Sable Offshore Corp. current report, 22 June 2023

Full document

Sable Offshore Corp. / Flame Acquisition Corp. Form 8-K Summary

Business context and reporting period

This Form 8-K was filed by Flame Acquisition Corp., a special purpose acquisition company, regarding events occurring on June 22, 2023. The filing is associated with the Sable transaction context, but the registrant identified in the filing is Flame Acquisition Corp., not Sable Offshore Corp.

Material financial terms

  • Flame Acquisition Corp. issued two unsecured, non-interest-bearing promissory notes to Flame Acquisition Sponsor LLC.
  • The Flame Expenses Note has a principal amount of $50,000.
  • The Sable Expenses Note has a principal amount of $100,000.
  • Total principal issued was $150,000.
  • Both notes are repayable in full upon consummation of the company’s initial business combination.
  • No revenue, profit, cash flow, margin, debt, liquidity, or operating performance metrics were reported in this filing.

Material changes, outlook, and unusual items

  • If a business combination is not completed, the notes generally will not be repaid and amounts owed will be forgiven, except to the extent the company has funds available outside its IPO trust account.
  • Upon completion of a business combination, the Sponsor may elect to convert all or part of the $50,000 Flame Expenses Note into working capital warrants at a rate of one warrant per $1 of principal converted.
  • The working capital warrants would have terms identical to the private placement warrants issued in connection with the IPO.
  • Customary events of default may accelerate the unpaid principal and other amounts due.
  • The notes were issued under the Securities Act Section 4(a)(2) registration exemption.
  • The filing provides no management guidance or operating outlook.

Important facts for investors to verify

  • Confirm the status and terms of the related business combination involving Sable Offshore Corp.
  • Verify whether either note was repaid, forgiven, or converted into warrants upon closing or termination of the transaction.
  • Review Exhibits 10.1 and 10.2 for the complete note terms, including events of default and repayment provisions.
  • Assess the potential dilution from any working capital warrants issued to the Sponsor.
  • Confirm the amount of cash available outside the IPO trust account if the business combination is not completed.