Item 4 is hereby amended by adding the following paragraphs:
Merger Agreement
As disclosed in a Current Report on Form 8K that the Issuer filed on August 23,2023 (the “August Form 8K”) with the U.S. Securities and Exchange Commission (the “SEC”), the Issuer previously entered into an Agreement and Plan of Merger (the “Merger Agreement”), dated August 23,2023, with SEP Acquisition Holdings Inc., a Nevada corporation and a wholly owned subsidiary of the Issuer (“Merger Sub”), and SANUWAVE Health, Inc., a Nevada corporation (“SANUWAVE”), pursuant to which Merger Sub will merge with and into SANUWAVE, with SANUWAVE being the surviving entity and whollyowned subsidiary of the Issuer (the “Business Combination”). The Merger Agreement contains a covenant requiring the Issuer to file, prior to the closing of the Business Combination upon approval by the holders of the Founder Shares, an amendment (the “Class B Charter Amendment”) to the Issuer’s Amended and Restated Certificate of Incorporation, dated July 27,2021, as amended on December 20,2022 (the “Amended and Restated Certificate of Incorporation”), to remove the antidilution provision applicable to certain issuances of securities by the Issuer and to adjust the conversion ratio so that the Founder Shares shall be convertible into shares of Class A Common Stock on a 1:0.277 basis instead of a 1:1 basis.
Forfeiture and Redemption Agreement
As disclosed in a Current Report on Form 8K that the Issuer filed on October 3,2023 (the “October Form 8K”), the Issuer received notice from the staff of The Nasdaq Stock Market LLC that it is not in compliance with the $35 million minimum Market Value of Listed Securities (“MVLS”) standard. In order to bring the Issuer into compliance with the MVLS standard, the Sponsor has elected to convert 2,415,375 Founder Shares into 2,415,375 shares of Class A Common Stock so that the Issuer’s MVLS is above the $35 million minimum requirement.
In order to conform with the terms and conditions of the Merger Agreement and to maintain the same economics of the Business Combination for all Class B stockholders, on October 2,2023, the Sponsor, the Issuer and SANUWAVE entered into a Forfeiture and Redemption Agreement (the “Forfeiture and Redemption Agreement”), pursuant which the Sponsor has agreed to forfeit 1,746,316 of its shares (the “Forfeited Shares”) of Class A Common Stock contingent upon and effective immediately prior to the closing of the Business Combination (the “Closing”). The Forfeiture and Redemption Agreement also provides that the Issuer will subsequently redeem the Forfeited Shares in exchange for no consideration contingent upon and effective immediately prior to the Closing. The Sponsor’s agreement to forfeit the Forfeited Shares pursuant to the Forfeiture and Redemption Agreement will result in the Sponsor having the number of shares of Class A Common Stock at the Closing that it would have otherwise had if it had converted all of its Founder Shares at the Closing on a 1:0.277 basis pursuant to the Class B Charter Amendment.
The foregoing description of the Forfeiture and Redemption Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Forfeiture and Redemption Agreement, a copy of which is filed herewith as Exhibit 99.7 and is incorporated herein by reference.
Class B Charter Amendment
As disclosed in the October Form 8K, on October 3,2023, the Sponsor, being the holder of a majority of the Founder Shares, acting by written consent pursuant to Section 228(a) of the General Corporation Law of the State of Delaware and the Issuer’s bylaws, approved the Class B Charter Amendment. The Issuer filed the Class B Charter Amendment with the Secretary of State of the State of Delaware on October 3,2023.
Sponsor Voting Agreement
As disclosed in the August Form 8K, simultaneously with the execution and delivery of the Merger Agreement, the Issuer and SANUWAVE entered into a voting agreement (the “Sponsor Voting Agreement”) with the Sponsor. Under the Sponsor Voting Agreement, the Sponsor has agreed to vote all of the Sponsor’s shares of the Issuer in favor of the Merger Agreement and the Business Combination and to otherwise take (or not take, as applicable) certain other actions in support of the Merger Agreement and the Business Combination and the other matters to be submitted to the Issuer’s stockholders for approval in connection with the Business Combination, in the manner and subject to the conditions set forth in the Sponsor Voting Agreement, and provide a proxy to SANUWAVE to vote such shares of the Issuer accordingly (subject to the condition that the Issuer’s Registration Statement on Form S4 (File No. 333274653) has been declared effective by the SEC, provided that the covenants not to take certain actions to delay, impair or impede the Business Combination as set forth in the Sponsor Voting Agreement shall take effect from the date such agreement is executed). The Sponsor Voting Agreement prevents transfers of the shares of the Issuer held by the Sponsor between the date of the Sponsor Voting Agreement and the termination of such Sponsor Voting Agreement, except for certain permitted transfers where the recipient also agrees to comply with the Sponsor Voting Agreement.
The foregoing description of the Sponsor Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Sponsor Voting Agreement, a copy of which is filed herewith as Exhibit 99.8 and is incorporated herein by reference.
Voting and NonRedemption Agreement
As disclosed in the August Form 8K, simultaneously with the execution and delivery of the Merger Agreement, the Issuer entered into voting and nonredemption agreements (collectively, the “Voting and NonRedemption Agreements”) with certain stockholders of the Issuer, which included Mercury Houston and Mercury Affiliates. Under the Voting and NonRedemption Agreements, Mercury Houston and Mercury Affiliates agreed to vote all of their shares of the Issuer in favor of the Merger Agreement and the Business Combination and to otherwise take (or not take, as applicable) certain other actions in support of the Merger Agreement and the Business Combination and the other matters to be submitted to the Issuer’s stockholders for approval in connection with the Business Combination, in the manner and subject to the conditions set forth in the Voting and NonRedemption Agreements, and provide a proxy to the Issuer to vote such shares accordingly. Under the Voting and NonRedemption Agreements, Mercury Houston and Mercury Affiliates agreed to not redeem 130,023 and 491,489 shares of Class A Common Stock, respectively, pursuant to or in connection with the Merger. In consideration for entering into and complying with the terms of the Voting and NonRedemption Agreements, Mercury Houston and Mercury Affiliates are entitled to receive additional shares of Class A Common Stock of the Issuer in accordance with the formula set forth in the Voting and NonRedemption Agreements if the price of the shares of Class A Common Stock sold in the Issuer’s PIPE offering is below $10 per share. It is anticipated that the price of the shares of Class A Common Stock sold in the Issuer’s PIPE offering will be $10.00 per share. As a result, it is anticipated that no additional shares of Class A Common Stock will be issued pursuant to the Voting and NonRedemption Agreements. The Voting and NonRedemption Agreements prevent transfers of the shares of the Issuer between the date of the Voting and NonRedemption Agreement and the Closing or earlier termination of the Merger Agreement or such Voting and NonRedemption Agreement, except for certain permitted transfers where the recipient also agrees to comply with the Voting and NonRedemption Agreement.
The foregoing description of the Voting and NonRedemption Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Voting and NonRedemption Agreements, a copy of which is filed herewith as Exhibit 99.9 and is incorporated herein by reference.