Item 1.01 Entry Into a Material Definitive Agreement.
On
Business Combination Agreement
Subject to the terms and conditions set forth in the BCA, including the approval of Lionheart's stockholders, the parties thereto will enter into a business combination transaction (the "Business Combination"), pursuant to which, among other things Merger Sub shall be merged with and into Lionheart with Lionheart continuing as a wholly owned subsidiary of Parent.
Scheme of Implementation Deed
Under the SID, SMX has agreed to propose a scheme of arrangement under Part 5.1 of the Corporations Act ("Scheme") and capital reduction ("Capital Reduction") which, if implemented, will result in all shares in SMX being cancelled in return for the issue of ordinary shares of Parent ("Parent Shares"), with Parent then being issued shares in SMX ("SMX Shares") (resulting in SMX becoming a wholly owned subsidiary of Parent), subject to SMX shareholder approval, Australian court approval and the satisfaction of various conditions.
In addition, SMX has agreed to propose an option scheme of arrangement under Part 5.1 of the Corporations Act ("Option Scheme") which, if implemented, will result in the SMX options held by participants in the Option Scheme being subject to a cashless exercise based on a Black-Scholes valuation, in exchange for SMX Shares. Under the Scheme those shares will be cancelled and such participants receiving Parent Shares on the basis of the Scheme consideration, subject to SMX option holder approval, Australian court approval and the satisfaction of various conditions.
Consideration
Subject to the terms and conditions set forth in the BCA and the SID, SMX
shareholders will receive consideration the Scheme of 1 Parent Share per 10.2432
SMX shares having an implied value of
Under the BCA, Merger Sub will merge with and into Lionheart, with Lionheart surviving the merger as a wholly owned subsidiary of Parent, with existing Lionheart stockholders and warrant holders receiving Parent Shares and warrants ("Parent Warrants"), as further described in the BCA, in exchange for their existing Lionheart shares and warrants, subject to Lionheart stockholder approval and the satisfaction of various other conditions.
Representations and Warranties
The BCA and SID, collectively, contain customary representations and warranties of the parties thereto with respect to the parties, the transactions contemplated by the BCA and the SID and their respective business operations and activities. The representations and warranties in the BCA and SID shall terminate and expire upon the occurrence of the closing of the transactions contemplated thereby Closing.
Covenants
The BCA and SID, collectively, contain customary covenants of the parties thereto, including: (a) the requirement to take all reasonable steps to consummate the Business Combination and the Scheme, (b) preparation and filing of a Registration Statement on Form F-4 with respect to the Parent Shares and Parent Warrants issuable in connection with the Business Combination, which Form F-4 will contain the proxy statement/prospectus for Lionheart stockholders (the "Proxy Statement/Prospectus"); (c) restrictions on the conduct of SMX's and Lionheart's respective businesses and (d) exclusivity provisions requiring (i) subject to certain exceptions, that each of SMX and Lionheart must ensure that neither it nor any of its representatives solicits, invites, facilitates, encourages or initiates enquiries, discussions or negotiations with any person concerning a SMX Competing Transaction (as defined in the SID) or Lionheart Competing Transaction (as defined in the SID), as the case may be.
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Conditions to Closing
Consummation of the Business Combination is subject to conditions that are
customary for a transaction of this type in
Termination
The BCA and SID each include termination provisions.
The SID may be terminated under certain customary and limited circumstances
prior to
The BCA may be terminated under certain customary and limited circumstances prior to the Second Court Date, including (a) by mutual written consent of Lionheart and SMX, (b) by either Lionheart or SMX if the Effective Date has not occurred prior to the End Date, (c) by either Lionheart or SMX, as applicable, in each instance that a party is entitled to terminate the SID that is not otherwise addressed in the BCA, (d) by either Lionheart or SMX if Lionheart fails to obtain approval of certain proposals to be set forth in the Proxy Statement/Prospectus, (e) by either Lionheart or SMX if the SID has been terminated in accordance with its terms, (f) by Lionheart if SMX, Parent or Merger Sub has breached or failed to perform any of its covenants or agreements set forth in the BCA such that the condition requiring material compliance with covenants would not be satisfied (provided if such breach is curable by SMX, Parent or Merger Sub, Lionheart may not terminate the BCA pursuant to this provision for so long as SMX, Parent or Merger Sub continues to exercise its reasonable efforts to cure such breach, unless such breach is not cured by the earlier of thirty (30) days after notice of such breach is provided by Lionheart to SMX and the End Date) or (g) by SMX if Lionheart has breached or failed to perform any of its covenants or agreements set forth in the BCA such that the condition requiring material compliance with covenants would not be satisfied (provided if such breach is curable by Lionheart, SMX may not terminate the BCA pursuant to this provision for so long as Lionheart continues to exercise its reasonable efforts to cure such breach, unless such breach is not cured by the earlier of thirty (30) days after notice of such breach is provided by SMX to Lionheart and the End Date).
SMX is required to pay the Lionheart Break Fee (
Item 7.01 Regulation FD Disclosure.
On
Furnished herewith as Exhibit 99.3 and incorporated into this Item 7.01 by reference is an investor presentation that may be used by Lionheart to discuss the Business Combination and the other transactions contemplated by the BCA and SID.
The foregoing (including the information presented in Exhibits 99.1, 99.2 and 99.3) is being furnished pursuant to Item 7.01 and will not be deemed to be filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise be subject to the liabilities of that section, nor will it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act. The submission of the information set forth in this Item 7.01 shall not be deemed an admission as to the materiality of any information in this Item 7.01, including the information presented in Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3, that is provided solely in connection with Regulation FD.
Important Information and Where to Find It
In connection with the potential business combination (the "proposed business
combination"), a registration statement on Form F-4 (the "Form F-4") is expected
to be filed by
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. Lionheart, SMX, and their respective directors, executive
officers and other members of their management and employees, may, under
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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.
Forward-Looking Statements
This communication includes forward-looking statements that involve risks and
uncertainties. Forward-looking statements are statements that are not historical
facts. Such forward-looking statements, including the identification of a target
business and potential business combination or other such transaction, are
subject to risks and uncertainties, which could cause actual results to differ
from the forward-looking statements. These risks and uncertainties include, but
are not limited to, those factors described in the section entitled "Risk
Factors" in the annual report on Form 10-K filed by Lionheart on
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Item 9.01 Financial Statement and Exhibits.
(d) Exhibits. Exhibit Number Description 99.1 US Press Release datedJuly 26, 2022 99.2 AUS Press Release datedJuly 26, 2022 99.3 Investor Presentation 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). 7
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