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.
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 contained in this Current Report on Form 8-K, and incorporated herein by reference, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s management’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. These forward-looking statements are based on information available as of the date of this Current Report on Form 8-K, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and the Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to:
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expectations regarding the Company’s strategies and future financial performance, including the Company’s future business plans or objectives, prospective performance and commercial opportunities and competitors, services, pricing, marketing plans, operating expenses, market trends, revenues, liquidity, cash flows and uses of cash, capital expenditures, and the Company’s ability to invest in growth initiatives;
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the outcome of any legal proceedings that may be instituted against the Company or Sky in connection with the Business Combination and related transactions;
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the risk that the proposed Business Combination disrupts Sky’s current operations as a result of the announcement and consummation of the transactions described herein;
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Sky’s limited operating history makes it difficult to predict future revenues and operating results;
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financial projections with respect to Sky may not prove to be reflective of actual financial results;
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the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, and the ability of the combined business to grow and manage growth profitably;
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costs related to the Business Combination;
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changes in applicable laws or regulations;
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the possibility that the Company or Sky may be adversely affected by other economic, business, and/or competitive factors; and
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other risks and uncertainties indicated in the Proxy Statement, including those set forth under the section entitled “Risk Factors.”
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Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may vary in material respects from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements.
Business
The information set forth in the section entitled “Other Information about the SHG Corporation” beginning on page 153 of the Proxy Statement is incorporated herein by reference.
Risk Factors
The information set forth in the section entitled “Risk Factors” beginning on page 48 of the Proxy Statement is incorporated herein by reference.
Selected Consolidated Historical Financial and Other Information
Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of YAC and Sky. Reference is further made to the disclosure contained in the Proxy Statement in the sections titled “Comparative Share Information” beginning on page 47.
Unaudited Pro Forma Condensed Combined 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 and Sky is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk
Reference is made to the disclosure contained in the Proxy Statement in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Sky” beginning on page 174 and that information is incorporated herein by reference.
Facilities
The information set forth in the section entitled “Other Information about SHG Corporation — Initial Portfolio” on page 155 of the Proxy Statement is incorporated herein by reference.
Security Ownership of Certain Beneficial Owners and Management
Following the Business Combination, Sky is a subsidiary of the Company. In its capacity as managing member of Sky, the Company will operate and control all of Sky’s business and affairs and will consolidate Sky’s financial results into the Company’s financial statements.
The following table sets forth information regarding the beneficial ownership of the Company’s common stock as of the Closing Date by:
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each person known to be the beneficial owner of more than 5% of the Company’s outstanding ordinary shares;
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each director and each of the Company’s named executive officers; and
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all current executive officers and directors as a group.
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The information below is based on an aggregate of 14,937,581 shares of Class A Common Stock and 42,192,250 shares of Class B Common Stock issued and outstanding as of the Closing Date, and does not reflect any possible redemptions from funds which acquired Class A Common Stock in the public markets and have not yet filed a corresponding Schedule 13G reflecting a change in ownership. Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if she, he or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Voting power represents the combined voting power of shares of Class A Common Stock and Class B Common Stock owned beneficially by such person. On all matters to be voted upon, holders of shares of Class A Common Stock and Class B Common Stock will vote together as a single class on all matters submitted to the stockholders for their vote or approval. Holders of Class A Common Stock and Class B Common Stock are entitled to one vote per share on all matters submitted to the stockholders for their vote or approval.
Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all shares of Common Stock beneficially owned by the individuals below:
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Class A
Common Stock
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Class B
Common Stock
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Combined
Voting
Power
(%)(2)
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Name and Address of Beneficial Owner(1)
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Number
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%
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Number
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%
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Five Percent Holders:
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Boston Omaha Corporation(3)
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4,500,000
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30.1
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%
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-
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-
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7.9
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%
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BOC Yellowstone LLC(4)
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3,193,474
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21.4
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%
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-
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-
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5.6
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%
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BOC YAC Funding LLC(5)
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5,500,000
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36.8
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%
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-
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-
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9.6
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%
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Hudson Bay Capital Management LP and Sandler Gerber(6)
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900,000
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6.0
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%
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-
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-
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1.6
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%
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Glazer Capital, LLC and Paul J. Glazer(7)
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1,265,352
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8.5
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%
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-
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-
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2.2
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%
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Karpus Management LLC(8)
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1,717,277
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11.5
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%
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-
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-
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3.0
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%
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Polar Asset Management Partners Inc.(9)
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984,371
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6.6
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%
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-
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-
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1.7
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%
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Barclays PLC and Barclays Bank PLC(10)
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759,608
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5.1
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%
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-
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-
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1.3
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%
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Shaolin Capital Management LLC(11)
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750,955
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5.0
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%
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-
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-
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1.3
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%
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Due West Partners LLC(12)(15)
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-
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-
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11,640,460
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27.6
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%
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20.4
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%
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Center Sky Harbour LLC(13)
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-
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-
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11,637,960
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27.6
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%
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20.4
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%
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Directors and Executive Officers:
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-
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Tal Keinan
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-
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-
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17,943,792
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42.5
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%
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31.4
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%
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Alex Saltzman
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-
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-
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-
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-
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-
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Francisco Gonzalez
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-
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-
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-
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-
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-
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Michael Schmitt
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-
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-
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-
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-
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-
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Gerald Adler
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-
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-
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-
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-
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-
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Walter Jackson
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-
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-
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412,072
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*
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*
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Alethia Nancoo
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-
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-
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-
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-
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Alex B. Rozek(14)
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13,399,724
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89.7
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%
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-
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-
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23.5
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%
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Lysa Leiponis
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-
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-
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-
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-
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-
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Nick Wellmon(15)
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-
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-
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11,640,460
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27.6
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%
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20.4
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%
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Robert S. Rivkin
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-
|
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-
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|
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-
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|
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-
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|
|
|
-
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|
All directors and executive officers, as a group (11 individuals)
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13,399,724
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89.7
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%
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29,996,324
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|
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|
71.2
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%
|
|
|
76.0
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%
|
|
(1)
|
This table is based on 57,129,831 shares of Common Stock outstanding as of January 25, 2022. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to shares. Unless otherwise noted, the business address of each of those listed in the table above is c/o Sky Harbour Group Corporation, 136 Tower Road, Suite 205, Westchester County Airport, White Plains, NY 10604.
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(2)
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Percentage of combined voting power represents voting power with respect to all shares of Class A common stock and Class B Common Stock, voting together as a single class. Holders of Class A Common Stock and Class B Common Stock are entitled to one vote per share on all matters submitted to the stockholders for their vote or approval.
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(3)
|
The business address of Boston Omaha Corporation is 1601 Dodge Street, Suite 3300, Omaha, Nebraska 68102.
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(4)
|
The business address of BOC Yellowstone LLC is c/o BOC Yellowstone LLC 1601 Dodge Street, Suite 3300, Omaha, Nebraska 68102.
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(5)
|
The business address of BOC YAC Funding LLC is c/o BOC Yellowstone LLC 1601 Dodge Street, Suite 3300, Omaha, Nebraska 68102.
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(6)
|
According to Schedule 13G filed on filed on February 11, 2021. The business address of Hudson Bay Capital Management LP and Mr. Sander Gerber is 777 Third Avenue, 30th Floor, New York, New York 10017.
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(7)
|
According to Schedule 13G filed on February 16, 2021. The business address of Glazer Capital, LLC and Mr. Paul J. Glazer is 250 West 55th Street, Suite 30A, New York, New York 10019.
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(8)
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According to Schedule 13G filed on July 9, 2021. Karpus Management, Inc., d/b/a Karpus Investment Management‘s business address is 183 Sully's Trail, Pittsford, New York 14534.
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(9)
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According to Schedule 13G filed on February 11, 2021. The business address of Polar Asset Management Partners Inc. is 401 Bay Street, Suite 1900, PO Box 19, Toronto, Ontario M5H 2Y4, Canada.
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(10)
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According to Schedule 13G filed on February 11, 2021. The business address of Barclays PLC and Barclays Bank PLC is 1 Churchill Place, London, E14 5HP, England.
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(11)
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According to Schedule 13G filed on February 24, 2021. The business address of Shaolin Capital Management LLC is 1460 Broadway, New York, New York 10036.
|
|
(12)
|
The business address of Due West Partners LLC is 8260 SE 31st St., Mercer Island, Washington 98040.
|
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(13)
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The business address of Center Sky Harbour LLC is 9355 Wilshire Blvd, Suite 350, Beverly Hills, California 90210.
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(14)
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The business address of Mr. Rozek is c/o Boston Omaha Corporation 1601 Dodge Street, Suite 3300, Omaha, Nebraska 68102. Mr. Rozek is an officer, director and stockholder of Boston Omaha Corporation. Mr. Rozek is a manager of BOC Yellowstone LLC, which is owned by Boston Omaha Corporation and is the sole managing member of BOC Yellowstone II LLC. As such, he may be deemed to have or share beneficial ownership of the Class A common stock held directly by BOC Yellowstone LLC and BOC Yellowstone II LLC. Mr. Rozek disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary indirect interest he may have therein as a stockholder of Boston Omaha Corporation.
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(15)
|
Represents shares held by Due West Partners LLC (“Due West”). Mr. Wellmon is the Founder and Managing Partner of Due West, and as such has voting and investment discretion with respect to the shares of Class B Common Stock held of record by Due West and may be deemed to have shared beneficial ownership of the shares of Class B Common Stock held directly by Due West. Mr. Wellmon disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary indirect interest he may have therein.
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Directors and Executive Officers
Information with respect to the Company’s directors and executive officers immediately after the closing is set forth in the section entitled “SHG Corporation Management After the Business Combination” beginning on page 189 in the Proxy Statement and Item 5.02 of this Current Report on Form 8-K and is incorporated herein by reference.
Each of Tal Keinan, Walter Jackson, Alethia Nancoo, Alex B. Rozek, Lysa Leiponis, Nick Wellmon and Robert S. Rivkin were elected to serve as directors of the Company. Mr. Keinan was appointed as Chairman of the board of directors, and Ms. Leiponis was appointed as lead independent director. The size of the board is seven members. Biographical information for these individuals is set forth in the section entitled “SHG Corporation Management After the Business Combination” beginning on page 189 in the Proxy Statement and is incorporated herein by reference. In accordance with the Second Amended and Restated Certificate of Incorporation of the Company (the “A&R Certificate of Incorporation”), each director will have a term that expires at the Company’s annual meeting of stockholders in 2022 or until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death.
The Board appointed Ms. Leiponis, Mr. Jackson and Mr. Rivkin to serve on the Audit Committee, with Mr. Jackson serving as its chairman. The Board appointed Mr. Keinan, Ms. Leiponis, Ms. Nancoo, Mr. Jackson, Mr. Wellmon and Mr. Rozek to serve on the Compensation Committee, with Ms. Nancoo serving as its chairman. The Board appointed Mr. Kienan, Ms. Leiponis, Ms. Nancoo, Mr. Rivkin and Mr. Rozek to serve on the Nominating and Corporate Governance Committee, with Ms. Leiponis serving as its chairman. Information with respect to the Company’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee is set forth in the section entitled “SHG Corporation Management After the Business Combination — Committees of the Board of Directors” beginning on page 190 of the Proxy Statement and is incorporated herein by reference.
In connection with the completion of the Business Combination, Tal Keinan was appointed to serve as the Company’s Chief Executive Officer, Alex Saltzman was appointed to serve as the Chief Operating Officer and Francisco Gonzalez was appointed to serve as Chief Financial Officer. Biographical information for these individuals 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 by reference herein.
Executive Compensation
The information set forth in the section entitled “Compensation of Executive Officers and Directors After the Business Combination” beginning on page 195 of the Proxy Statement, which includes the executive compensation information of Sky is incorporated herein by reference.
Director Compensation
The information set forth in the section entitled “Compensation of Executive Officers and Directors After the Business Combination” beginning on page 195 of the Proxy Statement, which includes the director compensation information of Sky is incorporated herein by reference.
Certain Relationships and Related Transactions
The information set forth in the sections entitled “Certain Relationships and Related Party Transactions — YAC’s Related Party Transactions” beginning on page 202 of the Proxy Statement and “Certain Relationships and Related Party Transactions — Sky’s Related Party Transactions” beginning on page 204 of the Proxy Statement are incorporated herein by reference.
Director Independence
At the closing of the Business Combination, the board of directors of the Company adopted NYSE American listing standards to assess director independence. The board of directors has determined that each of Walter Jackson, Alethia Nancoo, Lysa Leiponis, Nick Wellmon and Robert S. Rivkin qualifies as “independent” under the listing requirements of NYSE American. Mr. Jackson is also an “audit committee financial expert” under the rules of the Securities and Exchange Commission.
Legal Proceedings
The information set forth in the section entitled “Other Information about Sky—Legal Proceedings” on page 173 of the Proxy Statement is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Prior to the Closing Date, the Company’s publicly traded units, common stock and warrants were listed on The New York Stock Exchange (“NYSE”) under the symbols “YSACU,” “YSAC,” and “YSACW,” respectively. Upon the closing, the Company’s Class A Common Stock and warrants were listed on the NYSE American under the symbols “SKYH” and “SKYH WS,” respectively. The Company’s publicly traded units automatically separated into their component securities upon the closing of the Business Combination, and as a result, no longer trade as a separate security and were delisted from NYSE.
As of January 25, 2022, following the completion of the Business Combination, there were four holders of record of Class A Common Stock and three holders of record of Warrants. However, because many of the shares of Class A Common Stock and the Warrants are held by brokers and other institutions on behalf of stockholders, the Company believes there are substantially more beneficial holders of Class A Common Stock and Warrants than record holders.
The information set forth in the section entitled “Price Range of Securities and Dividends—YAC” on page 226 of the Proxy Statement is incorporated herein by reference.
Market Information and Holders of the Company
As of January 25, 2022, following the completion of the Business Combination, there were 14,937,581 shares of Class A Common Stock, 14,519,218 SHG Warrants (including 7,719,779 private placement warrants) and 42,192,250 Sky Common Units (excluding Sky Common Units held by the Company), which are convertible into Class A Common Stock, outstanding. The Company has reserved a total of 5,211,975 shares of Class A Common Stock for issuance pursuant to the 2022 Incentive Award Plan, subject to certain adjustments set forth therein.
Dividends of the Company
YAC has never paid any cash dividends on YAC’s Class A Common Stock. The payment of cash dividends in the future will be dependent upon revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of the Company’s board of directors and the board of directors will consider whether or not to institute a dividend policy. The board of directors currently anticipates the Company will retain all earnings of the Company, if any, for use in the Company’s business and operations and, accordingly, the board of directors does not anticipate declaring any dividends in the foreseeable future.
Description of Registrant’s Securities
Pursuant to the A&R Certificate of Incorporation, there are 260,000,000 authorized shares of the Company, consisting of 200,000,000 shares of Class A Common Stock, 50,000,000 shares of Class B Common Stock and 10,000,000 shares of preferred stock, par value $0.0001 per share.
The information set forth in the section entitled “Description of SHG Corporation Securities” beginning on page 217 of the Proxy Statement is incorporated herein by reference.
Indemnification of Directors and Officers
In connection with the closing of the Business Combination, the Company entered into indemnification agreements with each of its directors and executive officers. Each indemnification agreement provides for indemnification and advancement by the Company of certain expenses and costs relating to claims, suits or proceedings arising from service to the Company or, at its request, service to other entities, as officers or directors to the maximum extent permitted by applicable law, for both the current directors and executive officers of the Company and the former YAC directors and executive officers. The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreements, a form of which is attached hereto as Exhibit 10.8 and is incorporated herein by reference.
Further information about the indemnification of the Company’s directors and officers is set forth in the section entitled “Description of SHG Corporation Securities — Limitations on Liability and Indemnification of Officers and Directors” beginning on page 224 of the Proxy Statement and is incorporated herein by reference.