The foregoing description of the Second Amended Sponsor Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the Second Amended Sponsor Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is
incorporated herein by reference.
New PIPE Subscription Agreements
On June 15, 2023, FWAC and certain investors including the Initial Pipe Investor (as defined below) (each, a New PIPE Investor and collectively,
the New PIPE Investors), entered into subscription agreements (the New PIPE Subscription Agreements) pursuant to which, among other things, the New PIPE Investors agreed to subscribe for and purchase, and FWAC agreed to issue
and sell to the New PIPE Investors, 46,000 shares of Series 2 Preferred Stock (as defined below) for a purchase price of $1,000.00 per share in a private placement to be conducted by Surviving Pubco for an aggregate purchase price of $46,000,000.
The New PIPE Subscription Agreements contain customary representations and warranties of FWAC, on the one hand, and the New PIPE Investors, on the other
hand, and customary conditions to closing, including the consummation of the transactions contemplated by the Merger Agreement. Shares of Series 2 Preferred Stock to be issued and sold to the New PIPE Investors pursuant to the New PIPE Subscription
Agreements will not be registered under the Securities Act of 1933, as amended (the Securities Act) in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated
thereunder. The New PIPE Investors will be entitled to the registration rights set forth in the Registration Rights Agreement attached to the New PIPE Subscription Agreements as Annex A thereto. The New PIPE Subscription Agreements further provide
the shares of Series 2 Preferred Stock issued (and any Surviving Pubco Shares issued upon conversion of the shares of Series 2 Preferred Stock) to the New PIPE Investors will be subject to a one-year lock-up period.
A copy of the form of the New PIPE Subscription Agreements is filed with this Current Report on Form 8-K as Exhibit 10.2 and is incorporated herein by
reference. The foregoing description of the New PIPE Subscription Agreements is not complete and is qualified in its entirety by reference to the form of the New PIPE Subscription Agreements filed herewith, which is incorporated by reference herein.
Item 1.02 |
Termination of a Material Definitive Agreement. |
Termination of the Initial PIPE Subscription Agreement
On December 13, 2022, concurrently with the execution of the Merger Agreement, FWAC entered into subscription agreements (collectively, the Initial PIPE
Subscription Agreement) with each of Harvest Small Cap Partners, L.P. and Harvest Small Cap Partners Master, Ltd. (collectively, the Initial PIPE Investor), entities controlled by Jeffrey B. Osher, a director of MIC, pursuant to
which, among other things, the Initial PIPE Investor agreed to subscribe for and purchase, and FWAC agreed to issue and sell to the Initial PIPE Investor, an aggregate of 1,200,000 Surviving Pubco Shares for a purchase price of $10.00 per 1.2
shares, on the terms and subject to the conditions set forth therein. The Initial PIPE Investor agreed to subscribe for $10,000,000 of the Surviving Pubco Shares.
On June 15, 2023, FWAC and the Initial PIPE Investor agreed to terminate the Initial PIPE Subscription Agreement, by mutual consent, pursuant to Section 9(b)
thereof and Section 16 of the New PIPE Subscription Agreements. As a result of the termination of the Initial PIPE Subscription Agreement, the Initial PIPE Subscription Agreement is void and of no further force and effect, and all rights and
obligations of the parties thereunder have terminated.
Item 3.02 |
Unregistered Sales of Equity Securities. |
The disclosures set forth in Item 1.01 of this Current Report on Form 8-K relating to the New PIPE Subscription
Agreements are incorporated by reference into this Item 3.02. The shares of Series 2 Preferred Stock to be issued and sold to the New PIPE Investors pursuant to the New PIPE Subscription Agreements, will not be registered under the Securities
Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
Terms of Preferred Shares
In connection with the
consummation of the Domestication, FWAC will file a charter with the State Department of Assessments and Taxation of Maryland (the Proposed Charter) that will designate 60,000 shares of Surviving Pubcos preferred stock as Series 2
Convertible Preferred Stock, par value $0.0001 per share (the Series 2 Preferred Stock). The following is a summary of certain terms of the Series 2 Preferred Stock:
Ranking. Series 2 Preferred Stock ranks senior to Surviving Pubco Shares and Series A Convertible Redeemable Preferred Stock, par value $0.0001 per
share, of Surviving Pubco and Series 1 Convertible Redeemable Preferred Stock, par value $0.0001 per share, of Surviving Pubco (collectively, the Surviving Pubco Preferred Stock) with respect to the payment of dividends and rights upon
liquidation, dissolution or winding up.
Stated Value. Each share of Series 2 Preferred Stock has an initial stated value of $1,000 (Series 2
Preferred Stock Stated Value).
Dividends. Subject to the rights of holders of any class or series of Senior Stock (as defined in the
Proposed Charter), holders of Series 2 Preferred Stock are entitled to receive, when and as authorized by the Board of Directors of Surviving Pubco (the Board of Directors) and declared by Surviving Pubco, cumulative distributions on
each share of Series 2 Preferred Stock which will be paid in kind at a cumulative annual rate of 10% during the period between the initial issuance of such shares and the conversion thereof into Surviving Pubco Shares; provided that the if the date
of distribution occurs prior to the first anniversary of the original date of issuance of such share, the holder of such share of Series 2 Preferred Stock shall receive dividends at a cumulative annual rate of 10.0% of the $1,000.00 per share
liquidation preference for a period of one year, which shall be paid in full on the conversion date.
Conversion. Each share of Series 2 Preferred
Stock is convertible into Surviving Pubco Shares upon the earlier to occur of (a) thirty (30) days after the date that the Surviving Pubco Shares first become listed on Nasdaq, the New York Stock Exchange or the NYSE American; provided that
(x) there has been no suspension or removal from listing during such thirty (30)-day period and (y) such date shall, in no case, occur prior to December 31, 2023, and (b) a change of
control of Surviving Pubco, at a conversion price of $3.67 per Surviving Pubco Share, subject to appropriate adjustment in relation to certain events, such as recapitalizations, stock dividends, stock splits, stock combinations, reclassifications or
similar events affecting the Series 2 Preferred Stock, as set forth in the Proposed Charter. Such Surviving Pubco Shares issued upon conversion of the Series 2 Preferred Stock may not be sold or transferred by the holders thereof until the earlier
of (a) one year following the conversion and (b) the date after the closing of the Merger on which Surviving Pubco completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of
the Surviving Pubcos stockholders having the right to exchange their equity holdings in Surviving Pubco for cash, securities or other property.
Redemption. The Series 2 Preferred Stock is generally not redeemable automatically by its terms or at the option of Surviving Pubco or the holders
thereof.