TUSCAN HOLDINGS CORP. II Item 1.01 Entry into a Material Definitive Agreement.
On
Pursuant to the Merger Agreement, upon the closing ("Closing") of the transactions contemplated by the Merger Agreement (the "Transactions"), Merger Sub I will merge with and into Tuscan (the "First Merger"), with Tuscan surviving the First Merger as a wholly-owned subsidiary of Parentco, and, simultaneously with the First Merger, Merger Sub II will merge with and into the Company (the "Second Merger" and together with the First Merger, the "Mergers"), with the Company surviving the Second Merger as a wholly-owned subsidiary of Parentco.
The Merger Agreement contemplates a related business combination transaction
pursuant to which on the Closing Date a wholly-owned subsidiary of Parentco
would be merged with and into
Following the Mergers and the Southern Acquisition, (i) the Company, Southern and Tuscan will be wholly owned subsidiaries of Parentco, (ii) the security holders of Tuscan, the Company and Southern will be security holders of Parentco, (iii) Parentco will be the publicly traded company and (iv) Parentco's business will be the business of the Company and Southern.
The Company provides a regional air mobility platform with scheduled routes and
on demand charter flights operated by third-party Part 135 charter operators.
The Company intends to accelerate the adoption of green flying and develop
proprietary powertrain technology to electrify existing fleets. Southern is a
passenger operator of Cessna Grand Caravans in
Concurrently with the execution of the Merger Agreement, (i) the Company entered
into an Amended and Restated Share Purchase Agreement (the "Equity Line
Agreement") with
The Closing is expected to occur in the second half of 2022, following receipt of the required Tuscan Stockholder Approval (as defined below), Company Member Approval (as defined below) and the fulfilment of certain other conditions set forth in the Merger Agreement and described in this Current Report on Form 8-K.
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Merger Agreement
Conversion of
Pursuant to the Merger Agreement, at the effective time of the First Merger (the
"First Effective Time"), each shares of common stock of Tuscan, par value
Each warrant of Tuscan (the "Tuscan Warrants") that is outstanding immediately
prior to the First Effective Time will be exchanged for a warrant to purchase
one share of Parentco Common Stock (the "Parentco Warrant") on substantially the
same terms as were in effect for the Tuscan Warrants immediately prior to the
First Effective Time under the terms of the warrant agreement, dated
Tuscan expects that each of its units, consisting of one share of Tuscan Common Stock and one-half of one Tuscan Warrant, will be separated into its constituent securities immediately prior to the First Effective Time.
Conversion of
Closing Consideration
The aggregate consideration payable at the Closing (including amounts issuable
to the security holders of the Company and Southern) is a number of shares of
Parentco Common Stock equal to (i)
At the effective time of the Second Merger (the "Second Effective Time"), each ordinary share of the Company ("Ordinary Share") including Ordinary Shares issuable upon conversion of Company preferred shares (collectively, the "Company Shares," each a "Company Share") issued and outstanding immediately prior to the Second Effective Time (other than shares to be canceled as described in the Merger Agreement and shares as to which the holders have exercised their statutory dissenter's rights as described in the Merger Agreement) shall be canceled and converted into the right to receive the Company Closing Per Share Consideration. The "Company Closing Per Share Consideration" is a number of shares of Parentco Common Stock equal to (i) the Company Closing Share Consideration less the number of shares of Parentco Common Stock issued to stockholders of Southern at the Closing pursuant to the Southern Acquisition, divided by (ii) the total number of outstanding Ordinary Shares of the Company immediately prior to the Second Effective Time on a fully-diluted basis, including the Warrant Shares and the Note Shares (as defined below), and including the Ordinary Shares issuable upon conversion of Company preferred shares. The fully-diluted Ordinary Shares of the Company outstanding exclude (a) shares reserved under the Company's equity plans but not subject to issued and outstanding awards thereunder as of immediately prior to the First Effective Time and (b) any equity interest of any of the parties issuable in connection with SAFE Agreements and such other financings effected by the Company, Parentco or any of their respective subsidiaries after the execution of the Merger Agreement but prior to or concurrent with the Closing.
Each issued and outstanding warrant of the Company ("Company Warrant") that does not expire or terminate by its terms by virtue of the Second Merger will be converted into the right to receive the Company Closing Per Share Consideration for each Ordinary Share underlying the Company Warrant, assuming a net exercise of the Company Warrant and the conversion into Ordinary Shares of any preferred shares of the Company issuable upon such exercise (the "Warrant Shares"). Each convertible promissory note of the Company ("Company Convertible Note") that does not expire or terminate by its terms by virtue of the Second Merger will be converted into the right to receive the Company Closing Per Share Consideration for each Ordinary Share underlying the Company Convertible Note (the "Note Shares"). Each option to purchase Ordinary Shares ("Company Option") issued under the Company's 2016 Equity Incentive Plan, as amended (the "Plan"), whether vested or unvested, that is outstanding immediately prior to the Second Effective Time shall be automatically converted into an option to acquire the Company Closing Per Share Consideration for each Ordinary Share underlying the Company Option, and the exercise price will be correspondingly adjusted. Each outstanding award of restricted stock units granted by the Company with respect to the Company's Ordinary Shares ("Company RSU") that is then outstanding and unvested shall be fully vested, and shall be automatically converted into the Company Closing Per Share Consideration for each Ordinary Share underlying the Company RSU.
If any Ordinary Shares of the Company are, immediately prior to the Second Effective Time, subject to vesting conditions that are not accelerated at the Second Effective Time, then the shares of Parentco Common Stock received in respect of such Ordinary Shares will remain subject to the same vesting conditions.
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Earnout Consideration
The Merger Agreement provides for the payment of up to an aggregate of . . .
Item 7.01 Regulation FD Disclosure.
Press Release
Attached as Exhibit 99.1 to this Report is the press release jointly issued by
the parties on
The information set forth in this Item 7.01, including the exhibit attached hereto, is intended to be furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Cautionary Note Regarding Forward Looking Statements
Neither Tuscan, the Surf Entities, nor any of their respective affiliates makes any representation or warranty as to the accuracy or completeness of the information contained in this Current Report on Form 8-K. This Current Report on Form 8-K is not intended to be all-inclusive or to contain all the information that a person may desire in considering the proposed Transactions discussed herein. It is not intended to form the basis of any investment decision or any other decision in respect of the proposed Transactions.
This Current Report on Form 8-K and the exhibits filed or furnished herewith include "forward-looking statements" made pursuant to the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 with respect to the proposed transactions between Tuscan and the Surf Entities, including statements regarding the benefits of the transaction, the anticipated timing of the Transactions, the business of the Surf Entities and the markets in which they operate. Actual results may differ from expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements generally are identified by the words or phrases such as "aspire," "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "will be," "will continue," "will likely result," "could," "should," "believe(s)," "predicts," "potential," "continue," "future," "opportunity," seek," "intend," "strategy," or the negative version of those words or phrases or similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Tuscan's and the Surf Entities' expectations with respect to future performance and anticipated financial impacts of the proposed Transactions.
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These forward-looking statements involve significant risks and uncertainties
that could cause the actual results to differ materially from the expected
results. Most of these factors are outside Tuscan's and the Surf Entities'
control and are difficult to predict. Factors that may cause such differences
include, but are not limited to: the occurrence of any event, change or other
circumstances that could impact the acquisition of Southern to result in a
leading air mobility platform with scheduled routes and on-demand charter
flights operated by Southern and other third-party operators; the Company's
ability to upgrade Southern's current fleet of nearly 40 Cessna Grand Caravans
to hybrid electric aircraft using technology; the ability of the Company's first
generation of electrified aircraft to meaningfully decarbonize aviation and help
alleviate the environmental impact of flying by reducing carbon emissions by as
much as 50 percent; the risk that the benefits of the Merger may not be
realized; the risk that the Merger may not be completed in a timely manner or at
all, which may adversely affect the price of Tuscan's securities; the failure to
satisfy the conditions to the consummation of the Merger, including the failure
of Tuscan's stockholders to approve and adopt the Merger Agreement; the
occurrence of any event, change or other circumstance that could give rise to
the termination of the Merger Agreement; the outcome of any legal proceedings
that may be initiated following announcement of the Merger; the combined
company's continued listing on Nasdaq after Closing; the risk that the proposed
transaction disrupts current plans and operations of the Surf Entities as a
result of the announcement and consummation of the Merger; costs related to the
Merger; changes in applicable laws or regulations; the possibility that the
combined company may be adversely affected by other economic, business, and/or
competitive factors; the occurrence of any event, change or other circumstances
that could give rise to the termination of the definitive agreements with
AeroTEC and magniX to accelerate development of electrified commercial aircraft
or the inability of SAM to realize the anticipated benefits of the these
agreements; the ability of the Company, along with AeroTEC and magniX, to
develop and certify hybrid and fully-electric powertrains for new and existing
Tuscan and the Surf Entities caution that the foregoing list of factors is not exclusive. Tuscan and the Surf Entities caution readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Neither Tuscan nor any of the Surf Entities undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
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Additional Information and Where to Find It
This document is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the transaction and does not constitute an offer to sell, buy, or exchange or the solicitation of an offer to sell, buy, or exchange any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, purchase, or exchange of securities or solicitation of any vote or approval in any jurisdiction in contravention of applicable law.
In connection with the proposed transaction between Tuscan and the Surf
Entities, Parentco will file with the
Participants in the Solicitation
Tuscan, the Surf Entities, and certain of their respective directors, executive officers, and employees may be considered to be participants in the solicitation . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits: Exhibit Description 2.1* Merger Agreement, dated as ofMay 17, 2022 , by and among Tuscan and the Surf Entities. 10.1 Confidentiality and Lockup Agreement, dated as ofMay 17, 2022 . 10.2 Voting Support Agreement, dated as ofMay 17, 2022 . 10.3 Sponsor Letter Agreement, dated as ofMay 17, 2022 . 10.4 Form of Registration Rights Agreement. 99.1Joint Press release, datedMay 18, 2022 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Certain exhibits and schedules to this Exhibit have been omitted in accordance
with Regulation S-K Item 601(b)(2).
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