UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
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☒ | | | Preliminary Proxy Statement |
☐ | | | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☐ | | | Definitive Proxy Statement |
☐ | | | Definitive Additional Materials |
☐ | | | Soliciting Material under §240.14a-12 |
Focus Impact Acquisition Corp.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ | | | No fee required. |
☐ | | | Fee paid previously with preliminary materials. |
☐ | | | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11 |
PRELIMINARY PROXY MATERIALS —SUBJECT TO COMPLETION, DATED NOVEMBER 18, 2022MARCH 21, 2023
LETTER TO STOCKHOLDERS OF FOCUS IMPACT ACQUISITION CORP.
250 Park Avenue Ste 911
New York, NY 10177
Dear Focus Impact Acquisition Corp. Stockholder:
You are cordially invited to attend a special meeting of Focus Impact Acquisition Corp., a Delaware corporation (“FIAC”), which will be held on DecemberApril , 2022,2023, at a.m., Eastern Time, as a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be postponed or adjourned (the “Stockholder Meeting”).
You can participate in the virtual Stockholder Meeting, vote, and submit questions via live webcast by visiting https://www.cstproxy.com/. Please see “Questions and Answers about the Stockholder Meeting — How do I attend the virtual Stockholder Meeting?” in the accompanying proxy statement for more information. Even if you are planning on attending the Stockholder Meeting online, please promptly submit your proxy vote online, or, if you received a printed form of proxy in the mail, by completing, dating, signing and returning the enclosed proxy, so your shares will be represented at the Stockholder Meeting.
The accompanying notice of the Stockholder Meeting and proxy statement describe the business FIAC will conduct at the Stockholder Meeting and provide information about FIAC that you should consider when you vote your shares. As more fully described in the accompanying proxy statement, which is dated , 2022,2023, and is first being mailed to stockholders on or about that date, the Stockholder Meeting will be held for the purpose of considering and voting on the following proposals:
1. | Proposal No. 1 — Extension Amendment Proposal — To amend FIAC’s amended and restated certificate of incorporation (the “Certificate of Incorporation”) to extend the date (the “Termination Date”) by which FIAC has to consummate a Business Combination (as defined below) (the “Charter Extension”) from May 1, 2023 (the “Original Termination Date”) to |
2. | Proposal No. 2 — Redemption Limitation Amendment Proposal — To amend, FIAC’s Certificate of Incorporation to eliminate from the Certificate of Incorporation the limitation that FIAC may not redeem Public Stock (as defined below) to the extent that such redemption would result in FIAC having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended), of less than $5,000,000 (the “Redemption Limitation”) in order to allow FIAC to redeem Public Stock irrespective of whether such redemption would exceed the Redemption Limitation (the “Redemption Limitation Amendment,” and such proposal the “Redemption Limitation Amendment Proposal”). A copy of the proposed amendment is set forth in Annex B to the accompanying proxy statement; and |
3. | Proposal No. 3 — Adjournment Proposal — To adjourn the Stockholder Meeting to a later date or dates, if necessary, (i) to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Stockholder Meeting, there are insufficient shares of Class A common stock, par value $0.0001 per share (the “Class A Common Stock”) and shares of Class B common stock, par value $0.0001 per share (“Class B Common Stock” and together with the Class A Common Stock, the “Common Stock”), in the capital of FIAC represented (either in person or by proxy) |
The Extension Amendment Proposal, the ExtensionRedemption Limitation Amendment Proposal and the Adjournment Proposal are more fully described in the accompanying proxy statement. Please take the time to read carefully each of the proposals in the accompanying proxy statement before you vote.
Approval of the Extension Amendment Proposal is a condition to the implementation of the Charter Extension. In addition, FIAC will not proceed with the Charter Extension unless (i) the Redemption Limitation Amendment Proposal is approved or (ii) if FIAC will not have at least $ remaining in the Trust Account (as defined below)$5,000,000 of net tangible assets following approval of the Extension Amendment Proposal, after taking into account the Redemptions (as defined below) (WHICH REQUIRES THAT A SUBSTANTIAL NUMBER OF PUBLIC STOCKHOLDERS DO NOT REDEEM OR REDEEM ONLY A PORTION OF THEIR PUBLIC STOCK).Redemptions. FIAC cannot predict the amount that will remain in the Trust Account following the Redemptions if the Extension Amendment Proposal is approved, and the amount remaining in the Trust Account may be significantly less than the approximately $ that was in the Trust Account as of , 20222023 (including interest not previously released to FIAC to pay its franchise and income taxes).
The purpose of the Extension Amendment Proposal is to allow FIAC additional time to complete an initial business combination (a “Business Combination”). You are not being asked to vote on any Business Combination at this time.
The Certificate of Incorporation provides that FIAC has until the Original Termination Date to complete its initial Business Combination. FIAC’s board of directors (the “Board”)Board has determined that it is in the best interests of FIAC to seek an extension of the Original Termination Date and have FIAC’s stockholders approve the Extension Amendment Proposal to allow for a period of additional time to consummate a Business Combination. Without the Charter Extension, FIAC believes that it may not be able to complete a Business Combination on or before the Original Termination Date. If that were to occur, FIAC would be precluded from completing a Business Combination and would be forced to liquidate.
If the Extension Amendment Proposal is approved and the Charter Extension becomes effective, within ten (10) business days of the date of the Shareholder Meeting, the Sponsor (or one or more of its affiliates, members or third-party designees) (the “Lender”) shall make a deposit into the Trust Account (as defined below) of $0.0975 per share of Public Stock that is not redeemed in connection with the Stockholder Meeting, in exchange for one or more non-interest bearing, unsecured promissory notes issued by FIAC to the Lender. In addition, if the Extension Amendment Proposal is approved and the Charter Extension becomes effective, in the event that FIAC has not consummated a Business Combination by August 1, 2023, without approval of FIAC’s public shareholders, FIAC may, by resolution of the Board, if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, extend the Termination Date up to nine times, each by one additional month (for a total of up to nine additional months to complete a Business Combination), provided that the Lender will deposit into the Trust Account for each month so extended $0.0325 per each share of Public Stock that is not redeemed in connection with the Shareholder Meeting, for an aggregate deposit of up to $0.2925 per each share of Public Stock that is not redeemed in connection with the Shareholder Meeting (if all nine additional monthly extensions are exercised), in exchange for a non-interest bearing, unsecured promissory note issued by FIAC to the Lender. If FIAC completes a Business Combination, it will, at the option of the Lender, repay the amounts loaned under the promissory note or convert a portion or all of the amounts loaned under such promissory note into warrants, which warrants will be identical to the Private Placement Warrants (as defined below). If FIAC does not complete a Business Combination by the applicable Termination Date, such promissory note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.
The purpose of the Redemption Limitation Amendment Proposal is to eliminate from the Certificate of Incorporation the Redemption Limitation in order to allow FIAC to redeem Public Shares, irrespective of whether such redemption would exceed the Redemption Limitation. The Board believes it is in the best interests of FIAC and its shareholders for FIAC to be allowed to effect redemptions irrespective of the Redemption Limitation.
FIAC reserves the right at any time to cancel the Stockholder Meeting and not to submit to its stockholders the Extension Amendment Proposal and implement the Charter Extension. In the event the Stockholder Meeting is cancelled, and a Business Combination is not consummated prior to the Original Termination Date, FIAC will dissolve and liquidate in accordance with the Certificate of Incorporation.
As contemplated by the Certificate of Incorporation, the holders of FIAC’s Class A common stock,Common Stock, issued as part of the units sold in FIAC’s initial public offering (the “Public Stock”), may elect to redeem all or a
portion of their Public Stock (the “Redemptions”) in exchange for their pro rata portion of the funds held in a trust account (the “Trust Account”) established to hold a portion of the proceeds of FIAC’s initial public offering (the “Initial Public Offering”) and the concurrent sale of private placement warrants (the “Private Placement Warrants”), if the Charter Extension is implemented, regardless of how such public stockholders vote in regard to the Extension Amendment Proposal or the Redemption Limitation Amendment Proposal. If the Extension Amendment Proposal or the Redemption Limitation Amendment Proposal is approved by the requisite vote of stockholders (and not abandoned) and the Charter Amendment or the Redemption Limitation Amendment is filed, holders of Public Stock remaining after the Redemptions will retain their right to redeem their Public Stock for their pro rata portion of the funds available in the Trust Account upon consummation of a Business Combination or if FIAC does not complete a Business Combination by the Charter Extension Date.
On , 2022,2023, the most recent practicable date prior to the date of this proxy statement, the redemption price per share was approximately $ , based on the aggregate amount on deposit in the Trust Account of approximately $ as of , 20222023 (including interest not previously released to FIAC to pay its franchise and income taxes), divided by the total number of then outstanding Public Stock. The redemption price per share in connection with the Extension Amendment Proposal will be calculated based on the aggregate amount on deposit in the Trust Account two business days prior to the Stockholder Meeting. The closing price of the Public Stock on the Nasdaq Stock Market LLC on , 2022,2023, was $ . If the closing price of the Public Stock was to remain the same until the date of the Stockholder Meeting, exercising redemption rights would result in a public stockholder receiving approximately $ [more/less] per share than if the shares were sold in the open market (based on the current per share redemption price as of , 2022)2023). FIAC cannot assure stockholders that they will be able to sell their Public Stock in the open market, even if the market price per share is lower than the redemption price stated above, as there may not be sufficient liquidity in its securities when such stockholders wish to sell their shares. FIAC believes that such redemption right enables its public stockholders to determine whether or not to sustain their investments for an additional period if FIAC does not complete a Business Combination on or before the Original Termination Date.
If the Extension Amendment Proposal is not approved and a Business Combination is not completed on or before the Original Termination Date, FIAC will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Public Stock,, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to FIAC to pay its franchise and income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding Public Stock, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of FIAC’s remaining shareholders and the Board, liquidate and dissolve, subject in each case to FIAC’s obligations under the Delaware General Corporation Law to provide for claims of creditors and the requirements of other applicable law. There will be no distribution from the Trust Account with respect to FIAC’s warrants, which will expire worthless in the event of our winding up.
The approval of the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal requires the affirmative vote of at least sixty-five percent (65%) of the issued and outstanding shares of Common Stock.
Approval of the Adjournment Proposal requires the affirmative vote of at least a majority of the votes cast by the holders of the issued and outstanding shares of Common Stock who are present in person or represented by proxy and entitled to vote thereon at the Stockholder Meeting. The Adjournment Proposal will only be put forth for a vote if there are insufficient shares of Common Stock presentvoted at the Stockholder Meeting to constitute a quorum or there are not sufficient votes to approve the Extension Amendment Proposal or the Redemption Limitation Amendment Proposal at the Stockholder Meeting.
Meeting or where the Board has determined it is otherwise necessary.
The Board has fixed the close of business on November 23, 2022, 2023 as the date for determining FIAC’s stockholders entitled to receive notice of and vote at the Stockholder Meeting and any adjournment thereof (the “Record Date”). Only holders of record of Common Stock on that date are entitled to have their votes counted at the Stockholder Meeting or any adjournment thereof.
FIAC believes that it is in the best interests of FIAC’s stockholders that FIAC obtain the Charter Extension.Extension and the Redemption Limitation Amendment. After careful consideration of all relevant factors, the Board has determined that the Extension Amendment Proposal, the Redemption Limitation Amendment and the Adjournment Proposal are in the best interests of FIAC and its stockholders, has declared it advisable and recommends that you vote or give instruction to vote “FOR” the Extension Amendment Proposal, “FOR” the Redemption Limitation Amendment and “FOR” the Adjournment Proposal.
Your vote is very important. Whether or not you plan to attend the Stockholder Meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement to make sure that your shares are represented and voted at the Stockholder Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Stockholder Meeting. The approval of each of the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal requires the affirmative vote of at least sixty-five percent (65%) of the issued and outstanding shares of Common Stock. Approval of the Adjournment Proposal requires the affirmative vote of at least a majority of the votes cast by the holders of the issued and outstanding shares of Common Stock who are present in person or represented by proxy and entitled to vote thereon at the Stockholder Meeting. Accordingly, if you fail to vote in person or by proxy at the Stockholder Meeting, your shares will not be counted for the purposes of determining whether the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Adjournment Proposal are approved by the requisite majorities.
If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the Stockholder Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Stockholder Meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Stockholder Meeting but will not constitute votes cast at the Stockholder Meeting and therefore will have the same effect as a vote “AGAINST” the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal and no effect on the approval of the Adjournment Proposal. If you are a stockholder of record and you attend the Stockholder Meeting and wish to vote in person, you may withdraw your proxy and vote in person.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR SHARES OF CLASS A COMMON STOCK ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO FIAC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE INITIALLY SCHEDULED DATE OF THE STOCKHOLDER MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT
WITHDRAWAL AT CUSTODIAN) SYSTEM. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.
Enclosed is the proxy statement containing detailed information about the Stockholder Meeting, the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Adjournment Proposal. Whether or not you plan to attend the Stockholder Meeting, FIAC urges you to read this material carefully and vote your shares.
Moreover, the process of government review, whether by the CFIUS or otherwise, could be lengthy and we have limited time to complete our Business Combination. If we cannot complete a Business Combination by May 1, 2023 (or up to NovemberMay 1, 20232024 if extended) because the transaction is still under review or because our Business Combination is ultimately prohibited by CFIUS or another U.S. government entity, we may be required to liquidate. If we liquidate, our public stockholders may only receive $ per share of Public Stock, and our warrants will expire worthless. This will also cause you to lose the investment opportunity in a target company and the chance of realizing future gains on your investment through any price appreciation in the combined company.
Q: | Why should I vote “FOR” the Extension Amendment Proposal? |
A: | FIAC believes stockholders will benefit from FIAC consummating a Business Combination and is proposing the Extension Amendment Proposal to extend the date by which FIAC has to complete a Business Combination until the Charter Extension Date. Without the Charter Extension, FIAC believes that FIAC may not be able to complete a Business Combination on or before the Original Termination Date. If that were to occur, FIAC would be forced to liquidate. |
Q: | Why should I vote “FOR” the Redemption Limitation Amendment Proposal? |
A: | FIAC believes stockholders will benefit from FIAC implementing the Charter Extension and is proposing the Redemption Limitation Amendment Proposal to delete the Redemption Limitation. If the Redemption Limitation Amendment Proposal is not approved and there are significant requests for redemption (including as a result of the Redemption Limitation Amendment Proposal) such that FIAC’s net tangible assets would be less than $5,000,000 following the redemptions, we would be unable to implement the Charter Extension. |
Q: | What if I do not want to vote “FOR” the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal or the Adjournment Proposal? |
A: | If you do not want the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal or the Adjournment Proposal to be approved, you may “ABSTAIN”, not vote, or vote “AGAINST” such proposal. |
If you attend the Stockholder Meeting in person or by proxy, you may vote “AGAINST” the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal or the Adjournment Proposal, and your Common Stock will be counted for the purposes of determining whether the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal or the Adjournment Proposal (as the case may be) are approved.
However, if you fail to attend the Stockholder Meeting in person or by proxy, or if you do attend the Stockholder Meeting in person or by proxy but you “ABSTAIN” or otherwise fail to vote at the Stockholder Meeting, your Common Stock will not be counted for the purposes of determining whether the Adjournment Proposal is approved, and your Common Stock which are not voted at the Stockholder
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Meeting will have no effect on the outcome of such vote. If you “ABSTAIN” or otherwise fail to vote at the Stockholder Meeting, this will have the same effect as a vote “AGAINST” the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal.
If the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal is approved, the Adjournment Proposal will not be presented for a vote.
Q: | How are the funds in the Trust Account currently being held? |
A: | With respect to the regulation of SPACs like FIAC, on March 30, 2022, the SEC issued the SPAC Proposed Rules relating to, among other items, the extent to which SPACs could become subject to regulation under the Investment Company Act, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. |
With regard to the SEC’s investment company proposals included in the SPAC Proposed Rules, while the funds in the Trust Account have, since FIAC’s Initial Public Offering, been held only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries, to mitigate the risk of being viewed as operating an unregistered investment company (including pursuant to the subjective test of Section 3(a)(1)(A) of the Investment Company Act of 1940), FIAC currently intends, prior to the 24-month anniversary of its Initial Public Offering (if the Termination Date is extended past such date), to instruct Continental, the trustee managing the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and thereafter to maintain the funds in the Trust Account in cash in an interest-bearing demand deposit account at a bank until the earlier of the consummation of a Business Combination and the liquidation of FIAC. Interest on such deposit account is currently 2.75% per annum, but such deposit account carries a variable rate and FIAC cannot assure you that such rate will not decrease or increase significantly.
Q: | Will you seek any further extensions to liquidate the Trust Account? |
A: | Other than as described in this proxy statement, FIAC does not currently anticipate seeking any further extension to consummate a Business Combination, but may do so in the future. |
Q: | What happens if the Extension Amendment Proposal is not approved? |
A: | If there are insufficient votes to approve the Extension Amendment Proposal, FIAC may put the Adjournment Proposal to a vote in order to seek additional time to obtain sufficient votes in support of the Charter Extension. |
If the Extension Amendment Proposal is not approved at the Stockholder Meeting or at any adjournment thereof and a Business Combination is not completed on or before the Original Termination Date, then as contemplated by and in accordance with the Certificate of Incorporation, FIAC will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Public Stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to FIAC to pay its franchise and income taxes, if any (less up to $100,000 of such interest to pay dissolution expenses), divided by the total number of the then-outstanding shares of Public Stock, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of FIAC’s remaining stockholders and the Board, in accordance with applicable law, liquidate and dissolve, subject in each case to FIAC’s obligations under the Delaware General Corporation Law (the “DGCL���”) to provide for claims of creditors and the requirements of other applicable law.
The Sponsor waived its right to participate in any liquidation distribution with respect to the 5,750,000 shares of Class B Common Stock held by it. There will be no distribution from the Trust Account with respect to FIAC’s warrants, which will expire worthless in the event FIAC dissolves and liquidates the Trust Account.
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Q: | If the Extension Amendment Proposal is approved, what happens next? |
A: | If the Extension Amendment Proposal is approved, FIAC will file the Charter Amendment with the Delaware Secretary of State and will continue to attempt to consummate a Business Combination until the applicable Termination Date. |
If the Extension Amendment Proposal is approved and the Charter Extension is implemented, the removal from the Trust Account of the amount equal to the pro rata portion of funds available in the Trust Account with respect to such redeemed Public Stock will reduce the amount remaining in the Trust Account and increase the percentage interest of FIAC held by the Sponsor. In addition, FIAC will not proceed with the Charter Extension unless (i) the Redemption Limitation Amendment Proposal is approved or (ii) if FIAC will not have at least $ remaining in the Trust Account$5,000,000 of net tangible assets following approval of the Extension Amendment Proposal, after taking into account the Redemptions (WHICH REQUIRES THAT A SUBSTANTIAL NUMBER OF PUBLIC STOCKHOLDERS DO NOT REDEEM OR REDEEM ONLY A PORTION OF THEIR PUBLIC STOCK).
Redemptions.Q: | If I vote for or against the Extension Amendment Proposal or the Redemption Limitation Amendment Proposal, do I need to request that my shares be redeemed? |
A: | Yes. Whether you vote “for” or “against” the Extension Amendment Proposal or the Redemption Limitation Amendment Proposal, or do not vote at all, you will need to submit a redemption request for your shares if you choose to redeem. |
Q: | What amount will holders receive upon consummation of a Business Combination or liquidation if the Extension Amendment Proposal is approved? |
A: | If the Extension Amendment Proposal is approved and the Charter Extension becomes effective, within ten (10) business days of the date of the Stockholder Meeting, the Lender shall make a deposit into the Trust Account (as defined below) of $0.0975 per share of Public Stock that is not redeemed in connection with the Stockholder Meeting, in exchange for one or more non-interest bearing, unsecured promissory notes issued by FIAC to the Lender. In addition, if the Extension Amendment Proposal is approved and the Charter Extension becomes effective, in the event that FIAC has not consummated a Business Combination by August 1, 2023, without approval of FIAC’s public stockholders, FIAC may, by resolution of the Board, if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, extend the Termination Date up to nine times, each by one additional month (for a total of up to nine additional months to complete a Business Combination), provided that the Lender will deposit into the Trust Account for each month so extended $0.0325 per each share of Public Stock that is not redeemed in connection with the Stockholder Meeting for each such monthly extension, for an aggregate deposit of up to $0.2925 per each share of Public Stock that is not redeemed in connection with the Shareholder Meeting (if all nine additional monthly extensions are exercised), in exchange for a non-interest bearing, unsecured promissory note issued by FIAC to the Lender. If FIAC completes a Business Combination, it will, at the option of the Lender, repay the amounts loaned under the promissory note or convert a portion or all of the amounts loaned under such promissory note into warrants, which warrants will be identical to the Private Placement Warrants (as defined below). If FIAC does not complete a Business Combination by the applicable Termination Date, such promissory note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. |
Q: | What happens if the Redemption Limitation Amendment Proposal is not approved? |
A: | If there are insufficient votes to approve the Redemption Limitation Amendment Proposal, FIAC may put the Adjournment Proposal to a vote in order to seek additional time to obtain sufficient votes in support of the Redemption Limitation Amendment. |
If the Redemption Limitation Amendment Proposal is not approved at the Stockholder Meeting or at any adjournment thereof and following Redemptions in connection with the Charter Extension FIAC doesn’t meet the Redemption Limitation, then the Charter Extension will not be implemented and if a Business Combination is not completed on or before the Termination Date, then as contemplated by and in accordance with the Certificate of Incorporation, FIAC will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Public Stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds
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held in the Trust Account and not previously released to FIAC to pay its franchise and income taxes, if any (less up to $100,000 of such interest to pay dissolution expenses), divided by the total number of the then-outstanding shares of Public Stock, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of FIAC’s remaining stockholders and the Board, in accordance with applicable law, liquidate and dissolve, subject in each case to FIAC’s obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law.. There will be no distribution from the Trust Account with respect to FIAC’s warrants, which will expire worthless in the event FIAC dissolves and liquidates the Trust Account.
Additionally, in the event that the Redemption Limitation Amendment Proposal is not approved and we receive notice of redemptions of Public Stock approaching or in excess of the Redemption Limitation, we and/or the Sponsor may take action to increase our net tangible assets to avoid exceeding the Redemption Limitation, which may include, at our and our Sponsor’s option and in our and its sole discretion, any, several or all of the following actions: (a) attempting to secure waivers of certain of our significant liabilities, including the deferred underwriting fees, and (b) entering into non-redemption agreements with certain of our significant stockholders.
If the Redemption Limitation Amendment Proposal is not approved and the Redemption Limitation is exceeded, either because we do not take action to increase our net tangible assets or because our attempt to do so is not successful, then we will not proceed with the Charter Extension and we will not redeem any Public Stock. In such case, Public Stock which a public stockholder elects to redeem but which are not redeemed shall be returned to such public stockholder or such public stockholder’s account and such public stockholder will retain the right to have their Public Stock redeemed for cash if FIAC has not completed an initial Business Combination by the Termination Date.
The Sponsor waived its right to participate in any liquidation distribution with respect to the 10,350,000 Class B Ordinary Shares held by it.
Q: | Am I being asked to vote on a Business Combination at this Stockholder Meeting? |
A: | No. You are not being asked to vote on a Business Combination at this time. If the Charter Extension is implemented and you do not elect to redeem your shares of Public Stock, provided that you are a stockholder on the record date for the stockholder meeting to consider a Business Combination, you will be entitled to vote on a Business Combination when it is submitted to stockholders and will retain the right to redeem your shares of Public Stock for cash in connection with a Business Combination or liquidation. |
Q: | Will how I vote affect my ability to exercise redemption rights? |
A: | No. You may exercise your redemption rights whether or not you are a holder of Public Stock on the Record Date (so long as you are a holder at the time of exercise), or whether you are a holder and vote your Public Stock on the Extension Amendment Proposal or the Redemption Limitation Amendment Proposal (for or against) or any other proposal described in this proxy statement. As a result, the Charter Extension can be approved by stockholders who will redeem their Public Stock and no longer remain stockholders, leaving stockholders who choose not to redeem their Public Stock holding shares in a company with a potentially less liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of Nasdaq. |
Q: | May I change my vote after I have mailed my signed proxy card? |
A: | Yes. Stockholders may send a later-dated, signed proxy card to Focus Impact Acquisition Corp., at 250 Park Avenue Ste 911, New York, NY 10177, so that it is received by FIAC prior to the vote at the Stockholder Meeting (which is scheduled to take place on |
Q: | How are votes counted? |
A: | Votes will be counted by the inspector of election appointed for the Stockholder Meeting, who will separately count “FOR” and “AGAINST” votes and abstentions. The approval of each of the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal requires the affirmative vote of at least sixty-five percent (65%) of the issued and outstanding shares of Common Stock. Approval of the Adjournment Proposal requires the affirmative vote of at least a majority of the votes cast by the holders of the issued and outstanding shares of Common Stock who are present in person or represented by proxy and entitled to vote thereon at the Stockholder Meeting. |
Stockholders who attend the Stockholder Meeting, either in person or by proxy, will be counted (and the number of Common Stock held by such stockholders will be counted) for the purposes of determining whether a quorum is present at the Stockholder Meeting. The presence, in person or by proxy, of stockholders holding a majority of the Common Stock entitled to vote at the Stockholder Meeting constitutes a quorum at the Stockholder Meeting.
With respect to the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal, abstentions will have the same effect as a vote “AGAINST” the proposal. As this proposal is not a “routine” matter, brokers will not be permitted to exercise discretionary voting on this proposal.
With respect to the Adjournment Proposal, abstentions will have no effect on the approval of the proposal. As this proposal is not a “routine” matter, brokers will not be permitted to exercise discretionary voting on this proposal.
Q: | If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? |
A: | If your shares are held in “street name” in a stock brokerage account or by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to FIAC or by voting online at the Stockholder Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or other nominee. |
Under the applicable rules, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not permitted to exercise their voting discretion with respect to the approval of matters that are determined to be “non-routine” without specific instructions from the beneficial owner. The Extension Amendment Proposal, Redemption Limitation Amendment Proposal and Adjournment proposalProposal are “non-routine” matters and therefore, brokers are not permitted to exercise their voting discretion with respect to these proposals.
If you are a FIAC stockholder holding your shares in “street name” and you do not instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee will not vote your shares on the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal or the Adjournment Proposal. Accordingly, your bank, broker, or other nominee can vote your shares on the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal or the Adjournment Proposal at the Stockholder Meeting only if you provide instructions on how to vote. You should instruct your broker to vote your shares as soon as possible in accordance with directions you provide.
Q: | Does the Board recommend voting “FOR” the approval of the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Adjournment Proposal? |
A: | Yes. After careful consideration of the terms and conditions of each of the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Adjournment Proposal, the Board has determined that each of the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Adjournment Proposal is in the best interests of FIAC and its stockholders. The Board unanimously recommends that FIAC’s stockholders vote “FOR” each of the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Adjournment Proposal. |
Q: | What interests do FIAC’s directors and officers have in the approval of the Extension Amendment Proposal? |
A: | FIAC’s directors and officers have interests in the Extension Amendment Proposal that may be different from, or in addition to, your interests as a stockholder. These interests include, among others, ownership, directly or indirectly through the Sponsor, of Common Stock and Private Placement Warrants. See the section entitled “Proposal No. 1 — The Extension Amendment Proposal — Interests of the Sponsor and FIAC’s Directors and Officers” in this proxy statement. |
Q: | What interests do FIAC’s directors and officers have in the approval of the Redemption Limitation Amendment Proposal? |
A: | FIAC’s directors and officers have interests in the Redemption Limitation Amendment Proposal that may be different from, or in addition to, your interests as a stockholder. These interests include, among others, ownership, directly or indirectly through the Sponsor, of Common Stock and Private Placement Warrants. See the section entitled “Proposal No 2 — The Redemption Limitation Amendment Proposal — Interests of the Sponsor, FIAC’s Directors, and Officers” in this proxy statement. |
Q: | Do I have appraisal rights if I object to the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal? |
A: | No. There are no appraisal rights available to FIAC’s stockholders in connection with the Extension Amendment Proposal or the Redemption Limitation Amendment Proposal. However, you may elect to have your shares redeemed in connection with the adoption of the Extension Amendment Proposal or the Redemption Limitation Amendment Proposal as described under |
Q: | If I am a Public Warrant (defined below) holder, can I exercise redemption rights with respect to my Public Warrants? |
A: | No. The holders of public warrants issued in connection with the |
Q: | What do I need to do now? |
A: | You are urged to read carefully and consider the information contained in this proxy statement and to consider how the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Adjournment Proposal will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee. |
Q: | How do I exercise my redemption rights? |
A: | If you are a holder of Public Stock and wish to exercise your right to redeem your Public Stock, you must: |
I. | (a) hold Public Stock or (b) hold Public Stock through Units and elect to separate your Units into the underlying Public Stock and Public Warrants prior to exercising your redemption rights with respect to the Public Stock; |
II. | prior to 5:00 p.m., Eastern Time, on |
III. | deliver your Public Stock to the Transfer Agent, physically or electronically through the Depository Trust Company (“DTC”). |
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The address of the Transfer Agent is listed under the question “Who can help answer my questions?” below.
Holders of Units must elect to separate the underlying Public Stock and Public Warrants prior to exercising redemption rights with respect to the Public Stock. If holders hold their Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the Units into the underlying Public Stock and Public Warrants, or if a holder holds Units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so.
In connection with the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal and contingent upon the effectiveness of the implementation of the Charter Extension, any holder of Public Stock will be entitled to request that their Public Stock be redeemed for a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the Stockholder Meeting, including interest earned on the funds held in the Trust Account and not previously released to FIAC to pay its franchise and income taxes, divided by the number of then-outstanding shares of Public Stock. As of , 2022,2023, the most recent practicable date prior to the date of this proxy statement, this would have amounted to approximately $ per share of Public Stock.
However, the proceeds deposited in the Trust Account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders. Therefore, the per share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. We anticipate that the funds to be distributed to public stockholders electing to redeem their Public Stock will be distributed promptly after the Stockholder Meeting.
Any request for Redemption, once made by a holder of Public Stock, may be withdrawn at any time until the Redemption Deadline, and thereafter, with the approval of the Board. If you deliver your shares for Redemption to the Transfer Agent and later decide prior to the Redemption Deadline not to elect Redemption, you may request that FIAC instruct the Transfer Agent to return the shares (physically or electronically). You may make such request by contacting the Transfer Agent at the phone number or address listed at the end of this section. We will be required to honor such request only if made prior to the deadline for exercising redemption requests.
No request for Redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the Transfer Agent by 5:00 p.m., Eastern Time, on DecemberApril , 20222023 (two business days prior to the initially scheduled date of the Stockholder Meeting).
If a holder of Public Stock properly makes a request for Redemption and the Public Stock is delivered as described above, then, FIAC will redeem Public Stock for a pro rata portion of funds deposited in the Trust Account, calculated as of two business days prior to the Stockholder Meeting. If you are a holder of Public Stock and you exercise your redemption rights, it will not result in the loss of any Public Warrants that you may hold.
If the Stockholder Meeting is abandoned for any reason, then holders of Public Stock shall not have the right to redeem their Public Stock at this time.
Q: | What are the U.S. federal income tax consequences of exercising my redemption rights? |
A: | The U.S. federal income tax consequences of exercising your redemption rights will depend on your particular facts and circumstances. Accordingly, you are urged to consult your tax advisor to determine your tax consequences from the exercise of your redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances. For additional discussion of certain material U.S. federal income tax considerations with respect to the exercise of these redemption rights, see “Certain Material U.S. Federal Income Tax Considerations for Stockholders Exercising Redemption Rights.” |
Q: | What should I do if I receive more than one set of voting materials for the Stockholder Meeting? |
A: | You may receive more than one set of voting materials for the Stockholder Meeting, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are |
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registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.
Q: | Who will solicit and pay the cost of soliciting proxies for the Stockholder Meeting? |
A: | FIAC will pay the cost of soliciting proxies for the Stockholder Meeting. FIAC has engaged Morrow Sodali LLC (“Morrow Sodali”) to assist in the solicitation of proxies for the Stockholder Meeting. FIAC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Public Stock for their expenses in forwarding soliciting materials to beneficial owners of Public Stock and in obtaining voting instructions from those owners. The directors, officers and employees of FIAC may also solicit proxies by telephone, by facsimile, by mail or on the Internet. They will not be paid any additional amounts for soliciting proxies. |
Q: | Who can help answer my questions? |
A: | If you have questions about the proposals or if you need additional copies of this proxy statement or the enclosed proxy card you should contact: |
Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Individuals call toll-free (800) 662-5200
Banks and brokers call (203) 658-9400
Email: FIAC.info@investor.morrowsodali.com
You also may obtain additional information about FIAC from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.” If you are a holder of Public Stock and you intend to seek Redemption of your shares, you will need to deliver your Public Stock (either physically or electronically) to the Transfer Agent at the address below prior to 5:00 p.m., Eastern Time, on DecemberApril , 20222023 (two business days prior to the initially scheduled date of the Stockholder Meeting). If you have questions regarding the certification of your position or delivery of your shares, please contact:
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, New York 10004
Attn: Mark Zimkind
E-mail: mzimkind@continentalstock.com
This proxy statement is being provided to FIAC stockholders as part of a solicitation of proxies by the Board for use at the special meeting of FIAC stockholders to be held on DecemberApril , 2022,2023, and at any adjournment thereof. This proxy statement contains important information regarding the Stockholder Meeting, the proposals on which you are being asked to vote and information you may find useful in determining how to vote and voting procedures.
This proxy statement is being first mailed on or about , 20222023 to all stockholders of record of FIAC as of the Record Date for the Stockholder Meeting. Stockholders of record who owned Common Stock at the close of business on the Record Date are entitled to receive notice of, attend and vote at the Stockholder Meeting.
Date, Time and Place of Stockholder Meeting
The Stockholder Meeting will be held on DecemberApril , 2022,2023, at a.m., Eastern Time, as a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be postponed or adjourned.
You can pre-register to attend the virtual Stockholder Meeting starting DecemberApril , 2022,2023, at 9:00 a.m., Eastern Time (two business days prior to the meeting date). Enter the URL address into your browser https://www.cstproxy.com/, enter your control number, name and email address. Once you pre- register you can vote or enter questions in the chat box. At the start of the Stockholder Meeting you will need to log in again using your control number and will also be prompted to enter your control number if you vote during the Stockholder Meeting.
Stockholders who hold their investments through a bank or broker, will need to contact the Transfer Agent to receive a control number. If you plan to vote at the Stockholder Meeting you will need to have a legal proxy from your bank or broker or if you would like to join and not vote, the Transfer Agent will issue you a guest control number with proof of ownership. Either way you must contact the Transfer Agent for specific instructions on how to receive the control number. The Transfer Agent can be contacted at 917-262-2373, or via email at proxy@continentalstock.com. Please allow up to 72 hours prior to the meeting for processing your control number.
If you do not have access to the Internet, you can listen only to the meeting by dialing (or +1 if you are located outside the United States and Canada (standard rates apply)) and when prompted enter the pin number #. Please note that you will not be able to vote or ask questions at the Stockholder Meeting if you choose to participate telephonically.
The Proposals at the Stockholder Meeting
At the Stockholder Meeting, FIAC stockholders will consider and vote on the following proposals:
1. | Proposal No. 1 — Extension Amendment Proposal — To amend FIAC’s Certificate of Incorporation to extend the Termination Date by which FIAC has to consummate a Business Combination from the Original Termination Date to the Charter Extension Date. A copy of the proposed amendment is set forth in Annex A to this proxy statement; and |
2. | Proposal No. 2 – Redemption Limitation Amendment Proposal – To amend FIAC’s Certificate of Incorporation to eliminate from the Certificate of Incorporation the limitation that FIAC may not redeem Public Shares to the extent that such redemption would result in FIAC having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,000 in order to allow FIAC to redeem Public Shares irrespective of whether such redemption would exceed the Redemption Limitation. A copy of the proposed amendment is set forth in Annex B to this proxy statement; and |
3. | Proposal No. 3 — Adjournment Proposal — To adjourn the Stockholder Meeting to a later date or |
dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Stockholder Meeting, there are insufficient shares of Common Stock, in the capital of FIAC represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the Stockholder Meeting or at the time of the Stockholder Meeting to approve the Extension Amendment Proposal.
If the Extension Amendment Proposal is approved and the Charter Extension becomes effective, within ten (10) business days of the date of the Stockholder Meeting, the Lender shall make a deposit into the Trust Account (as defined below) of $0.0975 per share of Public Stock that is not redeemed in connection with the Stockholder Meeting, in exchange for one or more non-interest bearing, unsecured promissory notes issued by FIAC to the Lender. In addition, if the Extension Amendment Proposal is approved and the Charter Extension becomes effective, in the event that FIAC has not consummated a Business Combination by August 1, 2023, without approval of FIAC’s public stockholder , FIAC may, by resolution of the Board, if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, extend the Termination Date up to nine times, each by one additional month (for a total of up to nine additional months to complete a Business Combination), provided that the Lender will deposit into the Trust Account for each month so extended $0.0325 per each share of Public Stock that is not redeemed in connection with the Stockholder Meeting for each such monthly extension, for an aggregate deposit of up to $0.2925 per each share of Public Stock that is not redeemed in connection with the Shareholder Meeting (if all nine additional monthly extensions are exercised), in exchange for a non-interest bearing, unsecured promissory note issued by FIAC to the Lender. If FIAC completes a Business Combination, it will, at the option of the Lender, repay the amounts loaned under the promissory note or convert a portion or all of the amounts loaned under such promissory note into warrants, which warrants will be identical to the Private Placement Warrants (as defined below). If FIAC does not complete a Business Combination by the applicable Termination Date, such promissory note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.
FIAC will not proceed with the Charter Extension unless (i) the Redemption Limitation Amendment Proposal is approved or (ii) if FIAC will not have at least $ remaining in the Trust Account$5,000,000 of net tangible assets following approval of the Extension Amendment Proposal, after taking into account the Redemptions (WHICH REQUIRES THAT A SUBSTANTIAL NUMBER OF PUBLIC STOCKHOLDERS DO NOT REDEEM OR REDEEM ONLY A PORTION OF THEIR PUBLIC STOCK).Redemptions. FIAC cannot predict the amount that will remain in the Trust Account (as defined below) following the Redemptions if the Extension Amendment Proposal is approved, and the amount remaining in the Trust Account may be significantly less than the approximately $ that was in the Trust Account as of , 20222023 (including interest not previously released to FIAC to pay its franchise and income taxes).
Voting Power; Record Date
As a stockholder of FIAC, you have a right to vote on certain matters affecting FIAC. The proposals that will be presented at the Stockholder Meeting and upon which you are being asked to vote are summarized above and fully set forth in this proxy statement. You will be entitled to vote or direct votes to be cast at the Stockholder Meeting if you owned Common Stock at the close of business on November 23, 2022,, 2023, which is the Record Date for the Stockholder Meeting. You are entitled to one vote for each share of Common Stock that you owned as of the close of business on the Record Date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the Record Date, there were 28,750,000 issued and outstanding shares of Common Stock, of which 23,000,000 shares of Class A Common Stock were held by public stockholders and 5,750,000 shares of Class B Common Stock were held by the Sponsor.
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Recommendation of the Board
THE BOARD UNANIMOUSLY RECOMMENDS
THAT YOU VOTE “FOR” EACH OF THE PROPOSALS
Quorum
The presence, in person or by proxy, of stockholders holding a majority of the Common Stock entitled to vote at the Stockholder Meeting constitutes a quorum at the Stockholder Meeting. Abstentions will be considered present for the purposes of establishing a quorum. The Sponsor, who owns 20.0% of the issued and outstanding shares of Common Stock as of the Record Date, will count towards this quorum. As a result, as of the Record Date, an additional 8,625,001 shares of Common Stock held by public stockholders would be required to be present at the Stockholder Meeting to achieve a quorum.
Abstentions
Abstentions will be considered present for the purposes of establishing a quorum but will not constitute votes cast at the Stockholder Meeting and therefore will have the same effect as a vote “AGAINST” the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal and no effect on the approval of the Adjournment Proposal.
Under the applicable rules, if a stockholder holds their shares in “street” name through a bank, broker or other nominee and the stockholder does not instruct their broker, bank or other nominee how to vote their shares on a proposal, the broker, bank or other nominee has the authority to vote the shares in its discretion on certain “routine” matters. However, banks, brokers and other nominees are not authorized to exercise their voting discretion on any “non-routine” matters. This can result in a “broker non-vote,” which occurs on a proposal when (i) a bank, broker or other nominee has discretionary authority to vote on one or more “routine” proposals to be voted on at a meeting of stockholders, (ii) there are one or more “non-routine” proposals to be voted on at the meeting for which the bank, broker or other nominee does not have authority to vote without instructions from the beneficial owner of the shares and (iii) the beneficial owner fails to provide the bank, broker or other nominee with voting instructions on a “non-routine” matter.
The Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Adjournment proposalProposal are “non-routine” matters and therefore, brokers are not permitted to exercise their voting discretion with respect to these proposals. As a result, if you hold your shares in street name, your bank, brokerage firm or other nominee cannot vote your shares on any of these proposals at the Stockholder Meeting without your instruction.
Vote Required for Approval
The approval of the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal requires the affirmative vote of at least sixty-five percent (65%) of the issued and outstanding shares of Common Stock.
Approval of the Adjournment Proposal requires the affirmative vote of at least a majority of the votes cast by the holders of the issued and outstanding shares of Common Stock who are present in person or represented by proxy and entitled to vote thereon at the Stockholder Meeting.
The Sponsor and FIAC’s officers and directors intend to vote all of their Common Stock in favor of the proposals being presented at the Stockholder Meeting. As of the date of this proxy statement, the Sponsor owns 20.0% of the issued and outstanding shares of Common Stock and FIAC’s officers and directors do not own any Common Stock (excluding any securities indirectly owned by officers or directors as a result of his or her membership interest in the Sponsor).
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The following table reflects the number of additional shares of Public Stock required to approve each proposal:
Number of Additional Shares of Public Stock Required To Approve Proposal | | | | Number of Additional Shares of Public Stock Required To Approve Proposal | |||||||||||
Proposal | Approval Standard | If Only Quorum is Present and All Present Shares Cast Votes | If All Shares Are Present and All Present Shares Cast Votes | | Approval Standard | | If Only Quorum is Present and All Present Shares Cast Votes | | If All Shares Are Present and All Present Shares Cast Votes | ||||||
Extension Amendment Proposal | 65% of Issued and Outstanding Shares of Common Stock | N/A | 12,937,500 | | 65% of Issued and Outstanding Shares of Common Stock | | N/A | | 12,937,500 | ||||||
Redemption Limitation Amendment Proposal | | 65% of Issued and Outstanding Shares of Common Stock | | N/A | | 12,937,500 | |||||||||
Adjournment Proposal | Majority of Voted Stock | 1,437,501 | 8,625,001 | | Majority of Voted Stock | | 1,437,501 | | 8,625,001 |
Voting Your Shares
If you were a holder of record of Common Stock as of the close of business on the Record Date for the Stockholder Meeting, you may vote with respect to the proposals electronically, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. Your proxy card shows the number of shares of Common Stock that you own. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
There are two ways to vote your Common Stock at the Stockholder Meeting:
Voting by Mail. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the Stockholder Meeting in the manner you indicate. You are encouraged to sign and return the proxy card even if you plan to attend the Stockholder Meeting so that your shares will be voted if you are unable to attend the Stockholder Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by 5:00 p.m., Eastern Time, on DecemberApril , 2022.
Voting Electronically. You may attend, vote and examine the list of stockholders entitled to vote at the Stockholder Meeting by visiting https://www.cstproxy.com/and entering the control number found on your proxy card, voting instruction form or notice included in the proxy materials.
Revoking Your Proxy
If you give a proxy, you may revoke it at any time before the Stockholder Meeting or at the Stockholder Meeting by doing any one of the following:
you may send another proxy card with a later date;
you may notify FIAC’s Chief Executive Officer in writing to Focus Impact Acquisition Corp., 250 Park Avenue Ste 911, New York, NY 10177, before the Stockholder Meeting that you have revoked your proxy; or
you may attend the virtual Stockholder Meeting, revoke your proxy, and vote electronically, as indicated above.
No Additional Matters
The Stockholder Meeting has been called only to consider and vote on the approval of the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Adjournment Proposal. Under the amended and restated bylaws of FIAC, other than procedural matters incident to the conduct of the Stockholder Meeting, no other matters may be considered at the Stockholder Meeting if they are not included in this proxy statement, which serves as the notice of the Stockholder Meeting.
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Who Can Answer Your Questions about Voting
If you are a FIAC stockholder and have any questions about how to vote or direct a vote in respect of your Common Stock, you may call Morrow Sodali, our proxy solicitor, by calling (800) 662-5200 (toll-free), or banks and brokers can call (203) 658-9400, or by emailing FIAC.info@investor.morrowsodali.com.
Redemption Rights
Pursuant to the Certificate of Incorporation, holders of Public Stock may seek to redeem their shares for cash, regardless of whether they vote for or against, or whether they abstain from voting on, the Extension Amendment Proposal or the Redemption Limitation Amendment Proposal. In connection with the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal and contingent upon the effectiveness of the implementation of the Charter Extension and the Redemption Limitation Amendment, any stockholder holding Public Stock may demand that FIAC redeem such shares for a full pro rata portion of the Trust Account (which, for illustrative purposes, was $ per share of Public Stock as of , 2022)2023), calculated as of two business days prior to the Stockholder Meeting. If a holder properly seeks Redemption as described in this section, FIAC will redeem these shares for a pro rata portion of funds deposited in the Trust Account and the holder will no longer own these shares following the Stockholder Meeting. However, However, FIAC will not proceed with the CharterArticles Extension ifunless (i) the Redemption Limitation Amendment Proposal is approved or (ii) FIAC will not have at least $ remaining in the Trust Account$5,000,000 of net tangible assets following approval of the Extension Amendment Proposal, after taking into account the Redemptions (WHICH REQUIRES THAT A SUBSTANTIAL NUMBER OF PUBLIC STOCKHOLDERS DO NOT REDEEM OR REDEEM ONLY A PORTION OF THEIR PUBLIC STOCK).
As a holder of Public Stock, you will be entitled to receive cash for any Public Stock to be redeemed only if you:
(i) | (a) hold Public Stock or (b) hold Public Stock through Units and elect to separate your Units into the underlying Public Stock and Public Warrants prior to exercising your redemption rights with respect to the Public Stock; |
(ii) | submit a written request to the Transfer Agent, in which you (a) request that FIAC redeem all or a portion of your Public Stock for cash, and (b) identify yourself as the beneficial holder of the Public Stock and provide your legal name, phone number and address; and |
(iii) | deliver your Public Stock to the Transfer Agent, physically or electronically through DTC. |
Holders must complete the procedures for electing to redeem their Public Stock in the manner described above prior to 5:00 p.m., Eastern Time, on DecemberApril , 20222023 (two business days prior to the initially scheduled date of the Stockholder Meeting) in order for their shares to be redeemed.
The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares.
If you hold your shares in “street name,” you will have to coordinate with your broker to have your shares certificated or delivered electronically. Shares of FIAC that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through DTC’s DWAC system. The Transfer Agent will typically charge the tendering broker a fee and it would be up to the broker whether or not to pass this cost on to the redeeming stockholder.
Any request for Redemption, once made by a holder of Public Stock, may not be withdrawn following the Redemption Deadline, unless approved by the Board. Any corrected or changed written exercise of redemption rights must be received by the Transfer Agent, by the Redemption Deadline.
Notwithstanding the foregoing, a public stockholder, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its Public Stock with respect to more than an aggregate of 15% of the outstanding shares of Public Stock, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the outstanding shares of Public Stock, then any such shares in excess of that 15% limit would not be redeemed for cash, without our prior consent.
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The closing price of Public Stock on , 2022,2023, the most recent practicable date prior to the date of this proxy statement, was $ per share. The cash held in the Trust Account on such date was approximately $ (including$(including interest not previously released to FIAC to pay its franchise and income taxes) ($ per share of Public Stock). Prior to exercising redemption rights, stockholders should verify the market price of Public Stock as they may receive higher proceeds from the sale of their Public Stock in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. FIAC cannot assure its stockholders that they will be able to sell their Public Stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its stockholders wish to sell their shares.
If a holder of Public Stock exercises his, her or its redemption rights, then he, she or it will be exchanging its Public Stock for cash and will no longer own those shares. You will be entitled to receive cash for these shares only if you properly demand Redemption by delivering your share certificate (either physically or electronically) to the Transfer Agent two business days prior to the initially scheduled date of the Stockholder Meeting.
For a discussion of certain material U.S. federal income tax considerations for stockholders with respect to the exercise of these redemption rights, see “Certain Material U.S. Federal Income Tax Considerations for Stockholders Exercising Redemption Rights.” The consequences of a Redemption to any particular stockholder will depend on that stockholder’s particular facts and circumstances. Accordingly, you are urged to consult your tax advisor to determine your tax consequences from the exercise of your redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances.
Appraisal Rights
There are no appraisal rights available to FIAC’s stockholders in connection with the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal. However, holders of Public Stock may elect to have their shares redeemed in connection with the adoption of the Extension Amendment Proposal, and the Redemption Limitation Amendment Proposal, as described under “Redemption Rights”“Redemption Rights” above.
Proxy Solicitation Costs
FIAC is soliciting proxies on behalf of the Board. This proxy solicitation is being made by mail, but also may be made by telephone or in person. FIAC has engaged Morrow Sodali to assist in the solicitation of proxies for the Stockholder Meeting. FIAC and its directors, officers and employees may also solicit proxies in person. FIAC will ask banks, brokers and other institutions, nominees and fiduciaries to forward this proxy statement and the related proxy materials to their principals and to obtain their authority to execute proxies and voting instructions.
FIAC will bear the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing and distribution of this proxy statement and the related proxy materials. FIAC will pay Morrow Sodali a fee of $ , plus disbursements, reimburse Morrow Sodali for its reasonable out-of-pocket expenses and indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses, damages and expenses for its services as FIAC’s proxy solicitor. FIAC will reimburse brokerage firms and other custodians for their reasonable out-of-pocket expenses for forwarding this proxy statement and the related proxy materials to FIAC stockholders. Directors, officers and employees of FIAC who solicit proxies will not be paid any additional compensation for soliciting.
Overview
FIAC is proposing to amend its Certificate of Incorporation to extend the date by which FIAC has to consummate a Business Combination to the Charter Extension Date so as to give FIAC additional time to complete a Business Combination.
Without the Charter Extension, FIAC believes that FIAC may not be able to complete a Business Combination on or before the Original Termination Date. If that were to occur, FIAC would be forced to liquidate.
As contemplated by the Certificate of Incorporation, the holders of Public Stock may elect to redeem all or a portion of their Public Stock in exchange for their pro rata portion of the funds held in the Trust Account if the Charter Extension is implemented.
On , 2022,2023, the most recent practicable date prior to the date of this proxy statement, the redemption price per share was approximately $ , based on the aggregate amount on deposit in the Trust Account of approximately $ as of , 20222023 (including interest not previously released to FIAC to pay its franchise and income taxes), divided by the total number of then outstanding Public Stock. The redemption price per share in connection with the Extension Amendment Proposal will be calculated based on the aggregate amount on deposit in the Trust Account two business days prior to the Stockholder Meeting. The closing price of the Public Stock on Nasdaq on , 2022,2023, was $. $ . Accordingly, if the market price of the Public Stock were to remain the same until the date of the Stockholder Meeting, exercising redemption rights would result in a public stockholder receiving approximately $ [more/less] per share than if the shares were sold in the open market (based on the current per share redemption price as of , 2022)2023). FIAC cannot assure stockholders that they will be able to sell their Public Stock in the open market, even if the market price per share is lower than the redemption price stated above, as there may not be sufficient liquidity in its securities when such stockholders wish to sell their shares. FIAC believes that such redemption right enables its public stockholders to determine whether or not to sustain their investments for an additional period if FIAC does not complete a Business Combination on or before the Original Termination Date.
Reasons for the Extension Amendment Proposal
FIAC’s Certificate of Incorporation provides that FIAC has until May 1, 2023 to complete a Business Combination. FIAC and its officers and directors agreed that they would not seek to amend FIAC’s Certificate of Incorporation to allow for a longer period of time to complete a Business Combination unless FIAC provided holders of its Public Stock with the right to seek Redemption of their Public Stock in connection therewith. The Board believes that it is in the best interests of FIAC stockholders that the Charter Extension be obtained so that FIAC will have an additional amount of time to consummate a Business Combination. Without the Charter Extension, FIAC believes that FIAC may not be able to complete a Business Combination on or before May 1, 2023. If that were to occur, FIAC would be forced to liquidate.
The Extension Amendment Proposal is essential to allowing FIAC additional time to consummate a Business Combination. Approval of the Extension Amendment Proposal is a condition to the implementation of the Charter Extension. In addition, FIAC will not proceed with the Charter Extension ifunless (i) the Redemption Limitation Amendment Proposal is approved or (ii) FIAC will not have at least $ remaining in the Trust Account$5,000,000 of net tangible assets following approval of the Extension Amendment Proposal, after taking into account the Redemptions (WHICH REQUIRES THAT A SUBSTANTIAL NUMBERRedemptions.
If the Extension Amendment Proposal is approved and the Charter Extension becomes effective, within ten (10) business days of the date of the Shareholder Meeting, the Lender shall make a deposit into the Trust Account (as defined below) of $0.0975 per share of Public Stock that is not redeemed in connection with the Stockholder Meeting, in exchange for one or more non-interest bearing, unsecured promissory notes issued by FIAC to the Lender. In addition, if the Extension Amendment Proposal is approved and the Charter Extension becomes effective, in the event that FIAC has not consummated a Business Combination by August 1, 2023, without approval of FIAC’s public shareholders, FIAC may, by resolution of the Board, if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, extend the Termination Date up to nine times, each by one additional month (for a total of up to nine additional months to complete a Business Combination), provided that the Lender will deposit into the Trust Account for each month so extended
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TABLE OF PUBLIC STOCKHOLDERS DO NOT REDEEM OR REDEEM ONLY A PORTION OF THEIR PUBLIC STOCK)CONTENTS
$0.0325 per each share of Public Stock that is not redeemed in connection with the Shareholder Meeting for each such monthly extension, for an aggregate deposit of up to $0.2925 per each share of Public Stock that is not redeemed in connection with the Shareholder Meeting (if all nine additional monthly extensions are exercised), in exchange for a non-interest bearing, unsecured promissory note issued by FIAC to the Lender. If FIAC completes a Business Combination, it will, at the option of the Lender, repay the amounts loaned under the promissory note or convert a portion or all of the amounts loaned under such promissory note into warrants, which warrants will be identical to the Private Placement Warrants (as defined below).
If FIAC does not complete a Business Combination by the applicable Termination Date, such promissory note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.If the Extension Amendment Proposal is Not Approved
If the Extension Amendment Proposal is not approved and a Business Combination is not completed on or before the Original Termination Date, then, as contemplated by and in accordance with the Certificate of Incorporation, FIAC will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Public Stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to FIAC to pay its franchise and income taxes, if any (less up to $100,000 of such interest to pay dissolution expenses), divided by the total number of the then-outstanding shares of Public Stock, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of FIAC’s remaining stockholders and the Board, in accordance with applicable law, liquidate and dissolve, subject in each case to FIAC’s obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law. There will be no distribution from the Trust Account with respect to FIAC’s warrants, which will expire worthless in the event of our winding up.
The Sponsor has waived its rights to participate in any liquidation distribution with respect to the 5,750,000 shares of Class B Common Stock held by it.
If the Extension Amendment Proposal is Approved
If the Extension Amendment Proposal is approved, FIAC shall procure that all filings required to be made with the Delaware Secretary of State in connection with the Extension Amendment Proposal to extend the time it has to complete a Business Combination until the Charter Extension Date are made. FIAC will then continue to attempt to consummate a Business Combination until the Charter Extension Date. FIAC will remain a reporting company under the Exchange Act and its Public Stock and Public Warrants will remain publicly traded during this time.
In addition, FIAC will not proceed with the Charter Extension unless (i) the Redemption Limitation Amendment Proposal is approved or (ii) if FIAC will not have at least $ remaining in the Trust Account$5,000,000 of net tangible assets following approval of the Extension Amendment Proposal, after taking into account the Redemptions (WHICH REQUIRES THAT A SUBSTANTIAL NUMBERRedemptions.
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Interests of the Sponsor and FIAC’s Directors and Officers
When considering the recommendation of the Board, FIAC stockholders should be aware that aside from their interests as direct or indirect stockholders, the Sponsor and certain members of the Board and officers of FIAC have interests that are different from, or in addition to, those of other stockholders generally. The Board was aware of and considered these interests, among other matters, in recommending to FIAC stockholders that they approve the Extension Amendment Proposal. FIAC stockholders should take these interests into account in deciding whether to approve the Extension Amendment Proposal:
the fact that the Sponsor paid $11,200,000 for 11,200,000 Private Placement Warrants, each of which is exercisable commencing on the later of 12 months from the closing of our Initial Public Offering and 30 days following the closing of the Business Combination for one share of Class A Common Stock at $11.50 per share.share. If the Extension Amendment Proposal is not approved and FIAC does not consummate a Business Combination by May 1, 2023, then a portion of the proceeds from the sale of the Private Placement Warrants will be part of the liquidating distribution to the public stockholders and the Private Placement Warrants held by our Sponsor will be worthless;
the fact that the Sponsor (and certain of FIAC’s officers and directors who are members of the Sponsor), have invested in FIAC an aggregate of $11,225,000, comprised of the $25,000 purchase price for 5,750,000 shares of Class B Common Stock and the $11,200,000 purchase price for 11,200,000 Private Placement Warrants. Assuming a trading price of $ per share of Class A Common Stock and $ per Public Warrant (based upon the respective closing prices of the Class A Common Stock and the Public Warrants on Nasdaq on , 2022)2023), the 5,750,000 shares of Class B Common Stock and 11,200,000 Private Placement Warrants would have an implied aggregate market value of $.$ . Even if the trading price of the shares of Class A Common Stock were as low as $1.96 per share, the aggregate market value of the Class B Common Stock alone (without taking into account the value of the Private Placement Warrants) would be approximately equal to the initial investment in FIAC by the Sponsor (and certain of FIAC’s officers and directors who are members of the Sponsor). As a result, if a Business Combination is completed, the Sponsor (and certain of FIAC’s officers and directors who are members of the Sponsor) is likely to be able to make a substantial profit on its investment in FIAC at a time when the Class A Common Stock has lost significant value. On the other hand, if the Extension Amendment Proposal is not approved and FIAC liquidates without completing a Business Combination before May 1, 2023, the Sponsor (and FIAC’s officers and directors who are members of the Sponsor) will lose its entire investment in FIAC;
the fact that the Sponsor and FIAC’s officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any shares of Common Stock (other than Public Stock) held by them if the Extension Amendment Proposal is not approved and FIAC fails to complete a Business Combination by May 1, 2023;
the indemnification of FIAC’s existing officers and directors and the liability insurance maintained by FIAC;
the fact that the Sponsor and FIAC’s officers and directors will lose their entire investment in FIAC and will not be reimbursed for any loans extended, fees due or out-of-pocket expenses if the Extension Amendment Proposal is not approved and a Business Combination is not consummated by May 1, 2023. As of the date of this proxy statement, there are no loans extended, fees due or outstanding out-of-pocket expenses for which FIAC’s officers and directors and the Sponsor are awaiting reimbursement; and
the fact that the Sponsor has agreed that it will be liable to FIAC if and to the extent any claims by a third party (other than FIAC’s independent auditors) for services rendered or products sold to FIAC, or a prospective target business with which FIAC has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.20 per public share or (ii) such lesser amount per share of Public Stock held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any
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claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.
Redemption Rights
Pursuant to the Certificate of Incorporation, holders of Common Stock may seek to redeem their shares for cash, regardless of whether they vote for or against, or whether they abstain from voting on, the Extension Amendment Proposal. In connection with the Extension Amendment Proposal and contingent upon the effectiveness of the implementation of the Charter Extension, any stockholder holding shares of Public Stock may demand that FIAC redeem such shares for a full pro rata portion of the Trust Account (which, for illustrative purposes, was $per share as of , 2023), calculated as of two business days prior to the Stockholder Meeting. If a holder properly seeks Redemption as described in this section, FIAC will redeem these shares for a pro rata portion of funds deposited in the Trust Account and the holder will no longer own these shares following the Stockholder Meeting. However, FIAC will not proceed with the Charter Extension unless (i) the Redemption Limitation Amendment Proposal is approved or (ii) if FIAC will have at least $5,000,000 of net tangible assets following approval of the Extension Amendment Proposal, after taking into account the Redemptions. As a holder of Public Stock, you will be entitled to receive cash for any Public Stock to be redeemed only if you:
(i) | (a) hold Public Stock or (b) hold Public Stock through Units and elect to separate your Units into the underlying Public Stock and Public Warrants prior to exercising your redemption rights with respect to the Public Stock; |
(ii) | submit a written request to the Transfer Agent, in which you (a) request that FIAC redeem all or a portion of your Public Stock for cash, and (b) identify yourself as the beneficial holder of the Public Stock and provide your legal name, phone number and address; and |
(iii) | deliver your Public Stock to the Transfer Agent, physically or electronically through DTC. |
Holders must complete the procedures for electing to redeem their Public Stock in the manner described above prior to 5:00 p.m., Eastern Time, on April , 2023 (two business days prior to the initially scheduled date of the Stockholder Meeting) in order for their shares to be redeemed.
The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares.
If you hold the shares in “street name,” you will have to coordinate with your broker to have your shares certificated or delivered electronically. Shares of FIAC that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through DTC’s DWAC system. The Transfer Agent will typically charge the tendering broker a fee and it would be up to the broker whether or not to pass this cost on to the redeeming stockholder.
Any request for Redemption, once made by a holder of Public Stock, may not be withdrawn following the Redemption Deadline, unless approved by the Board. Any corrected or changed written exercise of redemption rights must be received by the Transfer Agent by the Redemption Deadline.
Notwithstanding the foregoing, a public stockholder, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its Public Stock with respect to more than an aggregate of 15% of the outstanding shares of Public Stock, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the outstanding shares of Public Stock, then any such shares in excess of that 15% limit would not be redeemed for cash, without our prior consent.
The closing price of Public Stock on , 2023, the most recent practicable date prior to the date of this proxy statement, was $ per share. The cash held in the Trust Account on such date was approximately $ (including interest not previously released to FIAC to pay its franchise and income taxes) ($ per share
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of Public Stock). Prior to exercising redemption rights, stockholders should verify the market price of Public Stock as they may receive higher proceeds from the sale of their Public Stock in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. FIAC cannot assure its stockholders that they will be able to sell their Public Stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its stockholders wish to sell their shares.
If a holder of Public Stock exercises his, her or its redemption rights, then he, she or it will be exchanging its Public Stock for cash and will no longer own those shares. You will be entitled to receive cash for these shares only if you properly demand Redemption by delivering your share certificate (either physically or electronically) to the Transfer Agent two business days prior to the initially scheduled date of the Stockholder Meeting.
Vote Required for Approval
The approval of the Extension Amendment Proposal requires the affirmative vote of at least sixty-five percent (65%) of the issued and outstanding shares of Common Stock. Abstentions will be considered present for the purposes of establishing a quorum but will not constitute votes cast at the Stockholder Meeting and therefore will have the same effect as a vote “AGAINST” the Extension Amendment Proposal.
As of the date of this proxy statement, the Sponsor and FIAC’s officers and directors intend to vote all Common Stock owned by them in favor of the Extension Amendment Proposal. As of the date hereof, the Sponsor owns 20.0% of the issued and outstanding shares of Common Stock and FIAC’s officers and directors do not own any Common Stock (excluding any securities indirectly owned by officers or directors as a result of his or her membership interest in the Sponsor). As a result, in addition to the Sponsor, approval of the Extension Amendment Proposal will require the affirmative vote of at least 12,937,500 shares of Public Stock (or approximately 56.25% of the Public Stock).
Recommendation of the Board
BOARD UNANIMOUSLY RECOMMENDS THAT FIAC STOCKHOLDERS VOTE “FOR”
THE EXTENSION AMENDMENT PROPOSAL.
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Overview
FIAC is proposing to amend its Certificate of Incorporation to eliminate the requirement that FIAC has at least $5,000,000 in tangible net assets (as determined in accordance with Rule 3a51-1(g)(1) under the Exchange Act) following redemptions in connection with this Stockholder Meeting or a Business Combination.
Without the Redemption Limitation Amendment, FIAC may not be able to implement the Articles Extension if following redemptions in connection with the Charter Extension FIAC would not have at least $5,000,000 in tangible net assets (as determined in accordance with Rule 3a51-1(g)(1) under the Exchange Act). If that were to occur, African would be forced to liquidate on the Termination Date.
The purpose of the Redemption Limitation requirements was to ensure that FIAC would not be subject to the “penny stock” rules of the SEC as long as it met the Redemption Limitation requirement, and therefore not be deemed a “blank check company” as defined under Rule 419 of the Securities Act because it complied with Rule 3a51-1(g)(1) (the “NTA Rule”). FIAC is proposing to amend its Certificate of Incorporation to remove the Redemption Limitation requirements. The NTA Rule is one of several exclusions from the “penny stock” rules of the SEC and FIAC believes that it can rely on another exclusion, which relates to it being listed on Nasdaq (Rule 3a51-1(a)(2)) (the “Exchange Rule”). Therefore, the Company intends to rely on the exclusion from the penny stock rules set forth in Rule 3a51-1(a)(2) as a result of its securities being listed on Nasdaq.
As disclosed in our initial public offering prospectus, FIAC is a blank check company formed for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Under Rule 419 of the Securities Act the term “blank check company” means a company that (i) is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and (ii) is issuing “penny stock,” as defined in Rule 3a51-1 under the Exchange Act. Rule 3a51-1 sets forth that the term “penny stock” shall mean any equity security, unless it fits within certain enumerated exclusions including the NTA Rule and the Exchange Rule. Historically SPACs have relied upon the NTA Rule to avoid being deemed a penny stock issuer. The inclusion of the Redemption Limitation requirements in the Certificate of Incorporation was to ensure that through the consummation of an initial Business Combination, FIAC would not be considered a penny stock issuer and therefore a blank check company if no other exemption from the rule was available.
The Exchange Rule excludes from the definition of “penny stock” a security that is registered, or approved for registration upon notice of issuance, on a national securities exchange, or is listed, or approved for listing upon notice of issuance on, an automated quotation system sponsored by a registered national securities association, that has established initial listing standards that meet or exceed the criteria in the rule. The Company’s securities are listed on Nasdaq and have been since the consummation of its Initial Public Offering. The Company believes that Nasdaq has initial listing standards that meet the criteria identified in the Exchange Rule and that it can therefore rely on this rule to avoid being treated as a penny stock. Therefore, the inclusion of the Redemption Limitation in the Certificate of Incorporation is unnecessary.
Reasons for the Redemption Limitation Amendment Proposal
Stockholders are being asked to adopt the proposed Redemption Limitation Amendment Proposal which, in the judgment of the Board, may facilitate the consummation of an initial Business Combination. The Certificate of Incorporation limits FIAC’s ability to consummate an initial Business Combination, or to redeem Ordinary Stock in connection with an initial Business Combination, if it would cause FIAC to have less than $5,000,000 in net tangible assets. The purpose of such limitation was initially to ensure that the Ordinary Stock were not deemed to be a “penny stock” pursuant to Rule 3a51-1 under the Exchange Act in the event that such Ordinary Stock failed to be listed on an approved national securities exchange. If the Redemption Limitation Amendment Proposal is not approved and there are significant requests for redemption in connection with the Charter Extension such that following such redemptions, FIAC’s net tangible assets would be less than $5,000,000, the Redemption Limitation in the Certificate of Incorporation would prevent FIAC from being able to implement the Charter Extension. If that were to occur, FIAC would be forced to liquidate on the Termination Date.
Additionally, if the Redemption Limitation Amendment Proposal is not approved and there are significant requests for redemption in connection with consummation of an initial Business Combination, the Redemption
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Limitation in the Certificate of Incorporation would prevent FIAC from being able to consummate an initial Business Combination even if all other conditions to closing are met.
If the Redemption Limitation Proposal is Not Approved
If the Redemption Limitation Amendment Proposal is not approved, we will not redeem Public Stock to the extent that accepting all properly submitted redemption requests would exceed the Redemption Limitation. In the event that the Redemption Limitation Amendment Proposal is not approved and we receive notice of redemptions of Public Stock approaching or in excess of the Redemption Limitation, we and/or the Sponsor may take action to increase our net tangible assets to avoid exceeding the Redemption Limitation, which may include, at our and our Sponsor’s option and in our and its sole discretion, any, several or all of the following actions: (a) attempting to secure waivers of certain of our significant liabilities, including the deferred underwriting fees, and (b) entering into non-redemption agreements with certain of our significant stockholders. If the Redemption Limitation Amendment Proposal is not approved and the Redemption Limitation is exceeded, either because we do not take action to increase our net tangible assets or because our attempt to do so is not successful, then we will not proceed with the Charter Extension and we will not redeem any Public Stock. In such case, Public Stock which a public stockholder elects to redeem but which are not redeemed shall be returned to such public stockholder or such public stockholder’s account and such public stockholder will retain the right to have their Public Stock redeemed for cash if FIAC has not completed an initial Business Combination by the Termination Date.
If the Redemption Limitation Proposal is Approved
If the Redemption Limitation Amendment Proposal is approved (and the Extension Amendment Proposal is also approved), FIAC shall procure that all filings required to be made with the Delaware Secretary of State in connection with the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal are made and, assuming the Extension Amendment Proposal is approved, redeem Public Stock as necessary, irrespective of whether such redemptions exceed the Redemption Limitation.
Interests of the Sponsor, FIAC’s Directors, and Officers
When you consider the recommendation of the Board, FIAC stockholders should be aware that aside from their interests as stockholders, the Sponsor, certain members of the Board, and officers of FIAC have interests that are different from, or in addition to, those of other stockholders generally. The Board was aware of and considered these interests, among other matters, in recommending to FIAC stockholders that they approve the Redemption Limitation Amendment Proposal. FIAC stockholders should take these interests into account in deciding whether to approve the Redemption Limitation Amendment Proposal:
the fact that the Sponsor paid $11,200,000 for 11,200,000 Private Placement Warrants, each of which is exercisable commencing on the later of 12 months from the closing of our Initial Public Offering and 30 days following the closing of the Business Combination for one share of Class A Common Stock at $11.50 per share. If the Extension Amendment Proposal is not approved and FIAC does not consummate a Business Combination by May 1, 2023, then a portion of the proceeds from the sale of the Private Placement Warrants will be part of the liquidating distribution to the public stockholders and the Private Placement Warrants held by our Sponsor will be worthless;
the fact that the Sponsor (and certain of FIAC’s officers and directors who are members of the Sponsor), have invested in FIAC an aggregate of $11,225,000, comprised of the $25,000 purchase price for 5,750,000 shares of Class B Common Stock and the $11,200,000 purchase price for 11,200,000 Private Placement Warrants. Assuming a trading price of $ per share of Class A Common Stock and $ per Public Warrant (based upon the respective closing prices of the Class A Common Stock and the Public Warrants on Nasdaq on , 2023), the 5,750,000 shares of Class B Common Stock and 11,200,000 Private Placement Warrants would have an implied aggregate market value of $ . Even if the trading price of the shares of Class A Common Stock were as low as $1.96 per share, the aggregate market value of the Class B Common Stock alone (without taking into account the value of the Private Placement Warrants) would be approximately equal to the initial investment in FIAC by the Sponsor (and certain of FIAC’s officers and directors who are members of the Sponsor). As a result, if a Business Combination is completed, the Sponsor (and certain of FIAC’s
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officers and directors who are members of the Sponsor) is likely to be able to make a substantial profit on its investment in FIAC at a time when the Class A Common Stock has lost significant value. On the other hand, if the Extension Amendment Proposal is not approved and FIAC liquidates without completing a Business Combination before May 1, 2023, the Sponsor (and FIAC’s officers and directors who are members of the Sponsor) will lose its entire investment in FIAC;
the fact that the Sponsor and FIAC’s officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any shares of Common Stock (other than Public Stock) held by them if the Extension Amendment Proposal is not approved and FIAC fails to complete a Business Combination by May 1, 2023;
the indemnification of FIAC’s existing officers and directors and the liability insurance maintained by FIAC;
the fact that the Sponsor and FIAC’s officers and directors will lose their entire investment in FIAC and will not be reimbursed for any loans extended, fees due or out-of-pocket expenses if the Extension Amendment Proposal is not approved and a Business Combination is not consummated by May 1, 2023. As of the date of this proxy statement, there are no loans extended, fees due or outstanding out-of-pocket expenses for which FIAC’s officers and directors and the Sponsor are awaiting reimbursement; and
the fact that the Sponsor has agreed that it will be liable to FIAC if and to the extent any claims by a third party (other than FIAC’s independent auditors) for services rendered or products sold to FIAC, or a prospective target business with which FIAC has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.20 per public share or (ii) such lesser amount per share of Public Stock held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third partythird-party claims.
Redemption Rights
Pursuant to the Certificate of Incorporation, holders of Common Stock may seek to redeem their shares for cash, regardless of whether they vote for or against, or whether they abstain from voting on, the ExtensionRedemption Limitation Amendment Proposal. In connection with the ExtensionRedemption Limitation Amendment Proposal and contingent upon the effectiveness of the implementation of the Charter Extension,Redemption Limitation Amendment, any stockholder holding shares of Public Stock may demand that FIAC redeem such shares for a full pro rata portion of the Trust Account (which, for illustrative purposes, was $ per share as of , 2022)2023), calculated as of two business days prior to the Stockholder Meeting. If a holder properly seeks Redemption as described in this section, FIAC will redeem these shares for a pro rata portion of funds deposited in the Trust Account and the holder will no longer own these shares following the Stockholder Meeting. However, FIAC will not proceed with the Charter Extension if FIAC will not have at least $ remaining in the Trust Account following approval of the Extension Amendment Proposal, after taking into account the Redemptions (WHICH REQUIRES THAT A SUBSTANTIAL NUMBER OF PUBLIC STOCKHOLDERS DO NOT REDEEM OR REDEEM ONLY A PORTION OF THEIR PUBLIC STOCK).
As a holder of Public Stock, you will be entitled to receive cash for any Public Stock to be redeemed only if you:
(iv) | (a) hold Public Stock or (b) hold Public Stock through Units and elect to separate your Units into the underlying Public Stock and Public Warrants prior to exercising your redemption rights with respect to the Public Stock; |
(v) | submit a written request to the Transfer Agent, in which you (a) request that FIAC redeem all or a portion of your Public Stock for cash, and (b) identify yourself as the beneficial holder of the Public Stock and provide your legal name, phone number and address; and |
(vi) | deliver your Public Stock to the Transfer Agent, physically or electronically through DTC. |
Holders must complete the procedures for electing to redeem their Public Stock in the manner described above prior to 5:00 p.m., Eastern Time, on DecemberApril , 20222023 (two business days prior to the initially scheduled date of the Stockholder Meeting) in order for their shares to be redeemed.
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