{"url_path":"/sec/cgctw/8-k/2026-06-10/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 Entry into a Material Definitive Agreement**","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-06-10","source_url":"https://www.sec.gov/Archives/edgar/data/2049662/0001104659-26-072433-index.html","accession_number":"0001104659-26-072433","cik":"0002049662","ticker":"FAC","issuer_name":"Factorial Energy Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/2049662/0001104659-26-072433-index.html","primary_entity_key":"0002049662","primary_entity_name":"Factorial Energy Inc."},"word_count":1536,"has_tables":true,"body_markdown":"**Item 1.01. Entry into a Material Definitive Agreement**\n\n \n\n**A&R Registration Rights Agreement**\n\n \n\nIn connection with the Closing, PubCo, Sponsor,\nCantor and certain stockholders of Factorial entered into an amended and restated registration rights agreement (“A&R Registration\nRights Agreement”). Pursuant to the A&R Registration Rights Agreement, among other things, PubCo agreed that, within 30 calendar\ndays following the Closing Date, PubCo will file with the Commission (at PubCo’s sole cost and expense) a registration statement\nregistering the resale of certain shares of PubCo Series A Common Stock held by or issuable to the parties thereto (the “Resale\nRegistration Statement”), and PubCo will use its commercially reasonable efforts to have the Resale Registration Statement declared\neffective as soon as reasonably practicable after the filing thereof. Such holders are entitled to customary piggyback registration rights\nand demand registration rights, including underwritten demands.\n\n \n\nThe PIPE Investors also have demand registration rights pursuant to\nthe terms of the Investor Stock Purchase Agreements.\n\n \n\n \n\n \n\nApproximately 80.6 million shares of PubCo Series A\nCommon Stock will be subject to registration rights pursuant to the A&R Registration Rights Agreement and Investor Stock Purchase\nAgreements immediately following the Closing, representing approximately 88.1% of the total issued and outstanding shares of PubCo Series A\nCommon Stock following the Business Combination. For more information, see “*Proposal No. 1 - The Business Combination Proposal\n- Ancillary Agreements - A&R Registration Rights Agreement*.”\n\n \n\nThe foregoing description for the A&R Registration\nRights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the A&R Registration\nRights Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report and is incorporated herein by reference.\n\n \n\n**Lock-Up Provisions of PubCo Bylaws**\n\n \n\nReference is made to the disclosure set forth\nbelow under Item 5.03 of this Current Report concerning the lock-up provisions in the PubCo Bylaws (as defined below), which is incorporated\nherein by reference.\n\n \n\n**A&R Warrant Agreement**\n\n \n\nIn connection with the Closing, PubCo and Continental\nStock Transfer & Trust Company entered into an amended and restated warrant agreement (“A&R Warrant Agreement”).\nReference is made to the disclosure in the Proxy Statement/Prospectus in the section titled “*Description of PubCo Securities\n– PubCo Warrants*,” which is incorporated herein by reference. This description is qualified in its entirety by reference\nto the full text of the A&R Warrant Agreement, a copy of which is attached as Exhibit 4.2 hereto and is incorporated herein by\nreference.\n\n \n\n**Indemnification Agreements**\n\n \n\nOn the Closing Date, PubCo entered into indemnification\nagreements with each of its directors and officers and, prior to the Closing Date, purchased directors’ and officers’ liability\ninsurance. The indemnification agreements require PubCo to indemnify its directors and officers to the fullest extent permitted under\nDelaware law.\n\n \n\nThe foregoing description of the indemnification\nagreements with each of the directors and officers does not purport to be complete and is qualified in its entirety by reference to the\nfull text of the forms of indemnification agreement, which are filed as Exhibit 10.14 and Exhibit 10.15 to this Current Report,\nrespectively, and are incorporated herein by reference.\n\n \n\n**Factorial Energy Inc. 2026 Equity Incentive Plan**\n\n \n\nAt the EGM, CGC shareholders approved the Factorial\nEnergy Inc. 2026 Equity Incentive Plan (the “PubCo Incentive Plan”), which became effective on the day immediately prior to\nthe Closing. The PubCo Incentive Plan allows PubCo to make equity and equity-based incentive awards to officers, employees, non-employee\ndirectors and consultants. The board of directors of PubCo (the “PubCo Board”) anticipates that providing such persons with\na direct stake in PubCo will assure a closer alignment of the interests of such individuals with those of PubCo and its stockholders,\nthereby stimulating their efforts on PubCo’s behalf and strengthening their desire to remain with PubCo.\n\n \n\nThe PubCo Incentive Plan will be administered\nby the PubCo Board, the compensation committee of the PubCo Board or such other similar committee pursuant to the terms of the PubCo Incentive\nPlan. The plan administrator, which initially will be the compensation committee of the PubCo Board, will have full power to select, from\namong the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants\nand to determine the specific terms and conditions of each award, subject to the provisions of the PubCo Incentive Plan. The plan administrator\nmay delegate to a subcommittee consisting of one or more members of the PubCo Board, or a committee consisting of one or more officers,\nthe authority to grant awards to employees who are not subject to the reporting and other provisions of Section 16 of the Securities\nExchange Act of 1934, as amended (the “Exchange Act”) and not members of the delegated subcommittee or committee, subject\nto certain limitations and guidelines.\n\n \n\n \n\n \n\nThe total number of shares of PubCo Series A\nCommon Stock initially reserved for issuance under the PubCo Incentive Plan was 21,000,000 shares (the “Initial Limit”). The\nPubCo Incentive Plan provides that the number of shares reserved and available for issuance thereunder will automatically increase on\nJanuary 1, 2027 and each January 1 thereafter by (i) 5% of the sum of (a) the number of shares of PubCo Common Stock\nissued and outstanding and (b) the number of shares of PubCo Series A Common Stock issuable pursuant to the exercise of any\noutstanding, pre-funded warrants to acquire PubCo Common Stock for a nominal exercise price (“Outstanding Shares”) on the\nimmediately preceding December 31 or (ii) such lesser number of shares as determined by the administrator of the PubCo Incentive\nPlan (the “Annual Increase”). These limits are subject to adjustment in the event of a reorganization, recapitalization, reclassification,\nstock split, stock dividend, extraordinary cash dividend, reverse stock split or other similar change in PubCo’s capitalization.\nThe maximum aggregate number of shares of PubCo Series A Common Stock that may be issued upon exercise of incentive stock options\nunder the PubCo Incentive Plan shall not exceed the Initial Limit cumulatively increased on January 1, 2027 and on each January 1\nthereafter by the lesser of the Annual Increase or 7,250,000 shares of PubCo Series A Common Stock, subject, in each case, to any\nadjustments permitted under the PubCo Incentive Plan. Shares of PubCo Series A Common Stock underlying any awards under the PubCo\nIncentive Plan that are forfeited, canceled, held back upon exercise of an option or settlement of an award to cover the exercise price\nor tax withholding, reacquired by PubCo prior to vesting, satisfied without the issuance of stock or otherwise terminated (other than\nby exercise) are added back to the shares of PubCo Series A Common Stock available for issuance under the PubCo Incentive Plan and,\nto the extent permitted under Section 422 of the Code and the regulations promulgated thereunder, the shares that may be issued as\nincentive stock options. Shares repurchased by PubCo on the open market will not be added to the shares of available for issuance under\nthe PubCo Incentive Plan. A more complete summary of the terms of the PubCo Incentive Plan is included in the Proxy Statement/Prospectus\nin the section titled “*Proposal No. 6 - The Incentive Plan Proposal*”. That summary and the foregoing description\nof the PubCo Incentive Plan are qualified in their entirety by reference to the full text of the PubCo Incentive Plan, a copy of which\nis filed as Exhibit 10.17 to this Current Report and is incorporated herein by reference.\n\n \n\n**Factorial Energy Inc. 2026 Employee Stock Purchase Plan**\n\n \n\nAt the EGM, CGC shareholders approved the Factorial\nEnergy Inc. 2026 Employee Stock Purchase Plan (the “ESPP”), which became effective on the day immediately prior to the Closing.\nThe ESPP has two components: a component intended to qualify as an “employee stock purchase plan” within the meaning of Section 423\nof the Code (the “423 Component”) and a component that is not intended to so qualify, (the “Non-423 Component”).\nExcept as otherwise provided, the Non-423 Component will be operated and administered in the same manner as the 423 Component, except\nwhere prohibited by law.\n\n \n\nThe number of shares of PubCo Common Stock initially\nreserved and authorized for issuance under the ESPP was 1,830,211 shares of PubCo Series A Common Stock. The ESPP provides that the\nnumber of shares reserved and available for issuance thereunder will automatically increase each January 1, beginning on January 1,\n2027 and ending on January 1, 2036, by the least of (i) 2% of our Outstanding Shares on the immediately preceding December 31,\n(ii) 3,000,000 shares of PubCo Series A Common Stock and (iii) such number of shares of PubCo Series A Common Stock\nas determined by the administrator of the ESPP. If our capital structure changes because of a stock dividend, stock split or similar event,\nthe number of shares that can be issued under the ESPP will be appropriately adjusted.\n\n \n\nA more complete summary of the terms of the ESPP\nis included in the Proxy Statement/Prospectus in the section titled “*Proposal No. 7 - The ESPP Proposal*”. That\nsummary and the foregoing description of the ESPP are qualified in their entirety by reference to the full text of the ESPP, a copy of\nwhich is filed as Exhibit 10.18 to this Current Report and incorporated herein by reference."}