Item 1.01. Entry into a Material Definitive Agreement.
Agreement
and Plan of Merger and Business Combination Agreement
On
January 18, 2023, Broad Capital Acquisition Corp., a Delaware corporation (the “Company”), entered into a definitive
Agreement and Plan of Merger and Business Combination Agreement (the “BCA”) with Openmarkets Group Pty Ltd, an Australian
proprietary limited company (the “Target”), BMYG OMG Pty Ltd, an Australian proprietary limited company (the “Shareholder”),
and Broad Capital LLC, a Delaware limited liability company, solely in its capacity as the Company’s sponsor (the “Indemnified
Party Representative”). The Company, Target, Shareholder, and the Indemnified Party Representative, as well as the to-be-formed
Purchaser and Merger Sub (each of which are defined below), are sometimes referred to herein individually as a “Party”
and, collectively, as the “Parties.”
Business
Combination
Pursuant
to the BCA, prior to the closing (the “Closing”) of the contemplated transactions (collectively, the “Business
Combination”), the Parties will cause the Company to move its domicile from the State of Delaware to Australia by merging a
to-be-formed Delaware corporation (“Merger Sub”), which shall be wholly-owned by a to-be-formed Australian corporation
(the “Purchaser”) with and into the Company, with the Company continuing as the surviving entity and a wholly-owned
subsidiary of the Purchaser (the “Redomestication Merger”). As a result of the Redomestication Merger, (i) each issued
and outstanding share of the Company’s common stock, par value $0.000001 per share (the “Company Common Stock”),
will convert into the right to receive one ordinary share of the Purchaser (the “Purchaser Shares”); (ii) each of
the Company’s units (the “Company Units”), comprised of one share of Company Common Stock and one right to receive
one-tenth of one share of Company Common Stock upon the Closing (each a “Company Right”), shall convert into the right
to receive one unit of the Purchaser, comprised of one Purchaser Share and one right to receive one-tenth of one Purchaser Share upon
the Closing (each a “Purchaser Right”); and (iii) each Company Right shall be converted into the right to receive
one Purchaser Right.
Following
the Redomestication Merger, the Company and the Purchaser will cause the Company to liquidate, such that all assets of the Company are,
or shall be, transferred to the Purchaser and all liabilities of the Company are, or shall be, assumed by the Purchaser (the “Liquidation”).
Additionally, the Company will cause all of its contracts to be assigned to and assumed by the Purchaser.
Following
the Redomestication Merger and Liquidation, the Shareholder will contribute all of the issued and outstanding ordinary shares of the
Target to the Purchaser in exchange for 9,000,000 Purchaser Shares (the “Exchange Consideration”), which shares shall
have a deemed value of $10.00 per share for the purposes of all calculations and adjustments under the BCA, with such Exchange Consideration
subject to adjustment based on the Target’s net indebtedness, working capital, and indemnification obligations following the Closing
as detailed in the BCA (the “Acquisition Contribution and Exchange”). Any adjustments to the Exchange Consideration
shall be made from Purchaser Shares placed in escrow pursuant to the Escrow Agreement (as defined below) (the “Escrow Shares”),
which Escrow Shares shall be released to either the Purchaser or the Shareholder based on the nature of the adjustment to the Exchange
Consideration. Additionally, in the event the Target’s net working capital at the Closing (the “Net Working Capital”)
exceeds the Target’s pre-Closing estimated net working capital (the “Estimated Net Working Capital”), the Shareholder
will receive additional Purchaser Shares in an amount equal to the difference between the Net Working Capital and the Estimated Net Working
Capital (the “Adjustment Exchange Consideration”). Further, in addition to the Escrow Shares and the Adjustment Exchange
Consideration, an additional 2,000,000 Purchaser Shares may be paid to the Shareholder
based on certain performance benchmarks following the Closing as detailed in the BCA (the “Earnout”).
In
connection with the Closing, the Purchaser shall cause its board of directors to consist of seven (7) directors, which shall include
not less than four (4) independent directors under Nasdaq rules requiring a majority of directors to be independent, with two of such
directors to be designated by the Indemnified Party Representative (one of which shall be independent) and the remaining directors, both
independent and not independent, to be designated by the Target prior to the Closing.
Representations
and Warranties; Covenants
Pursuant
to the BCA, the Parties made customary representations and warranties for transactions of this type. Aside from certain representations
and warranties made by the Target regarding litigation, actions, or other matters that are brought or initiated against the Target prior
to the Closing or that may arise following the Closing, the representations and warranties made by the Company, the Purchaser, the Target,
and the Shareholder will not survive the Closing. In addition, the Parties agreed to be bound by certain covenants that are customary
for transactions of this type, including obligations of the Parties to use their best efforts to operate their respective businesses
in the ordinary course, and to refrain from taking certain specified actions without the prior written consent of the applicable Party,
in each case, subject to certain exceptions and qualifications. Additionally, the Parties have agreed not to solicit, negotiate, or enter
into a competing transaction. The covenants of the Parties generally will not survive the Closing, subject to certain exceptions, including
certain covenants and agreements that by their terms are to be performed in whole or in part after the Closing.
Conditions
to Each Party’s Obligation to Close
Pursuant
to the BCA, the obligations of the Parties to consummate the Business Combination are subject to the satisfaction or waiver of certain
customary closing conditions of the respective Parties, including, without limitation: (i) the representations and warranties of the
respective Parties being true and correct subject to the materiality standards contained in the BCA; (ii) material compliance by the
Parties of their respective pre-closing covenants and agreements, subject to the standards contained in the BCA; (iii) the approval by
the Purchaser’s stockholders of the Business Combination; (iv) the absence of any Material Adverse Effect (as defined in the BCA)
with respect to the Company, with respect to the Purchaser, or with respect to the Target since the effective date of the BCA that is
continuing and uncured; (v) the expiration or termination, as applicable, of any waiting period (and any extension thereof) applicable
to the consummation of the BCA under any antitrust laws; (vi) the receipt of all consents required to be obtained from or made with any
governmental authority in order to consummate the transactions contemplated by the BCA; (vii) the receipt of any approvals required under
the Australian Foreign Acquisitions and Takeovers Act 1975 (Cth); (viii) the Purchaser having at least $5,000,001 in tangible net assets
upon the Closing; (ix) the Target having at least A$7,000,000 in cash or cash equivalents upon the Closing; (x) the entry into certain
ancillary agreements as of the Closing; (xi) the receipt by the Purchaser of copies of all third-party consents identified in the BCA
in a form and substance reasonably satisfactory to the Purchaser, which consents shall not have been revoked at the time of the Closing;
(xii) the continued listing of the Purchaser Shares and the Purchaser Rights on the Nasdaq Capital Market and the approval of the listing
of the Purchaser Shares to be issued to the Shareholder in connection with the Business Combination on the Nasdaq Capital Market; and
(xiii) the receipt of certain closing deliverables.
Termination
The
BCA may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, among others, (i)
by the mutual written consent of the Purchaser and the Target; (ii) by the Purchaser, if any of the representations or warranties of
the Shareholder or the representations or warranties of the Target set forth in the BCA shall not be true and correct, or if the Target
has failed to perform any covenant or agreement on the part of the Target set forth in the BCA, in each case such that the conditions
to the Closing set forth in the BCA would not be satisfied and the breach or breaches causing such representations or warranties not
to be true and correct, or the failure to perform any covenant or agreement, as applicable, are not cured (or waived by the Purchaser)
by the earlier of (a) the Outside Date (as defined below) or (b) 20 business days after written notice thereof is delivered to the Target;
(iii) by the Target or the Shareholder, if any of the representations or warranties of the Purchaser set forth in the BCA shall not be
true and correct, or if the Purchaser has failed to perform any covenant or agreement on its part set forth in the BCA, in each case
such that the conditions to the Closing set forth in the BCA would not be satisfied and the breach or breaches causing such representations
or warranties not to be true and correct, or the failure to perform any covenant or agreement, as applicable, are not cured (or waived
by the Target) by the earlier of (a) the Outside Date or (b) 20 business days after written notice thereof is delivered to the Purchaser;
(iv) by any of the Target, the Shareholder, or the Purchaser: (a) on or after June 30, 2023, or such later date agreed by the Parties
in writing (the “Outside Date”), if the Acquisition Contribution and Exchange shall not have been consummated prior
to the Outside Date; (b) if any order having the effect of prohibiting or preventing the Closing shall be in effect and shall have become
final and non-appealable; or (c) if any of the matters to be approved pursuant to the Proxy Statement shall fail to receive the required
votes to approve such matter (unless the special meeting called to approve such matters has been adjourned or postponed, in which case
at the final adjournment or postponement thereof); (v) by the Purchaser, (a) in the event that the Target has not delivered to the Purchaser
by February 19, 2023, or such later date as agreed by the Parties in writing, the Audited 2021/2022 Financial Statements (as defined
in the BCA), or (b) in the event certain actions or other matters contemplated by the BCA would prevent the Purchaser from closing the
Business Combination by the Outside Date or would prevent the Target from delivering certain closing deliverables; or (vi) by the Target,
if it notifies the Purchaser in accordance with the BCA that it wishes to pursue an Alternative Proposal (as defined in the BCA).
In
the event the BCA is terminated pursuant to clauses (ii) or (vi) of the above paragraph, the Target must pay the Purchaser a breakup
fee equal to $5,000,000 plus the amount of the Purchaser’s reasonable and documented out-of-pocket expenses incurred in connection
with the BCA and the transactions contemplated thereunder. In the event the BCA is terminated pursuant to clause (v) of the above paragraph,
the Target must reimburse the Purchaser for its reasonable and documented out-of-pocket expenses incurred in connection with the BCA
and the transactions contemplated thereunder.
The
foregoing description of the BCA does not purport to be complete and is qualified in its entirety by reference to the full text of the
BCA filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. The BCA provides investors with information
regarding its terms and is not intended to provide any other factual information about the Parties. In particular, the assertions embodied
in the representations and warranties contained in the BCA were made as of the execution date of the BCA only and are qualified by information
in confidential disclosure schedules provided by the Parties in connection with the signing of the BCA. These disclosure schedules contain
information that modifies, qualifies, and creates exceptions to the representations and warranties set forth in the BCA. Moreover, certain
representations and warranties in the BCA may have been used for the purpose of allocating risk between the parties rather than establishing
matters of fact. Accordingly, you should not rely on the representations and warranties in the BCA as characterizations of the actual
statements of fact about the parties.
Escrow
Agreement
Prior
to the Closing, the Company (and the Purchaser as the successor entity thereto), the Shareholder, and a mutually agreed upon escrow agent
shall enter into an escrow agreement (the “Escrow Agreement”), pursuant to which, among other things, the parties
shall cause a certain number of Purchaser Shares, including the Escrow Shares to be held in escrow for use in connection with any adjustments
to the Exchange Consideration, 1,607,000 Purchaser Shares to be held in escrow for use in connection with the indemnification obligations
of the Target, and 2,000,000 Purchaser Shares to be held in escrow for use in connection with the Earnout.
Lock-up
Agreement
At
the Closing, the Company (and the Purchaser as the successor entity thereto), the Shareholder, and any person or entity who receives
shares on behalf of the Shareholder shall enter into a lock-up agreement (the “Lock-Up Agreement”), pursuant to which,
among other things, and subject to certain exceptions, the Purchaser Shares held by the Shareholder or any such other person or entity
will be locked-up for a period of up to twelve months from the date of the Closing, in accordance with the terms set forth therein.
Non-Competition
Agreement
At
the Closing, the Company (and the Purchaser as the successor entity thereto) and its affiliates, successors, and indirect and direct
subsidiaries, the Target and its affiliates, successors, and indirect and direct subsidiaries, and the Shareholder shall enter into a
non-competition and non-solicitation agreement (the “Non-Competition Agreement”), pursuant to which, among other things,
the Shareholder will agree not to (i) compete with the business of the post-combination company for a period of five (5) years following
the Closing, among other matters, or (ii) solicit the employees or customers of the Company, the Target, or their affiliates for a period
of five (5) years following the Closing, among other matters.
Registration
Rights Agreement
At
the Closing, the Company (and the Purchaser as the successor entity thereto) and the Shareholder shall enter into a registration rights
agreement (the “Registration Rights Agreement”), pursuant to which, among other things, the Purchaser will be obligated
to file a registration statement to register the resale of the Purchaser Shares held by the Shareholder. The Registration Rights Agreement
will also provide the Shareholder with “piggy-back” registration rights, subject to certain requirements and customary conditions.
Proxy
Statement
As
promptly as practicable after the effective date of the BCA, the Company will file with the SEC a proxy statement on Schedule 14A (as
amended or supplemented, the “Proxy Statement”) to be delivered to its stockholders in connection with a special meeting
of the Company’s stockholders to be held to consider approval and adoption of (i) the BCA and the Business Combination; (ii) the
Liquidation; (iii) the issuance of the Purchaser Shares in connection with the Business Combination; (iv) an equity incentive plan for
the Purchaser as described in the BCA; (iv) such other matters as the parties mutually determine to be necessary or appropriate in order
to effect the Business Combination (the approvals described in foregoing clauses (i) through (iii), collectively, the “Stockholder
Approval Matters”); and (v) the adjournment of the special meeting of the Company’s stockholders, if necessary, to permit
further solicitation and vote of proxies in the reasonable determination of the Company.
Stock
Exchange Listing
The
Company and the Purchaser will use their best efforts to cause the Purchaser Shares issued in connection with the BCA to be approved
for listing on the Nasdaq Capital Market at Closing. During the period from the date hereof until the Closing, the Company will use its
best efforts to maintain the listing of the Company Units, Company Common Stock, and the Company Rights for trading on the Nasdaq Capital
Market.
Additional
Information and Where to Find It
As
discussed above, the Company intends to file the Proxy Statement with the SEC describing the Business Combination and other Stockholder
Approval Matters for the consideration of the Company’s stockholders, which Proxy Statement will be delivered to its stockholders
once definitive. This document does not contain all the information that should be considered concerning the Business Combination and
the other Stockholder Approval Matters and is not intended to form the basis of any investment decision or any other decision in respect
of the Business Combination and the other Stockholder Approval Matters. The Company’s stockholders and other interested persons
are advised to read, when available, the Proxy Statement and the amendments thereto, if any, and other documents filed in connection
with the Business Combination and the other Stockholder Approval Matters, as these materials will contain important information about
the Company, the Target, the Business Combination, and the other Stockholder Approval Matters. When available, the Proxy Statement and
other relevant materials for the Business Combination and the other Stockholder Approval Matters will be mailed to stockholders of the
Company as of a record date to be established for voting on the Business Combination and the other Stockholder Approval Matters. Stockholders
will also be able to obtain copies of the Proxy Statement and other documents filed with the SEC, without charge, once available, at
the SEC’s website at www.sec.gov, or by directing a request to: Broad Capital Acquisition Corp., 5345 Annabel Lane, Plano, TX 75093.
No
Offer or Solicitation
This
Current Report on Form 8-K is for informational purposes only and is not intended to and shall not constitute a proxy statement or the
solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the Business Combination or any related
transactions and is not intended to and shall not constitute a solicitation of any vote of approval.
Participants
in Solicitation
The
Company and its directors and executive officers may be deemed participants in the solicitation of proxies from the Company’s stockholders
with respect to the Business Combination and related matters. A list of the names of those directors and executive officers and a description
of their interests in the Company is contained in the Company’s Registration Statement on Form S-1, as filed on August 19, 2021,
as amended, which was filed with the SEC and is available free of charge at the SEC’s web site at www.sec.gov, or by directing
a request to Broad Capital Acquisition Corp., 5345 Annabel Lane, Plano, TX 75093. Additional information regarding the interests of such
participants will be contained in the Proxy Statement when available.
The
Target and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the Company’s
stockholders in connection with the Business Combination and related matters. A list of the names of such parties and information regarding
their interests in the Business Combination and related matters will be included in the Proxy Statement when available.
Cautionary
Statement Regarding Forward-Looking Statements
This
Current Report on Form 8-K contains “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,”
“would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,”
“outlook,” “project,” “anticipate,” “will likely result” and similar expressions that
predict or indicate future events or trends or that are not statements of historical matters. All statements, other than statements of
present or historical fact included in this Current Report on Form 8-K, including those regarding the terms of the Company’s proposed
business combination with the Target, the Company’s ability to consummate the proposed transaction on the stated timeline, the
benefits of the transaction, anticipated timing of the proposed business combination, and the combined company’s future performance
relative to other similar companies, the combined company’s strategy, operations, growth plans and objectives of management, the
growth of the Target’s business sector, the Target’s market expansion, and the combined company’s future products and
services are forward-looking statements. These statements are based on various assumptions, whether or not identified in this Current
Report on Form 8-K, and on the current expectations of the respective management of the Company and the Target and are not predictions
of actual performance.
These
forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on as,
a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult
or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company
or the Target. Potential risks and uncertainties that could cause the actual results to differ materially from those expressed or implied
by forward-looking statements include, but are not limited to, changes in domestic and foreign business, market, financial, political
and legal conditions; the inability of the parties to successfully or timely consummate the proposed business combination, including
the risk that any regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely
affect the combined company or the expected benefits of the proposed business combination or that the approval of the stockholders of
the Company is not obtained; failure to realize the anticipated benefits of the proposed business combination; risk relating to the uncertainty
of the projected financial information with respect to the Target; the amount of redemption requests made by the Company’s stockholders
and the impact of such requests on the cash needs of the combined company; the overall level of consumer demand for the Target’s
products and services; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; disruption
and volatility in the global currency, capital, and credit markets; the ability to maintain the listing of the Company’s securities
on NASDAQ; the Target’s ability to implement its business strategy; changes in governmental regulation, the Target’s exposure
to litigation, claims, and other loss contingencies; disruptions and other impacts to the Target’s business; stability of the Target’s
suppliers and customers, as well as consumer demand for its products and services; the impact that global climate change trends may have
on the Target and its suppliers and customers; the Target’s ability to recruit and retain qualified personnel to deliver their
services; any breaches of, or interruptions in, the Target’s information systems; fluctuations in foreign currency; and changes
in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks. The foregoing list of potential risks and uncertainties
is not exhaustive. More information on potential factors that could affect the Company’s or the Target’s financial results
is included from time to time in the Company’s public reports filed with the SEC, including its Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K as well as the other documents the Company has filed, or will file, with the SEC,
including the Proxy Statement that the Company intends to file with the SEC in connection with the Company’s solicitation of proxies
for the meeting of shareholders to be held to approve, among other things, the proposed business combination. If any of these risks materialize
or the Company’s or the Target’s assumptions prove incorrect, actual results could differ materially from the results implied
by these forward-looking statements. There may be additional risks that neither the Company nor the Target presently know, or that the
Company and the Target currently believe are immaterial, that could also cause actual results to differ from those contained in the forward-looking
statements. In addition, forward-looking statements reflect the Company’s and the Target’s expectations, plans or forecasts
of future events and views as of the date of this Current Report on Form 8-K. Neither the Company nor the Target gives assurance that
either the Company or the Target, or the combined company, will achieve its expectations. The Company and the Target anticipate that
subsequent events and developments will cause their assessments to change. However, while the Company and the Target may elect to update
these forward-looking statements at some point in the future, the Company and the Target specifically disclaim any obligation to do so,
except as required by law. These forward-looking statements should not be relied upon as representing the Company’s or the Target’s
assessments as of any date subsequent to the date of this Current Report on Form 8-K. Accordingly, undue reliance should not be placed
upon the forward-looking statements.