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UNITED STATES |
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SECURITIES AND EXCHANGE COMMISSION |
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Washington, D.C. 20549 |
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FORM |
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CURRENT REPORT |
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PURSUANT TO SECTION 13 OR 15(d) OF THE |
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(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction |
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Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry Into a Material Definitive Agreement
Prepaid Forward Agreement
As previously announced, on April 21, 2022, LMF Acquisition Opportunities, Inc., a Delaware corporation (“LMF”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among LMF, LMF Merger Sub, Inc., a Delaware corporation and direct wholly owned subsidiary of LMF (“Merger Sub”), and SeaStar Medical, Inc., a Delaware corporation (“SeaStar Medical”), pursuant to which SeaStar Medical will be merged with and into Merger Sub, with SeaStar Medical continuing as the surviving entity in the merger as a wholly-owned subsidiary of LMF and with LMF changing its name in connection with the merger to SeaStar Medical Holdings Corporation (“SeaStar Medical Holdings”). The transactions contemplated by the Merger Agreement, as it may be amended from time to time, and the related ancillary agreements are hereinafter referred to as the “Business Combination”.
On October 26, 2022, LMF, SeaStar Medical and HB Strategies LLC (“Seller”) entered into an agreement (the “Prepaid Forward Agreement”) for an equity prepaid forward transaction (the “Transaction”). Pursuant to the terms of the Prepaid Forward Agreement, Seller may (i) purchase through a broker in the open market, from holders of Shares (as defined below) other than LMF or affiliates thereof, shares of Class A common stock, par value $0.0001 per share, of LMF (together with the shares of common stock of SeaStar Medical Holdings following the closing of the Business Combination, the “Shares”), or (ii) reverse Seller’s prior exercise of redemption rights as to Shares, which redemption rights are set forth in LMF’s Amended and Restated Certificate of Incorporation dated as of January 26, 2021, as amended from time to time (the “Amended and Restated Certificate”), in connection with the Business Combination (all such purchased or reversed Shares, the “Recycled Shares”). While Seller has no obligation to purchase any Shares under the Prepaid Forward Agreement, the aggregate total Recycled Shares that may be purchased or reversed under the Prepaid Forward Agreement shall be no more than 700,000 shares (the “Maximum Number of Shares”), exclusive of the Additional Shares (as defined below). The number of Recycled Shares that are actually purchased or reversed under the Prepaid Forward Agreement is referred to as the “Number of Shares”. Seller has agreed to hold the Recycled Shares for the benefit of (a) LMF until the closing of the Business Combination (the “Closing”) and (b) SeaStar Medical Holdings after the Closing (each a “Counterparty”). Seller also may not beneficially own greater than 9.9% of issued and outstanding Shares following the Business Combination.
The Prepaid Forward Agreement provides that, no later than the earlier of (a) one (1) local business day after the Closing and (b) the date any assets from LMF’s trust account are disbursed in connection with the Business Combination, Seller shall be paid directly, out of the funds held in LMF’s trust account, a cash amount (the “Prepayment Amount”) equal to the Number of Shares multiplied by the Per-Share Redemption Price (the “Redemption Price”), as defined in Section 9.2(b) of the Amended and Restated Certificate.
In addition to the Prepayment Amount, Seller shall be paid directly from LMF’s trust account an amount equal to the product of 50,000 multiplied by the Redemption Price (the “Share Consideration”), for the purpose of repayment of Seller purchasing in the open market or reversing its redemption election as to, prior to the Closing, 50,000 additional Shares (the “Additional Shares”), which Shares shall not be included in the Number of Shares under the Prepaid Forward Agreement, and which Additional Shares will be free and clear of all obligations of Seller in connection with the Prepaid Forward Agreement.
Seller may in its discretion sell Recycled Shares that Seller purchases, the effect of which is to terminate the Prepaid Forward Agreement in respect of such Recycled Shares sold (the “Terminated Shares”). The Counterparty shall be entitled to receive proceeds from such sales of Terminated Shares equal to the product of (x) the number of Terminated Shares multiplied by (y) the Reset Price. Following the Closing, the “Reset Price” will initially be $10.00 per Share, but will be adjusted on the last scheduled trading day of each month (each a “Reset Date”) commencing on the first calendar month following the Closing to the lowest of (a) the then-current Reset Price, (b) $10.00 and (c) the volume weighted average price (“VWAP Price”) of the Shares of the last ten (10) trading days of the prior calendar month, but not lower than $5.00; provided, however, that to the extent Counterparty sells, enters any agreement to sell or grants any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Shares or any securities of Counterparty or any of their respective subsidiaries which would entitle the holder thereof to acquire at any time Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Shares, at an effective price per share less than the then existing Reset Price, then the Reset Price shall be adjusted to equal such reduced price.
The maturity date of the Transaction (the “Maturity Date”) will be the earliest to occur of (a) the third anniversary of the Closing and (b) the date following the effective date specified by Seller in a written notice to be delivered at Seller’s discretion (not earlier than the day such notice is effective) after any occurrence wherein during any 30 consecutive trading-day period, the VWAP Price for 20 trading days is less than $3.00 per Share (a “VWAP Trigger Event”). Upon the occurrence of the Maturity Date, Counterparty is obligated to pay to Seller an amount equal to the product of (a) (x) the number of Recycled Shares less (y) the number of Terminated Shares multiplied by (b) $2.50 (the “Maturity Consideration”). The Maturity Consideration shall be payable by Counterparty, in cash or, at the option of Counterparty, Shares based on the daily VWAP Price over 30 trading days ending on (i) the Maturity Date to the extent the Shares used to pay the Maturity Consideration are freely tradable by Seller, or (ii) if not freely tradeable by Seller, the date
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on which the Shares used to pay the Maturity Consideration are registered under the Securities Act of 1933, as amended, and delivered to Seller. If Counterparty pays the Maturity Consideration in Shares, then Counterparty shall pay the Maturity Consideration on a net basis such that Seller retains a Number of Shares due to Counterparty upon such Maturity Date equal to the number of Maturity Consideration Shares payable to Seller, only to the extent the Number of Shares due to Counterparty upon the Maturity Date are equal to or more than the number of Maturity Consideration Shares payable to Seller, with any Maturity Consideration remaining due to be paid to Seller in newly issued Shares. In addition to the Maturity Consideration, at the Maturity Date, Seller will be entitled to retain a cash amount equal to the product of (y) the Number of Shares remaining in the Transaction multiplied by (z) the Redemption Price, and Seller will deliver to Counterparty the Number of Shares that remain in the Transaction.
The Prepaid Forward Agreement may be terminated if any of the following events occurs (a) failure to consummate the Business Combination on or before October 28, 2022, (b) termination of the Merger Agreement prior to the Closing and (c) the Shares are involved in a delisting on the relevant exchange and are not immediately re-listed, save for any transactions contemplated by the Merger Agreement. Upon such a termination event, a break-up fee equal to (i) all of Seller’s actual out-of-pocket reasonable fees, costs and expenses relating to the Business Combination (without a cap) plus (ii) $1,000,000 is payable by SeaStar Medical to Seller in the event the Transaction is terminated by (a) Counterparty and the Business Combination closes or (b) SeaStar Medical Holdings following the Closing (collectively, the “Break-Up Fee”); provided that the Break-Up Fee is not payable if the Business Combination does not close by reason of failure of Seller to purchase the Maximum Number of Shares or Seller’s beach of the Prepaid Forward Agreement. However, Seller has waived any and all right, title and interest, or any claim of any kind it has or may have in the future, in or to any monies held in LMF’s trust account, as such trust account is described more fully LMF’s final prospectus for its initial public offering filed with the Securities and Exchange Commission on January 27, 2021.
The Seller does not possess any redemption rights in respect of the Recycled Shares. In addition, the Seller may freely transfer or assign its rights under the Prepaid Forward Agreement.
The foregoing description of the Prepaid Forward Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Prepaid Forward Agreement, a copy of which is attached as Exhibit 10.1 hereto and is incorporated by reference herein.
Item 7.01 Regulation FD Disclosure.
Redemption of Class A Common Stock
As of October 26, 2022, holders of an aggregate of 8,878,960 Shares had exercised their right to redeem their Shares, after giving effect to any redemption reversals by stockholders to have requested to reverse their election to have their shares redeemed. Seller has informed us that it has reversed its redemption election as to an aggregate of 700,000 Recycled Shares and 50,000 Additional Shares. LMF does not currently intend to permit any further requests to reverse redemption elections with respect to Shares.
Receipt of Pricing Notice under October 17, 2022 Prepaid Forward Agreement
On October 7, 2022, LMF filed a Current Report on Form 8-K in which LMF disclosed that it entered into an equity prepaid forward confirmation with Vellar Oportunity Fund SPV LLC – Series 4 (“Vellar”) with respect to a maximum of 1,500,000 shares (the “Vellar Prepaid Forward Agreement”). On October 25, 2022, Vellar delivered to LMF a notification that Vellar acquired a total of 523,000 shares subject to the Vellar Prepaid Forward Agreement plus an additional 100,000 “Additional Shares” within the meaning of the Vellar Prepaid Forward Agreement.
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Important Information about the Business Combination and Where to Find It
In connection with the business combination transaction, LMF has filed a registration statement on Form S-4 (the “Registration Statement”) with the SEC, which includes the proxy statement relating to LMF’s solicitation of proxies for the vote by LMF’s stockholders with respect to the transaction, as well as the prospectus relating to the offer and sale of securities to be issued in connection with the completion of the proposed business combination. Investors and security holders and other interested parties are urged to read the proxy statement/prospectus, any amendments thereto and any other documents filed with the SEC carefully and in their entirety because they contain important information about LMF, SeaStar Medical and the transaction. Investors and security holders may obtain free copies of the proxy statement/prospectus and other documents filed with the U.S. Securities and Exchange Commission (the “SEC”) by LMF through the website maintained by the SEC at http://www.sec.gov, or by directing a request to: LMF Acquisition Opportunities, Inc., 1200 Platt Street, Suite 1000 Tampa, FL 33602.
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Forward Looking Statements
This communication contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1955. These forward-looking statements include, without limitation, LMF’s and SeaStar Medical’s expectations with respect to the proposed business combination between LMF and SeaStar Medical, including statements regarding the benefits of the transaction, the anticipated timing of the transaction, the implied valuation of SeaStar Medical, the products offered by SeaStar Medical and the markets in which it operates, and SeaStar Medical’s projected future results. Words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside LMF’s and SeaStar Medical’s control and are difficult to predict. Factors that may cause actual future events to differ materially from the expected results, include, but are not limited to: (i) the risk that the business combination transaction between SeaStar Medical and LMF may not be completed in a timely manner or at all, which may adversely affect the price of LMF’s securities, (ii) the risk that the transaction may not be completed by LMF’s business combination deadline, even if extended by its sponsor, (iii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the agreement and plan of merger (“Merger Agreement”) by the stockholders of LMF and the satisfaction of the minimum trust account amount following redemptions by LMF’s public stockholders, (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (v) the receipt of an unsolicited offer from another party for an alternative transaction that could interfere with the business combination, (vi) the effect of the announcement or pendency of the transaction on SeaStar Medical’s business relationships, performance, and business generally, (vii) the inability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of the post-combination company to grow and manage growth profitability and retain its key employees, (viii) costs related to the business combination, (ix) the outcome of any legal proceedings that may be instituted against SeaStar Medical or LMF following the announcement of the proposed business combination, (x) the ability to maintain the listing of LMF’s securities on the Nasdaq, (xi) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed business combination, and identify and realize additional opportunities, (xii) the risk of downturns and the possibility of rapid change in the highly competitive industry in which SeaStar Medical operates, (xiii) the risk that SeaStar Medical and its current and future collaborators are unable to successfully develop and commercialize SeaStar Medical’s products or services, or experience significant delays in doing so, including failure to achieve approval of its products by applicable federal and state regulators, (xiv) the risk that SeaStar Medical may never achieve or sustain profitability; (xv) the risk that SeaStar Medical may need to raise additional capital to execute its business plan, which many not be available on acceptable terms or at all; (xvi) the risk that third-parties suppliers and manufacturers are not able to fully and timely meet their obligations, (xvii) the risk of product liability or regulatory lawsuits or proceedings relating to SeaStar Medical’s products and services, (xviii) the risk that SeaStar Medical is unable to secure or protect its intellectual property, (xix) the risk that the post-combination company’s securities will not be approved for listing on Nasdaq or if approved, maintain the listing and (xx) other risks and uncertainties indicated from time to time in LMF’s registration statement on Form S-4 (File No. 333-264993), including those under the “Risk Factors” section therein and in LMF’s other filings with the SEC. The foregoing list of factors is not exhaustive. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and SeaStar Medical and LMF assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit |
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Description |
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10.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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LMF Acquisition Opportunities, Inc. |
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Dated: October 27, 2022 |
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/s/ Richard Russell |
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Name: |
Richard Russell |
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Title: |
Chief Financial Officer, Treasurer and Secretary |
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