Item 1.01 Entry into a Material Definitive Agreement
OTC Equity Prepaid Forward Agreement
As previously disclosed on the Current Report on Form 8-K filed by
On
Pursuant to the terms of the Confirmation, CF agreed to (a) transfer to MSP for cancellation any warrants to purchase Shares received as a result of being the stockholder of record of a Share as of the close of business on the closing date of the Business Combination, pursuant to the previously announced and declared LCAP dividend and (b) waive any redemption right that would require the redemption of the Subject Shares (as defined below) in exchange for a pro rata amount of the funds held in LCAP's trust account (the "Trust").
Immediately following the closing of the Business Combination, MSP will transfer from the Trust to the Escrow Account (as defined in the Confirmation) an amount equal to (a) the aggregate number of such Subject Shares, multiplied by (b) the per share redemption price for Shares out of the Trust (the "Forward Price") (such actual aggregate cash amount, the "Prepayment Amount"), as a prepayment to CF of the amount to be paid to CF in settlement of the Transaction upon the Valuation Date (as defined below) for the number of Shares owned by CF at the closing of the Business Combination (the "Subject Shares").
After the closing of the Business Combination, CF may sell the Subject Shares at its sole discretion in one or more transactions, publicly or privately, at any time prior to the Valuation Date (the "Valuation Date"). Any such sale shall constitute an optional early termination of the Transaction (an "Optional Early Termination"). Any Subject Shares sold by CF during the term of the Transaction will cease to be Subject Shares (the "OET Shares"). CF will give written notice to MSP of any sale of Subject Shares by CF within one business day of the date of such sale, such notice to include the date of the sale, the number of Subject Shares sold, and the sale price per Subject Share. In connection with each such Optional Early Termination, on the Valuation Date (as defined below), (a) CF will receive from the Escrow Account an amount equal to the positive excess, if any, of (x) the product of the Redemption Price and the aggregate number of OET Shares over (y) an amount equal to the proceeds received by CF in connection with sales of the OET Shares, and (b) the Company will receive from the Escrow Account the amount set forth in (y) above.
After the closing of the Business Combination, CF may also buy and sell additional shares for its own account or on behalf of third parties.
The Valuation Date for the Transaction will be the earlier to occur of (a) the
five (5) month anniversary of the closing of the Business Combination and (b)
the date specified by the Seller in a written notice (not earlier than the day
such notice is effective) of the occurrence of a certain enumerated events,
including: (i) the surviving entity of the Business Combination has a resale
registration statement declared effective by the
The foregoing description is only a summary of the Confirmation and is qualified in its entirety by reference to the full text of the Confirmation, which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
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Company Common Stock Purchase Agreement
As previously disclosed on the
On
Sales of the shares of MSP's common stock to CF under the Purchase Agreement, and the timing of any such sales, will be determined by MSP from time to time in its sole discretion (subject to the terms and conditions set forth therein) and will depend on a variety of factors, including, among other things, market conditions, the trading price of the common stock, as well as determinations by MSP about the use of proceeds of such common stock sales. The net proceeds from any such sales under the Purchase Agreement will depend on the frequency with, and the price at, which the shares of common stock are sold to CF.
Upon the initial satisfaction of the conditions to CF's obligation to purchase
shares of common stock set forth under the Purchase Agreement (the
"Commencement"), including that a registration statement registering the resale
by CF of the shares of common stock under the Securities Act of 1933, as amended
(the "Securities Act"), purchased pursuant to the Purchase Agreement (the
"Resale Registration Statement") is declared effective by the
MSP has the right to terminate the Purchase Agreement at any time after the Commencement, at no additional cost or penalty, upon three (3) trading days' prior written notice.
The foregoing description is only a summary of the Purchase Agreement and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 10.2 hereto and incorporated by reference herein.
Registration Rights Agreement
On
The foregoing description is only a summary of the Registration Rights Agreement and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, which is filed as Exhibit 10.3 hereto and incorporated by reference herein.
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Item 3.02 Unregistered Sales of
The disclosure set forth above, in Item 1.01 of this Current Report on Form 8-K under the heading "Company Common Stock Purchase Agreement," is incorporated by reference. The common stock to be issued in connection with the Purchase Agreement, and after the closing of the Business Combination, will not be registered under the Securities Act in reliance on the exemption from the registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
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
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,
4 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. 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 failure to enter into a
definitive agreement in respect of the arrangements contemplated by the
Confirmation and/or the Purchase Agreement; the transactions contemplated by the
Confirmation and the Purchase Agreement not achieving their intended result or
having a negative impact on the trading of LCAP's equity securities; 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
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 10.1 OTC Equity Prepaid Forward Transaction Confirmation, datedMay 17, 2022 , by and betweenLionheart Acquisition Corporation II andCF Principal Investments LLC 10.2 Common Stock Purchase Agreement, datedMay 17, 2022 , betweenLionheart Acquisition Corporation II andCF Principal Investments LLC 10.3 Registration Rights Agreement, datedMay 17, 2022 , betweenLionheart Acquisition Corporation II andCF Principal Investments LLC Cover Page Interactive Data File (embedded within the Inline XBRL 104 document) 5
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