Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On May 27, 2022, Mana Capital Acquisition Corp., a Delaware corporation ("Mana
Capital"), entered into a Merger Agreement and Plan of Reorganization (the
"Merger Agreement") with Mana Merger Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Mana ("Merger Sub"), Cardio Diagnostics, Inc., a
Delaware corporation ("Cardio") and Meeshanthini (Meesha) Dogan, in her capacity
as the representative of the Cardio shareholders. Pursuant to the terms of the
Merger Agreement, and subject to the satisfaction or waiver of certain
conditions set forth therein, (i) Merger Sub will merge with and into Cardio
(the "Merger"), with Cardio surviving the merger in accordance with the Delaware
General Corporation Law as a wholly-owned subsidiary of Mana Capital; and (ii)
Mana Capital will change its name to Cardio Diagnostics Holdings Inc. (the
transactions contemplated by the Merger Agreement and the related ancillary
agreements, the "Business Combination").
Consideration
The aggregate consideration payable at the closing of the Business Combination
(the "Closing") to the stockholders of Cardio will be the issuance of such
number of shares of Mana Capital Common Stock, par value $0.00001 per share (the
"Common Stock") as shall be determined by dividing the "Aggregate Closing Merger
Consideration Value" by $10.00, which represents the agreed valuation of one
share of Mana Capital Common Stock. Under the Merger Agreement, the Aggregate
Closing Merger Consideration Value is determined by adding (i) the aggregate
exercise price of outstanding Cardio Options and Warrants and (ii) the amount by
which Cardio's closing cash exceeds $500,000 to the base value of $75,000,000,
and subtracting from that sum the amount by which Cardio's closing net debt
exceeds $500,000. Of the shares of Mana Capital Common Stock to be delivered at
Closing, the holders of Cardio common stock will receive, in exchange for the
Cardio shares owned by such persons, shares of Common Stock of Mana Capital. On
the date the Merger is effective (the "Effective Time") by virtue of the Merger
and without any action on the part of Mana Capital, Merger Sub, or Cardio:
a. each share of Cardio common stock issued and outstanding immediately prior
to the Effective Time shall be canceled and automatically converted into such
Cardio Stockholder's right to receive the number of shares of Mana Capital
Common Stock equal to the product obtained by multiplying the number of shares
of common stock of Cardio held by such stockholders by the Exchange Ratio (as
defined in the Merger Agreement as the quotient of (a) the Aggregate Closing
Merger Consideration divided by (b) the Company Fully Diluted Capital Stock);
b. each Cardio stock option (whether vested or unvested) that is outstanding
and unexercised immediately prior to the Effective Time shall be assumed by Mana
Capital and automatically converted into an option to purchase shares of Mana
Capital Common Stock (each an "Assumed Option"). The number of shares of Mana
Capital Common Stock (rounded down to the nearest whole share) that are subject
to each Assumed Option shall be equal to the product of (i) the number of shares
of Cardio common stock subject to the Cardio stock option and (ii) the Exchange
Ratio, and the exercise price per share of the Assumed Option (rounded up to the
nearest whole cent) shall be equal to the quotient obtained by dividing (A) the
exercise price per share of the Cardio stock option by (B) the Exchange Ratio.
Mana Capital shall take all corporate action necessary to reserve for future
issuance, and shall maintain such reservation for so long as any Assumed Options
remain outstanding, a sufficient number of shares of Mana Capital Common Stock
for delivery upon the exercise of such Assumed Options;
c. each Cardio common stock purchase warrant that is outstanding and
unexercised immediately prior to the Effective Time shall be assumed by Mana
Capital and automatically converted into a warrant to purchase shares of Mana
Capital Common Stock (each an "Assumed Warrant"). The number of shares of Mana
Capital Common Stock (rounded down to the nearest whole share) that are subject
to each Assumed Warrant shall be equal to the product of (i) the number of
shares of Cardio common stock subject to the Cardio warrant and (ii) the
Exchange Ratio, and the exercise price per share of the Assumed Warrant (rounded
up to the nearest whole cent) shall be equal to the quotient obtained by
dividing (A) the exercise price per share of the Cardio warrant by (B) the
Exchange Ratio. Mana Capital shall take all corporate action necessary to
reserve for future issuance, and shall maintain such reservation for so long as
any Assumed Warrants remain outstanding, a sufficient number of shares of Mana
Capital Common Stock for delivery upon the exercise of such Assumed Warrants;
and
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d. each share of common stock of Merger Sub, par value $0.00001 per share
issued and outstanding immediately prior to the Effective Time will be converted
into and exchanged for one validly issued, fully paid and nonassessable share of
common stock, par value $0.00001 per share, of Cardio, the surviving corporation
in the Merger.
Stockholder Earnout
Pursuant to the terms of the Merger Agreement, holders of Cardio common stock
will also receive, in the aggregate, up to an additional 1,000,000 shares of
Common Stock (the "Earnout Shares") in four equal tranches if, during the period
from the Closing through and including the fourth anniversary of the date of the
Closing, the dollar volume-weighted average price of Common Stock (as determined
in accordance with the Merger Agreement) equals or exceeds $12.50, $15.00,
$17.50 and $20.00, respectively, per share for thirty (30) of any forty
(40) consecutive trading days commencing after the Closing on the Nasdaq or any
other national securities exchange, as applicable for each of such four
tranches, respectively. The Earnout Shares will be allocated on a pro rata basis
among the members of the Stockholder Earnout Group (as defined in the Merger
Agreement) in accordance with the Merger Agreement.
Nasdaq Listing
Pursuant to the terms of the Merger Agreement, Mana Capital is required to use
its reasonable best efforts to cause the Common Stock to be issued in connection
with the Merger to be approved for listing on the Nasdaq Global Market
("Nasdaq") at the Closing. The approval by Nasdaq of Mana Capital's listing
application is a condition of Closing.
Mana Capital Post-Closing Board of Directors and Executive Officers
Immediately following the Closing, Mana Capital's board of directors will
consist of no more than seven directors of which Mana Capital has the right to
designate one director and the remaining six directors will be designated by
Cardio. At Closing, all of the executive officers of Mana Capital shall resign
and the individuals serving as executive officers of Mana Capital immediately
after the Closing will be the same individuals (in the same offices) as those of
Cardio immediately prior to the Closing.
Stockholder Approval
Mana Capital has filed with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-4 including proxy materials in the form of a
proxy statement (as amended or supplemented from time to time, the "Form S-4")
for the purpose of soliciting proxies from the stockholders of Mana Capital to
among other things, vote in favor of the Merger Agreement and the other
proposals set forth below at a special meeting of the stockholders of Mana
Capital (the "Special Meeting") and to register certain securities of Mana
Capital with the SEC. After the Form S-4 has been declared effective, Mana
Capital will mail a definitive proxy statement, when available, to its
stockholders.
Mana Capital will seek stockholder approval of the following proposals: (i) to
consider and vote on a proposal to adopt and approve (a) the Merger Agreement
and (b) the Merger and the other transactions contemplated by the Merger
Agreement (the "Business Combination Proposal"), (ii) to consider and vote on a
proposal to adopt the proposed amended and restated certificate of incorporation
of Mana Capital (the "Charter Amendment Proposal"); (iii) to consider and vote
on a proposal to approve the 2022 Equity Incentive Plan, a copy of which will be
included in the proxy statement mailed to stockholders (the "Equity Plan
Adoption Proposal"); (iv) to consider and vote on a proposal to approve, for
purposes of complying with Nasdaq Rules 5635(a) and (b), the issuance of more
than 20% of the issued and outstanding Mana Capital Common Stock and the
resulting change in control in connection with the Merger (the "Nasdaq 20% Share
Issuance Proposal"); (v) to consider and vote upon a proposal to elect,
effective as of the consummation of the Merger, certain directors to serve on
the Mana Capital Board of Directors (the "Director Election Proposal"); and (vi)
to approve a proposal to adjourn the Special Meeting to a later date or dates,
if necessary, to permit further solicitation and vote of proxies if, based upon
the tabulated vote at the time of the Special Meeting, there are not sufficient
votes to approve the Business Combination Proposal, the Charter Amendment
Proposal, the Equity Plan Adoption Proposal, the Nasdaq 20% Share Issuance
Proposal or the Director Election Proposal (the "Adjournment Proposal" and
collectively with the Business Combination Proposal, the Charter Amendment
Proposal, the Equity Plan Adoption Proposal, the Nasdaq 20% Share Issuance
Proposal and the Director Election Proposal, the "Mana Capital Proposals").
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. . .
Item 7.01 Regulation FD Disclosure.
Attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated
into this Item 7.01 by reference is a copy of the press release issued on May
31, 2022 announcing the proposed transaction.
The information in this Item 7.01, including Exhibit 99.1, is furnished and
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
liabilities under that section, and shall not be deemed to be incorporated by
reference into the filings of Mana Capital under the Securities Act of 1933, as
amended (the "Securities Act") or the Exchange Act, regardless of any general
incorporation language in such filings. This Current Report on Form 8-K will not
be deemed an admission as to the materiality of any information of the
information in this Item 7.01, including Exhibit 99.1.
Important Information and Where To Find It
In connection with the proposed Business Combination, Mana Capital has filed a
registration statement on Form S-4 containing proxy materials in the form of a
proxy statement with the SEC. The Form S-4 includes a proxy statement to be
distributed to holders of Mana Capital's common stock in connection with Mana
Capital's solicitation of proxies for the vote by Mana Capital's stockholders
with respect to the proposed Business Combination and other matters as described
in the Form S-4, as well as the prospectus relating to the offer of securities
to be issued to Cardio's stockholders in connection with the proposed Business
Combination. After the Form S-4 has been declared effective, Mana Capital will
mail a definitive proxy statement, when available, to its stockholders.
Investors and security holders and other interested parties are urged to read
the Form S-4, any amendments thereto and any other documents filed with the SEC
carefully and in their entirety when they become available because they will
contain important information about Mana Capital, Cardio and the proposed
Business Combination. Additionally, Mana Capital will file other relevant
materials with the SEC in connection with the Business Combination. Copies may
be obtained free of charge at the SEC's web site at www.sec.gov. Securityholders
of Mana Capital are urged to read the Form S-4 and the other relevant materials
when they become available before making any voting decision with respect to the
proposed Business Combination because they will contain important information
about the Business Combination and the parties to the Business Combination.
Participants in the Solicitation
Mana Capital and Cardio and their respective directors and executive officers
may be considered participants in the solicitation of proxies with respect to
the proposed Business Combination under the rules of the SEC. Security holders
may obtain more detailed information regarding the names, affiliations, and
interests of certain of Mana Capital's executive officers and directors in the
solicitation by reading Mana Capital's Form S-4 and other relevant materials
filed with the SEC in connection with the Business Combination when they become
available. Information about the directors and executive officers of Mana
Capital is set forth in Mana Capital's annual report for the year ended December
31, 2021 on Form 10-K (the "Form 10-K"), which was filed with the SEC on March
31, 2022. Information regarding the persons who may, under the rules of the SEC,
be deemed participants in the solicitation of the stockholders in connection
with the proposed Business Combination is set forth in the Form S-4. These
documents can be obtained free of charge at www.sec.gov.
Cardio and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the stockholders of Mana
Capital in connection with the proposed Business Combination. A list of the
names of such directors and executive officers and information regarding their
interests in the proposed Business Combination is included in the Form S-4 filed
in connection with the proposed Business Combination.
No Offer or Solicitation
This Current Report on Form 8-K is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or in respect of
the proposed Business Combination and shall not constitute an offer to sell or a
solicitation of an offer to buy the securities of Mana Capital or Cardio, nor
shall there be any sale of any such securities in any state or jurisdiction in
which such offer, solicitation, or sale would be unlawful prior to registration
or qualification under the securities laws of such state or jurisdiction. No
offering of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended, or an
exemption therefrom.
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Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Mana Capital and Cardio's actual results may differ from
their expectations, estimates and projections and consequently, you should not
rely on these forward-looking statements as predictions of future events. Words
such as "expect," "estimate," "project," "budget," "forecast," "anticipate,"
"intend," "plan," "may," "will," "could," "should," "believes," "predicts,"
"potential," "continue," and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements include, without
limitation, Mana Capital's and Cardio's expectations with respect to future
performance and anticipated financial impacts of the Business Combination, the
satisfaction of the closing conditions to the Business Combination and the
timing of the completion of the Business Combination. These forward-looking
statements involve significant risks and uncertainties that could cause the
actual results to differ materially from the expected results. Most of these
factors are outside Mana Capital's and Cardio's control and are difficult to
predict. Factors that may cause such differences include, but are not limited
to: (1) the occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement or could otherwise cause
the Business Combination to fail to close; (2) the outcome of any legal
proceedings that may be instituted against Mana Capital or Cardio following the
announcement of the Merger Agreement and the Business Combination; (3) the
inability to complete the Business Combination, including due to failure to
obtain approval of the stockholders of Mana Capital or other conditions to
closing in the Merger Agreement; (4) the receipt of an unsolicited offer from
another party for an alternative business transaction that could interfere with
the Business Combination; (5) the inability to obtain the listing of the common
stock of the post-acquisition company on the Nasdaq Stock Market or any
alternative national securities exchange following the Business Combination; (6)
the risk that the announcement and consummation of the Business Combination
disrupts current plans and operations; (7) the ability to recognize the
anticipated benefits of the Business Combination, which may be affected by,
among other things, competition, the ability of the combined company to grow and
manage growth profitably and retain its key employees; (8) costs related to the
Business Combination; (9) changes in applicable laws or regulations; (10) the
possibility that Cardio may be adversely affected by other economic, business,
and/or competitive factors; (11) the impact of COVID-19 on the combined
company's business; and (12) other risks and uncertainties indicated from time
to time in the proxy statement to be filed relating to the Business Combination,
including those under "Risk Factors" therein, and in Mana Capital's other
filings with the SEC. Some of these risks and uncertainties may in the future be
amplified by the COVID-19 outbreak and there may be additional risks that Mana
Capital considers immaterial or that are unknown. Mana Capital cautions that the
foregoing list of factors is not exclusive. Mana Capital further cautions
readers not to place undue reliance upon any forward-looking statements, which
speak only as of the date made. Mana Capital does not undertake or accept any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements to reflect any change in its expectations or any
change in events, conditions or circumstances on which any such statement is
based.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are attached to this Current Report on Form 8-K:
Exhibit No. Exhibit Title or Description
2.1 Merger Agreement and Plan of Reorganization by and among Cardio
Diagnostics, Inc., Meeshanthini (Meesha) Dogan, as Representative of the
Shareholders of the Company, Mana Capital Acquisition Corp. and Mana
Merger Sub, Inc., dated May 27, 2022*
10.1 Form of Lock-up Agreement
10.2 Form of Non-Compete Agreement
99.1 Press Release dated May 31, 2022** .
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Schedules and other similar attachments have been omitted pursuant to Item
601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish
supplementally copies of any of the omitted schedules and other similar
attachments upon request by the SEC.
** Furnished but not filed.
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