SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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|Item 1.01|| |
Entry into a Material Definitive Agreement.
As previously disclosed in the current report on Form 8-K filed on December 14, 2020, on that date, Torchlight Energy Resources, Inc. (“Torchlight”) and its newly formed subsidiaries, Metamaterial Exchangeco Inc. (formerly named 2798832 Ontario Inc., “Canco”) and 2798831 Ontario Inc., both Ontario corporations, entered into an Arrangement Agreement (the “Agreement”) with Metamaterial Inc., an Ontario corporation headquartered in Nova Scotia, Canada (“Metamaterial”), to acquire all of the outstanding common shares of Metamaterial by way of a statutory plan of arrangement (the “Arrangement”) under the Business Corporations Act (Ontario), on and subject to the terms and conditions of the Agreement. On February 3, 2021, Torchlight and its Ontario subsidiaries entered into an Amendment to Arrangement Agreement (the “Amendment”) with Metamaterial, to amend the Agreement as follows:
To extend the date by when Metamaterial must hold its meeting of security holders to March 31, 2021;
To extend the date by when Metamaterial must apply to the Ontario Superior Court of Justice for the interim order with respect to the Arrangement to February 28, 2021;
To extend the date by when Torchlight must hold its meeting of stockholders to March 31, 2021;
To provide that upon the closing of the pre-closing financing contemplated by the Agreement, Torchlight will use a portion of the net proceeds to provide $5,000,000 of additional bridge financing to Metamaterial, to be evidenced by a third unsecured promissory note, substantially in the same form as the previous bridge notes issued by Metamaterial to Torchlight on September 20, 2020 and December 16, 2020; in the event the Agreement is terminated, and the closing of the Arrangement does not otherwise occur, then Metamaterial will be obligated to repay to Torchlight, on the one-year anniversary of the closing of the pre-closing financing, an amount equal to $5,400,000 (which amount represents the outstanding principal of $5,000,000 plus interest accrued on such principal at the rate of 8% per annum); and
To update the Plan of Arrangement attached to the Agreement (the “Plan of Arrangement”) to, among other things, include amended terms for the shares issuable by Canco (the “Exchangeable Shares”) in the Arrangement and update certain defined terms contained therein.
The description of the Amendment, the Plan of Arrangement and the terms of the Exchangeable Shares set forth herein does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, including the updated Plan of Arrangement and terms of the Exchangeable Shares attached thereto, which are attached to this current report as Exhibit 2.1 and incorporated by reference herein.
This current report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the “safe harbor” created by those sections. All statements in this current report that are not based on historical fact are “forward looking statements.” These statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “strategy,” “goal,” or “planned,” “seeks,” “may,” “might”, “will,” “expects,” “intends,” “believes,” “should,” and similar expressions, or the negative versions thereof, and which also may be identified by their context. All statements that address operating performance or events or developments Torchlight expects or anticipates will occur in the future, such as stated objectives or goals, refinement of strategy, attempts to secure additional financing, exploring possible business alternatives, or that are not otherwise historical facts, are forward-looking statements. While management has based any forward-looking statements included in this current report on its current expectations, the information on which such expectations were based may change. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements as a result of various factors, including risks associated with Torchlight’s ability to obtain additional capital in the future to fund planned expansion, the demand for oil and natural gas which demand could be materially affected by the economic impacts of COVID-19 and possible increases in supply from Russia and OPEC, the proposed business combination transaction with Metamaterial, general economic factors,
competition in the industry and other factors that could cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Additional risks and uncertainties are described in or implied by the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of Torchlight’s 2019 Annual Report on Form 10-K, filed on March 16, 2020 and other reports filed from time to time with the Securities and Exchange Commission (“SEC”). Torchlight urges you to consider those risks and uncertainties in evaluating its forward-looking statements. Readers are cautioned to not place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, Torchlight disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in its expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.
Additional Information and Where to Find It
Torchlight will prepare a proxy statement for Torchlight’s stockholders to be filed with the SEC. The proxy statement will be mailed to Torchlight’s stockholders. Torchlight urges investors, stockholders and other interested persons to read, when available, the proxy statement, as well as other documents filed with the SEC, because these documents will contain important information about the proposed business combination transaction. Such persons can also read Torchlight’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, for a description of the security holdings of its officers and directors and their respective interests as security holders in the consummation of the transactions described herein. Torchlight’s definitive proxy statement will be mailed to stockholders of Torchlight as of a record date to be established for voting on the transactions described in this report. Torchlight’s stockholders will also be able to obtain a copy of such documents, without charge, by directing a request to: John A. Brda, President of Torchlight Energy Resources, Inc., 5700 W. Plano Parkway, Suite 3600, Plano, Texas 75093; e-mail: firstname.lastname@example.org. These documents, once available, can also be obtained, without charge, at the SEC’s web site (http://www.sec.gov).
Participants in Solicitation
Torchlight and its directors, executive officers and other members of their management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies of Torchlight stockholders in connection with the proposed business combination. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of Torchlight’s directors in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the SEC on March 16, 2020. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to Torchlight’s stockholders in connection with the proposed business combination will be set forth in the proxy statement for the proposed business combination when available. Information concerning the interests of Torchlight’s participants in the solicitation, which may, in some cases, be different than those of Torchlight’s equity holders generally, will be set forth in the proxy statement relating to the proposed business combination when it becomes available.
|Item 9.01.|| |
Financial Statements and Exhibits.
|Exhibit 2.1||Amendment to Arrangement Agreement dated February 3, 2021|
|104||Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|Torchlight Energy Resources, Inc.|
|Date: February 4, 2021||
|John A. Brda|