Item 1.01. Entry into a Material Definitive Agreement.
Stockholders' Agreement
On January 25, 2022, in connection with the completion of the Business
Combination and as contemplated by the Equity Purchase Agreement, the Company,
the Existing Sky Equityholders and the Sponsor entered into a stockholders'
agreement (the "Stockholders' Agreement"). The material terms of the
Stockholders' Agreement are described in the section of the Proxy Statement
beginning on page 113 titled "Proposal No. 1 - The Business Combination Proposal
- Related Agreements - Stockholders' Agreement and Election of Directors." Such
description is qualified in its entirety by the full text of the Stockholders'
Agreement, which is included as Exhibit 10.1 to this Current Report on Form 8-K
(this "Report") and is incorporated herein by reference.
Registration Rights Agreement
On January 25, 2022, in connection with the completion of the Business
Combination and as contemplated by the Equity Purchase Agreement, Sky, the
Existing Sky Equityholders and Sponsor entered into a registration rights
agreement (the "Registration Rights Agreement"). The material terms of the
Registration Rights Agreement are described in the section of the Proxy
Statement beginning on page 128 titled "Proposal No. 1 - The Business
Combination Proposal - Related Agreements -Registration Rights Agreement." Such
description is qualified in its entirety by the text of the Registration Rights
Agreement, which is included as Exhibit 10.2 to this Report and is incorporated
herein by reference.
Tax Receivable Agreement
On January 25, 2022, in connection with the completion of the Business
Combination and as contemplated by the Equity Purchase Agreement, the Company,
Sky, the Existing Sky Equityholders and Tal Keinan, as the TRA Holder
Representative, entered into a tax receivable agreement (the "Tax Receivable
Agreement"). The material terms of the Tax Receivable Agreement are described in
the section of the Proxy Statement beginning on page 110 titled "Proposal No. 1
- The Business Combination Proposal - Related Agreements - Tax Receivable
Agreement." Such description is qualified in its entirety by the text of the Tax
Receivable Agreement, which is included as Exhibit 10.3 to this Report and is
incorporated herein by reference.
A&R Operating Agreement
On January 25, 2022, in connection with the completion of the Business
Combination and as contemplated by the Equity Purchase Agreement, the Company,
Sky and each of the Existing Sky Equityholders entered into the Third A&R
Operating Agreement, which, among other things, (i) restructured the
capitalization of Sky, and (ii) appointed the Company as the managing member of
Sky. The material terms of the Third A&R Operating Agreement are described in
the section of the Proxy Statement beginning on page 110 titled "Proposal No. 1
- The Business Combination Proposal - Related Agreements - A&R Operating
. . .
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information set forth in the "Introductory Note" above is incorporated into
this Item 2.01 by reference. On January 25, 2022, the Business Combination was
approved by the stockholders of YAC at a special meeting of stockholders (the
"Special Meeting"). The Business Combination was completed on January 25, 2022.
Consideration to YAC's Stockholders in the Business Combination
In connection with the Business Combination, holders of 12,061,041 shares of
Class A Common Stock exercised their right to redeem those shares for cash at an
approximate price of $10.20 per share, for an aggregate of approximately $123
million, which was paid to such holders on the Closing Date.
Upon completion of the Business Combination, 3,399,724 shares of Sponsor Stock
held by the Sponsor converted into shares of Class A Common Stock at the closing
of the Business Combination. Following such conversion, the Sponsor intends to
transfer 206,250 shares to Glazer Capital LLC and an aggregate of 75,000 shares
to YAC's former independent directors that resigned upon the closing of the
Business Combination.
Consideration Paid to the Existing Sky Equityholders in the Business Combination
The consideration paid to the Existing Sky Equityholders in connection with the
Business Combination consisted of 42,192,250 shares of Class B Common Stock.
The material terms and conditions of the Equity Purchase Agreement are described
in the section entitled "Proposal No. 1 - The Business Combination Proposal"
beginning on page 98 of the Proxy Statement, which are incorporated herein by
reference.
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Company Securities Outstanding Following the Business Combination
On the Closing Date, all of YAC's outstanding units separated into their
component parts of one share of YAC Class A Common Stock and one half of one YAC
Warrant. Immediately after the Business Combination, there were 14,937,581
shares of Class A Common Stock, Warrants to purchase 14,519,218 shares of Class
A Common Stock (including 7,719,779 private placement warrants) and 42,192,250
shares of Class B Common Stock issued and outstanding. On the Closing Date,
there were 42,192,250 Sky Common Units outstanding (excluding Sky Common Units
held by the Company) and 2,807,750 Sky Incentive Units outstanding. The Sky
Incentive Equity Units are convertible, subject to the terms of the Third
Amended and Restated Operating Agreement of Sky, into Sky Common Units, which
are redeemable for shares of Class A Common Stock at each Sky Common Unit
holder's election.
FORM 10 INFORMATION
Forward-Looking Statements
Some of the information contained in this Current Report on Form 8-K, or
incorporated herein by reference, contains forward-looking statements. When
. . .
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On the Closing Date, all of YAC's outstanding units separated into their
component parts of one share of Class A Common Stock and one half of one Warrant
to purchase one share of Class A Common Stock and YAC's units ceased trading on
NYSE.
Item 3.02 Unregistered Sales of Equity Securities.
On January 25, 2022, in connection with the completion of the Business
Combination and as contemplated by the Equity Purchase Agreement and the
Subscription Agreements, the Company made the following issuances of
unregistered securities, as further described in the disclosure set forth under
the Introductory Note above:
? 4,500,000 shares of Class A common stock to Boston Omaha for aggregate
consideration of $45.0 million;
? 5,500,000 shares of Class A common stock to BOC YAC Funding LLC upon
conversion of series B preferred units in Sky for aggregate consideration of
$55.0 million; and
? 42,192,250 shares of Class B Common Stock to the Existing Sky Equityholders.
The Sky Common Units are redeemable for shares of Class A Common Stock at each
Sky Common Unit holder's election. Up to 42,192,250 shares of Class A Common
Stock are issuable upon the redemption of the Sky Common Units. The Company
issued the foregoing securities in transactions not involving an underwriter and
not requiring registration under Section 5 of the Securities Act of 1933, as
amended, in reliance on the exemption afforded by Section 4(a)(2) thereof.
Item 3.03 Material Modification to Rights of Security Holders
On the Closing Date, in connection with the completion of the Business
Combination, the Company's Certificate of Incorporation and Bylaws were amended
and restated. Pursuant to the A&R Certificate of Incorporation, there are
260,000,000 shares authorized, of which 200,000,000 shares are shares of Class A
Common Stock, par value $0.0001 per share, 50,000,000 shares are shares of Class
B Common Stock, par value $0.0001 per share, and 10,000,000 shares are shares of
preferred stock, par value $0.0001 per share. The disclosure set forth in the
sections titled "Description of YAC Securities" and "Description of SHG
Corporation Securities" in the Proxy Statement is incorporated herein by
reference.
The foregoing description of the A&R Certificate of Incorporation and Bylaws of
the Company does not purport to be complete and is qualified in its entirety by
the terms of the A&R Certificate of Incorporation and Bylaws of the Company,
which are attached hereto as Exhibits 3.1 and 3.2, respectively, and are
incorporated herein by reference.
The material terms of each of the A&R Certificate of Incorporation and the
Bylaws and the general effect upon the rights of holders of the Company's
capital stock are included in the Proxy Statement under the sections titled
"Proposal No. 1 - The Business Combination Proposal - Related Agreements - A&R
Certificate of Incorporation," "Proposal No. 1 - The Business Combination
Proposal - Related Agreements - Anti-Takeover Effects of the A&R Certificate of
Incorporation and the SHG Corporation Bylaws" and "Description of SHG
Corporation Securities" beginning on pages 108, 109 and 217 of the Proxy
Statement, respectively, which are incorporated herein by reference.
Item 4.01 Change in Registrant's Certifying Accountant.
On January 25, 2022, the Audit Committee of the Board of Directors approved the
engagement of EisnerAmper LLP ("EA") as the Company's independent registered
public accounting firm to audit the Company's consolidated financial statements
as of and for the year ending December 31, 2022.
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EA served as independent registered public accounting firm of Sky prior to the
Business Combination. Accordingly, KPMG LLP ("KPMG"), YAC's independent
registered public accounting firm prior to the Business Combination, was
informed that it would be replaced by EA as the Company's independent registered
public accounting firm following completion of its audit of YAC's financial
statements as of and for the year ended December 31, 2021, which consists only
of the accounts of the pre-Business Combination special purpose acquisition
company, YAC.
The audit report of KPMG on YAC's, the Company's legal predecessor, financial
statements as of December 31, 2020 and for the period from August 25, 2020
(inception) to December 31, 2020 did not contain an adverse opinion or a
disclaimer of opinion, and was not qualified or modified as to uncertainties,
audit scope or accounting principles. As discussed in Note 2 to the financial
statements, the 2020 financial statements have been restated to correct certain
misstatements.
During the period from August 25, 2020 (inception) to December 31, 2020 and the
subsequent interim period through January 25, 2022, there were no (1)
disagreements between YAC and KPMG on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to their satisfaction would have caused them to
make reference in connection with their opinion to the subject matter of the
disagreements and (2) no "reportable events" (as defined in Item 304(a)(1)(v) of
Regulation S-K under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) except as described in the following paragraph.
On May 24, 2021, following the issuance of the statement regarding the
accounting and reporting considerations for warrants issued by special purpose
acquisition companies entitled "Staff Statement on Accounting and Reporting
Considerations for Warrants Issued by Special Purpose Acquisition Companies
("SPACs")" by the Commission, YAC's management and the Audit Committee of YAC's
board of directors, after consultation with management, concluded that YAC's
financial statements as of December 31, 2020 and the period from August 25, 2020
(inception) to December 31, 2020 (the "Original Financial Statements") should no
longer be relied upon and are to be restated in order to correct a
classification error. The Original Financial Statements were restated in the
financial statements accompanying YAC's Annual Report on Form 10-K/A filed with
the Commission on May 24, 2021. As part of such process, YAC identified a
material weakness in its internal controls over financial reporting, solely
related to YAC's accounting for warrants.
The Company has provided KPMG with a copy of the foregoing disclosures and has
requested that KPMG furnish the Company with a letter addressed to the SEC
stating whether it agrees with the statements made by the Company set forth
above. A copy of KPMG's letter dated January 31, 2022 is filed as Exhibit 16.1
to this Current Report on Form 8-K.
Item 5.01. Changes in Control of Registrant.
The information set forth under in the sections titled "Proposal No. 1 - The
Business Combination Proposal" beginning on page 98 of the Proxy Statement and
"Introductory Note" and Item 2.01 in this Current Report on Form 8-K is
incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Election of Directors and Appointment of Officers
On January 25, 2022 each of Tal Keinan, Walter Jackson, Alethia Nancoo, Alex B.
Rozek, Lysa Leiponis, Nick Wellmon and Robert S. Rivkin were elected as
directors of the Company, with Tal Keinan appointed as chairman of the board, in
each case, effective upon the completion of the Business Combination.
Biographical information with respect to such directors is set forth in the
section entitled "SHG Corporation Management After the Business Combination"
beginning on page 189 of the Proxy Statement and is incorporated herein by
reference.
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On January 25, 2022, Tal Keinan was appointed to serve as the Chief Executive
Officer, Alex Saltzman was appointed to serve as the Chief Operating Officer,
Francisco Gonzalez was appointed to serve as Chief Financial Officer, Michael
Schmitt was appointed to serve as the Chief Accounting Officer and Gerald Adler
was appointed to serve as the General Counsel and Corporate Secretary, in each
case, effective upon the closing of the Business Combination. Biographical
information with respect to Tal Keinan, Francisco Gonzalez and Alex Saltzman is
set forth in the section entitled "SHG Corporation Management After the Business
Combination" beginning on page 189 of the Proxy Statement is incorporated herein
by reference.
Michael Schmitt, the Company's Chief Accounting Officer, has over fourteen years
of accounting and audit experience, most recently at PricewaterhouseCoopers LLP
("PwC"), where he held roles of increasing responsibility within the firm's
audit practice since 2012. While at PwC, Mr. Schmitt most recently served as an
Assurance Director from July 2021 until January 2022 and an Assurance Senior
Manager from July 2019 until June 2021. During Mr. Schmitt's time at PwC, he
served clients primarily in the transportation, travel, and logistics
industries, inclusive of airlines, aircraft leasing and finance companies, as
well and other multibillion-dollar SEC registrants in the consumer and
industrial sectors. Mr. Schmitt holds a Bachelor of Science in Accountancy from
Bryant University and is a licensed Certified Public Accountant and a member of
the American Institute of Certified Public Accountants.
Gerald Adler, the Company's interim General Counsel and Corporate Secretary, has
over thirty-five years of experience practicing corporate law. Before joining
the Company, Mr. Adler operated a solo practice in 2020, where he advised
businesses, start-ups, and venture capital and private equity firms on general
corporate and commercial law matters including mergers, acquisitions,
financings, capital raises, restructuring, employment matters and commercial
licenses and agreements. He previously served as Chief Operating Officer and
General Counsel of Paine Schwartz Partners, LLC, a private equity firm
specializing in sustainable food chain investing, from 2012 until 2019, and
served as a Partner in the Corporate and Securities groups of Friedman Kaplan
Seiler & Adelman, LLP from 2008 until 2011, Dechert, LLP from 2005 until 2007
and Swidler Berlin Shereff Friedman from 1989 until 2004. Mr. Adler holds a
Bachelor of Arts in Economics from Yeshiva University and a J.D. from the
Columbia University School of Law. He is admitted to practice law in New York
and is a member of the New York City Bar Association.
Departure of Directors and Certain Officers
Effective upon the Closing Date, each of Adam K. Peterson, Sydney C. Atkins,
David J. Bronczek and Shanna N. Khan resigned as directors of the Company, and
Tal Keinan replaced Adam K. Peterson and Alex B. Rozek as chairman of the board
of directors, although Mr. Rozek will continue as a director of the Company.
Effective upon the Closing Date, each of Adam K. Peterson, Alex B. Rozek and
Joshua P. Weisenburger resigned as executive officers of the Company.
2022 Incentive Award Plan
On January 25, 2022, the Sky Harbour Group Corporation 2022 Incentive Award Plan
(the "2022 Incentive Award Plan") became effective. The 2022 Incentive Award
Plan was approved by YAC's stockholders at the Special Meeting on January 25,
2022. The purpose of the 2022 Incentive Award Plan is to promote the success and
enhance the value of the Company and Sky by attracting, retaining and motivating
selected employees, consultants and directors of the Company and Sky. The 2022
Incentive Award Plan provides for grants of stock-based compensation awards,
including without limitation, non-qualified stock options, incentive stock
options, stock appreciation rights, or SARs, restricted stock awards, restricted
stock unit awards, incentive unit awards other stock or cash based awards and
dividend equivalent awards. Employees, officers and consultants of the Company
or any parent or affiliate, including Sky, or any non-employee director of the
Company's board of directors are eligible to receive awards under the 2022
Incentive Award Plan. The 2022 Incentive Award Plan is administered by the
Company's board of directors which may delegate its duties and responsibilities
to committees of the Company's board of directors and/or officers, referred to
herein as the "plan administrator", subject to certain limitations that may be
. . .
Item 5.06. Change in Shell Company Status.
As a result of the Business Combination, YAC ceased being a shell company. The
material terms of the Business Combination are described in the section entitled
"Proposal No. 1 - The Business Combination Proposal" beginning on page 98 of the
Proxy Statement, in the information set forth under "Introductory Note" and in
the information set forth under Item 2.01 in this Current Report on Form 8-K,
each of which is incorporated herein by reference.
Item 9.01. Financial Statement and Exhibits.
(a) Financial statements of businesses acquired
The financial statements of Sky as of and for the years ended December 31, 2020
and 2019, the related notes and report of independent registered public
accounting firm thereto are set forth in the Proxy Statement beginning on page
F-56 and are incorporated herein by reference. The unaudited financial
statements of Sky as of and for the nine months ended September 30, 2021 and the
related notes thereto are set forth in the Proxy Statement beginning on page
F-32 and are incorporated herein by reference.
The financial statements of YAC as of the year ended December 31, 2020 and for
the period from August 25, 2020 (inception) to December 31, 2020, the related
notes and report of independent public accounting firm thereto are set forth in
the Proxy Statement beginning on page F-14 and are incorporated herein by
reference. The financial statements of YAC as of and for the nine months ended
September 30, 2021 and the related notes thereto are set forth in the Proxy
Statement beginning on page F-2 and are incorporated herein by reference.
(b) Pro Forma Financial Information
The information set forth in Exhibit 99.1 to this Current Report on Form 8-K,
which includes the unaudited pro forma condensed combined financial information
of the Company as of September 30, 2021 and for the year ended December 31, 2020
and the nine months ended September 30, 2021 is set forth in Exhibit 99.1 and is
incorporated herein by reference.
(d) Exhibits.
Exhibit No. Document
2.1* Equity Purchase Agreement, dated as of August 1, 2021, by and
among Yellowstone Acquisition Company and Sky Harbour LLC
(incorporated by reference from YAC's Form 8-K dated August 3,
2021)
3.1 Second Amended and Restated Certificate of Incorporation of
Yellowstone Acquisition Company
3.2 Bylaws of Sky Harbour Group Corporation
4.1 Warrant Agreement, dated October 21, 2020, between Yellowstone
Acquisition Company and Continental Stock Transfer & Trust Company,
as warrant agent (incorporated by reference from YAC's Form 8-K
dated October 26, 2020)
10.1* Stockholders' Agreement, dated as of January 25, 2022, by and
among Sky Harbour Group Corporation, Tal Keinan, Due West Partners
LLC, Center Sky Harbour LLC, BOC Yellowstone I LLC, and BOC
Yellowstone II LLC
10.2* Registration Rights Agreement, dated as of September 14, 2021 by
and among Sky Harbour LLC, the Existing Sky Equityholders, BOC YAC,
the Sponsor and the BOC PIPE investors
10.3* Tax Receivable Agreement, dated as of January 25, 2022, by and
among Sky Harbour Group Corporation, the Existing Sky Equityholders
and the TRA Holder Representative
10.4* Third Amended and Restated Operating Agreement of Sky Harbour
LLC
10.5† Sky Harbour Group Corporation 2022 Incentive Award Plan
10.6† Sky Harbour Group Corporation 2022 Incentive Award Plan - Form of
Restricted Stock Unit Agreement
10.7† Form of Director and Officer Indemnification Agreement
10.8† Employment Agreement with Francisco Gonzalez
10.9† Employment Agreement with Alex Saltzman
10.10 Trust Indenture between the Public Finance Authority and The Bank
of New York Mellon
10.11 Specimen Series 2021 Bonds (included as part of Exhibit 10.10)
10.12 Loan Agreement by and between the Public Finance Authority, Sky
Harbour Sugar Land Airport, LLC, Sky Harbour Opa Locka Airport, LLC,
Nashville Hangars LLC, APA Hangars LLC and DVT Hangars LLC.
10.13 Ground Sublease between Sunborne XVI, LTD. and APA Hangars LLC
10.14* Unsubordinated Ground Lease and Option to Lease Additional Land
between City of Phoenix and DVT Hangars LLC
10.15 Lease Agreement by and between The Metropolitan Nashville Airport
Authority and Sky Harbour, LLC
10.16* First Amendment to the Lease Agreement by and between The
Metropolitan Nashville Airport Authority and Nashville Hangars
LLC
10.17* Sublease Agreement by and between AA Acquisitions, LLC and Sky
Harbour Opa Locka Airport, LLC
10.18* First Amendment to Sublease Agreement between AA Acquisitions, LLC
and Sky Harbour Opa Locka Airport, LLC
10.19 Amended and Restated Standard Form Airport Corporate Hangar Land
Lease between the City of Sugar Land and Sky Harbour Sugar Land
Airport, LLC
10.20 Amendment No. 2 to the Standard Form Airport Corporate Hangar Land
Lease between the City of Sugar Land and Sky Harbour Sugar Land
Airport, LLC
16.1 Letter from KPMG LLP to the SEC, dated January 31, 2022
21.1 List of subsidiaries
99.1 Unaudited pro forma condensed combined financial information of
the Company as of September 30, 2021 and for the year ended December
31, 2020 and the nine months ended September 30, 2021
* Certain schedules and exhibits to this Exhibit have been omitted pursuant to
Item 601(a)(5) or Item 601(b)(10)(iv), as applicable, of Regulation S-K. The
Registrant agrees to furnish supplemental copies of all omitted exhibits and
schedules to the Securities and Exchange Commission upon its request.
† Indicates a management contract or compensatory plan.
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