FG Merger Corp. (FGMC) Adds FPA to iCoreConnect Deal
by Marlena Haddad on 2023-08-14 at 4:55pm

FG Merger Corp. (NASDAQ:FGMC) announced in an 8-K this afternoon that it has signed a prepaid forward purchase agreement (FPA) with RiverNorth SPAC Arbitrage Fund in connection to its combination with iCoreConnect.

As a part of the agreement, RiverNorth will purchase the lesser of 1.5 million shares of FGMC common stock and such number of shares following the business combination, not exceeding 9.9% of the total number of shares outstanding from shareholders for no greater than the redemption price.

Once the deal is completed, each forward purchase share will automatically convert into one share of FGMC preferred stock and the greater of 100,000 purchased shares, or 5% of the purchased shares will be deemed to be “commitment shares” while the remaining will be “prepaid forward purchase shares”.

Additionally, no later than the earlier of one day after the deal closes and the date any assets from FGMC’s trust are disbursed, RiverNorth will be paid an amount equal to the number of purchased shares multiplied by the redemption price. As of June 30, this was $10.65.

Upon the sale of the prepaid forward purchase shares by RiverNorth, it will remit the reference price per share to FGMC. In the event that the parties breach the agreement, there is a registration failure, or the maturity date occurs, then RiverNorth will pay an amount equal to the number of prepaid forward purchase shares that it held on the maturity date, multiplied by the lowest daily VWAP per share of FGMC during the 20 days beginning on the day after the maturity date less $0.15.

Between the maturity date and the payment date, RiverNorth is restricted from selling more prepaid forward purchase shares per day than a set value. This value is determined by taking the greater of two options: 5% of the purchased shares owned at the maturity date, or 10% of the daily trading volume on that specific date.

Further, RiverNorth agreed that the FGMC Common Stock won’t be sold for lower than the reference price, which is set to match the redemption price. Subsequently, it will be lowered every month starting from the first day of the month that follows 30 days after the closing. The reduction will align with the VWAP of the FGMC common stock over the preceding 10 trading days. However, this price will never drop below $10 per share unless FGMC exercises its discretion to decrease it. Any adjustment to the floor will be communicated to RiverNorth through written notice from FGMC.

FG Merger Corp. inked its $98 million deal with healthcare workflow platform iCoreConnect in January and shareholders are expected to vote on the transaction during a meeting this Friday, August 18.

The SPAC currently has about $82.5 million in its trust and has not supplemented this with further committed financing. Additionally, the transaction does not include a minimum cash condition, but if the closing cash is less than $20 million, then the sponsor will forfeit any and all dividends accrued on any shares of preferred stock.

Ocoee, Florida-based iCore Connect is a cloud-based software and technology company focused on increasing workflow productivity and customer profitability through its enterprise and healthcare workflow platform of applications and services.

 

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