Finnovate Acquisition Corp. (FNVT) Sells Founder Shares
by Marlena Haddad on 2023-05-03 at 5:51pm

Finnovate Acquisition Corp. (NASDAQ:FNVT) announced this afternoon that it has entered into an investment agreement with its sponsor and an investor, Sunorange Limited, to sell a portion of its founder shares.

As part of the agreement, Sunorange will acquire partnership interests in the sponsor and Class B ordinary shares directly held by certain directors of Finnovate. The combined interests will entitle Sunorange to receive 3,557,813 Class B ordinary shares and 6,160,000 private placement warrants.

As a result, Finnovate will undergo a change in management and its board. David Gershon will be stepping down as Chairman of the Board and CEO and will be replaced by Calvin Kung. Tommy Chiu Wang Wong will replace Ron Golan as CFO and director, effective upon the closing of the investment.

Jonathan Ophir and Uri Chaitchik will tender their resignations as Chief Investment Officer and Senior Consultant, respectively. Mitch Garber, Gustavo Schwed and Nadav Zohar will step down as directors, to be effective upon the expiration of all applicable waiting periods and their vacancies will be filled by individuals designated by Sunorange.

But, the completion of the investment agreement is contingent on several factors, including shareholder approval at Finnovate’s upcoming extension meeting on May 8 and the SPAC maintaining at least $30 million in its trust account after accounting for all redemptions in connection with the meeting. The company is currently facing a completion deadline of May 8, 2023, but is looking to extend its timeline by an entire year until May 8, 2024.

Other conditions for the investment agreement include obtaining or extending a D&O insurance policy on terms satisfactory to the parties, the conversion of Class B ordinary shares into Class A ordinary shares as needed to retain shareholders and meet continued listing requirements of Nasdaq, the amendment of the sponsor’s existing limited partnership agreement, the transfer of 61,875 Class B ordinary shares from certain directors to Sunorange and the cancellation of an outstanding $550,000 loan from the sponsor and the reduction of certain advisory fees to be due upon the closing of an initial business combination.

If the extension and other proposals are approved at next week’s meeting, then Sunorange will contribute to Finnovate’s loans of the lesser of $100,000 or $0.033 for each public share that is not redeemed for each calendar month needed to complete a deal until May 8, 2024.

Additionally, the investor will assume up to $550,000 of vendor payables currently outstanding by the company plus the cost of preparing the proxy. Sunorange will be entitled to receive additional Class B ordinary shares to the extent that liabilities incurred by Finnovate prior to the closing of the investment exceed $550,000.

The SPAC announced the pricing of its $150 million IPO in November 2021. Although it hasn’t found a target to combine with just yet, it intends to focus its search on fintech companies that are domiciled in Israel, that carry out all or a substantial portion of their activities in Israel, or that have some other significant Israeli connection.

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