Item 1.01 Entry into a Material Definitive Agreement.
Business Combination Agreement
On December 14, 2022, MBSC entered into a Business Combination Agreement (the
"Business Combination Agreement"), by and among MBSC, Greenfire Resources Ltd.,
an Alberta corporation ("PubCo"), DE Greenfire Merger Sub Inc., a Delaware
corporation and a direct, wholly owned subsidiary of PubCo ("Merger Sub"),
2476276 Alberta ULC, an Alberta corporation and a direct, wholly owned
subsidiary of PubCo ("Canadian Merger Sub" and, together with PubCo and Merger
Sub, each an "Acquisition Entity" and, together, the "Acquisition Entities"),
and Greenfire Resources Inc., an Alberta corporation ("Greenfire"). The
following description of the Business Combination Agreement does not purport to
be complete and is qualified in its entirety by reference to the full text of
the Business Combination Agreement, a copy of which is included as Exhibit 2.1
to this Current Report on Form 8-K and is incorporated herein by reference.
Capitalized terms used in this Current Report on Form 8-K but not otherwise
defined herein have the meanings given to them in the Business Combination
Agreement.
The Business Combination
The transactions contemplated by the Business Combination Agreement, the Plan of
Arrangement (as defined below) and the Ancillary Documents (collectively, the
"Transactions") are structured as follows:
(a) prior to the effectiveness of the Merger (as defined below), by way of a
statutory plan of arrangement (the "Plan of Arrangement") under the Business
Corporations Act (Alberta) (the "ABCA"), Greenfire will complete a number of
corporate steps as described below under "Plan of Arrangement," pursuant to
which, (i) the holders of Greenfire Shares (as defined below) ("Greenfire
Shareholders") will receive a number of common shares in the capital of PubCo
("PubCo Common Shares") as "Share Consideration" and a cash payment equal to
their pro rata share of $75,000,000 ("Cash Consideration"), all as determined in
accordance with the Plan of Arrangement, (ii) a certain portion of the
outstanding warrants ("Greenfire Performance Warrants") to purchase Greenfire
Shares issued pursuant to Greenfire's Performance Warrant Plan, whether vested
or unvested, that are held by each holder of such Greenfire Performance Warrants
(the "Greenfire Performance Warrantholders") will be deemed to be cancelled in
exchange for a cash payment from Greenfire equal to the pro rata share of the
Cash Consideration payable to the Greenfire Performance Warrantholders, as
determined in accordance with the Plan of Arrangement, and the remaining
Greenfire Performance Warrants shall be converted into PubCo Performance
Warrants with substantially the same terms as the Greenfire Performance Warrants
as adjusted in accordance with the Plan of Arrangement, (iii) Canadian Merger
Sub will amalgamate with and into Greenfire pursuant to an amalgamation to form
"Canadian Amalco" (the "Amalgamation"), except that the legal existence of
Greenfire will not cease and Greenfire will survive the Amalgamation, and (iv)
Canadian Amalco will become a wholly owned subsidiary of PubCo;
(b) in accordance with the terms of that certain Warrant Agreement, dated as of
August 12, 2021, between GAC Holdco Inc. (n/k/a Greenfire Resources Inc.), as
issuer and The Bank of New York Mellon, as warrant agent (as may be amended from
time to time, the "Company Warrant Agreement"), as amended by the First
Supplemental Warrant Agreement entered into between Greenfire and The Bank of
New York Mellon, as warrant agent, amending the Company Warrant Agreement (the
"Supplemental Warrant Agreement"): (a) a certain number of warrants to purchase
common shares in the capital of Greenfire ("Greenfire Shares") that are
outstanding, unexercised and issued pursuant to the Company Warrant Agreement
("Company Bond Warrants") held by each holder of Company Bond Warrants shall be
deemed to be cancelled in exchange for a cash payment from Greenfire equal to
the pro rata share of the Cash Consideration payable to holders of Company Bond
Warrants as determined in accordance with the Supplemental Warrant Agreement;
following which (b) each remaining Company Bond Warrant shall be deemed to be
exercised for Greenfire Shares pursuant to the terms of the Company Warrant
Agreement as amended by the Supplemental Warrant Agreement, and each former
holder of Company Bond Warrants shall, following the Amalgamation, receive PubCo
Common Shares as determined in accordance with the Supplemental Warrant
Agreement; and
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(c) on the Closing Date, Merger Sub will merge with and into MBSC (the
"Merger"), with MBSC continuing as the surviving corporation following the
Merger (the "Surviving Company"), as a result of which MBSC will become a
direct, wholly owned subsidiary of PubCo, with the equityholders of MBSC
receiving consideration as described below.
The number of PubCo Common Shares comprising the "Share Consideration" will
equal the quotient of: (a) (i) the Pre-Money Equity Value (equal to (A) the
Company Enterprise Value ($950,000,000), minus (B) the Net Indebtedness
($170,000,000)), minus (ii) the Cash Consideration, minus (iii) the amount of
unpaid transaction expenses of MBSC and Greenfire (subject to specified caps),
minus (iv) an amount equal to the number of shares of MBSC Class B common stock,
par value $0.0001 per share ("SPAC Class B Shares"), issued and outstanding at
the effective time of the Merger (the "Effective Time") (other than any Excluded
Shares (as defined below), and giving effect to the Sponsor Class B Share
Forfeitures (as defined below)) multiplied by $10.10, divided by (b) $10.10.
At the Effective Time, by virtue of the Merger and without any further action on
the part of the parties or any other person, the following will occur:
(a) each issued and outstanding share of MBSC Class A common stock, par value
$0.0001 per share ("SPAC Class A Shares"), other than any Excluded Shares (as
defined below) and after giving effect to redemptions of SPAC Class A Shares
(collectively, the "SPAC Stockholder Redemption") and the amount of PIPE
Investment (as defined below) consisting of subscriptions for SPAC Class A
Shares, if any, pursuant to the Subscription Agreements (as defined below), will
be automatically converted into and exchanged for the right to receive (i) if an
amount in cash less than or equal to $100,000,000 is remaining in MBSC's trust
account (the "Trust Account") after giving effect to the SPAC Stockholder
Redemption, one (1) PubCo Common Share and (ii) if an amount in cash greater
than $100,000,000 is remaining in the Trust Account after giving effect to the
SPAC Stockholder Redemption, (A) a fraction of a PubCo Common Share equal to
$100,000,000 divided by the amount in the Trust Account after giving effect to
the SPAC Stockholder Redemption, and (B) an amount in cash equal to the quotient
of (I) the amount in the Trust Account after giving effect to the SPAC
Stockholder Redemption that exceeds $100,000,000 minus the Extension Amount at
the Effective Time divided by (II) the amount of SPAC Class A Shares (other than
any Excluded Shares (as defined below) and after giving effect to the SPAC
Stockholder Redemption and the amount of PIPE Investment consisting of
subscriptions for SPAC Class A Shares, if any, pursuant to the Subscription
Agreements);
(b) each issued and outstanding SPAC Class B Share (other than any Excluded
Shares (as defined below) and after giving effect to the Sponsor Class B Share
Forfeitures (as defined below)) will be automatically converted into and
exchanged for the right to receive (i) one (1) PubCo Common Share and (ii) an
amount in cash equal to the quotient of (A) the SPAC Working Capital plus the
Extension Amount at the Effective Time divided by (B) the SPAC Class B Shares
outstanding at the Closing;
(c) by virtue of the Merger, each warrant to purchase SPAC Class A Shares (each,
a "SPAC Warrant") that is issued and outstanding immediately prior to the
Effective Time, pursuant to the terms of the Warrant Agreement governing the
SPAC Warrants (the "Warrant Agreement"), will be automatically and irrevocably
converted into one (1) warrant to purchase a PubCo Common Share (a "PubCo
Warrant") on the same terms as were in effect immediately prior to the Effective
Time pursuant to the Warrant Agreement;
(d) each share of common stock, par value $0.01 per share, of Merger Sub that is
issued and outstanding immediately prior to the Effective Time will convert
automatically into one (1) share of common stock, par value $0.01 per share, of
the Surviving Company; and
(e) each SPAC Class A Share held in MBSC's treasury or owned by Greenfire or any
other wholly owned subsidiary of Greenfire or MBSC immediately prior to the
Effective Time (each, an "Excluded Share"), will be cancelled for no
consideration.
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In addition, immediately prior to the Merger, the following will occur:
(a) If the amount of the PubCo Debt Financing (as defined below) issued at the
Closing exceeds $25,000,000, then 750,000 SPAC Class B Shares held by M3-Brigade
Sponsor III LP, a Delaware limited partnership (the "Sponsor"), will be
forfeited and cancelled for no consideration;
(b) 2,500,000 SPAC Class B Shares held by the Sponsor will be forfeited and
cancelled for no consideration (clause (a) above and this clause (b), together,
the "Sponsor Class B Share Forfeitures"); and
(c) 3,260,000 SPAC Warrants held by the Sponsor will be forfeited and cancelled
for no consideration (the "Sponsor Warrant Forfeiture").
. . .
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on
Form 8-K with respect to the Transaction Financing and the Business Combination
Agreement is incorporated by reference in this Item 3.02. The SPAC Class A
Shares to be issued in connection with the PIPE Investment will not be
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and will be issued in reliance on the exemption from registration requirements
thereof provided by Section 4(a)(2) of the Securities Act.
Additional Information and Where to Find It
A full description of the terms of the proposed business combination will be
provided in a registration statement on Form F-4 to be filed with the SEC by
PubCo that will include a prospectus with respect to PubCo's securities, to be
issued in connection with the proposed business combination and a proxy
statement with respect to the special meeting of MBSC stockholders to vote on
the proposed business combination and related proposals. PubCo and MBSC urge
investors, stockholders and other interested persons to read, when available,
the preliminary proxy statement/prospectus, as well as other documents filed
with the SEC, because these documents will contain important information about
PubCo, MBSC, Greenfire and the proposed business combination. After the
registration statement is declared effective, the definitive proxy
statement/prospectus to be included in the registration statement will be mailed
to stockholders of MBSC as of a record date to be established for voting on the
proposed business combination. Once available, stockholders will also be able to
obtain a copy of the registration statement on Form F-4 including the proxy
statement/prospectus, and other documents filed with the SEC without charge by
directing a request to: Greenfire Resources Inc., 1900 - 205 5th Avenue SW,
Calgary, AB T2P 2V7, and M3-Brigade Acquisition III Corp., 1700 Broadway, 19th
Floor, New York, NY 10019. The preliminary and definitive proxy
statement/prospectus to be included in the registration statement, once
available, can also be obtained, without charge, at the SEC's website
(www.sec.gov).
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Participants in Solicitation
PubCo, MBSC and Greenfire, and their respective directors and executive
officers, may be deemed participants in the solicitation of proxies of MBSC's
stockholders in respect of the proposed business combination. Information about
the directors and executive officers of MBSC is set forth in MBSC's filings with
the SEC. Information about the directors and executive officers of PubCo and
Greenfire and more detailed information regarding the identity of all potential
participants, and their direct and indirect interests by security holdings or
otherwise, will be set forth in the definitive proxy statement/prospectus for
the proposed business combination when available. Additional information
regarding the identity of all potential participants in the solicitation of
proxies to MBSC's stockholders in connection with the proposed business
combination and other matters to be voted upon at the special meeting, and their
direct and indirect interests, by security holdings or otherwise, will be
included in the definitive proxy statement/prospectus, when it becomes
available.
No Offer or Solicitation
This Current Report on Form 8-K does not constitute an offer or invitation for
the sale or purchase of securities, assets or the business described herein or a
commitment to PubCo, MBSC or Greenfire, nor is it a solicitation of any vote,
consent or approval in any jurisdiction pursuant to or in connection with the
Transactions or otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain forward-looking statements within the
meaning of the federal securities laws with respect to the proposed transaction
between PubCo, MBSC, Greenfire and the other parties thereto. These
forward-looking statements generally are identified by the words "believe,"
"project," "expect," "anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be," "will
continue," "will likely result," and similar expressions. 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 risks and uncertainties. Many factors could cause actual future
events to differ materially from the forward-looking statements in this
communication, including but not limited to: (i) the timing to complete the
proposed business combination by MBSC's business combination deadline and the
potential failure to obtain an extension of the business combination deadline if
sought by MBSC; (ii) the occurrence of any event, change or other circumstances
that could give rise to the termination of the definitive agreements relating to
the proposed business combination; (iii) the outcome of any legal, regulatory or
governmental proceedings that may be instituted against PubCo, MBSC, Greenfire
or any investigation or inquiry following announcement of the proposed business
combination, including in connection with the proposed business combination;
(iv) the inability to complete the proposed business combination due to the
failure to obtain approval of MBSC's stockholders or the inability to receive
approval of the proposed plan of arrangement in connection with the proposed
business combination; (v) Greenfire's and PubCo's success in retaining or
recruiting, or changes required in, its officers, key employees or directors
following the proposed business combination; (vi) the ability of the parties to
obtain the listing of PubCo's common shares and warrants on the New York Stock
Exchange upon the closing of the proposed business combination; (vii) the risk
that the proposed business combination disrupts current plans and operations of
Greenfire; (viii) the ability to recognize the anticipated benefits of the
proposed business combination; (ix) unexpected costs related to the proposed
business combination; (x) the amount of redemptions by MBSC's public
stockholders being greater than expected; (xi) the management and board
composition of PubCo following completion of the proposed business combination;
(xii) limited liquidity and trading of PubCo's securities; (xiii) geopolitical
risk and changes in applicable laws or regulations; (xiv) the possibility that
Greenfire or MBSC may be adversely affected by other economic, business, and/or
competitive factors; (xv) operational risks; (xvi) the possibility that the
COVID-19 pandemic or another major disease disrupts Greenfire's business; (xvii)
litigation and regulatory enforcement risks, including the diversion of
management time and attention and the additional costs and demands on
Greenfire's resources; (xviii) the risks that the consummation of the proposed
business combination is substantially delayed or does not occur; (xix) risks
associated with the oil and gas industry in general (e.g., operational risks in
development, exploration and production; disruptions to the Canadian and global
economy resulting from major public health events, the Russian-Ukrainian war and
the impact on the global economy and commodity prices; the impacts of inflation
and supply chain issues and steps taken by central banks to curb inflation;
pandemic, war, terrorist events, political upheavals and other similar events;
events impacting the supply and demand for oil and gas including the COVID-19
pandemic and actions taken by the OPEC + group; delays or changes in plans with
respect to exploration or development projects or capital expenditures); (xx)
the uncertainty of reserve estimates; (xxi) the uncertainty of estimates and
projections relating to production, costs and expenses; (xxii) health, safety
and environmental risks; (xxiii) commodity price and exchange rate fluctuations;
(xxiv) changes in legislation affecting the oil and gas industry; and (xxv)
uncertainties resulting from potential delays or changes in plans with respect
to exploration or development projects or capital expenditures. The foregoing
list of factors is not exhaustive. You should carefully consider the foregoing
factors and the other risks and uncertainties described in the "Risk Factors"
section of MBSC's registration on Form S-1 (Registration Nos. 333-256017 and
333-260423), MBSC's quarterly report on Form 10-Q for the quarter ended
September 30, 2022 filed with the SEC on November 14, 2022, MBSC's quarterly
report on Form 10-Q for the quarter ended June 30, 2022 filed with the SEC on
August 12, 2022, MBSC's quarterly report on Form 10-Q for the quarter ended
March 31, 2022 filed with the SEC on May 16, 2022, MBSC's annual report on Form
10-K for the year ended December 31, 2021 filed with the SEC on April 15, 2022,
the definitive proxy statement/prospectus of PubCo, when available, including
those under "Risk Factors" therein and other documents filed by MBSC or PubCo
from time to time with the SEC. These filings identify and address other
important risks and uncertainties that could cause actual events and results to
differ materially from those contained in the forward-looking statements.
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 PubCo,
MBSC and Greenfire assume no obligation and do not intend to update or revise
these forward-looking statements, whether as a result of new information, future
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.1 Business Combination Agreement, dated as of December 14, 2022, by and
among M3-Brigade Acquisition III Corp., Greenfire Resources Ltd., DE
Greenfire Merger Sub Inc., 2476276 Alberta ULC and Greenfire Resources
Inc.
10.1 Form of Subscription Agreement
10.2 Shareholder Support Agreement, dated as of December 14, 2022, by and
among M3-Brigade Acquisition III Corp., Greenfire Resources Ltd., DE
Greenfire Merger Sub Inc., 2476276 Alberta ULC and Greenfire Resources
Inc. and the Supporting Company Shareholders
10.3 Sponsor Agreement, dated as of December 14, 2022, by and among
M3-Brigade Sponsor III LP, M3-Brigade Acquisition III Corp., Greenfire
Resources Ltd. and Greenfire Resources Inc.
10.4 Form of Investor Support Agreement
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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