SECURITIES AND EXCHANGE COMMISSION FORM 425 Filing under Securities Act Rule 425 of certain prospectuses and communications in connection with business combination transactions Filing Date: 2021-06-21 SEC Accession No. 0001193125-21-194146 (HTML Version on secdatabase.com) SUBJECT COMPANY Leo Holdings III Corp. Mailing Address Business Address C/O LION CAPITAL C/O LION CAPITAL CIK:1840780| IRS No.: 000000000 | State of Incorp.:E9 | Fiscal Year End: 1231 100 WILSHIRE BOULEVARD 100 WILSHIRE BOULEVARD Type: 425 | Act: 34 | File No.: 001-40125 | Film No.: 211027388 LOS ANGELES CA 90401 LOS ANGELES CA 90401 SIC: 6770 Blank checks 310-800-1000 FILED BY Leo Holdings III Corp. Mailing Address Business Address C/O LION CAPITAL C/O LION CAPITAL CIK:1840780| IRS No.: 000000000 | State of Incorp.:E9 | Fiscal Year End: 1231 100 WILSHIRE BOULEVARD 100 WILSHIRE BOULEVARD Type: 425 LOS ANGELES CA 90401 LOS ANGELES CA 90401 SIC: 6770 Blank checks 310-800-1000 Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 17, 2021 LEO HOLDINGS III CORP (Exact name of registrant as specified in its charter) Cayman Islands 001-40125 98-1584830 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation or organization) File Number) Identification Number) Albany Financial Center South Ocean Blvd Suite #507 P.O. Box SP-63158 New Providence, Nassau, The Bahamas (Address of principal executive offices) (Zip Code) (310) 800 1000 Registrants telephone number, including area code Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions: ☒ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act: Trading Name of each exchange Title of each class Symbol(s) on which registered Units, each consisting of one Class A Ordinary LIII.U The New York Stock Exchange Share, $0.0001 par value, and one-fifth of one redeemable warrant Class A Ordinary Shares included as part of the LIII The New York Stock Exchange units Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Redeemable warrants included as part of the LIII WS The New York Stock Exchange units, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50 Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Item 1.01 Entry Into A Material Definitive Agreement. Merger Agreement On June 17, 2021, Leo Holdings III Corp, a Cayman Islands exempted company (Leo), entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the Merger Agreement), by and among Leo, Longleaf Merger Sub, Inc., a Delaware corporation (First Merger Sub), Longleaf Merger Sub II, LLC, a Delaware limited liability company (Second Merger Sub), and Local Bounti Corporation, a Delaware corporation (Local Bounti). The Merger Agreement and the transactions contemplated thereby were approved by the boards of directors of each of Leo and Local Bounti. The Business Combination The Merger Agreement provides for, among other things, the following transactions on the closing date: (i) Leo will become a Delaware corporation (the Domestication) and, in connection with the Domestication, (A) Leos name will be changed to Local Bounti Corporation, (B) each outstanding Class A ordinary share of Leo will become one share of common stock of Leo (the New Local Bounti Common Stock), (C) each outstanding Class B ordinary share of Leo will become one share of New Local Bounti Common Stock, and (D) each outstanding warrant of Leo will become one warrant to purchase one share of New Local Bounti Common Stock; (ii) following the Domestication, First Merger Sub will merge with and into Local Bounti, with Local Bounti as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Leo (the First Merger); and (iii) immediately following the consummation of the First Merger, Local Bounti will merge with and into Second Merger Sub, with Second Merger Sub as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly- owned subsidiary of Leo (the Second Merger and together with the First Merger, the Mergers). The Domestication, the Mergers and the other transactions contemplated by the Merger Agreement are hereinafter referred to as the Business Combination. The Business Combination is expected to close in the second half of 2021, following the receipt of the required approval by Leos shareholders and the fulfillment of other customary closing conditions. Merger Consideration In accordance with the terms and subject to the conditions of the Merger Agreement, based on an implied enterprise value of $650.0 million (excluding convertible debt of Local Bounti), plus the aggregate exercise price of all Local Bounti warrants, minus up to $37.5 million of cash consideration to certain Local Bounti stockholders, minus $4.0 million of transaction bonuses to certain Local Bounti employees, minus the payoff amount of certain Local Bounti indebtedness, (i) each share of Local Bounti voting common stock (other than shares held by Local Bounti as treasury stock (which shares will be cancelled for no consideration as part of the First Merger) and dissenting shares) will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised of New Local Bounti Common Stock, earn out shares (as described below) and up to $37.5 million of cash consideration (subject to certain conditions specified in the Merger Agreement), each as determined in the Merger Agreement, (ii) each share of Local Bounti restricted stock will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised of New Local Bounti Common Stock and earn out shares (as described below), each as determined in the Merger Agreement, (iii) each Local Bounti restricted stock unit, whether or not then vested, will be assumed by Leo and convert into a Leo restricted stock unit, subject to the same terms and conditions as applied to such Local Bounti restricted stock unit immediately prior to the Closing with a value as if such Local Bounti restricted stock unit were settled prior to the closing of the Business Combination, and (iv) each warrant of Local Bounti that is unexercised will be assumed by Leo and convert into a warrant to purchase New Local Bounti Common Stock and represent the right to receive the applicable portion of the merger consideration and earn out shares (as described below) upon exercise of such warrant as if such warrant were exercised prior to the closing of the Business Combination. In addition, all convertible debt of Local Bounti Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document will be fully converted into Local Bounti common stock as of immediately prior to the Closing and become eligible to receive New Local Bounti Common Stock (which amount, for the avoidance of doubt, is excluded from the implied equity value) and earn out shares (as described below) based on the number of shares of Local Bounti common stock issuable upon conversion of such convertible debt. Each Local Bounti equityholder will receive its applicable portion of equal thirds of 2.5 million earn out shares if the trading price of New Local Bounti Common Stock is greater than or equal to $13, $15 and $17 for any 20 trading days within any 30-trading day period and will also accelerate and be fully issuable in connection with any Change of Control (as defined in the Merger Agreement) if the applicable thresholds are met in such Change of Control. Representations and Warranties; Covenants The Merger Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type. Leo has also agreed to take all such actions necessary or appropriate such that, effective immediately after the Closing, the Leo board of directors shall consist of seven (7) directors divided into three (3) classes, designated Class I, II and III, with Class I consisting of three (3) directors, Class II consisting of two (2) directors and Class III consisting of two (2) directors. In addition, Leo has agreed to adopt an equity incentive plan and an employee stock purchase plan in an aggregate amount not to exceed 15.5% of New Local Bountis equity interests on a fully diluted basis, as described in the Merger Agreement.