Battery Future Acquisition Corp. (NYSE:BFAC), a blank check company, has entered into a significant agreement with an unnamed third-party investor, according to a recent 8-K filing with the Securities and Exchange Commission.
The deal, dated Monday, involves the purchase and sale of Series B preferred stock in a private investment in public equity (PIPE) transaction, which is set to raise up to $5 million for the company.
The PIPE agreement is part of a broader business combination between Battery Future Acquisition Corp., its subsidiary Classover Holdings, Inc. (Pubco), and Class Over Inc. Under the terms of the agreement, the investor commits to buy Series B preferred stock from Pubco.
The preferred stock will be issued in connection with the business combination, with an initial issuance of 2,400 shares, and additional shares to be issued upon the exercise of warrants.
The preferred shares will rank senior to other classes of stock and will be convertible into Class B common stock of Pubco. The conversion price is initially set at $12.00 per share, subject to adjustments. The agreement also includes provisions for dividends, voting rights, and redemption rights, offering the investor demand and piggyback registration rights through a separate registration rights agreement.
This PIPE transaction is designed to provide additional capital to support the business combination and future operations. The preferred stock comes with an 18% annual dividend in the event of certain triggering events, and holders will have the right to vote on certain matters alongside common stockholders.
The agreement outlines specific conditions under which the preferred stock can be converted or redeemed, including in the event of a change of control at the company. Pubco also retains the right to redeem the Series B preferred stock under certain conditions at a premium.
The financial details and strategic implications of this agreement are laid out in the associated exhibits filed with the SEC, which include the Certificate of Designations, the Securities Purchase Agreement, the Registration Rights Agreement, and the Warrant to Purchase Series B Convertible Preferred Stock.
Investors and interested parties can refer to these documents for a comprehensive understanding of the terms and conditions of the PIPE agreement. The information provided in this article is based on the press release statement from Battery Future Acquisition Corp.
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