| January 4, 2022 | | |
By Order of the Board of Directors
/s/ Ophir Sternberg
Chairman of the Board |
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Q.
Why am I receiving this proxy statement?
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A. The Company is a blank check company formed in December 2019 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. In August 2020, the Company consummated its IPO from which it derived gross proceeds of $230,000,000 (including $30,000,000 from the exercise of the underwriters’ over-allotment option). Like most blank check companies, our charter provides for the return of the IPO proceeds held in the trust account to the holders of public shares if there is no qualifying business combination(s) consummated on or before a certain date (in our case, February 18, 2022).
On July 11, 2021, the Company entered into the MIPA with Opco, the MSP Purchased Companies (as defined in the MIPA), the Members, and the Members’ Representative. Pursuant to the MIPA, and in connection with the Business Combination, the Members will sell and assign all of their membership interests in MSP to Opco in exchange for Up-C Units or, pursuant to notice delivered to the Company, with respect to all or a portion of the Up-C Units to be received by each such Member, one share of Class A Common Stock in lieu of each Up-C Unit.
This proxy statement relates to a special meeting of the stockholders to vote on the Extension Amendment Proposal. The purpose of the Extension Amendment Proposal and, if necessary, the Adjournment Proposal, is to allow the Company more time to complete an initial business combination. There may not be sufficient time to consummate the proposed Business Combination with MSP by February 18, 2022. Accordingly, the Company’s board of directors has determined that it is in the best interests of the Company’s stockholders to extend the date by which the Company has to consummate an initial business combination to the Extended Date. Notwithstanding stockholder approval of the Extension Amendment Proposal, the Company intends to consummate the Business Combination as soon as practicable.
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Q.
What is being voted on?
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| | A. You are being asked to vote on | |
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a proposal to amend the Company’s charter to extend the date by which the Company has to consummate an initial business combination to the Extended Date; and
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a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension Amendment Proposal.
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| | | | Approval of the Extension Amendment Proposal is a condition to the implementation of the Extension. | |
| | | | If the Extension is implemented, the Company will remove the Withdrawal Amount from the trust account, deliver to the holders of converted public shares the pro rata portion of the Withdrawal Amount and retain the remainder of the funds in the trust account, plus the Deposits or Contributions, for the Company’s use in connection with consummating an initial business combination on or before the Extended Date. | |
| | | | We will not proceed if we do not have at least $5,000,001 of net tangible assets following approval of the Extension Amendment Proposal, after taking into account the Conversion. | |
| | | | If the Extension Amendment Proposal is approved and the Extension is implemented, the removal of the Withdrawal Amount from the trust account will reduce the Company’s net asset value. The Company cannot predict the amount that will remain in the trust account if the Extension Amendment Proposal is approved and the amount remaining in the trust account may be only a small fraction of the approximately $230.0 million that was in the trust account as of the record date. In such event, the Company may need to obtain additional funds to complete an initial business combination and there can be no assurance that such funds will be available on terms acceptable to the parties or at all. | |
| | | | If the Extension Amendment Proposal is not approved and we do not consummate an initial business combination by February 18, 2022, we 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 outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest but net of taxes payable, divided by the number of then outstanding public shares, 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 our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. | |
| | | | The holders of the founder shares and private shares have waived their rights to participate in any liquidation distribution with respect to such shares. There will be no distribution from the trust account with respect to our warrants, which will expire worthless in the event we wind up. The Company will pay the costs of liquidation from its remaining assets outside of the trust account. If such funds are insufficient, the Sponsor has agreed to advance it the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has agreed not to seek repayment of such expenses. | |
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Q.
Why is the Company proposing the Extension Amendment Proposal?
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| | A. The Company’s charter provided for the return of the IPO proceeds held in the trust account to the holders of public shares if there is no qualifying business combination(s) consummated on or before February 18, 2022. | |
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On July 11, 2021, the Company entered into the MIPA with Opco, the MSP Purchased Companies (as defined in the MIPA), the Members, and the Members’ Representative. Pursuant to the MIPA, and in connection with the Business Combination, the Members will sell and assign all of their membership interests in MSP to Opco in exchange for Up-C Units or, pursuant to notice delivered to the Company, with respect to all or a portion of the Up-C Units to be received by each such Member, one share of Class A Common Stock in lieu of each Up-C Unit.
The purpose of the Extension Amendment Proposal and, if necessary, the Adjournment Proposal, is to allow the Company more time to complete an initial business combination. There may not be sufficient time to consummate the proposed Business Combination with MSP by February 18, 2022. Accordingly, the Company’s board of directors has determined that it is in the best interests of the Company’s stockholders to extend the date by which the Company has to consummate an initial business combination to the Extended Date. Notwithstanding stockholder approval of the Extension Amendment Proposal, the Company intends to consummate the Business Combination as soon as practicable.
The Company believes that given the Company’s expenditure of time, effort and money on the Business Combination, circumstances warrant providing public stockholders an opportunity to consider the Business Combination. Accordingly, the Company’s board of directors is proposing the Extension Amendment Proposal to extend the Company’s corporate existence until the Extended Date.
You are not being asked to vote on any proposed business combination at this time. If the Extension is implemented and you do not elect to convert your public shares now, you will retain the right to vote on any proposed business combination when and if one is submitted to stockholders and the right to convert your public shares into a pro rata portion of the trust account in the event a proposed business combination is approved and completed or the Company has not consummated an initial business combination by the Extended Date.
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Q.
Why should I vote for the Extension Amendment Proposal?
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| | A. The Company’s board of directors believes stockholders will benefit from the Company consummating the Business Combination and is proposing the Extension Amendment Proposal to extend the date by which the Company has to complete an initial business combination until the Extended Date and to allow for the Conversion. The Extension would give the Company additional time to complete an initial business combination. | |
| | | | Given the Company’s expenditure of time, effort and money on the Business Combination, circumstances warrant providing public stockholders an opportunity to consider the Business Combination, inasmuch as the Company is also affording stockholders who wish to convert their public shares as originally contemplated, the opportunity to do so as well. Accordingly, we believe that the Extension is consistent with the spirit in which the Company offered its securities to the public. | |
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Why should I vote for the Adjournment Proposal?
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| | A. If the Adjournment Proposal is not approved by the Company’s stockholders, the Company’s board of directors may not be able to adjourn the special meeting to a later date in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension Amendment Proposal. | |
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How do the Company’s executive officers, directors and affiliates intend to vote their shares?
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A. All of the Company’s directors, executive officers and their respective affiliates, as well as the Sponsor, are expected to vote any common stock over which they have voting control (including any public shares owned by them) in favor of the Extension Amendment Proposal and in favor of the Adjournment Proposal.
The holders of the founder shares and private shares are not entitled to convert such shares in connection with the Extension Amendment Proposal. On the record date, the 5,750,000 insider shares and 650,000 private shares represented approximately 21.8% of the Company’s issued and outstanding common stock.
Neither the Company’s Sponsor, directors or executive officers nor any of their respective affiliates beneficially owned any public shares as of the record date. However, they may choose to buy public shares in the open market and/or through negotiated private purchases after the date of this proxy statement. In the event that purchases do occur, the purchasers may seek to purchase shares from stockholders who would otherwise have voted against the Extension Amendment Proposal and/or elected to convert their shares. Any public shares so purchased will be voted in favor of the Extension Amendment Proposal and the Adjournment Proposal.
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What vote is required to adopt each proposal?
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A. Extension Amendment Proposal. Approval of the Extension Amendment Proposal will require the affirmative vote of holders of at least 65% of the issued and outstanding shares of the Company’s common stock as of the record date.
Adjournment Proposal. Approval of the Adjournment Proposal will require the affirmative vote of the holders of the majority of the issued and outstanding shares of the Company’s common stock represented in person or by proxy at the special meeting and entitled to vote thereon.
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What if I don’t want to vote for the Extension Amendment Proposal or the Adjournment Proposal?
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| | A. If you do not want the Extension Amendment Proposal to be approved, you must abstain, not vote, or vote against the proposal. If the Extension Amendment Proposal is approved, and the Extension is implemented, then the Withdrawal Amount will be withdrawn from the trust account and paid to the converting or non-voting holders. | |
| | | | If you do not want the Adjournment Proposal to be approved, you must abstain, not vote or vote against the proposal. | |
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Will you seek any further extensions to liquidate the trust account?
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| | A. Other than the extension until the Extended Date as described in this proxy statement, the Company does not currently anticipate seeking any further extension to consummate an initial business combination, although it may determine to do so in the future. | |
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What happens if the Extension Amendment Proposal is not approved?
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| | A. If the Extension Amendment Proposal is not approved and we do not consummate an initial business combination by February 18, 2022, we 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 outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest but net of taxes payable, divided by the number of then outstanding public shares, 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 our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. | |
| | | | The holders of the founder shares and private shares waived their rights to participate in any liquidation distribution with respect to such shares. There will be no distribution from the trust account with respect to our warrants which will expire worthless in the event we wind up. The Company will pay the costs of liquidation from its remaining assets outside of the trust account, which it believes are sufficient for such purposes. If such funds are insufficient, the Sponsor has agreed to advance the Company the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has agreed not to seek repayment of such expenses. | |
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If the Extension Amendment Proposal is approved, what happens next?
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A. If the Extension Amendment Proposal is approved, the Company will continue to attempt to consummate an initial business combination until the Extended Date or the earlier date on which the Company’s board of directors otherwise determines in its sole discretion that it will not be able to consummate an initial business combination by the Extended Date and does not wish to seek an additional extension.
The Company will remain a reporting company under the Securities Exchange Act of 1934 and its units, common stock and warrants will remain publicly traded until the Extended Date.
If the Extension Amendment Proposal is approved, the removal of the Withdrawal Amount from the trust account will reduce the amount remaining in the trust account and increase the percentage interest of Company shares held by the Company’s officers, directors and their affiliates.
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Would I still be able to exercise my conversion rights if I vote against any subsequently proposed business combination?
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| | A. Unless you elect to convert your shares, you will be able to vote on any subsequently proposed business combination when it is submitted to stockholders. If you disagree with the business combination, you will retain your right to vote against it and/or convert your public shares upon consummation of the business combination in connection with the stockholder vote to approve such business combination, subject to any limitations set forth in the charter. | |
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How do I attend the special meeting?
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| | A. You will need your control number for access. If you do not have your control number, contact Continental Stock Transfer & Trust Company at the phone number or e-mail address below. Beneficial investors who hold shares through a bank, broker or other intermediary, will need to contact them and obtain a legal proxy. Once you have your legal proxy, contact Continental Stock Transfer & Trust Company to have a control number generated. Continental Stock Transfer & Trust Company contact information is as follows: 917-262-2373, or email proxy@continentalstock.com. | |
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How do I change my vote?
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| | A. If you have submitted a proxy to vote your shares and wish to change your vote, you may do so by delivering a later-dated, signed proxy card to the Company’s secretary prior to the date of the special meeting or by attending the special meeting online and voting. Attendance at the special meeting alone will not change your vote. You also may revoke your proxy by sending a notice of revocation to the Company located at 4218 NE 2nd Avenue, Miami, Florida 33137. | |
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How are votes counted?
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A. Votes will be counted by the inspector of election appointed for the special meeting, who will separately count “FOR” and “AGAINST” votes, abstentions and broker non-votes. The Extension Amendment Proposal must be approved by the affirmative vote of at least 65% of the issued and outstanding shares of common stock as of the record date. The Adjournment Proposal must be approved by the affirmative vote of the majority of the issued and outstanding shares of the Company’s common stock represented in person or by proxy at the special meeting and entitled to vote thereon.
With respect to the Extension Amendment Proposal, abstentions and broker non-votes will have the same effect as “AGAINST” votes. Abstentions and broker non-votes will not have any effect on the Adjournment Proposal. If your shares are held by your broker as your nominee (that is, in “street name”), you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. If you do not give instructions to your broker, your broker can vote your shares with respect to “discretionary” items, but not with respect to “non-discretionary” items. Discretionary items are proposals considered routine under the rules of the New York Stock Exchange applicable to member brokerage firms. These rules provide that for routine matters your broker has the discretion to vote shares held in street name in the absence of your voting instructions. On non-discretionary items for which you do not give your broker instructions, the shares will be treated as broker non-votes.
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If my shares are held in “street name,” will my broker automatically vote them for me?
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| | A. No. Your broker can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares. Your broker can tell you how to provide these instructions. | |
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What is a quorum requirement?
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| | A. A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares of common stock on the record date are represented by stockholders present at the special meeting or by proxy. | |
| | | | Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the special meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, a majority of the votes present at the special meeting may adjourn the special meeting to another date. | |
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Who can vote at the special meeting?
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A. Only holders of record of the Company’s common stock at the close of business on December 31, 2021 are entitled to have their vote counted at the special meeting and any adjournments or postponements thereof. On the record date, 29,400,000 shares of common stock were outstanding and entitled to vote, including 23,650,000 shares of Class A Common Stock and 5,750,000 shares of Class B Common Stock.
Stockholder of Record: Shares Registered in Your Name. If on the record date your shares were registered directly in your name with the Company’s transfer agent, Continental Stock Transfer & Trust Company, then you are a stockholder of record. As a stockholder of record, you may vote in person at the special meeting or vote by proxy. Whether or not you plan to attend the special meeting in person, we urge you to fill out and return the enclosed proxy card to ensure your vote is counted.
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| | | | Beneficial Owner: Shares Registered in the Name of a Broker or Bank. If on the record date your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the special meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your broker or other agent. | |
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Does the board recommend voting for the approval of the Extension Amendment Proposal and the Adjournment Proposal?
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| | A. Yes. After careful consideration of the terms and conditions of these proposals, the board of directors of the Company has determined that the Extension Amendment and, if presented, the Adjournment Proposal are fair to and in the best interests of the Company and its stockholders. The board of directors recommends that the Company’s stockholders vote “FOR” the Extension Amendment Proposal and the Adjournment Proposal. | |
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What interests do the Company’s directors and officers have in the approval of the proposals?
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| | A. The Company’s directors, officers and their affiliates have interests in the proposals that may be different from, or in addition to, your interests as a stockholder. These interests include, but are not limited to, beneficial ownership of founder shares and private shares and warrants that will become worthless if the Extension Amendment Proposal is not approved, loans by them that will not be repaid in the event of our winding up and the possibility of future compensatory arrangements. See the section entitled “The Special Meeting — Interests of the Company’s Directors and Officers.” | |
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What if I object to the Extension Amendment Proposal? Do I have appraisal rights?
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| | A. Company stockholders do not have appraisal rights in connection with the Extension Amendment Proposal under the DGCL. | |
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What happens to the Company’s warrants if the Extension Amendment Proposal is not approved?
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| | A. If the Extension Amendment Proposal is not approved and we do not consummate an initial business combination by February 18, 2022, we 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 outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest but net of taxes payable, divided by the number of then outstanding public shares, 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 our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such event, your warrants will become worthless. | |
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What happens to the Company’s warrants if the Extension Amendment Proposal is approved?
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| | A. If the Extension Amendment Proposal is approved, the Company will continue to attempt to consummate an initial business combination until the Extended Date. The warrants will remain outstanding in accordance with their terms during any extension period. The warrants will still become exercisable commencing on the consummation of any business combination. | |
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What do I need to do now?
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| | A. The Company urges you to read carefully and consider the information contained in this proxy statement, including the annexes, and to consider how the proposals will affect you as a Company 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. | |
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How do I vote?
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| | A. If you are a holder of record of our common stock, you may vote online at the special meeting or by submitting a proxy for the special meeting. Whether or not you plan to attend the special meeting online, we urge you to vote by proxy to ensure your vote is counted. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. You may still attend the special meeting and vote online if you have already voted by proxy. | |
| | | | If your shares of our common stock are held in “street name” by a broker or other agent, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the special meeting. However, since you are not the stockholder of record, you may not vote your shares online at the special meeting unless you request and obtain a valid proxy from your broker or other agent. | |
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How do I convert my shares of Company common stock?
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| | A. If the Extension is implemented, each public stockholder may seek to convert his public shares for a pro rata portion of the funds available in the trust account, less any taxes we anticipate will be owed on such funds but have not yet been paid. Holders of public shares do not need to vote on the Extension Amendment Proposal or be a holder of record on the record date to exercise conversion rights. | |
| | | | To demand conversion, you must either physically tender your stock certificates to Continental Stock Transfer & Trust Company, the Company’s transfer agent, at Continental Stock Transfer & Trust Company, 1 State Street, New York, New York 10004, Attn: Mark Zimkind, mzimkind@continentalstock.com, no later than two business days prior to the vote for the Extension Amendment Proposal or deliver your shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, which election would likely be determined based on the manner in which you hold your shares. You will only be entitled to receive cash in connection with a conversion of these shares if you continue to hold them until the effective date of the Extension. | |
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What should I do if I receive more than one set of voting materials?
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| | A. You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards, if your shares are registered in more than one name or are registered in different accounts. 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. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your Company shares. | |
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Who is paying for this proxy solicitation?
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| | A. The Company will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors and officers may also solicit proxies in person, by telephone or by other means of communication. These parties will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. | |
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Who can help answer my questions?
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| | A. If you have questions about the proposals or if you need additional copies of the proxy statement or the enclosed proxy card you should contact: | |
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Lionheart Acquisition Corporation II
4218 NE 2nd Avenue Miami, Florida 33137 Attn: Paul Rapisarda Telephone: (305) 573-3900 |
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MacKenzie Partners, Inc.
1407 Broadway New York, New York 10018 Toll Free Telephone: (800) 322-2885 Main Telephone: (212) 929-5500 E-mail: proxy@mackenziepartners.com |
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| | | | You may also obtain additional information about the Company from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” | |
Name and Address of Beneficial Owner(1)
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Number of
Shares Beneficially Owned |
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Percentage
Shares of Shares of Outstanding Common Stock |
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Lionheart Equities, LLC(2)
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| | | | 4,922,500 | | | | | | 16.74% | | |
Ophir Sternberg(2)
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| | | | 4,922,500 | | | | | | 16.74% | | |
James Anderson
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Paul Rapisarda(3)
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| | | | 40,000 | | | | | | * | | |
Tom Byrne
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| | | | — | | | | | | — | | |
Tom Hawkins
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| | | | — | | | | | | — | | |
Roger Meltzer
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All directors and executive officers as a group (six individuals)
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| | | | 5,702,500 | | | | | | 19.40% | | |
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FOR
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AGAINST
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ABSTAIN
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Proposal 1 — Extension Amendment Proposal
Amend the Company’s amended and restated certificate of incorporation to extend the date that the Company has to consummate an initial business combination to August 18, 2022.
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FOR
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AGAINST
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ABSTAIN
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Proposal 2 — Adjournment Proposal
Adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of Proposal 1.
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