Item 1.01 Entry into a Material Definitive Agreement.
On
April 16, 2023, the Board of Directors (the “Board”) of Heliogen, Inc. (“Heliogen” or the “Company”),
a Delaware corporation, declared a dividend of one preferred share purchase right (“Right”) for each outstanding share of
common stock, par value $0.0001 per share, of the Company (“Company Common Stock”) to the stockholders of record as of the
close of business on April 28, 2023, and adopted a limited duration stockholder rights plan, effective
immediately, as set forth in the Rights Agreement, dated as of April 16, 2023 (the “Rights Agreement”), by and between the
Company and Continental Stock Transfer & Trust Company, as rights agent. The Rights will expire on April 17, 2024 (“Final Expiration
Date”) unless the rights are earlier redeemed or exchanged by the Company.
In
general terms, the Rights Agreement works by imposing a significant penalty upon any person or group that acquires beneficial
ownership of 12.5% (20% in the case of certain passive institutional investors) or more of the outstanding shares of Company Common
Stock without the approval of the Board. The Board adopted the Rights Agreement in response to the previously disclosed unsolicited,
non-binding proposal to acquire the Company made by Continuum Renewables, Inc. (“CRI”), which is controlled by entities
that directly or indirectly own approximately 26% of the Company’s outstanding shares. The Rights Agreement is intended to
enable all stockholders to realize the full value of their investment in the Company and afford the Board adequate time to consider
CRI’s non-binding proposal. The Rights Agreement will reduce the likelihood that any entity, person or group gains control of
Heliogen through open market accumulation without paying all stockholders an appropriate control premium or without providing the
Board sufficient time to make informed judgments and take actions that are in the best interests of all stockholders. The Rights
Agreement does not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it
is in the best interests of Heliogen and all of its stockholders.
The
Rights Agreement is similar to other plans adopted by publicly held companies in comparable circumstances.
A
summary of the terms of the Rights Agreement follows:
The
Rights. The Rights will not be exercisable and will trade with shares of the Company Common Stock until the earlier to occur of (a)
the tenth day (or such later date as may be determined by the Board) after a person or group acquires beneficial ownership of 12.5% or
more of Company Common Stock (20% in the case of a passive institutional investor) or (b) the tenth business day (or such later date as
may be determined by the Board) after a person or group announces a tender or exchange offer, the consummation of which would result in
ownership by a person or group of 12.5% or more of Company Common Stock (20% in the case of a passive institutional investor) (in each
case of (a) and (b), such person or group, an “Acquiring Person”); provided, however, the term “Acquiring Person”
is subject to certain customary exceptions whereby certain stockholders that would have otherwise been an Acquiring Person are excluded
from the definition of “Acquiring Person”. Any stockholders with beneficial ownership of Company Common Stock above the applicable
threshold as of the time of this announcement are grandfathered at their current ownership levels but are not permitted to increase their
ownership without triggering the Rights. Prior to exercise, the Right does not give its holder any dividend, voting or liquidation
rights.
The
date when the Rights separate from Company Common Stock and become exercisable is referred to herein as the “Distribution Date”.
Until that date, Company Common Stock certificates or, in the case of uncertificated shares, notations in the book-entry account system,
will evidence the Rights, and any transfer of shares of Company Common Stock will constitute a transfer of Rights. After the Distribution
Date, the Rights will be evidenced by separate book-entry credits or by Rights certificates that the Company will mail to all eligible,
certificated holders of Company Common Stock. Any Rights held by an Acquiring Person are null and void and may not be exercised.
Exercise
Price. After the Distribution Date, each Right will entitle the holder to purchase for $3.50 (the “Exercise Price”),
one-thousandth (1/1000th) of a share of the Company’s Preferred Stock (“Company Preferred Share”) with economic
terms similar to that of one share of Company Common Stock.
Beneficial
Ownership. Certain synthetic interests in securities created by derivative positions — whether or not such interests are considered
to be ownership of underlying shares of Company Common Stock or are reportable for purposes of Regulation 13D of the Securities Exchange
Act of 1934, as amended — are treated as beneficial ownership of the number of shares of Company Common Stock equivalent to the
economic exposure created by the derivative position, to the extent actual shares of Company Common Stock are directly or indirectly held
by counterparties to the derivatives contracts. Swaps dealers unassociated with any control intent or intent to evade the purposes of
the Rights Agreement are excepted from such imputed beneficial ownership. In addition, shares held by affiliates and associates of an
Acquiring Person, including shares that are subject of, or the reference securities for, or that underline, any derivative position
of such persons, will be deemed to be beneficially owned by the Acquiring Person. In addition, any securities beneficially owned by a
third party with whom the Acquiring Person has any agreement, arrangement or understanding (whether or not in writing) (i) for the purpose
of acquiring, holding or voting securities of the Company or (ii) to cooperate in obtaining, changing or influencing control of the Company,
will be deemed to be beneficially owned by the Acquiring Person.
Consequences
of a Person or Group Becoming an Acquiring Person.
| ● | Flip-In. If a person or group becomes an Acquiring Person, all
holders of Rights except the Acquiring Person or its affiliates may, for the Exercise Price, purchase shares of Company Common Stock with
a market value of twice the Exercise Price. |
| ● | Exchange. In lieu of “flip-in” feature described
above, the Board may, at its option at any time after a person or group becomes an Acquiring Person, exchange the Rights (other than Rights
owned by the Acquiring Person or its affiliates), in whole or in part, for shares of Company Common Stock at an exchange ratio of one
share of Company Common Stock per Right (subject to adjustment). |
| ● | Flip-Over. If the Company is later acquired in a merger or similar
transaction after the Distribution Date, all holders of Rights except the Acquiring Person or its affiliates may purchase, for the Exercise
Price, a number of shares of common stock of the person engaging in the transaction having a market value of twice the Exercise Price. |
Company Preferred
Share Provisions.
Each one-thousandth
of a Company Preferred Share, if issued:
| ● | will entitle the holder to a minimum preferential quarterly dividend
payment of $0.0001 per share; |
| ● | will entitle the holder upon liquidation either to receive $1.00 per
share, or an amount equal to the payment made on one share of Company Common Stock, whichever is greater; |
| ● | will have the same voting power as one share of Company Common Stock;
and |
| ● | if shares of Company Common Stock are exchanged via merger, consolidation,
or a similar transaction, will entitle the holder to a per share payment equal to the payment made on one share of Company Common Stock. |
The value of
one-thousandth interest in a Company Preferred Share is intended to approximate the value of one share of Company Common Stock.
Expiration.
The Rights will expire on the Final Expiration Date.
Redemption.
The Board may redeem the Rights for $0.0001 per Right at any time prior to the earlier of (A) such time as any person or group becomes
an Acquiring Person or (B) the close of business on the Final Expiration Date. If the Board redeems any Rights, it must redeem all of
the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $0.0001 per
Right. The redemption price will be adjusted if the Company effects a stock split or stock dividend of Company Common Stock.
Anti-Dilution
Provisions. Rights will have the benefit of certain customary anti-dilution provisions.
Amendments.
The terms of the Rights Agreement may be amended by the Board without the consent of the holders of the Rights. After a person or group
becomes an Acquiring Person, the Board may not amend the Rights Agreement in a way that adversely affects holders of the Rights.
Miscellaneous. The Rights Agreement does
not contain any dead-hand, slow-hand, no-hand or similar feature that limits the ability of a future Board to redeem the Rights.
The summary of the Rights
Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Rights
Agreement, which is filed as Exhibit 4.1 to this Current Report on Form 8-K, and incorporated by reference into this Item 1.01.