MIPA; the occurrence of any event, change, or other circumstance that could give
rise to the termination of the MIPA or could otherwise cause the Business
Combination to fail to close; the inability to obtain or maintain the common
stock listing on the Nasdaq Stock Market following the Business Combination; a
delay or failure to realize the expected benefits of the Business Combination;
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 to recognize the anticipated benefits of the Business Combination, which
may be affected by, among other things: future economic, financial, lending,
competitive and market conditions, including healthcare spending fluctuations;
future costs of and returns on capital; leverage and lending costs and terms;
operating costs and future business, investment, holding and sale decisions and
costs; the risks associated with MSP's business, including, among others, MSP's
ability to capitalize on its assignment agreements and recover monies that were
paid by the assignors; litigation results; the validity of the assignments of
claims to MSP; a determination that MSP's claims are not reasonable, related or
necessary; the failure of MSP's clients to renew their agreements with MSP (or
terminate those agreements early); MSP's claims being within applicable statutes
of limitations; the inability to successfully expand the scope of MSP's claims
or obtain new data and claims from MSP's existing assignor base or otherwise;
the limited number of MSP's assignors and the associated concentration of MSP's
current and future potential revenue; internal improvements to claims and retail
billing processes by MSP's clients that reduce the need for and revenue
generated by MSP's products and services; healthcare spending fluctuations;
programmatic changes to the scope of benefits and limitations to payment
integrity initiatives that reduce the need for MSP's services; delays in
implementing MSP's services to its claims; system interruptions or failures;
cyber-security breaches and other disruptions that could compromise MSP's data;
MSP's failure to maintain or upgrade its operational platforms; MSP's failure to
innovate and develop new solutions, or the failure of those solutions to be
adopted by MSP's existing and potential assignors; MSP's failure to comply with
applicable privacy, security and data laws, regulations and standards, including
with respect to third party providers; changes in legislation related to
healthcare programs and policies; changes in the healthcare market; negative
publicity concerning healthcare data analytics and payment accuracy;
competition; successfully protecting MSP's intellectual property rights; the
risk that third parties may allege infringement of their intellectual property;
changes in the healthcare regulatory environment and the failure to comply with
applicable laws and regulations or the increased costs associated with any such
compliance; failure to manage MSP's growth; the inability to attract and retain
key personnel; MSP's reliance on its senior management team and key employees
and the loss it could sustain if any of those employees separated from the
business; the failure of vendors and providers to deliver or perform as
expected, or the loss of such vendors or providers; MSP's geographic
concentration; MSP's relatively limited operating history, which makes it
difficult to evaluate its current or future business prospects; the impact of
the ongoing COVID-19 pandemic; and the risk that MSP may not be able to develop
. . .
Item 9.01 Financial Statement and Exhibits.
(d) Exhibits.
Exhibit
Number Description
4.1 First Amendment to Warrant Agreement, dated May 9, 2022, by and between
the Registrant and Continental Stock Transfer & Trust Company.
99.1 Press Release dated May 10, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL)
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