Item 1.01 Entry into a Material Definitive Agreement.
Business Combination Agreement
On April 19, 2023, ESGEN Acquisition Corporation, a Cayman Islands exempted
company incorporated with limited liability ("ESGEN"), ESGEN OpCo, LLC, a
Delaware limited liability company and wholly-owned subsidiary of ESGEN
("OpCo"), Sunergy Renewables, LLC, a Nevada limited liability company
("Sunergy"), the Sunergy equityholders set forth on the signature pages thereto
(collectively, "Sellers" and each, a "Seller", and collectively with Sunergy,
the "Sunergy Parties"), for limited purposes, ESGEN LLC, a Delaware limited
liability company (the "Sponsor"), and for limited purposes, Timothy
Bridgewater, an individual, in his capacity as the Sellers Representative,
entered into a Business Combination Agreement (as it may be amended,
supplemented or otherwise modified from time to time, the "Business Combination
Agreement").
The Business Combination
The Business Combination Agreement and the transactions contemplated thereby
(collectively, the "Business Combination") were unanimously approved by the
board of directors of ESGEN and the board of managers of Sunergy. The Business
Combination Agreement provides for, among other things, the following
transactions:
(i) following any Public Share Redemptions (as defined below) of Class A
ordinary shares, par value $0.0001 per share, of ESGEN (each, an "ESGEN
Class A Ordinary Share"), each outstanding Class B ordinary share, par
value $0.0001 per share, of ESGEN (each, an "ESGEN Class B Ordinary
Share") will convert into one ESGEN Class A Ordinary Share (the "ESGEN
Share Conversion"); provided, that if the holders of ESGEN Class B
Ordinary Shares are required to forfeit any ESGEN Class B Ordinary Shares
pursuant to the Business Combination Agreement, then the number of ESGEN
Class B Ordinary Shares otherwise deliverable to the holders of ESGEN
Class B Ordinary Shares pursuant to the ESGEN Share Conversion shall be
reduced (pro rata between the holders of ESGEN Class B Ordinary Shares)
by an amount equal to such forfeited ESGEN Class B Ordinary Shares;
(ii) subject to prior receipt of the requisite approval of the shareholders of
ESGEN as contemplated in the Business Combination Agreement, ESGEN will
change the jurisdiction of its incorporation by deregistering as an
exempted company in the Cayman Islands and domesticating to, and
continuing as a corporation incorporated under the laws of, the State of
Delaware (the "Domestication") and, in connection with the Domestication,
the following will occur: (A) each outstanding ESGEN Class A Ordinary
Share will become one share of Class A common stock, par value $0.0001
per share, of ESGEN (the "ESGEN Class A Common Stock"), (B) each
outstanding warrant to purchase one ESGEN Class A Ordinary Share (each,
an "ESGEN Warrant") will become a warrant to purchase one share of ESGEN
Class A Common Stock at an exercise price of $11.50 per share and
(C) ESGEN will file its certificate of incorporation substantially in the
form attached to the Business Combination Agreement as Exhibit F (the
"ESGEN Certificate of Incorporation") and will adopt bylaws substantially
in the form attached to the Business Combination Agreement as Exhibit G
to serve as its governing documents upon consummation of the
Domestication. In connection with the ESGEN Share Conversion and the
Domestication, each issued and outstanding unit of ESGEN, each consisting
of ESGEN Class A Ordinary Share and one-half of one warrant to purchase
one ESGEN Class A Ordinary Share (each, an "ESGEN Unit"), that has not
been previously separated into the underlying ESGEN Class A Ordinary
Shares and underlying ESGEN Warrants prior to the Domestication will be
cancelled and will entitle the holder thereof to (x) one share of ESGEN
Class A Common Stock and (y) one-half of one warrant representing the
right to purchase one share of ESGEN Class A Common Stock at an exercise
price of $11.50 per share on the terms and subject to the conditions
applicable to ESGEN Warrants set forth in the Warrant Agreement, dated as
of October 22, 2021, between ESGEN and Continental Stock Transfer & Trust
Company (the "Trustee");
(iii) ESGEN will cause the Private Placements (as defined below) to be
consummated in accordance with the terms of the applicable Financing
Agreements (as defined below);
(iv) Sunergy will cause all holders of any options, warrants or rights to
subscribe for or purchase any equity interests of Sunergy or its
subsidiaries or securities (including debt securities) convertible into
or exchangeable for, or that otherwise confer on the holder any right to
acquire, any equity interests of Sunergy or any subsidiary thereof
(collectively, the "Sunergy Convertible Interests") existing immediately
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prior to the closing of the Business Combination (the "Closing") either
to exchange or convert all such holder's Sunergy Convertible Interests
into limited liability interests of Sunergy (the "Sunergy Company
Interests") in accordance with the governing documents of Sunergy or the
Sunergy Convertible Interests (collectively, the "Sunergy Exchanges");
(v)(x) ESGEN will contribute to OpCo (1) all of its assets (excluding its
interests in OpCo, but including the amount of cash in the trust account
established by ESGEN with the proceeds from its initial public offering (the
"Trust Account") as of immediately prior to the Closing (after giving effect to
the exercise of redemption rights by any ESGEN shareholders pursuant to the
ESGEN amended and restated memorandum and articles of association, as amended
(the "Public Share Redemption")), and (2) a number of newly issued shares of
Class V common stock of ESGEN, par value $0.0001 per share, which will generally
have only voting rights (the "ESGEN Class V Common Stock"), equal to the number
of Seller OpCo Units (as defined in the Business Combination Agreement and
further described below) (the "Seller Class V Shares") and (y) in exchange, OpCo
shall issue to ESGEN (i) a number of common units of OpCo (the "OpCo Units")
which shall equal the number of total shares of ESGEN Class A Common Stock
issued and outstanding immediately after the Closing and (ii) a number of
warrants to purchase OpCo Units which shall equal the number of SPAC Warrants
issued and outstanding immediately after the Closing (the transactions in this
clause (v), the "ESGEN Contribution"); and
(vi) immediately following the ESGEN Contribution, (x) the Sellers will
contribute to OpCo the Sunergy Company Interests and (y) in exchange therefor,
OpCo will transfer to the Sellers the Seller OpCo Units and the Seller Class V
Shares.
The number of Seller OpCo Units to be issued in the ESGEN Contribution will
. . .
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report is
incorporated by reference herein. The shares of ESGEN Class A Common Stock to be
offered and sold in connection with the Initial PIPE Investment and the ESGEN
Class V Common Stock issued in connection with the Business Combination have not
been and will not be registered under the Securities Act in reliance upon the
exemption provided in Section 4(a)(2) thereof.
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Item 7.01. Regulation FD Disclosure.
A copy of the investor presentation relating to the Business Combination is
furnished as Exhibit 99.1 to this Current Report.
The information in this Item 7.01, including Exhibit 99.1, is furnished and
shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or
otherwise subject to liabilities under that section, and shall not be deemed to
be incorporated by reference into the filings of ESGEN under the Securities Act
or the Exchange Act, regardless of any general incorporation language in such
filings.
Important Information and Where to Find It
In connection with the Business Combination, ESGEN intends to file the
Registration Statement that includes a preliminary proxy statement/prospectus of
ESGEN, and after the Registration Statement is declared effective, ESGEN will
mail a definitive proxy statement/prospectus relating to the Business
Combination to ESGEN's shareholders. The Registration Statement, including the
proxy statement/prospectus contained therein, when declared effective by the
SEC, will contain important information about the Business Combination and the
other matters to be voted upon at a meeting of ESGEN's shareholders to be held
to approve the Business Combination. This Current Report does not contain all
the information that should be considered concerning the Business Combination
and other matters and is not intended to provide the basis for any investment
decision or any other decision in respect of such matters. ESGEN may also file
other documents with the SEC regarding the Business Combination. ESGEN
shareholders and other interested persons are advised to read, when available,
the preliminary proxy statement/prospectus and the amendments thereto and the
definitive proxy statement/prospectus and other documents filed in connection
with the Business Combination, as these materials will contain important
information about ESGEN, Sunergy and the Business Combination.
When available, the definitive proxy statement/prospectus and other relevant
materials for the Business Combination will be mailed to ESGEN shareholders as
of a record date to be established for voting on the Business Combination.
Stockholders will also be able to obtain copies of the preliminary proxy
statement/prospectus, the definitive proxy statement/prospectus and other
documents filed or that will be filed with the SEC, free of charge, by ESGEN
through the website maintained by the SEC at www.sec.gov, or by directing a
request to: ESGEN Acquisition Corporation, 5956 Sherry Lane, Suite 1400, Dallas,
TX 75225.
Participants in the Solicitation
ESGEN and Sunergy and their respective directors and officers may be deemed to
be participants in the solicitation of proxies from ESGEN's shareholders in
connection with the Business Combination. Information about ESGEN's directors
and executive officers and their ownership of ESGEN's securities is set forth in
ESGEN's filings with the SEC. To the extent that holdings of ESGEN's securities
by ESGEN's directors and executive officers have changed since the amounts
printed in ESGEN's Annual Report on Form 10-K for the fiscal year ended
December 31, 2022 as filed with the SEC on March 31, 2023 (the "Annual Report"),
such changes have been or will be reflected on Statements of Change in Ownership
on Form 4 filed with the SEC. Additional information regarding the interests of
those persons and other persons who may be deemed participants in the proposed
transaction may be obtained by reading the Registration Statement, including the
preliminary and definitive proxy statement/prospectus regarding the proposed
transaction when it becomes available. You may obtain free copies of these
documents as described in the preceding paragraph.
Forward Looking Statements
Certain statements included in this Current Report may be considered
forward-looking statements within the meaning of the safe harbor provisions of
the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that are not historical facts and generally relate to
future events or ESGEN's or Sunergy's future financial or other performance
metrics. In some cases, you can identify forward-looking statements by
terminology such as "believe," "may," "will," "potentially," "estimate,"
"continue," "anticipate," "intend," "could," "would," "project," "target,"
"plan," "expect," or the negatives of these terms or variations of them or
similar terminology. Such forward-looking statements include, among others,
statements about ESGEN's and Sunergy's ability to effectuate the Business
Combination; the benefits of the Business Combination; the future financial
performance of the combined company following the Business Combination; changes
in ESGEN's or Sunergy's
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strategy, future operations, financial position, estimated revenues and losses,
projected costs, prospects, the ability to raise additional funds prior to the
Closing and plans and objectives of management. These forward-looking statements
are based on information available as of the date of this Current Report, and
current expectations, forecasts and assumptions, and involve a number of
judgments, risks and uncertainties. Accordingly, forward-looking statements
should not be relied upon as representing ESGEN's or Sunergy's views as of any
subsequent date, and none of ESGEN or Sunergy undertakes any obligation to
update forward-looking statements to reflect events or circumstances after the
date they were made, whether as a result of new information, future events or
otherwise, except as may be required under applicable securities laws. You
should not place undue reliance on these forward-looking statements. As a result
of a number of known and unknown risks and uncertainties, ESGEN's and Sunergy's
actual results or performance may be materially different from those expressed
or implied by these forward-looking statements. Some factors that could cause
actual results to differ include: (i) the timing to complete the Business
Combination; (ii) the occurrence of any event, change or other circumstances
that could give rise to the termination of the definitive agreements relating to
the Business Combination; (iii) the outcome of any legal proceedings that may be
instituted against ESGEN, Sunergy or others following announcement of the
Business Combination; (iv) the inability to complete the Business Combination
due to the failure to obtain the approval of ESGEN shareholders; (v) the
combined company's success in retaining or recruiting, or changes required in,
its officers, key employees or directors following the Business Combination;
(vi) the combined company's ability to obtain the listing of its common stock
and warrants on the Nasdaq following the Business Combination; (vii) the risk
that the Business Combination disrupts current plans and operations of Sunergy
as a result of the announcement and consummation of the Business Combination;
(viii) the ability to recognize the anticipated benefits of the Business
Combination; (ix) unexpected costs related to the Business Combination; (x) the
amount of any redemptions by public shareholders of ESGEN being greater than
expected; (xi) the management and board composition of the combined company
following the Business Combination; (xii) limited liquidity and trading of the
combined company's securities; (xiii) the use of proceeds not held in the Trust
Account or available from interest income on the balance of the Trust Account;
(xiv) geopolitical risk and changes in applicable laws or regulations; (xv) the
possibility that ESGEN, Sunergy or the combined company may be adversely
affected by other economic, business, and/or competitive factors;
(xvi) operational risk; (xvii) litigation and regulatory enforcement risks,
including the diversion of management time and attention and the additional
costs and demands on Sunergy's resources; (xviii) the risks that the
consummation of the Business Combination is substantially delayed or does not
occur; and (xix) other risks and uncertainties, including those to be included
under the heading "Risk Factors" in the Registration Statement to be filed by
ESGEN with the SEC and those included under the heading "Risk Factors" in the
Annual Report and in its subsequent periodic reports and other filings with the
SEC. In light of the significant uncertainties in these forward-looking
statements, you should not regard these statements as a representation or
warranty by ESGEN, Sunergy, their respective directors, officers or employees or
any other person that ESGEN and Sunergy will achieve their objectives and plans
in any specified time frame, or at all. The forward-looking statements in this
Current Report represent the views of ESGEN and Sunergy as of the date of this
Current Report. Subsequent events and developments may cause that view to
change. However, while ESGEN and Sunergy may elect to update these
forward-looking statements at some point in the future, there is no current
intention to do so, except to the extent required by applicable law. You should,
therefore, not rely on these forward-looking statements as representing the
views of ESGEN or Sunergy as of any date subsequent to the date of this Current
Report.
No Offer or Solicitation
This Current Report relates to a proposed business combination between ESGEN and
Sunergy and does not constitute a proxy statement or solicitation of a proxy,
consent or authorization with respect to any securities or in respect of the
potential transaction, and shall not constitute an offer to sell or exchange or
a solicitation of an offer to buy any securities of ESGEN (prior to or upon
consummation of the Business Combination) or Sunergy, nor shall there be any
sale 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 state or jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the requirements of the
Securities Act.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
2.1† Business Combination Agreement, dated as of April 19, 2023, by and
among ESGEN, Sunergy, the Sellers, OpCo, the Sponsor and Timothy
Bridgewater
10.1 Amendment to Letter Agreement, dated as of April 19, 2023, by and
among ESGEN, the Sponsor and the Insiders party thereto.
10.2 Initial Subscription Agreement, dated as of April 19, 2023, by and
between ESGEN and the Sponsor.
99.1 Investor Presentation, dated April 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
† Certain of the schedules to this exhibit have been omitted in accordance with
Regulation S-K Item 601(a)(5). The Registrant agrees to furnish supplementally
a copy of all omitted exhibits and schedules to the SEC upon its request.
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