| Item 1.01 | Entry into a Material Definitive Agreement. |
The disclosure included under Item 2.03 is incorporated by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On September 7, 2022, ESM Acquisition Corporation, a Cayman Islands exempted company (the “Company”), entered into Promissory Note (the “Note”) with ESM Sponsor, LP, a Cayman Islands exempted limited partnership (“Sponsor”). The purposes of the Note are (i) to provide funding to the Company to pay its expenses and (ii) to facilitate the transactions contemplated by the Company’s registration statement on Form S-1, and the prospectus included therein, including any merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination by the Company with one or more businesses (a “Business Combination”).
Pursuant to the Note, Sponsor has agreed to advance to the Company from time to time, upon request by the Company, a maximum of $1,000,000 in the aggregate. The Company intends to promptly make an initial drawdown of $500,000 under the Note.
The Note is payable on the earlier of (i) date on which the Company consummates its initial Business Combination or (ii) March 12, 2023. No interest accrues on the unpaid principal balance of the Note. Sponsor cannot seek repayment from the Company’s trust account for amounts owed under the Note. Up to $1,500,000 of any loans from the Sponsor are convertible into warrants to purchase shares of common stock (the “Conversion Warrants”), at the option of the Sponsor. The number of Conversion Warrants granted will be equal to the portion of the principal amount of the Promissory Note being converted, divided by $1.50 (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction related to the Company’s common stock occurring after the date of the Note), rounded up to the nearest whole number of shares. The Conversion Warrants shall be identical to those warrants that were issued in a private placement that closed concurrently with the Company’s initial public offering. The holders of Conversion Warrants or shares of common stock underlying the Conversion Warrants are entitled to certain demand and piggyback registration rights pursuant to the terms of the Note.
A copy of the Note is filed as Exhibit 10.1.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
The following exhibits are being filed herewith:
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