Item 1.01 Entry into a Material Definitive Agreement.
On April 27, 2023, Finnovate Acquisition Corp. (the "Company") entered into an
agreement (the "Investment Agreement") with Finnovate Sponsor LP (the "Sponsor")
and Sunorange Limited (the "Investor"), pursuant to which Investor and its
designees shall acquire partnership interests in the Sponsor and Class B
ordinary shares directly held by certain Company directors, which combined
interests will entitle Investor to receive, in the aggregate, 3,557,813 Class B
ordinary shares and 6,160,000 private placement warrants, and the Company shall
introduce a change in management and the board as follows: (i) Calvin Kung shall
replace David Gershon as Chairman of the Board and Chief Executive Officer and
Tommy Chiu Wang Wong shall replace Ron Golan as Chief Financial Officer and
director, effective upon closing of the Investment (as defined herein); (ii)
Jonathan Ophir and Uri Chaitchik shall tender their resignations as Chief
Investment Officer and Senior Consultant, respectively, effective upon closing
of the Investment; and (iii) Mitch Garber, Gustavo Schwed and Nadav Zohar shall
tender their resignations as directors, to be effective upon expiration of all
applicable waiting periods under Section 14(f) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and Rule 14f-1 thereunder (such period of
time being referred to herein as the "Waiting Period"), and whose vacancies
shall be filled by individuals to be designated by the Investor and effective
upon expiration of the Waiting Period (such new officers and directors
collectively referred to herein as the "New Management"). Investor's acquisition
of partnership interests and related Class B ordinary shares, the change to New
Management, and other transactions contemplated by the Investment Agreement are
hereinafter referred to as the "Investment."
The consummation of the Investment is contingent on shareholder approval of
certain proposals (the "Charter Proposals") to amend the Company's memorandum
and articles of association to be submitted to the Company's shareholders at its
extraordinary general meeting of shareholders on May 8, 2023 (the "Extension
Meeting"), as well as other closing conditions, including but not limited to:
(i) a minimum of $30 million remaining in the Company's trust account (the
"Trust Account") after accounting for all redemptions in connection with the
Extension Meeting; (ii) the Company obtaining or extending a D&O insurance
policy on terms satisfactory to the parties, (iii) the conversion of Class B
ordinary shares into Class A ordinary shares as needed to retain shareholders
and meet continued listing requirements of Nasdaq in the event that the Articles
Extension Proposal is approved; (iv) the amendment of the Sponsor's existing
limited partnership agreement; (v) the transfer of 61,875 Class B ordinary
shares from certain Company directors to the Investor or its designees; and (vi)
the cancellation of an outstanding $550,000 loan from the Sponsor and the
reduction of certain advisory fees to be due upon the closing of an initial
business combination.
As disclosed in the Company's Definitive Proxy Statement on Schedule 14A filed
with the Securities and Exchange Commission on April 28, 2023 (the "Proxy
Statement"), the Charter Proposals seek to, among other things, extend the
period of time for the Company to complete an initial business combination. If
the Charter Proposals are implemented and all other closing conditions to the
Investment have been satisfied or waived, then, pursuant to the Investment
Agreement, the Investor will contribute to the Company loans (the "Loans") of
the lesser of (x) $100,000 or (y) $0.033 for each public share that is not
redeemed (such amount, the "Monthly Amount") for each calendar month (commencing
on May 8, 2023 and ending on the 8th day of each subsequent month), or portion
thereof, that is needed by the Company to complete an initial business
combination until May 8, 2024. The Investor shall also assume up to $550,000 of
vendor payables currently outstanding by the Company plus the cost of preparing
the Proxy Statement and the matters discussed therein. Investor shall be
entitled to receive additional Class B ordinary shares (or their equivalent) to
the extent that liabilities incurred by the Company (excluding the cost of
preparing this proxy statement and the matters discussed herein) prior to the
closing of the Investment exceed $550,000.
If the Charter Proposals are approved and implemented and the Investment is
consummated, then in accordance with the Trust Agreement, the Trust Account will
not be liquidated (other than to effectuate the redemptions described above)
until the earlier of (a) receipt by the trustee of a termination letter (in
accordance with the terms of the Trust Agreement) or (b) May 8, 2024 or such
earlier date as may be determined by the Company's board of directors in its
sole discretion. Notwithstanding shareholder approval of the Charter Proposals,
the Company's board of directors will retain the right to abandon and not
implement the Charter Proposals at any time without any further action by the
Company's shareholders.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed with this Current Report on Form
8-K:
Exhibit No. Description of Exhibits
10.1† Investment Agreement
† Certain of the exhibits and schedules to this Exhibit have been omitted in
accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish
a copy of all omitted exhibits and schedules to the SEC upon its request.
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