Item 1.01 Entry Into a Material Definitive Agreement.
Merger
Agreement
On May 29, 2023, SeqLL, Inc., a Delaware corporation (the “Company”),
SeqLL Merger LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Purchaser Sub”), Atlantic
Acquisition Corp, a Delaware corporation (“Atlantic”), Atlantic Merger LLC, a Delaware limited liability company and a majority-owned
subsidiary of Atlantic (“Atlantic Merger Sub”), Lyneer Investments, LLC, a Delaware limited liability company (“Lyneer”),
IDC Technologies, Inc., a California corporation (“IDC”), and Lyneer Management Holdings LLC, a Delaware limited liability
company (“Lyneer Management”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant
to which (i) Atlantic Merger Sub will be merged with and into Lyneer, with Lyneer continuing as the surviving entity and as an approximating
58%-owned subsidiary of Atlantic, an approximately 38%-owned subsidiary of IDC, and an approximately 4%-owned subsidiary of Lyneer Management
(the “Lyneer Merger”), and (ii) Purchaser Sub will subsequently be merged with and into Lyneer, with Lyneer continuing as
the surviving entity and as a wholly-owned subsidiary of the Company (the “SeqLL Merger” and, together with the Lyneer Merger,
the “Mergers”).
At the
effective time of the SeqLL Merger, in consideration of 100% of the membership interests of Lyneer, the Company will (i) pay to IDC and
Lyneer Management an aggregate of $60,000,000 in cash (the “Cash Consideration”) and (ii) issue to (a) IDC and Lyneer Management
an aggregate of 69,444,444 shares of the Company’s common stock (the “Lyneer Stock Consideration”) and (b) Atlantic
90,422,454 shares of the Company’s common stock (the “Atlantic Stock Consideration”), in each case subject to any change
in the outstanding shares of capital stock of the Company as a result of any stock split, stock dividend or stock distribution
prior to the consummation of the Mergers. The 159,866,898 shares of the Company’s common stock to be issued in connection with the
Merger are valued at $138,125,000, based upon an assumed offering price in the Capital Raise (as defined below) of $0.864 (subject to
adjustment for stock splits, stock dividends, stock distributions prior to the Capital Raise).
Prior
to the completion of the Mergers, the Company intends to consummate a public offering of the Company’s common stock (the “Capital
Raise”), a portion of the proceeds of which will be used to pay the Cash Consideration and the balance for working capital. If the
price per share at which the Company’s common stock is sold in the Capital Raise (the “Offering Price”) is less than
$0.864 (subject to adjustment for stock dividends, stock consolidations and the like prior to the Capital Raise), then at the time the
Company declares a cash dividend to the Company’s legacy stockholders pursuant to the Merger Agreement (as discussed below), (i)
the Company will simultaneously declare a stock dividend of the Company's common stock in an aggregate amount of shares so that the value
of (A) the product of (y) the number of outstanding shares of the Company’s common stock and (z) the Offering Price, plus (B) the
product of (y) the number of shares of the Company’s common stock issued in the stock dividend and (z) the Offering Price, equals
$12,000,000, and the aggregate number of shares of the Company’s common stock issuable as the Atlantic Stock Consideration shall
be reduced by the aggregate number of shares the Company’s common stock issuable in such stock dividend and (ii) the number of shares
of the Company’s common stock issuable as the Lyneer Stock Consideration will be increased by a number of shares of the Company’s
common stock so that the product of (y) the aggregate number of shares issuable as the Lyneer Stock Consideration and (z) the Offering
Price, equals $60,000,000, and the aggregate number of shares of the Company’s common stock issuable as the Atlantic Stock Consideration
shall be reduced by the aggregate number of additional shares of the Company’s common stock issuable as the Lyneer Stock Consideration.
The
Merger Agreement contains customary representations and warranties from the parties, and each party has agreed to customary covenants
applicable to such party, including, among others, covenants relating to (i) the conduct of their respective businesses in the ordinary
course prior to the effective time of the Mergers and (ii) the requirement of each party to maintain and preserve intact their respective
business organizations, assets, properties and material business relations. The Merger Agreement also requires that, prior to the closing
of the Mergers, the Company will declare a cash dividend payable to the Company’s stockholders of record as of the close of business
on a date to be determined by the Company, but in any event prior to the date of pricing of the Capital Raise, in an amount equal to the
Company’s cash and cash equivalents as of the closing date of the Mergers (exclusive of any proceeds of the Capital Raise), less
any amounts withheld for taxes and certain other obligations as of such date.
The
obligation of each of the Company, Atlantic and Lyneer, and their respective subsidiaries, to complete the Mergers is subject to the fulfillment
(or waiver, to the extent permissible under applicable law) of certain customary closing conditions, plus the conditions that (i) the
stockholders of the Company shall have approved the issuance of the shares of the Company’s common stock in the Mergers, (ii) the
Company completes the Capital Raise for gross proceeds of approximately $75 million, of which $60 million will be used to pay the Cash
Consideration, and (iii) the continued listing of the Company’s common stock on the Nasdaq Capital Market following the Mergers.
The Merger Agreement contains certain termination
rights, including (i) by mutual consent of the Company, Atlantic, IDC and Lyneer
Management, (ii) by any of the Company, Atlantic, IDC or Lyneer Management
upon a material breach of the representations or of any covenants or agreements of certain other parties, (iii) by any of the
Company, Atlantic, IDC or Lyneer Management if the Mergers have not been consummated by July 31, 2023, (iv) by any of the
Company, Atlantic, IDC or Lyneer Management if any governmental authority shall have issued an order or taken any other action
permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by the Merger Agreement, (v) by any of the
Company, Atlantic, IDC or Lyneer Management if the special meeting of the Company’s stockholders has been held and the approval
of the issuance of the common stock of the Company in the Mergers and the change of control of the Company that will be effected as a
result of such issuance and certain other proposals contemplated by the related proxy statement was not approved, or (vi) by Atlantic,
IDC or Lyneer Management if the Company is in breach of the rules and regulations of the Nasdaq Stock Market LLC (“Nasdaq”)
or has received a notice from Nasdaq relating to the delisting or maintenance of listing of the Company's common stock on Nasdaq and the
Company fails to cure and maintain its listing on Nasdaq prior to the closing of the Mergers.
The Merger Agreement further provides
that each party thereto will pay its fees and expenses incurred in connection with the negotiation, execution and performance of the Merger
Agreement and the transactions contemplated thereby, provided that (i) any governmental filing fees required to be paid prior to closing
the Mergers will be paid by Atlantic, (ii) Atlantic will pay up to $50,000 of the Company’s expenses in connection with the preparation
of the proxy statement for the special meeting of the Company’s stockholders, and (iii) at the closing of the Mergers, Atlantic
will reimburse the Company for all of its expenses in connection with the preparation and filing of any registration statement relating
to the Capital Raise and any transfer taxes.
The foregoing description of the Merger Agreement
and the Merger does not purport to be complete and is qualified in its entirety by the Merger Agreement, a copy of which is filed as Exhibit
2.1 to this Current Report on Form 8-K.
The foregoing summary
of the Merger Agreement has been included to provide investors and securityholders with information regarding the terms of the Merger
Agreement and is qualified in its entirety by the terms and conditions of the Merger Agreement. It is not intended to provide any other
factual information about the Company, Atlantic, Lyneer or their respective subsidiaries and affiliates. The representations, warranties
and covenants contained in the Merger Agreement were made only for purposes of such agreement and as of specified dates, were solely for
the benefit of the respective parties to such agreement, may be subject to limitations agreed upon by the contracting parties, and may
be subject to standards of materiality that differ from those applicable to investors. Moreover, certain representations and warranties
in the Merger Agreement may have been used for the purpose of allocating risk between the parties rather than establishing matters of
fact. Accordingly, investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations
of the actual state of facts or condition of the Company, Atlantic, Lyneer, Lyneer Management or any of their respective subsidiaries
or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the
date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Registration Statement and Stockholders
Meeting
Pursuant to the Merger
Agreement, the Company, Atlantic and Lyneer have agreed to promptly prepare and mutually agree upon, and the Company has agreed to file
with the Securities and Exchange Commission (the “SEC”), (i) an amendment to the Company’s existing registration statement
on Form S-1 (No. 333-254886) or to file a new registration statement on Form S-1 in order to effect the Capital Raise and (ii) a preliminary
proxy statement on Schedule 14A (as amended or supplemented from time to time, the “Proxy Statement”) for the purpose of soliciting
proxies from the Company’s stockholders for the matters to be acted upon at a special meeting of such stockholders. The Proxy Statement
will include proxy materials for the purpose of soliciting proxies from the Company’s stockholders to vote at the special meeting
in favor of resolutions (i) approving the issuance of the Company’s common stock in the Mergers and the change of control of the
Company, (ii) authorizing a change in the size of the Company’s board of directors (the “Board”) with a minimum of one
director and a maximum of seven directors, (iii) authorizing an amendment to the Company’s certificate of incorporation to effect
a reverse stock split of the Company’s common stock on a one new common share for up to 30 shares of old common stock basis, at
the discretion of the Board in connection with the consummation of the Mergers, (iv) authorizing an amendment to the Company’s certificate
of incorporation to change the name of the Company following consummation of the Mergers to “Atlantic International Corp.”,
(v) authorizing an amendment to the Company’s certificate of incorporation to increase the authorized shares of common stock from
80,000,000 shares to 300,000,000 shares, (vi) approving the Atlantic International Corp. 2023 Equity Incentive Plan authorizing the issuance
of up to approximately 15% of the issued and outstanding shares of the Company’s common stock following the Capital Raise, which
will become effective upon consummation of the Mergers, (vii) approving the Asset Purchase Agreement (as discussed below) by the disinterested
stockholders; and such other related matters and business as may properly come before the special meeting of the Company’s stockholders
or any adjournments or postponements thereof, and (viii) adjourning the special meeting of the Company’s stockholders, if necessary
or desirable in the reasonable determination of the Company.
In connection with the execution and delivery of
the Merger Agreement, Daniel Jones, the Chairman of the Board and Chief Executive Officer of the Company, another member of the Board,
William C. St. Laurent, one of the founders of the Company, and certain members of Mr. St. Laurent’s family (the “Major
Stockholders”) entered into a voting agreement pursuant to which the Major Stockholders agreed to vote their shares of the Company’s
common stock in favor of each of the proposals to be described in the Proxy Statement other than the proposal approving the Asset Purchase
Agreement, a proposal with respect to which Mr. Jones is an interested party and, as a result, on which he will abstain from voting.
The Major Stockholders own shares of the Company’s common stock that together represent sufficient voting power to approve each
of the proposals to be considered at the special meeting contemplated by the Proxy Statement (other than the Asset Sale Proposal, as to
which Mr. Jones will abstain from voting). As a result, the approval of each of such proposals, other than the Asset Sale Proposal,
by the Company’s stockholders is assured.
Post-Closing Governance
Pursuant
to the Merger Agreement, at the closing of the Mergers, the number of directors on the Board will be increased to seven, with only one
of the Company’s existing directors continuing on the Board. Five directors will be appointed at the closing of the Mergers
and a seventh director reasonably acceptable to Atlantic will
be appointed to the Board following the Mergers. In addition, all of the existing executive officers of the Company will resign at the
closing of the Mergers and at such closing the new Board will appoint certain executive officers of Atlantic as the executive officers
of the Company.
Asset Purchase Agreement
In connection with the execution and delivery
of the Merger Agreement, the Company entered into an asset purchase agreement (“Asset Purchase Agreement”) with SeqLL
Omics, Inc., a Delaware corporation (“SeqLL Omics”). SeqLL Omics was recently formed by Daniel Jones, the Chairman of
the Board and Chief Executive Officer of the Company, and certain other Company employees, for the purpose of carrying on the
Company’s pre-Merger business after the Mergers. Subject to the terms and conditions of the Asset Purchase Agreement, SeqLL
Omics has agreed to purchase from the Company, and the Company has agreed to sell to SeqLL Omics, for a purchase price of $1,000,
all of the Company’s rights, title and interests in the assets and properties of the Company as it exists immediately prior to
consummation of the Mergers, excluding cash and cash equivalents, including without limitation:
| ● | all leasehold interests in real estate; |
| ● | all contracts with customers, vendors and suppliers and all technology license agreements; |
| ● | all intellectual property and general intangibles; |
| ● | all equipment and other tangible assets used in, or related to, its business operations; and |
| ● | all accounts receivable. |
In addition to keeping its cash and cash equivalents
in order to make a cash dividend to the Company’s stockholders, the Company will not sell or transfer, and SeqLL Omics will not
acquire, certain contracts unrelated to the Company’s pre-Merger business operations, the Company’s corporate records or its
rights under the Merger Agreement.
Pursuant to the Asset Purchase Agreement, SeqLL
Omics will assume from the Company all obligations or liabilities of the Company related to its pre-Merger business operations, including
those under the contracts and leases that it will purchase, other than the following:
| ● | obligations to pay any rent pursuant to the Company’s real estate lease prior to the first anniversary
of the closing under the Asset Purchase Agreement; |
| ● | all obligations of the Company under the Merger Agreement; |
| ● | obligations of the Company that are not related to the Company’s current business operations and
arise following the closing; |
| ● | amounts payable under the promissory note of the Company in the principal amount of $1,375,000 payable
to St. Laurent Investments LLC, an entity affiliated with William C. St. Laurent, one of the founders and (directly and through affiliates)
a principal stockholder of the Company; and |
| ● | any obligations under the excluded contracts. |
The Company will be responsible for the payment
of transfer taxes, if any, related to the transfer of the transferred assets.
The foregoing description of the Asset Purchase
Agreement does not purport to be complete and is qualified in its entirety by the Asset Purchase Agreement, a copy of which is filed as
Exhibit 10.1 to this Current Report on Form 8-K.