Proxy Statement - Merger or Acquisition (preliminary) (prem14a)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Information Required in Proxy Statement

Schedule 14A Information

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

Zanite Acquisition Corp.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

Not applicable

  (2)  

Aggregate number of securities to which transaction applies:

 

Not applicable

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

Not applicable

  (4)  

Proposed maximum aggregate value of transaction:

 

$2,200,000,000

  (5)  

Total fee paid:

 

$203,940.00

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.:

 

     

  (3)  

Filing Party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


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PRELIMINARY PROXY STATEMENT, DATED

DECEMBER 30, 2021, SUBJECT TO COMPLETION

ZANITE ACQUISITION CORP.

25101 Chagrin Boulevard

Suite 350

Cleveland, Ohio 44122

Dear Zanite Stockholders:

We cordially invite you to attend a special meeting in lieu of the 2022 annual meeting of the stockholders (the “special meeting”) of Zanite Acquisition Corp., a Delaware corporation (“Zanite”, “we,” “us,” “our” or the “Company”), which will be held on [●] at [●] a.m., New York City time at https://www.cstproxy.com/zaniteacquisition/2022. In light of ongoing developments related to the novel coronavirus (COVID-19), after careful consideration, the Company has determined that the special meeting will be a virtual meeting conducted exclusively via live webcast in order to facilitate stockholder attendance and participation while safeguarding the health and safety of our stockholders, directors and management team. You or your proxyholder will be able to attend the virtual special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit questions during the special meeting by visiting https://www.cstproxy.com/zaniteacquisition/2022 and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement.

On December 21, 2021, the Company, Embraer S.A., a Brazilian corporation (sociedade anônima) (“Embraer”), Embraer Aircraft Holding, Inc., a Delaware corporation and a direct wholly owned subsidiary of Embraer (“EAH”), and EVE UAM, LLC, a Delaware limited liability company and a wholly owned subsidiary of EAH that was formed for purposes of conducting the UAM Business (as defined in the accompanying proxy statement) (“Eve”), entered into a Business Combination Agreement (the “Business Combination Agreement”).

Pursuant to the Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, a series of related transactions occurred, or will occur, including the following (the transactions contemplated by the Business Combination Agreement, the “business combination”): (x) pursuant to the terms of the Contribution Agreement (as defined in the accompanying proxy statement), (i) Embraer transferred certain assets and liabilities relating to the UAM Business to Eve or to EVE Soluções de Mobilidade Aérea Urbana Ltda., a Brazilian limited liability company (sociedade limitada) and a direct wholly owned subsidiary of Eve (the “Brazilian Subsidiary”), in exchange for the issuance of a number of limited liability company interests of Eve (the “Eve Interests”) as specified in the Contribution Agreement to Embraer (such issued Eve Interests, together with the Eve Interests that Embraer owned immediately prior to such issuance, together representing 100% of the issued and outstanding equity interests of Eve at the time of such issuance, the “Transferred Eve Interests”), and (ii) Embraer then transferred the Transferred Eve Interests to EAH in exchange for the issuance of such number of shares of common stock and shares of non-voting preferred stock of EAH as set forth in the Contribution Agreement; (y) entered into a binding agreement with, and subject to the terms and conditions set forth therein, sold and transferred to KPI Jet, LLC (the “Unaffiliated Investor”) such shares of non-voting preferred stock of EAH (the “Preferred Stock Sale”); and (z) upon the terms and subject to the conditions of the Business Combination Agreement, EAH, as the sole beneficial and record holder of all of the Transferred Eve Interests (being all of the issued and outstanding equity interests of Eve at such time), will contribute and transfer to Zanite, and Zanite will receive from EAH, all of the Transferred Eve Interests, as consideration and in exchange for the issuance and transfer by Zanite to EAH of 220,000,000 shares of common stock of Zanite, at the Closing (the “Equity Exchange”). You are being asked to vote on the business combination.

The Business Combination Agreement provides that Eve’s, Embraer’s and EAH’s obligations to consummate the business combination are conditioned on, among other things, the Company having available cash of at least $350,000,000 from (i) the Company’s trust account (the “trust account”) established in


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connection with the Company’s initial public offering (the “IPO”) (after deducting any amounts required to pay holders (“public stockholders”) who have elected to redeem their shares of Class A common stock included in the units sold by the Company in the IPO (the “public shares”) but prior to the payment of any transaction expenses or deferred compensation owed to the underwriters of the IPO) and (ii) the PIPE Investment (as defined below). The business combination is also subject to the satisfaction or waiver of certain other closing conditions (including, without limitation, certain conditions precedent to the consummation of the business combination) as described in the accompanying proxy statement. If these conditions are not met, and such conditions are not waived, then the Business Combination Agreement could terminate and the proposed business combination may not be consummated. There can be no assurance that the parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.

In connection with the transactions contemplated by the Business Combination Agreement, the Company has entered into subscription agreements, each dated December 21, 2021 (collectively, the “Subscription Agreements”) with certain investors, including certain strategic investors, Zanite Sponsor LLC, a Delaware limited liability company (the “Sponsor”), and EAH (collectively, the “PIPE Investors”) pursuant to which the Company agreed to issue and sell to the PIPE Investors in private placements to close immediately prior to the Closing, an aggregate of 31,500,000 shares of Class A common stock of Zanite, par value $0.0001 per share (the “Class A common stock” and, together with the Class B common stock, the “common stock”), at $10.00 per share, for an aggregate purchase price of $315,000,000, which includes the commitment of the Sponsor to purchase 2,500,000 shares of Class A common stock for a purchase price of $25,000,000 and the commitment of EAH to purchase 17,500,000 shares of Class A common stock for a purchase price of $175,000,000 (collectively, the “PIPE Investment”). In connection with the PIPE Investment, EAH has entered into arrangements with certain of such Strategic PIPE Investors to provide them with price protections in the amount of up to their $30 million aggregate commitments in the form of credits for parts and services or cash in exchange for the transfer of their shares to EAH following the closing of the business combination. The obligations of each party to consummate the PIPE Investment are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Business Combination Agreement.

At the special meeting, you will be asked to consider and vote upon the following proposals:

 

  (1)

Proposal No. 1: A proposal to adopt the Business Combination Agreement, a copy of which is attached to the accompanying proxy statement as Annex A, and to approve the transactions contemplated by the Business Combination Agreement (the “business combination”), which provides that, among other things, EAH, as the sole beneficial and record holder of all of the issued and outstanding equity interests of Eve as of immediately prior to the closing of the business combination (the “Closing”), will contribute and transfer to Zanite, and Zanite will receive from EAH, all of the issued and outstanding equity interests of Eve, as consideration and in exchange for the issuance and transfer by Zanite to EAH of 220,000,000 shares of common stock of Zanite at the Closing (the “Business Combination Proposal”);

 

  (2)

Proposal No. 2: Proposals to amend and restate, and further amend, the Company’s certificate of incorporation, dated November 16, 2020 (the “Current Charter”), as follows (such amended and restated and further amended certificate of incorporation referred to herein as the “Proposed Charter”) (collectively, the “Charter Amendment Proposals”):

 

  (A)

Charter Amendment Proposal A: to approve and adopt the Proposed Charter (other than the proposals addressed in Charter Amendment Proposal B), which, if approved, would amend and restate the Current Charter, and which, if approved, would take effect upon the Closing;

 

  (B)

Charter Amendment Proposal B: to approve and adopt a proposed amendment to the Proposed Charter to (i) increase the number of authorized shares of Class A common stock from 100,000,000 to 1,000,000,000, which will become shares of common stock, par value of $0.001 per share, of the combined company upon the Closing, and the total number of authorized shares of common stock from 111,000,000 to 1,000,000,000 and (ii) provide that the number of authorized shares of any class of common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the


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  holders of a majority of the stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) the General Corporation Law of the State of Delaware (the “DGCL”), which, if approved, will both be in effect upon the Closing;

 

  (3)

Proposal No. 3: Proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with U.S. Securities and Exchange Commission (the “SEC”) guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as six sub-proposals (collectively, the “Advisory Charter Proposals”);

 

  (A)

Proposal No. 3(A): A proposal to increase the total number of authorized shares of stock to 1,100,000,000 shares, consisting of (i) 1,000,000,000 shares of common stock and (ii) 100,000,000 shares of preferred stock, par value $0.0001 per share;

 

  (B)

Proposal No. 3(B): A proposal to provide that the number of authorized shares of any class of common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL;

 

  (C)

Proposal No. 3(C): A proposal to require the affirmative vote of the holders of at least two-thirds of the total voting power of all the then outstanding shares of capital stock of the Company entitled to vote thereon, voting together as a single class to (1) make amendments to certain provisions of the Proposed Charter (Article THIRTEENTH (A)) and (2) amend the proposed bylaws (as defined in the accompanying proxy statement) (Article SIXTH (F));

 

  (D)

Proposal No. 3(D): A proposal to provide that any action required or permitted to be taken by the stockholders of the Company may be taken by written consent until the time the issued and outstanding shares of common stock owned by Embraer entities (as defined in the accompanying proxy statement) represent less than 50% of the voting power of the then outstanding shares of capital stock of the Company;

 

  (E)

Proposal No. 3(E): A proposal to elect not to be governed by Section 203 of the DGCL relating to business combinations with interested stockholders; and

 

  (F)

Proposal No. 3(F): A proposal to provide for certain additional changes, including, among other things, (i) changing the post-business combination company’s corporate name from “Zanite Acquisition Corp.” to “Eve Holding, Inc.”, (ii) making the Company’s corporate existence perpetual and (iii) removing certain provisions related to our status as a blank check company that will no longer apply upon consummation of the business combination, all of which our board of directors believes are necessary to adequately address the needs of the post-business combination Company;

 

  (4)

Proposal No. 4: A proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq Stock Market (“Nasdaq”), (x) the issuance of more than 20% of the Company’s issued and outstanding common stock in connection with the business combination, consisting of the issuance of (i) shares of common stock to EAH pursuant to the terms of the Business Combination Agreement and (ii) shares of common stock to the PIPE Investors in connection with the PIPE Investment, plus any additional shares of common stock pursuant to Subscription Agreements we may enter into prior to the Closing, and (y) the issuance of shares of common stock to EAH in connection with the business combination and the PIPE Investment that would result in EAH owning more than 20% of our outstanding common stock, or more than 20% of the voting power, which could constitute a “change of control” under Nasdaq rules (the “Stock Issuance Proposal”);

 

  (5)

Proposal No. 5: A proposal to approve and adopt the Eve Holding, Inc. 2022 Stock Incentive Plan (the “Incentive Plan”), a copy of which is attached to the accompanying proxy statement as Annex K (the “Incentive Plan Proposal”);

 

  (6)

Proposal No. 6: A proposal to elect seven directors to serve staggered terms on our board of directors until the 2022, 2023 and 2024 annual meeting of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal (the “Director Election Proposal”); and


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  (7)

Proposal No. 7: A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals (as defined below) or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived (the “Adjournment Proposal”).

Each of these proposals is more fully described in the accompanying proxy statement, which you are encouraged to read carefully. Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Business Combination Proposal, the Charter Amendment Proposals, the Stock Issuance Proposal and the Director Election Proposal (collectively, the “Condition Precedent Proposals”) and each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal are not conditioned upon the approval of any other proposal. If our stockholders do not approve each of the Condition Precedent Proposals, the business combination may not be consummated. By contrast, approval of each of the other proposals in the proxy statement (i.e., the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal) is not a condition to the consummation of the business combination.

Our Class A common stock and warrants are currently listed on Nasdaq under the symbols “ZNTE” and “ZNTEW,” respectively. Certain of our shares of Class A common stock and warrants currently trade as units consisting of one share of Class A common stock and one-half of one redeemable warrant, and are listed on Nasdaq under the symbol “ZNTEU.” The units will automatically separate into their component securities upon consummation of the business combination and, as a result, will no longer trade as an independent security. Upon consummation of the transactions contemplated by the Business Combination Agreement, we will change our name to “Eve Holding, Inc.” We intend to apply to obtain the listing of our common stock and warrants on the NYSE under the symbols “EVEX” and “EVEXW,” respectively, upon the Closing.

Only holders of record of shares of our Class A common stock and shares of our Class B common stock at the close of business on [●] (the “record date”) are entitled to notice of and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting and electronically during the special meeting at https://www.cstproxy.com/zaniteacquisition/2022.

We are providing the accompanying proxy statement and proxy card to our stockholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments or postponements of the special meeting. Whether or not you plan to attend the special meeting, we urge you to read the accompanying proxy statement carefully and submit your proxy to vote on the business combination. Please pay particular attention to the section entitled “Risk Factors” beginning on page 24 of the accompanying proxy statement.

After careful consideration, our board of directors has unanimously approved the Business Combination Agreement and the transactions contemplated thereby and determined that each of the Business Combination Proposal, the Charter Amendment Proposals, the Advisory Charter Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal is in the best interests of the Company and its stockholders, and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals and “FOR” each of the director nominees.

The existence of financial and personal interests of our directors and officers may result in conflicts of interest, including a conflict between what may be in the best interests of the Company and its stockholders and what may be best for a director’s personal interests when determining to recommend that stockholders vote for the proposals. See the sections entitled “The Business Combination Proposal — Interests of Zanite’s Directors and Officers in the Business Combination” and “Beneficial Ownership of Securities in the accompanying proxy statement for a further discussion.


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Pursuant to the Current Charter, a public stockholder may request that we redeem all or a portion of such public stockholder’s public shares for cash if the business combination is consummated. You will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) hold public shares through units and you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and

 

  (ii)

prior to 10:00 AM, New York City time, on [●] (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to Continental Stock Transfer & Trust Company, our transfer agent (the “transfer agent”), that we redeem your public shares for cash, and (b) deliver your public shares to the transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders of units must elect to separate the underlying public shares and warrants included in the units sold by the Company in the IPO (the “public warrants”) prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public stockholders may elect to redeem all or a portion of their public shares even if they vote for the Business Combination Proposal. If the business combination is not consummated, the public shares will not be redeemed for cash. If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the transfer agent, we will redeem each public share for a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the business combination, including interest earned on the funds held in the trust account (net of amounts which may be withdrawn to pay our taxes (“permitted withdrawals”)), divided by the number of then-outstanding public shares. For illustrative purposes, as of December 27, 2021, this would have amounted to approximately $10.30 per public share. If a public stockholder exercises its redemption rights, then it will be exchanging its redeemed public shares for cash and will no longer own such shares. Any request to redeem public shares, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing. Furthermore, if a holder of a public share delivers its shares in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the Company instruct our transfer agent to return the shares (physically or electronically). The holder can make such request by contacting the transfer agent, at the address or email address listed in the accompanying proxy statement. We will be required to honor such request only if made prior to the deadline for exercising redemption requests. See “Special Meeting — Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash, without our prior consent.

Approval of the Business Combination Proposal, each of the Advisory Charter Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, and the Adjournment Proposal each require the affirmative vote of a majority of the votes cast by holders of shares of our Class A common stock and Class B common stock present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class. Approval of each of the Charter Amendment Proposals requires the affirmative vote of holders of a majority of the outstanding shares of our Class A common stock and Class B common stock entitled to vote thereon at the special meeting, voting as a single class. In addition, Charter Amendment Proposal B requires the affirmative vote of holders of a majority of the outstanding


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shares of Class A common stock, voting as a class. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the shares of our Class A common stock and Class B common stock cast by the Company’s stockholders present in person or by proxy at the virtual special meeting and entitled to vote thereon, voting as a single class.

Our “initial stockholders” (consisting of the Sponsor, John B. Veihmeyer, Larry R. Flynn, Ronald D. Sugar and Gerard J. DeMuro) and our other officers and directors entered into a letter agreement with us at the time of the IPO, pursuant to which they agreed (i) to vote the shares of our Class B common stock (the “founder shares”) purchased by them, as well as any public shares purchased by them during or after the IPO, in favor of the Business Combination Proposal and (ii) to waive their redemption rights with respect to any founder shares they hold and any public shares they may acquire in connection with the completion of the business combination. As of the date hereof, our initial stockholders own 20% of our total outstanding shares of common stock.

All our stockholders are cordially invited to attend the special meeting virtually. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible.

If you are a stockholder of record holding shares of common stock, you may also cast your vote virtually at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting virtually, obtain a proxy from your broker or bank.

If you fail to return a proxy card or fail to instruct a broker or other nominee how to vote, and do not attend the special meeting virtually, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have the same effect as a vote “AGAINST” the Charter Amendment Proposals, but will have no effect on the outcome of any other proposal in the accompanying proxy statement.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided.

If your shares are held in “street name” or are in a margin or similar account, you should contact your bank or broker to ensure that your shares are represented and voted at the special meeting.

On behalf of our board of directors, we would like to thank you for your support of Zanite Acquisition Corp. and look forward to a successful completion of the business combination.

 

  

By Order of the Board of Directors,

 

  

 

 

  

Steven H. Rosen

Co-Chief Executive Officer and Director

  

Kenneth C. Ricci

Co-Chief Executive Officer and
Director

If you return your proxy card signed and without an indication of how you wish to vote, your shares will be voted in favor of each of the proposals.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST (1) IF YOU HOLD SHARES OF CLASS A COMMON STOCK THROUGH UNITS, ELECT TO SEPARATE YOUR UNITS INTO THE UNDERLYING PUBLIC SHARES AND PUBLIC WARRANTS PRIOR TO EXERCISING YOUR REDEMPTION RIGHTS WITH RESPECT TO THE PUBLIC SHARES, (2) SUBMIT A WRITTEN REQUEST, INCLUDING THE LEGAL NAME, PHONE NUMBER AND ADDRESS OF THE BENEFICIAL OWNER OF THE SHARES FOR WHICH REDEMPTION IS REQUESTED, TO THE TRANSFER AGENT AT LEAST TWO BUSINESS


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DAYS PRIOR TO THE SCHEDULED VOTE AT THE SPECIAL MEETING, THAT YOUR PUBLIC SHARES BE REDEEMED FOR CASH, AND (3) DELIVER YOUR SHARES OF CLASS A COMMON STOCK TO THE TRANSFER AGENT, PHYSICALLY OR ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT/WITHDRAWAL AT CUSTODIAN) SYSTEM, IN EACH CASE IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “SPECIAL MEETING — REDEMPTION RIGHTS” IN THE ACCOMPANYING PROXY STATEMENT FOR MORE SPECIFIC INSTRUCTIONS.

Neither the SEC nor any state securities commission has approved or disapproved of the transactions described in the accompanying proxy statement, passed upon the merits or fairness of the Business Combination Agreement or the transactions contemplated thereby, or passed upon the adequacy or accuracy of the accompanying proxy statement. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated [●] and is first being mailed to our stockholders on or about [●].


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ZANITE ACQUISITION CORP.

25101 Chagrin Boulevard

Suite 350

Cleveland, Ohio 44122

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

OF ZANITE STOCKHOLDERS

To Be Held on []

TO THE STOCKHOLDERS OF ZANITE ACQUISITION CORP.:

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2022 annual meeting of the stockholders (the “special meeting”) of Zanite Acquisition Corp., a Delaware corporation (“Zanite”, “we,” “us,” “our” or the “Company”), will be held on [●], at [●] a.m., New York City time at https://www.cstproxy.com/zaniteacquisition/2022. In light of ongoing developments related to the novel coronavirus (COVID-19), after careful consideration, the Company has determined that the special meeting will be a virtual meeting conducted exclusively via live webcast in order to facilitate stockholder attendance and participation while safeguarding the health and safety of our stockholders, directors and management team. You are cordially invited to attend the virtual special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit questions during the special meeting by visiting https://www.cstproxy.com/zaniteacquisition/2022 and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement.

At the special meeting, you will be asked to consider and vote upon the following proposals:

 

  (1)

Proposal No. 1: A proposal to adopt the Business Combination Agreement, dated as of December 21, 2021 (the “Business Combination Agreement”), a copy of which is attached to the accompanying proxy statement as Annex A, by and among the Company, Embraer S.A., a Brazilian corporation (sociedade anônima) (“Embraer”), EVE UAM, LLC, a Delaware limited liability company and a newly formed direct wholly owned subsidiary of Embraer that was formed for purposes of conducting the UAM Business (as defined in the accompanying proxy statement) (“Eve”), and Embraer Aircraft Holding, Inc., a Delaware corporation and a direct wholly owned subsidiary of Embraer (“EAH”), and approve the transactions contemplated by the Business Combination Agreement (the “business combination”), which provides that, among other things, EAH, as the sole beneficial and record holder of all of the issued and outstanding equity interests of Eve as of immediately prior to the closing of the business combination (the “Closing”), will contribute and transfer to Zanite, and Zanite will receive from EAH, all of the issued and outstanding equity interests of Eve, as consideration and in exchange for the issuance and transfer by Zanite to EAH of 220,000,000 shares of common stock of Zanite at the Closing (the “Business Combination Proposal”);

 

  (2)

Proposal No. 2: Proposals to amend and restate, and further amend, the Company’s certificate of incorporation, dated November 16, 2020 (the “Current Charter”), as follows (such amended and restated and further amended certificate of incorporation referred to herein as the “Proposed Charter”) (collectively, the “Charter Amendment Proposals”):

 

  (A)

Charter Amendment Proposal A: to approve and adopt the Proposed Charter (other than the proposals addressed in Charter Amendment Proposal B), which, if approved, would amend and restate the Current Charter, and which, if approved, would take effect upon the Closing;

 

  (B)

Charter Amendment Proposal B: to approve and adopt a proposed amendment to the Proposed Charter to (i) increase the number of authorized shares of Class A common stock from 100,000,000 to 1,000,000,000, which will become shares of common stock, par value of $0.001 per share, of the combined company upon the Closing, and the total number of authorized shares of common stock from 111,000,000 to 1,000,000,000 and (ii) provide that the number of


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  authorized shares of any class of common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL, which, if approved, will both be in effect upon the Closing;

 

  (3)

Proposal No. 3: Proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with U.S. Securities and Exchange Commission (the “SEC”) guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as six sub-proposals (collectively, the “Advisory Charter Proposals”);

 

  (A)

Proposal No. 3(A): A proposal to increase the total number of authorized shares and classes of stock to 1,100,000,000 shares, consisting of (i) 1,000,000,000 shares of common stock and (ii) 100,000,000 shares of preferred stock, par value $0.0001 per share;

 

  (B)

Proposal No. 3(B): A proposal to provide that the number of authorized shares of any class of common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL;

 

  (C)

Proposal No. 3(C): A proposal to require the affirmative vote of the holders of at least two-thirds of the total voting power of all the then outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class to (1) make amendments to certain provisions of the Proposed Charter (Article THIRTEENTH (A)) and (2) amend the proposed bylaws (as defined in the accompanying proxy statement) (Article SIXTH (F));

 

  (D)

Proposal No. 3(D): A proposal to provide that any action required or permitted to be taken by the stockholders of the Company may be taken by written consent until the time the issued and outstanding shares of common stock owned by Embraer Entities (as defined in the accompanying proxy statement) represent less than 50% of the voting power of the then outstanding shares of capital stock of the Company;

 

  (E)

Proposal No. 3(E): A proposal to elect not to be governed by Section 203 of the DGCL relating to business combinations with interested stockholders; and

 

  (F)

Proposal No. 3(F): A proposal to provide for certain additional changes, including, among other things, (i) changing the post-business combination company’s corporate name from “Zanite Acquisition Corp.” to “Eve Holding, Inc.”, (ii) making the Company’s corporate existence perpetual and (iii) removing certain provisions related to our status as a blank check company that will no longer apply upon consummation of the business combination, all of which our board of directors believes are necessary to adequately address the needs of the post-business combination Company;

 

  (4)

Proposal No. 4: A proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq Stock Market (“Nasdaq”), (x) the issuance of more than 20% of the Company’s issued and outstanding common stock in connection with the business combination, consisting of the issuance of (i) shares of common stock to EAH pursuant to the terms of the Business Combination Agreement and (ii) shares of common stock to the PIPE Investors (as defined below) in connection with the PIPE Investment, plus any additional shares of common stock pursuant to subscription agreements we may enter into prior to the Closing, and (y) the issuance of shares of common stock to EAH in connection with the business combination and the PIPE Investment that would result in EAH owning more than 20% of our outstanding common stock, or more than 20% of the voting power, which could constitute a “change of control” under Nasdaq rules (the “Stock Issuance Proposal”);

 

  (5)

Proposal No. 5: A proposal to approve and adopt the Eve Holding, Inc. 2022 Stock Incentive Plan (the “Incentive Plan”), a copy of which is attached to the accompanying proxy statement as Annex K (the “Incentive Plan Proposal”);

 

  (6)

Proposal No. 6: A proposal to elect seven directors to serve staggered terms on our board of directors until the 2022, 2023 and 2024 annual meetings of stockholders, respectively, or until such directors’


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  successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal (the “Director Election Proposal”); and

 

  (7)

Proposal No. 7: A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals (as defined below) or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived (the “Adjournment Proposal”).

Each of these proposals is more fully described in the accompanying proxy statement, which you are encouraged to read carefully. Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Business Combination Proposal, the Charter Amendment Proposals, the Stock Issuance Proposal and the Director Election Proposal (collectively, the “Condition Precedent Proposals”) and each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal are not conditioned upon the approval of any other proposal. If our stockholders do not approve each of the Condition Precedent Proposals, the business combination may not be consummated. By contrast, approval of each of the other proposals in the accompanying proxy statement (i.e., the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal) is not a condition to the consummation of the business combination.

The Business Combination Agreement provides that Eve’s, Embraer’s and EAH’s obligations to consummate the business combination are conditioned on, among other things, the Company having available cash of at least $350,000,000 from (i) the Company’s trust account (the “trust account”) established in connection with the Company’s initial public offering (the “IPO”) (after deducting any amounts required to pay holders (“public stockholders”) who have elected to redeem their shares of Class A common stock included in the units sold by the Company in the IPO (the “public shares”) but prior to the payment of any transaction expenses or deferred compensation owed to the underwriters of the IPO) and (ii) the PIPE Investment (as defined below). The business combination is also subject to the satisfaction or waiver of certain other closing conditions (including, without limitation, certain conditions precedent to the consummation of the business combination) as described in the accompanying proxy statement.

In connection with the transactions contemplated by the Business Combination Agreement, the Company has entered into subscription agreements, each dated December 21, 2021 (collectively, the “Subscription Agreements”) with certain investors, including certain strategic investors, Zanite Sponsor LLC, a Delaware limited liability company (the “Sponsor”), and EAH (collectively, the “PIPE Investors”) pursuant to which the Company agreed to issue and sell to the PIPE Investors in private placements to close immediately prior to the Closing, an aggregate of 31,500,000 shares of Class A common stock of Zanite, par value $0.0001 per share (the “Class A common stock” and, together with the Class B common stock, the “common stock”), at $10.00 per share, for an aggregate purchase price of $315,000,000, which includes the commitment of the Sponsor to purchase 2,500,000 shares of Class A common stock for a purchase price of $25,000,000 and the commitment of EAH to purchase 17,500,000 shares of Class A common stock for a purchase price of $175,000,000 (collectively, the “PIPE Investment”). In connection with the PIPE Investment, EAH has entered into arrangements with certain of such Strategic PIPE Investors to provide them with price protections in the amount of up to their $30 million aggregate commitments in the form of credits for parts and services or cash in exchange for the transfer of their shares to EAH following the Closing. The obligations of each party to consummate the PIPE Investment are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Business Combination Agreement.

Our Class A common stock and warrants are currently listed on Nasdaq under the symbols “ZNTE” and “ZNTEW,” respectively. Certain of our shares of Class A common stock and warrants currently trade as units consisting of one share of Class A common stock and one-half of one redeemable warrant, and are listed on Nasdaq under the symbol “ZNTEU.” The units will automatically separate into their component securities upon consummation of the business combination and, as a result, will no longer trade as an independent security. Upon consummation of the transactions contemplated by the Business Combination Agreement, we will change our name to “Eve Holding, Inc.” We intend to apply to obtain the listing of our common stock and warrants on the NYSE under the symbols “EVEX” and “EVEXW,” respectively, upon the Closing.


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Only holders of record of shares of our Class A common stock and shares of our Class B common stock at the close of business on [●] (the “record date”) are entitled to notice of and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting and electronically during the special meeting at https://www.cstproxy.com/zaniteacquisition/2022.

Pursuant to the Current Charter, a public stockholder may request that we redeem all or a portion of such public stockholder’s public shares for cash if the business combination is consummated. You will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) hold public shares through units and you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and

 

  (ii)

prior to 10:00 AM, New York City Time, on [●] (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to Continental Stock Transfer & Trust Company, our transfer agent (the “transfer agent”), that we redeem your public shares for cash, and (b) deliver your public shares to the transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders of units must elect to separate the underlying public shares and warrants included in the units sold by the Company in the IPO (the “public warrants”) prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public stockholders may elect to redeem all or a portion of their public shares even if they vote for the business combination proposal. If the business combination is not consummated, the public shares will not be redeemed for cash. If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the transfer agent, we will redeem each public share for a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the business combination, including interest earned on the funds held in the trust account (net of amounts which may be withdrawn to pay our taxes (“permitted withdrawals”)), divided by the number of then-outstanding public shares. For illustrative purposes, as of December 27, 2021, this would have amounted to approximately $10.30 per public share. If a public stockholder exercises its redemption rights, then it will be exchanging its redeemed public shares for cash and will no longer own such shares. Any request to redeem public shares, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing. Furthermore, if a holder of a public share delivers its shares in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the Company instruct our transfer agent to return the shares (physically or electronically). The holder can make such request by contacting the transfer agent, at the address or email address listed in the accompanying proxy statement. We will be required to honor such request only if made prior to the deadline for exercising redemption requests. See “Special Meeting — Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash, without our prior consent. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.


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Approval of the Business Combination Proposal, each of the Advisory Charter Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, and the Adjournment Proposal each require the affirmative vote of a majority of the votes cast by holders of shares of our Class A common stock and Class B common stock present virtually or by proxy at the special meeting and entitled to vote thereon, voting as a single class. Approval of each of the Charter Amendment Proposals requires the affirmative vote of holders of a majority of the outstanding shares of our Class A common stock and Class B common stock entitled to vote thereon at the special meeting, voting as a single class. In addition, Charter Amendment Proposal B requires the affirmative vote of holders of a majority of the outstanding shares of Class A common stock, voting as a class. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the shares of our Class A common stock and Class B common stock cast by the Company’s stockholders present virtually or by proxy at the virtual special meeting and entitled to vote thereon, voting as a single class.

Our “initial stockholders” (consisting of the Sponsor, John B. Veihmeyer, Larry R. Flynn, Ronald D. Sugar and Gerard J. DeMuro) and our other officers and directors entered into a letter agreement with us at the time of the IPO, pursuant to which they agreed (i) to vote the shares of our Class B common stock (the “founder shares”) purchased by them, as well as any public shares purchased by them during or after the IPO, in favor of the Business Combination Proposal and (ii) to waive their redemption rights with respect to any founder shares they hold and any public shares they may acquire in connection with the completion of the business combination. As of the date hereof, our initial stockholders own 20% of our total outstanding shares of common stock.

All our stockholders are cordially invited to attend the special meeting virtually. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible.

If you are a stockholder of record holding shares of common stock, you may also cast your vote virtually at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting virtually, obtain a proxy from your broker or bank.

If you fail to return a proxy card or fail to instruct a broker or other nominee how to vote, and do not attend the special meeting virtually, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have the same effect as a vote “AGAINST” the Charter Amendment Proposals, but will have no effect on the outcome of any other proposal in the accompanying proxy statement.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided.

Our board of directors unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals and “FOR” each of the director nominees

Your attention is directed to the proxy statement accompanying this notice (including the Annexes thereto) for a more complete description of the proposed business combination and related transactions and each of the proposals. We urge you to read the accompanying proxy statement carefully. If you have any questions or need assistance voting your shares of common stock, please contact Morrow Sodali LLC (“Morrow”), our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing ZNTE.Info@investor.morrowsodali.com. This notice of special meeting and the accompanying proxy statement are available at https://www.cstproxy.com/zaniteacquisition/2022.

 

   By Order of the Board of Directors,   
  

 

  

 

  

Steven H. Rosen

Co-Chief Executive Officer and Director

  

Kenneth C. Ricci

Co-Chief Executive Officer and
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Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to be held on [●]: This notice of special meeting and the accompanying proxy statement will be available at https://www.cstproxy.com/zaniteacquisition/2022.


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CERTAIN DEFINED TERMS

     iv  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     xi  

SUMMARY TERM SHEET

     xiv  

QUESTIONS AND ANSWERS FOR STOCKHOLDERS OF ZANITE

     xxi  

SUMMARY OF THE PROXY STATEMENT

     1  

COMPARATIVE SHARE INFORMATION

     21  

MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION

     23  

RISK FACTORS

     24  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     78  

SPECIAL MEETING OF ZANITE STOCKHOLDERS

     90  

THE BUSINESS COMBINATION PROPOSAL

     98  

THE CHARTER AMENDMENT PROPOSALS

     140  

THE ADVISORY CHARTER PROPOSALS

     143  

THE STOCK ISSUANCE PROPOSAL

     147  

THE INCENTIVE PLAN PROPOSAL

     149  

THE DIRECTOR ELECTION PROPOSAL

     157  

THE ADJOURNMENT PROPOSAL

     158  

INFORMATION ABOUT ZANITE

     159  

ZANITE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     177  

INFORMATION ABOUT EVE

     181  

EVE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     194  

MANAGEMENT OF THE COMPANY FOLLOWING THE BUSINESS COMBINATION

     211  

EXECUTIVE COMPENSATION

     219  

DESCRIPTION OF SECURITIES

     220  

BENEFICIAL OWNERSHIP OF SECURITIES

     232  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     236  

U.S. MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

     240  

APPRAISAL RIGHTS

     247  

HOUSEHOLDING INFORMATION

     247  

TRANSFER AGENT AND REGISTRAR

     247  

SUBMISSION OF STOCKHOLDER PROPOSALS

     248  

FUTURE STOCKHOLDER PROPOSALS

     248  

WHERE YOU CAN FIND MORE INFORMATION

     249  

INDEX TO FINANCIAL STATEMENTS

     F-1  
ANNEXES   

Annex A — Business Combination Agreement

     A-1  

Annex B — Sponsor Support Agreement

     B-1  

Annex C — Form of Proposed Certificate of Incorporation

     C-1  

Annex D — Form of Proposed Bylaws

     D-1  

Annex E — Form of Stockholders Agreement

     E-1  

Annex F — Form of Amended and Restated Registration Rights Agreement

     F-1  

Annex G — Master Services Agreement between Eve and Embraer

     G-1  

Annex H — Master Services Agreement between Eve and Atech

     H-1  

Annex I — Services Agreement between Eve and Eve Brazil

     I-1  

Annex J — Contribution Agreement

     J-1  

Annex K — Form of Equity Incentive Plan

     K-1  

Annex L — Form of Indemnification Agreement

     L-1  

 

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Annex M — Data Access Agreement

     M-1  

Annex N — Shared Services Agreement

     N-1  

Annex O — Form of Tax Receivable Agreement

     O-1  

Annex P — Form of Strategic Warrant Agreement

     P-1  

Annex Q — Form of Subscription Agreement

     Q-1  

Annex R — Form of Tax Sharing Agreement

     R-1  

 

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TRADEMARKS

This proxy statement contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. The Company does not intend its use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of it by, any other companies.

 

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CERTAIN DEFINED TERMS

Unless otherwise stated in this proxy statement or the context otherwise requires, references to:

 

   

Adjournment Proposal” means the proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived;

 

   

Advisory Charter Proposals” means proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with the SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions;

 

   

Amended and Restated Registration Rights Agreement” means the registration rights agreement to be entered into at Closing, by and among the Sponsor, Zanite, EAH and certain other parties thereto, attached to this proxy statement as Annex F, as may be amended or modified from time to time;

 

   

Ancillary Agreements” means (a) the Subscription Agreements (b) the Amended and Restated Registration Rights Agreement (c) the Sponsor Support Agreement, (d) the Confidentiality Agreement, (e) the Services Agreements, (f) the Data Access Agreement, (g) the Stockholders Agreement, (h) the Contribution Agreement, (i) the Tax Receivable Agreement and (j) the Tax Sharing Agreement, collectively;

 

   

“Atech” means Atech—Negócios em Tecnologias S.A., a Brazilian corporation (sociedade anônima) and wholly owned subsidiary of Embraer;

 

   

BCA” or “Business Combination Agreement” means the Business Combination Agreement, dated as of December 21, 2021, by and among Eve, Embraer, EAH, and Zanite, as may be amended and modified from time to time, attached to this proxy statement as Annex A, as may be amended or modified from time to time;

 

   

board of directors” means the board of directors of the Company;

 

   

Brazilian Subsidiary” means Eve Soluções de Mobilidade Aérea Urbana Ltda., a Brazilian limited liability company (sociedade limitada) and a wholly owned subsidiary of Eve;

 

   

business combination” means the transactions contemplated by the Business Combination Agreement;

 

   

Business Combination Proposal” means the proposal to adopt the Business Combination Agreement and approve the Equity Exchange;

 

   

Charter Amendment Proposals” means the proposals to (a) approve and adopt the Proposed Charter (other than the proposals addressed in Charter Amendment Proposal B), which, if approved, would amend and restate the Current Charter, and which, if approved, would take effect upon the Closing; and (b) approve and adopt a proposed amendment to the Proposed Charter to (i) increase the number of authorized shares of Class A common stock from 100,000,000 to 1,000,000,000, which will become shares of common stock, par value of $0.001 per share, of the combined company upon the Closing, and the total number of authorized shares of common stock from 111,000,000 to 1,000,000,000 and (ii) provide that the number of authorized shares of any class of common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL, which, if approved, will both be in effect upon the Closing;

 

   

Class A common stock” means the Class A common stock of Zanite, par value $0.0001 per share;

 

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Class B common stock” means the Class B common stock of Zanite, par value $0.0001 per share;

 

   

Closing” means the closing of the business combination;

 

   

Closing Date” means the date of the Closing;

 

   

Code” means the United States Internal Revenue Code of 1986;

 

   

Combined Financial Statements” means the audited financial statements of the UAM Business as of and for the years ended December 31, 2018, 2019 and 2020, and the unaudited financial statements of the UAM Business as of and for the nine months ended September 30, 2021;

 

   

common stock” means (a) prior to the Closing, Class A common stock and Class B common stock and (b) from and after the Closing, shares of common stock, par value $0.0001 per share, of the Company;

 

   

Company”, “we”, “us” and “our” means Zanite, including, where applicable, Holdafter Zanite’s change of name to Eve Holding, Inc.;

 

   

completion window” means (i) the period in which the Company must complete its initial business combination, which was extended by the Sponsor on May 18, 2021 until November 19, 2021 and which was further extended by the Sponsor on November 17, 2021 until May 19, 2022, or (ii) such other time period in which the Company must consummate its initial business combination pursuant to an amendment to the Company’s amended and restated certificate of incorporation;

 

   

Condition Precedent Proposals” means the Business Combination Proposal, the Charter Amendment Proposals, the Stock Issuance Proposal and the Director Election Proposal;

 

   

Contributed Assets” means the assets to be transferred to Eve pursuant to the Contribution Agreement;

 

   

Contribution Agreement” means the Contribution Agreement, dated as of December 10, 2021, by and among Embraer, EAH, and Eve, attached to this proxy statement as Annex J, as may be amended or modified from time to time;

 

   

Confidentiality Agreement” means the Nondisclosure Letter, dated as of December 11, 2020, by and among Zanite, Embraer and Embraer Aerospace Technology, Inc. (formerly known as Embraer Urban Air Mobility Solutions, Inc.), as assigned by Embraer Aerospace Technology, Inc. to Eve pursuant to that certain Assignment and Assumption Agreement, dated as of September 10, 2021, by and between Embraer, Embraer Aerospace Technology, Inc. and Eve;

 

   

COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof or related or associated epidemics, pandemic or disease outbreaks;

 

   

COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down (including, the shutdown of air transport and cargo routes, shut down of foodservice or certain business activities), closure (including business and border closures), sequester, safety or similar applicable law, directive, guidelines or recommendations promulgated by any applicable Governmental Authority, in each case, in connection with or in response to COVID-19;

 

   

Current Charter” means the Company’s amended and restated certificate of incorporation, dated November 16, 2020;

 

   

CVM” means the Brazilian Securities Commission (Comissão de Valores Mobiliários);

 

   

Data Access Agreement” means the Database Limited Access Agreement, dated as of December 14, 2021 by and among Embraer, Eve and the Brazilian Subsidiary, attached to this proxy statement as Annex M, as may be amended and modified from time to time;

 

   

DTC” means the Depository Trust Company;

 

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DGCL” means the General Corporation Law of the State of Delaware;

 

   

Director Election Proposal” means the proposal to elect the directors who, upon consummation of the business combination, will be the directors of Eve Holding, Inc.;

 

   

EAH” means Embraer Aircraft Holding, Inc., a Delaware corporation and a wholly owned subsidiary of Embraer;

 

   

EAH Common Stock” means the common stock of EAH;

 

   

EAH Preferred Stock” means the non-voting preferred stock of EAH;

 

   

Embraer” means Embraer S.A., a Brazilian corporation (sociedade anônima);

 

   

“Embraer Entities” means the Embraer and any of its Subsidiaries (other than the Eve Entities);

 

   

Embraer Retained Business” means the businesses of Embraer (other than the UAM Business);

 

   

“EmbraerX” means Embraer’s market accelerator committed to the development of innovative solutions and focused on the promotion of innovative ideas aimed at the development of new businesses, products, technologies, services and processes;

 

   

Equity Exchange” means the transfer of all of the issued and outstanding Eve Interests from EAH to Zanite as consideration and in exchange for the issuance and transfer by Zanite to EAH of 220,000,000 shares of the Company’s common stock at the Closing;

 

   

ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended;

 

   

Eve” means EVE UAM, LLC, a Delaware limited liability company and wholly owned subsidiary of EAH;

 

   

Eve Holding” means the Company following the consummation of the business combination, including after its name change to “Eve Holding, Inc.”

 

   

Eve Entities” means Eve, the Brazilian Subsidiary and any other subsidiary of Eve, from time to time;

 

   

Eve Interests” means the limited liability company interests of Eve designated as “Common Units”;

 

   

eVTOL” means a passenger or cargo aircraft with electric propulsion with vertical take-off and landing capabilities, with maximum range of up to 200 nautical miles (370.4 kilometers);

 

   

Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

 

   

GAAP” means generally accepted accounting principles in the United States as in effect from time to time;

 

   

GDP” means the gross domestic product;

 

   

Governmental Authority” means any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal;

 

   

Governmental Order” means any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any Governmental Authority;

 

   

Group” means the Embraer Entities, on the one hand, or the Eve Entities, on the other hand, as the case may be;

 

   

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

 

   

Incentive Plan” means the Eve Holding, Inc. 2022 Stock Incentive Plan, a copy of which is attached to this proxy statement as Annex K, as may be amended and modified from time to time;

 

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Incentive Plan Proposal” means the proposal to adopt the Eve Holding, Inc. 2022 Stock Incentive Plan;

 

   

initial stockholders” means Zanite Sponsor LLC, John B. Veihmeyer, Larry R. Flynn, Ronald D. Sugar and Gerard J. DeMuro.

 

   

IPO” means the initial public offering of Zanite;

 

   

IRS” means the U.S. Internal Revenue Service;

 

   

JOBS Act” means the Jumpstart Our Business Startups Act of 2012;

 

   

Lease Agreements” means (a) the lease agreement, dated as of August 2, 2021, entered into by and between Embraer and the Brazilian Subsidiary, and (b) the sublease agreement, dated as of December 15, 2021, entered into by and between Eve and Embraer Engineering & Technology Center USA, Inc., in each case, on or prior to the Closing Date, pursuant to which the Brazilian Subsidiary or Eve leases or subleases certain Embraer or third-party properties, in each case, as may be amended or modified from time to time;

 

   

Master Services Agreements” or “MSAs” means (a) the Master Services Agreement, dated as of December 14, 2021, entered into by and between Eve and Embraer, (b) the Master Services Agreement, dated as of December 14, 2021, entered into by and between Eve and Atech and (c) the Services Agreement, dated as of December 14, 2021, entered into by and between Eve and the Brazilian Subsidiary, pursuant to which, in the case of (a) and (b), the Embraer Entities will provide certain services to the Eve Entities and, in the case of (c), the Brazilian Subsidiary will provide certain services to Eve, attached to this proxy statement as Annexes G, H and I, respectively, in each case, as may be amended or modified from time to time;

 

   

Minimum Cash Condition” means the Trust Amount and the PIPE Investment Amount, in the aggregate, being equal to or greater than $350,000,000 as of Closing;

 

   

Morrow” means Morrow Sodali LLC, the proxy solicitor to Zanite;

 

   

Nasdaq” means the Nasdaq Capital Market;

 

   

“new warrants” means the warrants to acquire an aggregate of up to 31,150,000 shares of common stock pursuant to the terms of the Strategic Warrant Agreements, which will be issued on or after the consummation of the Transactions, subject to certain triggering events, to certain Strategic PIPE Investors;

 

   

“NYSE” means the New York Stock Exchange;

 

   

PIPE Investment” means the purchase of shares of our common stock by the PIPE Investors pursuant to the Subscription Agreements, for a total aggregate purchase price of at least $315,000,000;

 

   

PIPE Investment Amount” means the aggregate gross purchase price received by Zanite prior to or substantially concurrently with the Closing for the shares in the PIPE Investment;

 

   

PIPE Investors” means those certain investors (including EAH, the Sponsor and the Strategic PIPE Investors) participating in the PIPE Investment pursuant to the Subscription Agreements;

 

   

Pre-Closing Restructuring” means the series of transactions effected pursuant to the Contribution Agreement including, among other things, the transfer by Embraer of certain assets and liabilities relating to the UAM Business to the Eve Entities;

 

   

Preferred Stock Purchase Agreement” means the purchase agreement, dated as of December 9, 2021, by and between Embraer and the Unaffiliated Investor, pursuant to which Embraer sold to the Unaffiliated Investor, and the Unaffiliated Investor purchased from Embraer, all of the issued and outstanding shares of EAH Preferred Stock for or an aggregate purchase price of $9,973,750.

 

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private placement warrants” means the warrants to purchase the Company’s Class A common stock purchased in a private placement in connection with the IPO;

 

   

Proposed Bylaws” means the second amended and restated bylaws of the Company, a copy of which is attached to this proxy statement as Annex D;

 

   

Proposed Charter” means the amended and restated certificate of incorporation of the Company, a copy of which is attached to this proxy statement as Annex C;

 

   

public shares” means the shares of our Class A common stock included in the units sold in the IPO (whether they were purchased in such offering or thereafter in the secondary market, and including the shares included as part of the additional units sold in connection with the underwriters’ election to exercise their over-allotment option in full);

 

   

public stockholders” means the holders of Zanite’s public shares, whether acquired in Zanite’s IPO or acquired in the secondary market;

 

   

public warrant holders” means the holders of Zanite’s public warrants, whether acquired in Zanite’s IPO or acquired in the secondary market;

 

   

“public warrants” means the warrants included in the units sold in the IPO, each of which is exercisable for one share of our Class A common stock, in accordance with its terms;

 

   

Regulation S-K” means Regulation S-K under the Securities Act;

 

   

Regulation S-X” means Regulation S-X under the Securities Act;

 

   

Sarbanes Oxley Act” means the Sarbanes-Oxley Act of 2002;

 

   

SEC” means the United States Securities and Exchange Commission;

 

   

Securities Act” means the Securities Act of 1933, as amended;

 

   

Services Agreements” means the Master Services Agreements and the Shared Services Agreement;

 

   

Stock Issuance Proposal” means the proposal to issue shares of common stock in connection with the business combination and the PIPE Investment;

 

   

Strategic PIPE Investors” means Azorra Aviation Holdings, LLC, BAE Systems plc, Falko Regional Aircraft Limited, Falko eVTOL LLC, Republic Airways Inc., Rolls-Royce plc, Strong Fundo de Investimento em Cotas de Fundos de Investimento Multimercado, SkyWest Leasing, Inc. and Thales USA, Inc.

 

   

Strategic Warrant Agreements” means the Warrant Agreements, dated as of December 21, 2021, each by and between or among the Company and (i) Republic Airways Inc., (ii) SkyWest Leasing, Inc., (iii) Falko Regional Aircraft Limited and Falko eVTOL LLC, (iv) BAE Systems plc, (v) Azorra Aviation Holdings, LLC, (vi) Rolls-Royce PLC or (vii) Strong Fundo de Investimento em Cotas de Fundos de Investimento Multimercado, the form of which is attached to this proxy statement as Annex P, as may be amended or modified from time to time;

 

   

Shared Services Agreement” means the Shared Services Agreement, dated as of December 14, 2021, entered into by and among Embraer, EAH, Eve and the Brazilian Subsidiary, pursuant to which the Embraer Entities have agreed to provide certain services to the Eve Entities, attached to this proxy statement as Annex N, as may be amended or modified from time to time;

 

   

special meeting” means the meeting to be held on [●], [●], 2022, at [●] a.m., New York City time at https://www.cstproxy.com/zaniteacquisition/2022 in lieu of the 2022 annual meeting of the stockholders of Zanite;

 

   

Sponsor” means Zanite Sponsor LLC, a Delaware limited liability company;

 

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Sponsor Parties” means Zanite Sponsor LLC, John B. Veihmeyer, Larry R. Flynn, Gerard J. DeMuro and Ronald D. Sugar;

 

   

Sponsor Support Agreement” means that certain Support Agreement, dated as of December 21, 2021, by and among the Sponsor, Zanite, Embraer, EAH and certain other parties thereto, attached to this proxy statement as Annex B, as may be amended or modified from time to time;

 

   

Stockholders Agreement” means the Stockholders Agreement to be entered into by and among the Company, the Sponsor and EAH at the Closing, the form of which is attached to this proxy statement as Annex E, as may be amended or modified from time to time;

 

   

Subscription Agreements” means the subscription agreements pursuant to which the PIPE Investment will be consummated, the form of which is attached to this proxy statement as Annex Q, as may be amended or modified from time to time;

 

   

Subsidiary” means, with respect to a person, a corporation or other entity of which more than 50% of the voting power of the equity securities or equity interests is owned, directly or indirectly, by such person;

 

   

Tax Receivable Agreement” means the Tax Receivable Agreement to be entered into by and between the Company and EAH at the Closing, the form of which is attached to this proxy statement as Annex O, as may be amended or modified from time to time;

 

   

Tax Sharing Agreement” means the Tax Sharing Agreement to be entered into by and between the Company and EAH at the Closing, the form of which is attached to this proxy statement as Annex R, as may be amended or modified from time to time;

 

   

Transaction Proposals” means, collectively, the Business Combination Proposal, the Charter Amendment Proposals, the Advisory Charter Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal, and the Adjournment Proposal;

 

   

Transactions” means, collectively, the business combination, including the Pre-Closing Restructuring, the PIPE Investment, the Equity Exchange, the Preferred Stock Sale and the other transactions contemplated by the Business Combination Agreement and Ancillary Agreements;

 

   

Transfer Agent” means Continental Stock Transfer & Trust Company;

 

   

trust account” means the Company’s trust account;

 

   

Trust Amount” means the amount of cash available in the trust account as of the Closing, after deducting the amount required to satisfy Zanite’s obligations to its stockholders (if any) that exercise their redemption rights (but prior to the payment or reimbursement, as applicable, of any (x) deferred underwriting commissions being held in the trust account and (y) transaction expenses of Embraer and its subsidiaries (including Eve) and Zanite);

 

   

UAM” means a system for commercial or non-commercial passenger or cargo air travel or transportation services, in each case, which involves an eVTOL vehicle and onboard/ground-piloted or autonomous piloting or operations;

 

   

UAM Business” means all activities by or on behalf of Embraer or its Subsidiaries (or, upon the Closing, the Company or the Brazilian Subsidiary) related to the research, design, development, testing, engineering, licensing, certification, manufacturing, procurement, assembling, packaging, sales support and after-sales support of, marketing, promotion, advertising, qualification, distribution, importation, fulfillment, offering, sale, deployment delivery, provision, exploitation, configuration, installation, integration, analysis, support, maintenance, repair, service, and other commercialization of or provision of services with respect to eVTOL and related products and services and the UATM for the UAM market, in each case, excluding any of the following applications or uses whether or not in connection with eVTOL: crop dusting, defense or security businesses;

 

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UAM Material Adverse Effect” means a material adverse effect with respect to the UAM Business, Eve or the Brazilian Subsidiary as set forth in the section entitled “The Business Combination Proposal — Material Adverse Effect”;

 

   

UATM” means the collection of systems and services (including organizations, airspace structures and procedures, environment and technologies) that support the integrated operation of UAM vehicles in low level airspace, which systems and services are directed to supporting UAM operations and enhancing the performance of UAM and low-level air travel, which for avoidance of doubt does not include general air traffic management systems;

 

   

Unaffiliated Investor” means KPI Jet, LLC;

 

   

units” the units sold in the IPO (including the units sold in connection with the underwriters’ election to exercise their over-allotment option in full), each of which consists of one share of Class A common stock and one-half of one redeemable warrant;

 

   

Warrant Agreement” means the Warrant Agreement, dated as of November 16, 2020, by and between Zanite and Continental Stock Transfer & Trust Company, as warrant agent;

 

   

Zanite” means Zanite Acquisition Corp., a Delaware corporation;

 

   

Zanite Material Adverse Effect” means a material adverse effect with respect to Zanite as set forth in the section entitled “The Business Combination Proposal — Material Adverse Effect”;

 

   

warrants” means the public warrants, the private placement warrants and the new warrants, as applicable.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement includes statements that are, or may be deemed to be, “forward-looking statements” within the meaning of the U.S. federal securities laws, including statements under the headings “Summary of the Proxy Statement,” “Risk Factors,” “Zanite’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Eve’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” are statements of future expectations and other forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “opportunity,” “plan,” “potential,” “predict,” “projected,” “should,” “strategy,” “suggests,” “targets,” “will,” “will be” or “would” or similar expressions or the negatives thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this proxy statement and include statements regarding the intentions, beliefs or current expectations of Zanite’s or Eve’s management teams concerning, among other things, their respective results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which they operate.

You are cautioned that forward-looking statements are not guarantees of future performance and that Zanite’s and Eve’s actual results of operations, financial condition and liquidity, and the development of the industry in which Eve operates, may differ materially from those made in or suggested by the forward-looking statements contained in this proxy statement. In addition, even if Zanite’s and Eve’s results of operations, financial condition and liquidity, and the development of the industry in which Eve operates are consistent with the forward-looking statements contained in this proxy statement, those results or developments may not be indicative of results or developments in subsequent periods.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and Zanite’s and Eve’s actual financial condition, results of operations and cash flows. The development of the industry in which Eve operates may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this proxy statement.

These statements are based on Zanite’s or Eve’s management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements. You should not place undue reliance on these forward-looking statements in deciding how to vote your proxy or instruct how your vote should be cast on the proposals set forth in this proxy statement. As a result of a number of known and unknown risks and uncertainties, Eve’s actual results or performance following the business combination may be materially different from those expressed or implied by these forward-looking statements. Factors that could cause such differences in actual results include:

 

   

the occurrence of any event, change or other circumstances that could delay the business combination or give rise to the termination of the BCA;

 

   

the inability to complete the PIPE Investment;

 

   

the outcome of any legal proceedings that may be instituted against Zanite or Eve following announcement of the execution of the BCA;

 

   

the inability to complete the business combination due to the failure to obtain approval of the stockholders of Zanite of the BCA or to satisfy other conditions to the closing in the BCA, or the failure to complete the business combination for any reason within the completion window;

 

   

the amount of cash available in Zanite’s trust account, after deducting the amount required to satisfy Zanite’s obligations to its stockholders (if any) that exercise their rights to redeem their public shares (but

 

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prior to the payment or reimbursement, as applicable, of any (a) deferred underwriting commissions being held in the Zanite’s trust account and (b) transaction expenses of Embraer and its subsidiaries (including Eve) and Zanite), plus the PIPE Investment Amount, may not be sufficient to satisfy the Minimum Cash Condition, in which case the business combination may not be able to be completed unless such condition is waived by Embraer, EAH and Eve;

 

   

the inability to obtain the listing of our shares of common stock on the NYSE following the Equity Exchange;

 

   

the risk that the business combination disrupts current plans and operations of Eve as a result of the announcement and consummation of the transactions described herein;

 

   

Eve’s ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of Eve to grow and manage growth profitably following the Equity Exchange;

 

   

costs related to the business combination;

 

   

changes in applicable laws or regulations;

 

   

the impact of the COVID-19 pandemic;

 

   

the risk of global and regional economic downturns;

 

   

competition from other manufacturers and operators of eVTOL and other methods of air or ground transportation;

 

   

the projected financial information, anticipated growth rate, and market opportunity of Eve;

 

   

foreign currency, interest rate, exchange rate and commodity price fluctuations;

 

   

various environmental requirements;

 

   

retention or recruitment of executive and senior management and other key employees;

 

   

the possibility that Zanite or Eve may be adversely affected by other economic, business, and/or competitive factors;

 

   

the risk that the proposed business combination disrupts current plans and operations of Eve as a result of the announcement and pendency of the business combination;

 

   

the ability of the Company to maintain an effective system of internal controls over financial reporting;

 

   

the ability of the Company to grow market share in its existing markets or any new markets it may enter;

 

   

the ability of the Company to respond to general economic conditions;

 

   

the ability of the Company to manage its growth effectively;

 

   

the ability of the Company to achieve and maintain profitability in the future;

 

   

the ability of the Company to access sources of capital to finance operations and growth;

 

   

the success of strategic relationships with third parties;

 

   

reliance on services to be provided by Embraer and other third parties; and

 

   

other risks and uncertainties described in this proxy statement, including those under “Risk Factors”.

The Company and Eve undertake no obligations to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events, other than as required by law.

 

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The foregoing factors and others described under “Risk Factors” should not be construed as exhaustive. There are other factors that may cause our actual results to differ materially from the forward-looking statements contained in this proxy statement. Moreover, new risks emerge from time to time and it is not possible for the Company and Eve to predict all such risks. The Company and Eve cannot assess the impact of all risks on their respective business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. The Company and Eve urge you to read the sections of this proxy statement entitled “Summary of the Proxy Statement,” “Risk Factors,” “Zanite’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Eve’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a more complete discussion of the factors that could affect their respective future performance and the industry in which we operate.

The forward-looking statements are based on plans, estimates and projections as they are currently available to the management of the Company and Eve, and neither undertakes any obligation, and neither expects, to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to the Company and Eve or to persons acting on behalf of the Company and Eve are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this proxy statement.

 

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SUMMARY TERM SHEET

This summary term sheet, together with the sections entitled “Questions and Answers for Stockholders of Zanite” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached Annexes, for a more complete understanding of the matters to be considered at the special meeting. In addition, for definitions used commonly throughout this proxy statement, including this summary term sheet, please see the section entitled “Certain Defined Terms.”

 

   

Zanite is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

   

There are currently 28,750,000 shares of our common stock outstanding, consisting of 23,000,000 shares of our Class A common stock and 5,750,000 shares of our Class B common stock, held of record by 6 holders, no shares of preferred stock outstanding and 25,750,000 warrants outstanding, consisting of 11,500,000 public warrants held of record by 2 holders and 14,250,000 private placement warrants held of record by one holder, our Sponsor. Each public warrant entitles its holder to purchase one share of our Class A common stock at an exercise price of $11.50 per share, to be exercised only for a whole number of shares of our Class A common stock. The public warrants will become exercisable on the later of 30 days after the Closing of our business combination or 12 months from the closing of the IPO, provided in each case that we have an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. The public warrants expire five years after the Closing of our business combination or earlier upon redemption or liquidation. Once the public warrants become exercisable, we may redeem the outstanding public warrants at a price of $0.01 per warrant, if the last sale price of our class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders. Except as otherwise provided in the warrant agreement, the private placement warrants, however, are non-redeemable so long as they are held by the Sponsor or its permitted transferees. For more information regarding the warrants, please see the section entitled “Description of Securities.”

 

   

The UAM Business that has been contributed to Eve as part of the contemplated transaction has been incubated for nearly four years within EmbraerX, a business unit within Embraer. In April 2021, Embraer formed EVE Urban Air Mobility Solutions, Inc., a Delaware corporation, which was later converted into a limited liability company and renamed “EVE UAM, LLC,” for purposes of conducting the UAM Business as an independent company. The UAM Business is developing a comprehensive UAM solution that includes: the design and production of electric vertical takeoff and landing vehicles (“eVTOLs”); a portfolio of maintenance and support services focused on Eve and third-party eVTOLs; fleet operations services conducted in collaboration with partners; and a new Urban Air Traffic Management (“UATM”) system designed to allow eVTOLs to operate safely and efficiently in dense urban airspace alongside conventional aircraft and drones. The UAM Business expects to achieve type certification of its eVTOL in 2025 and reach entry-into-service in 2026. To date, the UAM Business has established an initial order pipeline of 1,735 vehicles valued at $5.2 billion from 17 launch customers based on non-binding letters of intent, consistent with common aviation practices. The UAM Business believes that it is well positioned to achieve certification and volume production of its UAM solution due to the experience of its team, its portfolio of technologies, its network of leading partners and its strategic relationship with Embraer, among other factors.

 

   

In accordance with the terms and subject to the conditions of the Business Combination Agreement, Zanite has agreed to pay consideration in the form of 220,000,000 shares of common stock valued at $10.00 per share to EAH in exchange for all of the issued and outstanding equity interests of Eve. The following table

 

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summarizes the sources and uses of funds for the business combination. These figures assume (i) that no public stockholders of Zanite exercise their redemption rights in connection with the business combination and (ii) that Zanite issues 31,500,000 shares of common stock to the PIPE Investors pursuant to the PIPE Investment. If the actual facts are different from these assumptions, the below figures will be different.

 

Sources

   

Uses

 

Cash and investment held in trust account

   $ 236,920,000 (1)    Cash to balance sheet    $ 511,360,000  

PIPE Investment Amount

   $ 315,000,000    

Estimated transaction costs(2)

   $ 19,400,000  
     Cash disbursement(3)    $ 21,160,000  
  

 

 

      

 

 

 

Total sources

   $ 551,920,000     Total uses    $ 551,920,000  
  

 

 

      

 

 

 

 

(1)

Assumes no shares of Class A common stock are redeemed by the public stockholders in connection with the business combination. For every 100,000 shares of Class A common stock that are redeemed, the total sources and total uses would be reduced by $1.03 million to satisfy such redemption obligations to Zanite’s public stockholders.

(2)

Includes deferred underwriting commissions of $8,050,000 due to the underwriters of Zanite’s IPO and Zanite’s estimated transaction expenses of $11,350,000.

(3)

Reflects a disbursement of cash to Embraer, pursuant to the terms of the Business Combination Agreement, in the amount of $21,160,000 as payment for incurred transaction expenses which are unrelated to Eve or Eve’s subsidiaries and which are payable upon Closing.

 

   

In connection with the transactions contemplated by the Business Combination Agreement, the Company has entered into Subscription Agreements with the PIPE Investors pursuant to which, among other things, the Company agreed to issue and sell to the PIPE Investors in private placements to close immediately prior to the Closing, an aggregate of 31,500,000 shares of Class A common stock at $10.00 per share, for an aggregate purchase price of $315,000,000. The PIPE Investors include, among others, the Sponsor, which subscribed to purchase 2,500,000 shares of common stock for a purchase price of $25,000,000, EAH, which subscribed to purchase 17,500,000 shares of common stock for a purchase price of $175,000,000 and the other PIPE Investors, which subscribed to purchase 11,500,000 shares of common stock for a purchase price of $115,000,000. The obligations of each party to consummate the PIPE Investment are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Business Combination Agreement. The PIPE Investment is expected to close substantially concurrently with the Closing. In connection with the Closing, all of the issued and outstanding shares of our Class A common stock, including the shares of Class A common stock issued to the PIPE Investors, will be converted into, on a one-for-one basis, shares of common stock of Eve Holding. In addition, the Company has also entered into warrant agreements with certain of the Strategic PIPE Investors, pursuant to which, and subject to the terms and conditions of each applicable warrant agreement, the Company has agreed to issue to the Strategic PIPE Investors warrants to purchase an aggregate amount of (i) 14,150,000 shares of common stock with an exercise price of $0.01 per share, (ii) 12,000,000 shares of common stock with an exercise price of $15.00 per share and (iii) 5,000,000 shares of common stock with an exercise price of $11.50 per share. The warrant agreements provide for the issuance of such warrants upon the Closing and/or achievement of certain UAM Business milestones. In connection with the PIPE Investment, EAH has entered into arrangements with certain of such Strategic PIPE Investors to provide them with price protections in the amount of up to their $30 million aggregate commitments in the form of credits for parts and services or cash in exchange for the transfer of their shares to EAH following the Closing. Pursuant to the terms of the Subscription Agreements, a PIPE Investor, including the Sponsor and EAH, may assign all or a portion of its obligation to purchase its shares of Common Stock in the PIPE Investment with Zanite’s prior consent.

 

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We anticipate that, upon completion of the business combination and assuming that (i) the new warrants that will become exercisable at Closing will not be exercised immediately thereafter and (ii) no equity awards will be issued at Closing, the approximate ownership interests of the Company will be as set forth in the table below:

 

Stockholder

   Assuming No
Zanite Share Redemption(1)
    Assuming Maximum
Zanite Share Redemption(2)
 
           Shares             %             Shares             %  

EAH

     237,500,000 (3)      84.75     237,500,000 (3)      91.12

Zanite Public Stockholders

     23,000,000       8.21     3,398,058       1.30

Zanite Initial Stockholders

     8,250,000 (4)       2.94     8,250,000 (4)       3.17

Third-Party PIPE Investors

     11,500,000       4.10     11,500,000       4.41

Total

     280,250,000       100     260,648,058       100

 

(1)

For every 1,000,000 shares of common stock of Zanite redeemed by a Zanite public stockholder, (i) the percentage of shares of common stock of Zanite held by the Zanite public stockholders will be reduced by 0.36% and (ii) the percentage of shares of common stock of Zanite held by each of EAH, Zanite’s initial stockholders and the PIPE Investors (excluding the Sponsor and EAH) will be increased by 0.36%.

(2)

This presentation assumes 19,601,942 shares of Class A common stock are redeemed for their pro rata share of the funds in Zanite’s trust account, which amount is approximately $236.92 million as of December 27, 2021. This scenario gives effect to Zanite’s public stockholder redemptions of 19,601,942 shares for a per share redemption price of $10.30, representing an aggregate redemption payment of $201.90 million, and is based on the Minimum Cash Condition that the amount of cash available in Zanite’s trust account, after deducting the amount required to satisfy Zanite’s obligations to its stockholders (if any) that exercise their rights to redeem their public shares (but prior to the payment or reimbursement, as applicable, of any (a) deferred underwriting commissions being held in the Zanite’s trust account and (b) transaction expenses of Embraer and its subsidiaries (including Eve) and Zanite), plus the PIPE Investment Amount is at least $350,000,000. The Minimum Cash Condition is waivable by Embraer, Eve and EAH, and if so waived, the maximum amount of redemptions could exceed the 19,601,942 public share redemption scenario presented herein.

(3)

Includes the 17,500,000 shares of common stock EAH committed to purchase in connection with the PIPE Investment at a purchase price of $10.00 per share.

(4)

Includes the 2,500,000 shares of common stock the Sponsor committed to purchase in connection with the PIPE Investment at a purchase price of $10.00 per share.

 

   

Our management and board of directors considered various factors in determining whether to approve the Business Combination Agreement and the business combination. For more information about our decision-making process, see the section entitled “The Business Combination Proposal — Zanite’s Board of Directors’ Reasons for the Approval of the Business Combination”.

 

   

Pursuant to the Current Charter, in connection with the business combination, holders of our public shares may elect to have their Class A common stock redeemed for cash at the applicable redemption price per share calculated in accordance with the Current Charter. As of December 27, 2021, this would have amounted to approximately $10.30 per share. If a holder exercises his, her, or its redemption rights, then the holder will exchange his, her, or its public shares for cash and will no longer own shares of the post-business combination Company and will not participate in the future growth of the post-business combination Company, if any. Such a holder will be entitled to receive cash for his, her, or its public shares only if he, she, or it properly demands redemption and delivers his, her, or its shares (either physically or electronically) to the Transfer Agent at least two business days prior to the scheduled vote at the special meeting. Please see the section entitled “Special Meeting of Zanite Stockholders — Redemption Rights.”

 

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In addition to voting on the Business Combination Proposal, stockholders are being asked to vote on the following proposals at the special meeting:

 

(1)

Proposal No. 2 — The Charter Amendment Proposals: Proposals to amend and restate, and further amend, the Current Charter as follows:

 

  (A)

Charter Amendment Proposal A: to approve and adopt the Proposed Charter (other than the proposals addressed in Charter Amendment Proposal B), which, if approved, would amend and restate the Current Charter, and which, if approved, would take effect upon the Closing;

 

  (B)

Charter Amendment Proposal B: to approve and adopt a proposed amendment to the Proposed Charter to (i) increase the number of authorized shares of Class A common stock from 100,000,000 to 1,000,000,000, which will become shares of common stock, par value of $0.001 per share, of the combined company upon the Closing, and the total number of authorized shares of common stock from 111,000,000 to 1,000,000,000 and (ii) provide that the number of authorized shares of any class of common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL, which, if approved, will both be in effect upon the Closing;

 

   

Proposal No. 3 — The Advisory Charter Proposals: Proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with the SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as six sub-proposals;

 

   

Proposal No. 3(A): A proposal to increase the total number of authorized shares and classes of stock to 1,100,000,000 shares, consisting of (i) 1,000,000,000 shares of common stock and (ii) 100,000,000 shares of preferred stock, par value $0.0001 per share;

 

   

Proposal No. 3(B): A proposal to provide that the number of authorized shares of any class of common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL;

 

   

Proposal No. 3(C): A proposal to require the affirmative vote of the holders of at least two-thirds of the total voting power of all the then outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class to (1) make amendments to certain provisions of the Proposed Charter (Article THIRTEENTH (A)) and (2) amend the Proposed Bylaws (Article SIXTH (F));

 

   

Proposal No. 3(D): A proposal to provide that any action required or permitted to be taken by the stockholders of the Company may be taken by written consent until the time the issued and outstanding shares of common stock owned by Embraer Entities represent less than 50% of the voting power of the then outstanding shares of capital stock of the Company;

 

   

Proposal No. 3(E): A proposal to elect not to be governed by Section 203 of the DGCL relating to business combinations with interested stockholders; and

 

   

Proposal No. 3(F): A proposal to provide for certain additional changes, including, among other things, (i) changing the post-business combination company’s corporate name from “Zanite Acquisition Corp.” to “Eve Holding, Inc.”, (ii) making the Company’s corporate existence perpetual and (iii) removing certain provisions related to our status as a blank check company that will no longer apply upon consummation of the business combination, all of which our board of directors believes are necessary to adequately address the needs of the post-business combination Company;

 

   

Proposal No. 4 — The Stock Issuance Proposal: A proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq, (x) the issuance of more than 20% of the Company’s issued

 

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and outstanding common stock in connection with the business combination, consisting of the issuance of (i) shares of common stock to EAH pursuant to the terms of the Business Combination Agreement and (ii) shares of common stock to the PIPE Investors in connection with the PIPE Investment, plus any additional shares of common stock pursuant to subscription agreements we may enter into prior to the Closing, and (y) the issuance of shares of common stock to EAH in connection with the business combination and the PIPE Investment that would result in EAH owning more than 20% of our outstanding common stock, or more than 20% of the voting power, which could constitute a “change of control” under Nasdaq rules;

 

   

Proposal No. 5 — The Incentive Plan Proposal: A proposal to approve and adopt the Incentive Plan, a copy of which is attached to this proxy statement as Annex K;

 

   

Proposal No. 6 — The Director Election Proposal: A proposal to elect seven directors to serve staggered terms on our board of directors until the 2022, 2023 and 2024 annual meeting of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal; and

 

   

Proposal No. 7 — The Adjournment Proposal: A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived.

Please see sections entitled “The Business Combination Proposal,” “The Charter Amendment Proposals,” “The Advisory Charter Proposals,” “The Incentive Plan Proposal,” “The Director Election Proposal” and “The Adjournment Proposal.” Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Condition Precedent Proposals and each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal are not conditioned upon the approval of any other proposal. If our stockholders do not approve each of the Condition Precedent Proposals, the business combination may not be consummated. By contrast, approval of each of the other proposals in this proxy statement (i.e., the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal) is not a condition to the consummation of the business combination.

 

   

Our board of directors has decided to increase the size of the board of directors from six to seven directors if the business combination is completed. For more information, please see the section entitled “Management of the Company following the Business Combination.”

 

   

Unless waived by the parties to the Business Combination Agreement, and subject to applicable law, the Closing is subject to a number of conditions set forth in the Business Combination Agreement including, among others, the receipt of certain stockholder approvals contemplated by this proxy statement. For more information about the closing conditions to the business combination, please see the section entitled “The Business Combination Proposal — The Business Combination Agreement — Conditions to the Completion of the Business Combination.”

 

   

The Business Combination Agreement may be terminated at any time prior to the consummation of the business combination upon agreement of the parties thereto, or by the Company or Embraer in specified circumstances. For more information about the termination rights under the Business Combination Agreement, please see the section entitled “The Business Combination Proposal — Termination; Effectiveness.

 

   

The business combination involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”

 

   

When you consider the recommendation of our board of directors that you vote in favor of approval of the business combination, you should be aware that the initial stockholders, including the Company’s directors

 

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and officers, have interests in the business combination that may be different from, or in addition to, the interests of the Company’s other stockholders and warrant holders. These interests include:

 

   

The Sponsor and our officers and directors will lose their entire investment in us if we do not complete a business combination within the completion window.

On August 7, 2020, the Sponsor paid $25,000 in consideration for 5,750,000 founder shares, or approximately $0.004 per share, to cover certain of our offering costs in connection with the IPO. On October 15, 2020, the Sponsor transferred 250,000 founder shares to Ronald D. Sugar, our senior advisor, and 150,000 founder shares to each of John B. Veihmeyer, Larry R. Flynn and Gerard J. DeMuro, our then directors, resulting in the Sponsor holding 5,050,000 founder shares. In September 2021, in connection with his appointment to the board of directors, Patrick M. Shanahan was made a member of the Sponsor, pursuant to which Mr. Shanahan may be entitled to distributions of the Company’s securities held by the Sponsor following the consummation of the business combination. The 5,750,000 founder shares have an aggregate market value of approximately $58,420,000 based upon the closing per share price of $10.16 on Nasdaq on December 27, 2021.

On November 19, 2020, in connection with the closing of the IPO, the Sponsor purchased 9,650,000 private placement warrants from the Company at a price of $1.00 per private placement warrant, for an aggregate purchase price of $9,650,000. Each private placement warrant entitles the holder thereof to purchase one share of common stock at $11.50 per share. On May 18, 2021, the Sponsor purchased 2,300,000 private placement warrants from the Company at a price of $1.00 per private placement warrant, for an aggregate purchase price of $2,300,000, to extend the period of time the Company has to consummate its initial business combination by 6 months from the prior deadline of May 19, 2021 until November 19, 2021. On November 16, 2021, the Sponsor purchased 2,300,000 private placement warrants from the Company at a price of $1.00 per private placement warrant, for an aggregate purchase price of $2,300,000, to extend the period of time it the Company has to consummate its initial business combination by 6 months from the prior deadline of November 19, 2021 until May 19, 2022. The 14,250,000 private placement warrants have an aggregate market value of approximately $14,837,100 based upon the closing per warrant price of $1.04 on Nasdaq on December 27, 2021. We would need to seek and obtain the requisite consent of our stockholders to extend the period of time Zanite has to consummate its initial business combination beyond May 19, 2022.

On December 21, 2021, the Sponsor committed to purchase 2,500,000 shares of common stock for $25,000,000 at $10.00 per share in connection with the PIPE Investment. Such shares would have an aggregate market value of approximately $25,400,000 based upon the closing per share price of $10.16 on Nasdaq on December 27, 2021.

 

   

The initial stockholders and our officers and directors have agreed to waive their redemption rights with respect to their founder shares and any public shares they hold in connection with the completion of the business combination. In addition, the initial stockholders and our officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if the Company fails to complete a business combination within the completion window. There will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless if we fail to complete our initial business combination within the completion window.

 

   

The nominal purchase price paid by the Sponsor and our officers and directors for the founder shares may result in significant dilution to the implied value of the public shares upon consummation of the business combination. In addition, the value of the founder shares following the Closing is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common stock is substantially less than $10.00 per share. As a result, the Sponsor and our officers and directors are likely able to recoup their investment in us and make a substantial profit on that investment, even if our public shares have lost significant value. Accordingly, the Sponsor and our officers and directors may have an economic incentive that differs from that of our public stockholders to pursue and consummate an initial

 

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business combination rather than to liquidate and to return all of the cash in the trust account to the public stockholders, even if that business combination were with a riskier or less-established target business.

 

   

Following the consummation of the business combination, we will continue to indemnify our existing directors and officers and will maintain a directors’ and officers’ liability insurance policy.

 

   

Upon the Closing, Kenneth C. Ricci is expected to serve on the Company’s board of directors and Gerard J. DeMuro, a former member of our board of directors and Eve’s Co-Chief Executive Officer, is expected to serve as the Co-Chief Executive Officer of the Company. As such, in the future they may receive any cash fees, stock options or stock awards that the Company and its board of directors determines to pay to its directors and/or officers.

 

   

In connection with the Closing, we will enter into the Amended and Restated Registration Rights Agreement, which will provide certain of the Company’s stockholders, including the holders of the founder shares, private placement warrants and shares of common stock issuable upon conversion of the founder shares and private placement warrants, with registration rights.

 

   

Upon the Closing, subject to the terms and conditions of the Business Combination Agreement, the Company’s officers and directors are entitled to reimbursement for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Such reimbursable out-of-pocket expenses, if any, are not expected to be material.

 

   

Upon the completion of the business combination, BTIG and I-Bankers Securities, Inc., who acted as Zanite’s underwriters in the IPO, will be entitled to an aggregate deferred underwriting commission of $8,050,000. Additionally, Jefferies and Raymond James will receive customary financial advisory fees for a transaction of this nature, and Jefferies, BTIG, Bradesco BBI and Itau are entitled to receive customary placement agent and referral fees, as applicable, for a transaction of this nature. As of December 30, 2021, the total aggregate amount of transaction expenses expected to be paid or repaid by Zanite upon consummation of the business combination is approximately $40.56 million, inclusive of the financial advisory, private placement and referral fees and the deferred underwriting commission payable to Zanite’s underwriters in the IPO. If we were to fail to complete a business combination by May 19, 2022, BTIG, I-Bankers, Jefferies, Banco Itaú International and its affiliates, and Raymond James would not receive their expected compensation for their respective roles as underwriters, financial advisor, placement agent and/or referee, as applicable, unless we seek and obtain the requisite consent of our shareholders to extend the period of time Zanite has to consummate its initial business combination.

 

   

In connection with the Closing, the Sponsor and our officers and directors would be entitled to the repayment of any working capital loans and advances that have been made to the Company and remain outstanding. As of the date of this proxy statement, there are no such loans or advances outstanding. If we do not complete an initial business combination within the completion window, we may use a portion of our working capital held outside the trust account to repay the working capital loans, but no proceeds held in the trust account would be used to repay any working capital loans.

 

   

In order to protect the amounts held in the trust account, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or Business Combination Agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.10 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

 

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QUESTIONS AND ANSWERS FOR STOCKHOLDERS OF ZANITE

The questions and answers below highlight only selected information from this proxy statement and only briefly address some commonly asked questions about the special meeting and the proposals to be presented at the special meeting, including with respect to the business combination. The following questions and answers do not include all the information that is important to our stockholders. Stockholders are urged to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the business combination and the voting procedures for the special meeting.

Q: Why am I receiving this proxy statement?

A: Our stockholders are being asked to consider and vote upon a proposal to adopt the Business Combination Agreement and approve the transactions contemplated thereby, including the business combination, among other proposals. As contemplated by the terms of the Business Combination Agreement and the Contribution Agreement, on December 10, 2021, Embraer effected a series of transactions that resulted in (i) certain assets and liabilities of the UAM Business being transferred to and owned or licensed by Eve or one of its subsidiaries in exchange for newly issued limited liability company interests of Eve and (ii) Eve becoming a wholly owned subsidiary of EAH. At the Closing of the business combination, (x) EAH will contribute and transfer to Zanite all of the Eve Interests held by it in exchange for the issuance to EAH of 220,000,000 shares of common stock of Zanite (y) Eve will become a wholly-owned subsidiary of Zanite and (z) Zanite will change its name to “Eve Holding, Inc.” A copy of the Business Combination Agreement is attached to this proxy statement as Annex A.

This proxy statement and its Annexes contain important information about the proposed business combination and the other matters to be acted upon at the special meeting. You should read this proxy statement and its Annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.

Q: When and where is the special meeting?

A: The special meeting will be held on [●], at [●], New York City time at https://www.cstproxy.com/zaniteacquisition/2022.

In light of ongoing developments related to COVID-19, and the related protocols that governments have implemented, the board of directors determined that the special meeting will be a virtual meeting conducted exclusively via live webcast. The board of directors believes that this is the right choice for the Company and its stockholders at this time, as it permits stockholders to attend and participate in the special meeting while safeguarding the health and safety of the Company’s stockholders, directors and management team. You will be able to attend the special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit your questions during the special meeting by visiting https://www.cstproxy.com/zaniteacquisition/2022. To participate in the virtual meeting, you will need a 12-digit control number assigned by Continental Stock Transfer & Trust Company. The meeting webcast will begin promptly at [●], New York City time. We encourage you to access the meeting prior to the start time and you should allow ample time for the check-in procedures. Because the special meeting will be a completely virtual meeting, there will be no physical location for stockholders to attend.

Beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual special meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to Morrow. Beneficial stockholders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate in the special

 

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meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the meeting with a link and instructions for entering the virtual special meeting. Beneficial stockholders should contact Continental Stock Transfer & Trust Company at least five business days prior to the meeting date in order to ensure access.

Q: What are the specific proposals on which I am being asked to vote at the special meeting?

A: At the special meeting, you will be asked to consider and vote upon the following proposals:

 

  (1)

Proposal No. 1 — The Business Combination Proposal: A proposal to adopt the Business Combination Agreement, dated as of December 21, 2021, a copy of which is attached as Annex A, by and among the Company, Eve, Embraer, and EAH, and approve the transactions contemplated by the Business Combination Agreement, which provides that, among other things, EAH, as the sole beneficial and record holder of all of the issued and outstanding equity interests of Eve at such time, will contribute and transfer to Zanite, and Zanite will receive from EAH, all of the issued and outstanding equity interests of Eve, as consideration and in exchange for the issuance and transfer by Zanite to EAH of 220,000,000 shares of common stock of Zanite at the Closing;

 

  (2)

Proposal No. 2 — The Charter Amendment Proposals: Proposals to amend and restate, and further amend, the Current Charter as follows:

 

  (A)

Charter Amendment Proposal A: to approve and adopt Proposed Charter (other than the proposals addressed in Charter Amendment Proposal B), which, if approved, would amend and restate the Current Charter, and which, if approved, would take effect upon the Closing;

 

  (B)

Charter Amendment Proposal B: to approve and adopt a proposed amendment to the Proposed Charter to (i) increase the number of authorized shares of Class A common stock from 100,000,000 to 1,000,000,000, which will become shares of common stock, par value of $0.001 per share, of the combined company upon the Closing, and the total number of authorized shares of common stock from 111,000,000 to 1,000,000,000 and (ii) provide that the number of authorized shares of any class of common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL, which, if approved, will both be in effect upon the Closing;

 

  (3)

Proposal No. 3 — The Advisory Charter Proposals: Proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with the SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as six sub-proposals;

 

  (A)

Proposal No. 3(A): A proposal to increase the total number of authorized shares and classes of stock to 1,100,000,000 shares, consisting of (i) 1,000,000,000 shares of common stock and (ii) 100,000,000 shares of preferred stock, par value $0.0001 per share;

 

  (B)

Proposal No. 3(B): A proposal to provide that the number of authorized shares of any class of common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL;

 

  (C)

Proposal No. 3(C): A proposal to require the affirmative vote of the holders of at least two-thirds of the total voting power of all the then outstanding shares of capital stock of the Company entitled to vote thereon, voting together as a single class to (1) make amendments to certain provisions of the Proposed Charter (Article THIRTEENTH(A)) and (2) amend the Proposed Bylaws (Article SIXTH (F));

 

  (D)

Proposal No. 3(D): A proposal to provide that any action required or permitted to be taken by the stockholders of the Company may be taken by written consent until the time the issued and

 

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  outstanding shares of common stock owned by Embraer Entities represent less than 50% of the voting power of the then outstanding shares of capital stock of the Company;

 

  (E)

Proposal No. 3(E): A proposal to elect not to be governed by Section 203 of the DGCL relating to business combinations with interested stockholders; and

 

  (F)

Proposal No. 3(F): A proposal to provide for certain additional changes, including, among other things, (i) changing the post-business combination company’s corporate name from “Zanite Acquisition Corp.” to “Eve Holding, Inc.”, (ii) making the Company’s corporate existence perpetual and (iii) removing certain provisions related to our status as a blank check company that will no longer apply upon consummation of the business combination, all of which our board of directors believes are necessary to adequately address the needs of the post-business combination Company;

 

  (4)

Proposal No. 4 — The Stock Issuance Proposal: A proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq, (x) the issuance of more than 20% of the Company’s issued and outstanding common stock in connection with the business combination, consisting of the issuance of (i) shares of common stock to EAH pursuant to the terms of the Business Combination Agreement and (ii) shares of common stock to the PIPE Investors in connection with the PIPE Investment, plus any additional shares of common stock pursuant to subscription agreements we may enter into prior to the Closing, and (y) the issuance of shares of common stock to EAH in connection with the business combination and the PIPE Investment that would result in EAH owning more than 20% of our outstanding common stock, or more than 20% of the voting power, which could constitute a “change of control” under Nasdaq rules;

 

  (5)

Proposal No. 5 — The Incentive Plan Proposal: A proposal to approve and adopt the Incentive Plan, a copy of which is attached to the accompanying proxy statement as Annex K;

 

  (6)

Proposal No. 6 — The Director Election Proposal: A proposal to elect seven directors to serve staggered terms on our board of directors until the 2022, 2023 and 2024 annual meetings of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal; and

 

  (7)

Proposal No. 7 — The Adjournment Proposal: A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived.

Q: Are the proposals conditioned on one another?

A: Yes. Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Condition Precedent Proposals and each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal are not conditioned upon the approval of any other proposal. If our stockholders do not approve each of the Condition Precedent Proposals, the business combination may not be consummated. By contrast, approval of each of the other proposals in this proxy statement (i.e., the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal) is not a condition to the consummation of the business combination.

Q: Why is the Company providing stockholders with the opportunity to vote on the business combination?

A: Under the Current Charter, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote,

 

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rather than a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the Business Combination Proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the Closing. The adoption of the Business Combination Agreement is required under Delaware law and the approval of the business combination is required under the Current Charter. In addition, such approval is also a condition to the Closing under the Business Combination Agreement.

Q: What will happen in the business combination?

A: As contemplated by the terms of the Business Combination Agreement and the Contribution Agreement, on December 10, 2021, Embraer effected a series of transactions that resulted in (i) certain assets and liabilities of the UAM Business being transferred to and owned or licensed by Eve or one of its subsidiaries in exchange for newly issued limited liability company interests of Eve and (ii) Eve becoming a wholly owned subsidiary of EAH. At the Closing of the business combination, (x) EAH will contribute and transfer to Zanite all of the Eve Interests held by it in exchange for the issuance to EAH of 220,000,000 shares of common stock of Zanite, (y) Eve will become a wholly-owned subsidiary of Zanite and (z) Zanite will change its name to “Eve Holding, Inc.”

Q: Following the business combination, will the Company’s securities continue to trade on a stock exchange?

A: Yes. We intend to apply to obtain listing of the post-business combination Company’s common stock and warrants on the NYSE under the symbols “EVEX” and “EVEXW,” respectively, upon the Closing. Our units will automatically separate into the component securities upon consummation of the business combination and, as a result, will no longer trade as a separate security.

Q: How has the announcement of the business combination affected the trading price of the Company’s common stock?

A: On December 20, 2021, the trading date before the public announcement of the business combination, the Company’s units, Class A common stock and warrants closed at $10.45, $10.15 and $0.65, respectively. On December 29, 2021, the trading date immediately prior to the date of this proxy statement, the Company’s units, Class A common stock and warrants closed at $10.57, $10.16 and $0.96, respectively.

Q: How will the business combination impact the shares of the Company outstanding after the business combination?

A: Immediately after the business combination and the consummation of the transactions contemplated thereby, including the PIPE Investment, the amount of common stock issued and outstanding will increase to approximately 280,250,000 shares of common stock (excluding any shares of common stock issuable upon the exercise of any warrants which may be exercisable immediately following the Closing and assuming that no shares of common stock are redeemed). Additional shares of common stock may be issuable in the future as a result of the issuance of additional shares that are not currently outstanding. The issuance and sale of these shares in the public market could adversely impact the market price of our common stock, even if our business is doing well.

Q: Is the business combination the first step in a “going private” transaction?

A: No. The Company does not intend for the business combination to be the first step in a “going private” transaction. One of the primary purposes of the business combination is to provide a platform for Eve to access the U.S. public markets.

 

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Q: Will the management of Eve change in the business combination?

A: We anticipate that all of the executive officers of Eve will remain with Eve Holding. The current directors of the Company, other than Kenneth C. Ricci, will resign at the time of the business combination. Kenneth C. Ricci will be appointed to serve as a director of Eve Holding upon completion of the business combination. The remaining director nominees will be designated by EAH in accordance with the terms of the Business Combination Agreement, except for one director who will be jointly designated by EAH and the Sponsor. Please see the sections entitled “Management of the Company Following the Business Combination” and “The Director Election Proposal” for additional information.

 

Q:

What equity stake will current stockholders of the Company, the Sponsor, PIPE Investors (including Strategic PIPE Investors but excluding EAH) and EAH hold in the post-business combination Company after the Closing?

 

A:

We anticipate that, upon completion of the business combination and assuming that (i) the new warrants that will become exercisable at Closing will not be exercised immediately thereafter and (ii) no equity awards will be issued at Closing, the approximate ownership interests of the Company will be as set forth in the table below:

 

     Assuming No
Zanite Share Redemption(1)
    Assuming Maximum
Zanite Share Redemption(2)
 

Stockholder

  

        Shares         

    %    

        Shares         

    %  

EAH

     237,500,000 (3)      84.75     237,500,000 (3)      91.12

Zanite Public Stockholders

     23,000,000       8.21     3,398,058       1.30

Zanite Initial Stockholders

     8,250,000 (4)       2.94     8,250,000 (4)      3.17

Third-Party PIPE Investors

     11,500,000       4.10     11,500,000       4.41

Total

     280,250,000       100     260,648,058       100

 

(1)

For every 1,000,000 shares of common stock of Zanite redeemed by a Zanite public stockholder, (i) the percentage of shares of common stock of Zanite held by the Zanite public stockholders will be reduced by 0.36% and (ii) the percentage of shares of common stock of Zanite held by each of EAH, Zanite’s initial stockholders and the PIPE Investors (excluding the Sponsor and EAH) will be increased by 0.36%.

(2)

This presentation assumes 19,601,942 shares of Class A common stock are redeemed for their pro rata share of the funds in Zanite’s trust account, which amount is approximately $236.92 million as of December 27, 2021. This scenario gives effect to Zanite’s public stockholder redemptions of 19,601,942 shares for a per share redemption price of $10.30, representing an aggregate redemption payment of $201.90 million, and is based on the Minimum Cash Condition that the amount of cash available in Zanite’s trust account, after deducting the amount required to satisfy Zanite’s obligations to its stockholders (if any) that exercise their rights to redeem their public shares (but prior to the payment or reimbursement, as applicable, of any (a) deferred underwriting commissions being held in the Zanite’s trust account and (b) transaction expenses of Embraer and its subsidiaries (including Eve) and Zanite), plus the PIPE Investment Amount is at least $350,000,000. The Minimum Cash Condition is waivable by Embraer, Eve and EAH, and if so waived, the maximum amount of redemptions could exceed the 19,601,942 public share redemption scenario presented herein.

(3)

Includes the 17,500,000 shares of common stock EAH committed to purchase in connection with the PIPE Investment at a purchase price of $10.00 per share.

(4)

Includes the 2,500,000 shares of common stock the Sponsor committed to purchase in connection with the PIPE Investment at a purchase price of $10.00 per share.

For more information, please see the sections entitled “Summary of the Proxy Statement — Ownership of the Company following the Business Combination and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

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Q:

Will the Company obtain new financing in connection with the business combination?

 

A:

Yes, in connection with the transactions contemplated by the Business Combination Agreement, the Company has entered into Subscription Agreements, each dated December 21, 2021, with the PIPE Investors pursuant to which the Company agreed to issue and sell to the PIPE Investors in private placements to close immediately prior to the Closing, an aggregate of 31,500,000 shares of common stock at $10.00 per share, for an aggregate purchase price of $315,000,000. The PIPE Investors include, among others, the Sponsor, which subscribed to purchase 2,500,000 shares of common stock for a purchase price of $25,000,000, EAH, which subscribed to purchase 17,500,000 shares of common stock for a purchase price of $175,000,000, and the other PIPE Investors, which subscribed for 11,500,000 shares of common stock for a purchase piece of $115,000,000. Pursuant to the terms of the Subscription Agreements, a PIPE Investor, including the Sponsor and EAH, may assign all or a portion of its obligation to purchase its shares of Common Stock in the PIPE Investment with Zanite’s prior consent. At the Closing, the PIPE Investors and the Company will consummate the PIPE Investment pursuant to and in accordance with the terms of the Subscription Agreements.

In addition, the Company has also entered into warrant agreements with certain of the Strategic PIPE Investors, pursuant to which, and subject to the terms and conditions of each applicable warrant agreement, the Company has agreed to issue to the Strategic PIPE Investors warrants to purchase an aggregate amount of (i) 14,150,000 shares of common stock with an exercise price of $0.01 per share, (ii) 12,000,000 shares of common stock with an exercise price of $15.00 per share and (iii) 5,000,000 shares of common stock with an exercise price of $11.50 per share. The warrant agreements provide for the issuance of such warrants upon the Closing and achievement of certain UAM Business milestones. In connection with the PIPE Investment, EAH has entered into arrangements with certain of such Strategic PIPE Investors to provide them with price protections in the amount of up to their $30 million aggregate commitments in the form of credits for parts and services or cash in exchange for the transfer of their shares to EAH following the Closing.

The Company does not currently anticipate obtaining any new debt financing to fund the business combination.

 

Q:

What conditions must be satisfied to complete the business combination?

 

A:

There are a number of closing conditions that must be satisfied or waived in the Business Combination Agreement, including, among others, the approval of the Condition Precedent Proposals by the stockholders of the Company and the satisfaction of the Minimum Cash Condition. For a summary of the conditions that must be satisfied or waived prior to completion of the business combination, please see the section entitled “The Business Combination Proposal — The Business Combination Agreement.”

 

Q:

Why is the Company proposing the Charter Amendment Proposals?

 

A:

We are proposing the Charter Amendment Proposals in order to approve the Proposed Charter, substantially in the form attached to this proxy statement as Annex C. In the judgment of the board of directors, the proposed charter is necessary to address the needs of the post-business combination Company.

Pursuant to Delaware law and the Business Combination Agreement, we are required to submit the Charter Amendment Proposals to the Company’s stockholders for approval. Please see the section entitled “The Charter Amendment Proposals” for more information.

 

Q:

Why is the Company proposing the Advisory Charter Proposals?

 

A:

We are requesting that our stockholders vote upon, on a non-binding advisory basis, a series of proposals to approve certain amendments contained in the Proposed Charter that materially affect stockholder rights, which are those amendments that will be made to the Current Charter as reflected in the Proposed Charter if the Charter Amendment Proposals are approved.

 

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This separate vote is not otherwise required by Delaware law separate and apart from the Charter Amendment Proposals, but pursuant to SEC guidance, the Company is required to submit these provisions to our stockholders separately for approval. Please see the section entitled “The Advisory Charter Proposals” for additional information.

 

Q:

Why is the Company proposing the Stock Issuance Proposal?

 

A:

We are seeking stockholder approval in order to comply with Nasdaq Listing Rules 5635(a), (b) and (d), which require stockholder approval of certain transactions that result in the issuance of 20% or more of the outstanding voting power or shares of common stock outstanding before the issuance of stock or securities. Assuming no redemptions, we expect that approximately (i) 220,000,000 shares of common stock will be issued to EAH in connection with the business combination and (ii) 31,500,000 shares of Zanite Class A common stock will be issued to the PIPE Investors (inclusive of the 17,500,000 shares of common stock that will be issued to EAH in connection with the PIPE Investment and the 2,500,000 shares of common stock that will be issued to the Sponsor in connection with the PIPE Investment), plus any additional shares of common stock we may issue pursuant to subscription agreements we may enter into prior to the Closing. Because we may issue 20% or more of our outstanding common stock as consideration in the business combination and the PIPE investment, which would constitute 20% or more of the voting power, and therefore a “change of control” under Nasdaq Listing Rules 5635(a), (b) and (d), we are required to obtain stockholder approval of such issuance. For more information, please see the section entitled “The Stock Issuance Proposal.” For more information, please see the section entitled “Proposal No. 2 — The Nasdaq Proposal.”

 

Q:

Why is the Company proposing the Incentive Plan Proposal?

 

A:

The purpose of the Incentive Plan is to further align the interests of the eligible participants with those of stockholders by providing long-term incentive compensation opportunities tied to the performance of the Company. Please see the section entitled “The Incentive Plan Proposal” for additional information.

 

Q:

Why is the Company proposing the Director Election Proposal?

 

A:

Upon the Closing, our stockholders are being asked to consider and vote upon a proposal to elect seven directors to our board of directors, effective immediately upon the Closing of the business combination, with each Class I director having a term that expires at our annual meeting of stockholders in 2022, each Class II director having a term that expires at our annual meeting of stockholders in 2023 and each Class III director having a term that expires at our annual meeting of stockholders in 2024, or, in each case, when his or her respective successor is duly elected and qualified, or upon his or her earlier death, resignation, retirement or removal.

The Company believes it is in the best interests of stockholders to allow stockholders to vote upon the election of newly appointed directors. Please see the section entitled “The Director Election Proposal” for additional information.

 

Q:

Why is the Company proposing the Adjournment Proposal?

 

A:

We are proposing the Adjournment Proposal to allow our board of directors to adjourn the special meeting to a later date or dates to permit further solicitation of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Condition Precedent Proposals or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived. Please see the section entitled “The Adjournment Proposal” for additional information.

 

Q:

What happens if I sell my shares of Class A common stock before the special meeting?

 

A:

The record date for the special meeting is earlier than the date that the business combination is expected to be completed. If you transfer your shares of Class A common stock after the record date, but before the

 

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  special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares of Class A common stock because you will no longer be able to deliver them for cancellation upon consummation of the business combination. If you transfer your shares of Class A common stock prior to the record date, you will have no right to vote those shares at the special meeting or redeem those shares for a pro rata portion of the proceeds held in our trust account.

 

Q:

What constitutes a quorum at the special meeting?

 

A:

A majority of the issued and outstanding shares of common stock entitled to vote as of the record date at the special meeting must be present, in person (which would include presence at the virtual special meeting) or represented by proxy, at the special meeting to constitute a quorum and in order to conduct business at the special meeting. For Charter Amendment Proposal B, a quorum will be present at the special meeting if the holders of a majority of the Class A common stock outstanding and entitled to vote at the special meeting is represented in person (which would include presence at a virtual meeting) or by proxy at the special meeting. Abstentions will be counted as present for the purpose of determining a quorum. Shares held by the Sponsor, who currently beneficially owns approximately 20% of our issued and outstanding shares of common stock, will count towards this quorum. In the absence of a quorum, the chairman of the special meeting has the power to adjourn the special meeting. As of the record date for the special meeting, 14,375,001 shares of our common stock would be required to achieve a quorum.

 

Q:

What vote is required to approve the proposals presented at the special meeting?

 

A:

Approval of the Business Combination Proposal, the Advisory Charter Proposals (each of which is a non-binding vote), the Stock Issuance Proposal, the Incentive Plan Proposal, and the Adjournment Proposal each requires the affirmative vote of holders of a majority of the votes cast by our stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Approval of each of the Charter Amendment Proposals requires the affirmative vote of holders of a majority of the outstanding shares of our Class A common stock and Class B common stock entitled to vote thereon at the special meeting, voting as a single class. In addition, Charter Amendment Proposal B requires the affirmative vote of holders of a majority of the outstanding shares of Class A common stock, voting as a class.

The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that each of the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors.

A stockholder’s failure to vote by proxy or to vote in person at the special meeting (which would include voting at the virtual special meeting) will not be counted towards the number of shares of common stock required to validly establish a quorum. Abstentions will be counted in connection with the determination of whether a valid quorum is established. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting) and an abstention from voting on any of the Business Combination Proposal, the Advisory Charter Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal will have no effect on the outcome of any such proposal, but will have the same effect as a vote “AGAINST” the Charter Amendment Proposals.

 

Q:

What happens if the Business Combination Proposal is not approved?

 

A:

If the Business Combination Proposal is not approved and we do not consummate a business combination within the completion window, we will (i) cease all operations except for the purpose of winding up, (ii) as

 

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  promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject, in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

Q:

May the Sponsor, the initial stockholders or the Company’s directors or officers or their affiliates purchase shares or public warrants in connection with the business combination?

 

A:

In connection with the PIPE Investment, the Sponsor has agreed to purchase 2,500,000 shares of common stock for $25,000,000 at a price of $10.00 per share. Our initial stockholders and our directors, officers, advisors and their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of the business combination, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions. In the event that the Sponsor, the initial stockholders and our directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their public shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in the Business Combination Agreement, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding. Any such purchases of our securities may result in the completion of the business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A common stock or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on the NYSE.

 

Q:

How many votes do I have at the special meeting?

 

A:

Our stockholders are entitled to one vote on each proposal presented at the special meeting for each share of common stock held of record as of [●], the record date for the special meeting. As of the close of business on the record date, there were 28,750,000 outstanding shares of our common stock.

 

Q:

What interests do the Sponsor and the Company’s officers and directors have in the business combination?

 

A:

When you consider the recommendation of our board of directors that you vote in favor of approval of the business combination, you should be aware that the initial stockholders, including the Company’s directors and officers, have interests in the business combination that may be different from, or in addition to, the interests of the Company’s other stockholders and warrant holders. Our board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the business combination, and in recommending to our stockholders that they vote in favor of the proposals presented at the special meeting, including the Business Combination Proposal. Please see the section entitled “The Business Combination Proposal — Interests of Zanite’s Directors and Officers in the Business Combination” for additional information.

 

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Q:

Did the board of directors obtain a third-party fairness opinion in determining whether or not to proceed with the business combination?

 

A:

No. The Current Charter does not require our board of directors to seek a third-party fairness opinion in connection with a business combination unless the target business is affiliated with the Sponsor or our directors or officers.

 

Q:

What happens if I vote against the Business Combination Proposal?

 

A:

If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the requisite vote at the special meeting, then the Business Combination Proposal will be approved and, assuming the approval of the other Condition Precedent Proposals and the satisfaction or waiver of the other conditions to closing, the business combination will be consummated in accordance with the terms of the Business Combination Agreement.

If you vote against the Business Combination Proposal and the Business Combination Proposal does not obtain the affirmative vote of a majority of the votes cast by our stockholders at the special meeting, then the Business Combination Proposal will fail and we will not consummate the business combination.

 

Q:

Do I have redemption rights?

 

A:

Under the Current Charter, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. If you are a holder of public shares, you may redeem your public shares for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the trust account as of two business days prior to the consummation of the business combination, including interest not previously released to us to pay our taxes, by (ii) the total number of then-outstanding public shares; provided, that, the Company will not redeem any shares of Class A common stock issued in the IPO to the extent that the redemption would result in the Company having net tangible assets of less than $5,000,001. A public stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of our Class A common stock included in the units sold in our IPO without the prior consent of the Company. Holders of our outstanding public warrants do not have redemption rights in connection with the business combination. The Sponsor and our directors and officers have agreed to waive their redemption rights with respect to any public shares they may hold in connection with the consummation of the business combination, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price. For illustrative purposes, based on the fair value of the assets held in the trust account of approximately $236,920,000 as of December 27, 2021, the estimated per share redemption price would have been approximately $10.30.

You will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares or (b) hold public shares through units and you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and

 

  (ii)

prior to [●], New York City time, on [●] (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to the Transfer Agent that the Company redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through DTC.

 

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Holders of units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.

Additionally, shares properly tendered for redemption will only be redeemed if the business combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the trust account, including interest not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses) in connection with the liquidation of the trust account, unless we complete an alternative business combination within the completion window.

 

Q:

Can the initial stockholders and our officers and directors redeem their founder shares in connection with consummation of the business combination?

 

A:

No. The initial stockholders and our officers and directors have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the consummation of our business combination.

 

Q:

Is there a limit on the number of shares I may redeem?

 

A:

Yes. A public stockholder, together with any affiliate of the stockholder or any other person with whom the stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), is restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our IPO without the prior consent of the Company. Accordingly, all shares in excess of 15% owned by a holder will not be redeemed for cash without the prior consent of the Company. On the other hand, a public stockholder who holds less than 15% of the public shares of Class A common stock may redeem all of the public shares held by the stockholder for cash.

 

Q:

Is there a limit on the total number of shares that may be redeemed?

 

A:

Yes. The Current Charter provides that we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Other than this limitation, the Current Charter does not provide a specified maximum redemption threshold.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. You may exercise your redemption rights whether you vote your shares of common stock for or against, or whether you abstain from voting on the Business Combination Proposal or any other proposal described by this proxy statement.

Q: How do I exercise my redemption rights?

 

A:

In order to exercise your redemption rights, you must: (i) (a) hold public shares or (b) hold public shares through units and you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and (ii) prior to [●], New York City time, on [●] (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to the Transfer Agent that the Company redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through DTC. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.

 

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The Transfer Agent’s address is as follows:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Please check the box on the enclosed proxy card marked “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of common stock. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his, her, or its or any other person with whom he, she, or it is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the shares of Class A common stock included in the units sold in our IPO without the prior consent of the Company, which we refer to as the “15% threshold.” Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public stockholder or group will not be redeemed for cash without the prior consent of the Company.

Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name” are required to either tender their shares to our Transfer Agent prior to the date set forth in these proxy materials, or up to two business days prior to the scheduled vote on the proposal to approve the business combination at the special meeting, or to deliver their shares to the Transfer Agent electronically using DTC’s Deposit/Withdrawal At Custodian (DWAC) system, at the stockholder’s option. The requirement for physical or electronic delivery prior to the special meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the business combination is approved.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming stockholder. However, this fee would be incurred regardless of whether or not we require stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when delivery must be effectuated.

 

Q:

What are the U.S. material federal income tax consequences of exercising my redemption rights?

 

A:

The U.S. material federal income tax consequences of exercising your redemption rights depends on the particular facts and circumstances. Please see the section entitled “U.S. Material Federal Income Tax Considerations.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

 

Q:

If I am a warrant holder, can I exercise redemption rights with respect to my public warrants?

 

A:

No. The holders of the public warrants have no redemption rights with respect to the public warrants.

 

Q:

Do I have appraisal rights if I object to the business combination?

 

A:

No. Appraisal rights are not available to holders of our common stock in connection with the business combination.

 

Q:

What happens to the funds held in the trust account upon consummation of the business combination?

 

A:

If the business combination is consummated, the funds held in the trust account will be used to: (i) pay our stockholders who properly exercise their redemption rights; (ii) pay $8,050,000 in deferred underwriting commissions to the underwriters of the IPO in connection with the business combination; and (iii) pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by the Company and other parties to the Business Combination Agreement in connection with the business combination.

 

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Q:

What happens if the business combination is not consummated?

 

A:

There are certain circumstances under which the Business Combination Agreement may be terminated by the parties thereto and certain conditions that must be satisfied or waived to consummate the business combination. Please see the section entitled “The Business Combination Proposal — The Business Combination Agreement” for information regarding the parties’ specific termination rights and such conditions that must be satisfied or waived.

If we fail to complete an initial business combination within the completion window, then we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem our public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish our public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In addition, if we fail to complete a business combination within the completion window, there will be no redemption rights or liquidating distributions with respect to our outstanding warrants, which will expire worthless.

 

Q:

When is the business combination expected to be completed?

 

A:

The Closing is expected to take place in the second quarter of 2022, subject to the satisfaction or waiver of the conditions described in the section entitled “The Business Combination Proposal — The Business Combination Agreement — Conditions to the Completion of the Business Combination.” The Business Combination Agreement may be terminated by the parties thereto if the Closing has not occurred by June 21, 2022. For a description of the conditions to the completion of the business combination, see the section entitled “The Business Combination Proposal — The Business Combination Agreement — Conditions to the Completion of the Business Combination.”

 

Q:

What happens if the business combination is not completed by the end of Zanite’s completion window?

 

A:

Our completion window to complete an initial business combination will end on May 19, 2022, unless our stockholders vote to amend our amended and restated certificate of corporation to further extend the amount of time we have to complete an initial business combination.

If we are unable to complete our initial business combination within the completion window, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject, in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the completion window.

 

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Q:

What do I need to do now?

 

A:

You are urged to read carefully and consider the information contained in this proxy statement, including the Annexes, and to consider how the business combination will affect you as a stockholder.

You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q:

How do I vote?

 

A:

If you were the record holder of shares of our common stock as of the record date, you may submit your proxy to vote such shares by mail or at the special meeting.

To submit your proxy by mail, simply mark your proxy card, date and sign it and return it in the postage-paid envelope. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted.

If you vote by mail, your proxy card must be received no later than [●].

Please carefully consider the information contained in this proxy statement and, whether or not you plan to virtually attend the special meeting, please vote by mail so that your shares will be voted in accordance with your wishes even if you later decide not to virtually attend the special meeting.

We encourage you to vote by mail. If you virtually attend the special meeting, you may also submit your vote at the special meeting via the special meeting website at https://www.cstproxy.com/zaniteacquisition/2022, in which case any votes that you previously submitted by mail will be superseded by the vote that you cast at the special meeting. If your proxy is properly completed and submitted, and if you do not revoke it prior to or at the special meeting, your shares will be voted at the special meeting in the manner set forth in proxy statement or as otherwise specified by you. Again, your paper proxy card must be received by mail no later than 11:59 p.m., New York City time, on [●].

If your shares are held in an account at a broker, bank, or nominee (i.e., in “street name”), you must provide the record holder of your shares with instructions on how to vote the shares. Please follow the voting instructions provided by the broker, bank, or nominee. See the section entitled “Special Meeting of Zanite Stockholders — Voting Shares Held in Street Name” for more information.

 

Q:

What is the difference between a stockholder of record and a “street name” holder?

 

A:

If your shares are registered directly in your name with the transfer agent, you are considered the stockholder of record with respect to those shares, and the proxy materials are being provided directly to you. If your shares are held in a stock brokerage account or by a bank or other nominee, then you are considered the beneficial owner of those shares, which are considered to be held in “street name.” The proxy materials are being provided to you by your broker, bank or other nominee who is considered the stockholder of record with respect to those shares.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all of the proposals presented to the stockholders at this special meeting will be considered non-discretionary and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the special meeting. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

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Q:

What will happen if I abstain from voting or fail to vote at the special meeting?

 

A:

A stockholder’s failure to vote by proxy or to vote at the virtual special meeting will not be counted towards the number of shares of common stock required to validly establish a quorum. Abstentions will be counted in connection with the determination of whether a valid quorum is established. Each of the failure to vote by proxy, the failure to vote at the virtual special meeting and an abstention from voting on any of the Business Combination Proposal, the Advisory Charter Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal will have no effect on the outcome of any such proposal, but will have the same effect as a vote “AGAINST” each of the Charter Amendment Proposals.

 

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders and “FOR” each of the director nominees. The proxyholders may use their discretion to vote on any other matters which properly come before the special meeting.

 

Q:

How can I vote my shares without attending the special meeting?

 

A:

If you are a stockholder of record of our common stock as of the close of business on the record date, you can vote by proxy by mail by following the instructions provided in the enclosed proxy card or at the special meeting. Please note that if you are a beneficial owner of our common stock, you may vote by submitting voting instructions to your broker, bank or nominee, or otherwise by following instructions provided by your broker, bank or nominee. Telephone and internet voting may be available to beneficial owners. Please refer to the vote instruction form provided by your broker, bank or nominee.

 

Q:

May I change my vote after I have returned my proxy card or voting instruction form?

 

A:

Yes. If you are a holder of record of our common stock as of the close of business on the record date, you can change or revoke your proxy before it is voted at the special meeting by:

 

   

delivering a signed written notice of revocation to our Secretary at Zanite Acquisition Corp., 25101 Chagrin Boulevard, Suite 350, Cleveland, Ohio 44122, bearing a date later than the date of the proxy, stating that the proxy is revoked;

 

   

signing and delivering a new proxy, relating to the same shares and bearing a later date; or

 

   

virtually attending and voting at the special meeting and voting, although attendance at the special meeting will not, by itself, revoke a proxy.

If you are a beneficial owner of our common stock as of the close of business on the record date, you must follow the instructions of your broker, bank or other nominee to revoke or change your voting instructions.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the special meeting?

 

A:

The Company will pay the cost of soliciting proxies for the special meeting. The Company has engaged Morrow to assist in the solicitation of proxies for the special meeting. The Company has agreed to pay

 

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  Morrow a fee of $32,500, plus disbursements, and will reimburse Morrow for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. The Company will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of common stock for their expenses in forwarding soliciting materials to beneficial owners of common stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the business combination or if you need additional copies of this proxy statement or the enclosed proxy card you should contact:

Zanite Acquisition Corp.

25101 Chagrin Boulevard

Suite 350

Cleveland, Ohio 44122

Attn: Michael A. Rossi

Tel: (212) 739-7860

You may also contact our proxy solicitor at:

Morrow Sodali LLC

333 Ludlow Street, 5th Floor, South Tower

Stamford, CT 06902

Telephone: (800) 662-5200

(Banks and brokers can call: (203) 658-9400)

Email: ZNTE.info@investor.morrowsodali.com

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.

You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our Transfer Agent prior to the special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact our Transfer Agent:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. You should read this entire document and its annexes and the other documents to which we refer before you decide how to vote with respect to the proposals to be considered and voted on at the special meeting.

Information about the Parties to the Business Combination

Zanite Acquisition Corp.

25101 Chagrin Boulevard, Suite 350

Cleveland, Ohio 44122

(216) 292-0200

Zanite Acquisition Corp. is a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

Eve

Eve is a Delaware limited liability company, incorporated on April 21, 2020 as a corporation, and later converted into a limited liability company, and as a direct wholly owned subsidiary of Embraer solely in contemplation of the business combination. As part of the transactions, certain assets and liabilities related to the UAM Business, which has been incubated within Embraer since 2017, has been transferred from Embraer and its Subsidiaries to Eve and its Subsidiaries. Since the consummation of the Pre-Closing Restructuring on December 10, 2021, Eve has been a wholly owned subsidiary of EAH.

The UAM Business is developing a comprehensive UAM solution that includes: the design and production of eVTOLs; a portfolio of maintenance and support services focused on Eve and third-party eVTOLs; fleet operations services conducted in collaboration with partners; and a new UATM system designed to allow eVTOLs to operate safely and efficiently in dense urban airspace alongside conventional aircraft and drones.

Eve’s mission is to bring affordable air transportation to all passengers, improve quality of life, unleash economic productivity, save passengers time and reduce global carbon emissions.

Eve’s principal executive office is located at 1400 General Aviation Drive, Melbourne, FL 32935. Its telephone number is (321) 751-5050.

EAH

EAH is a Delaware corporation and a direct subsidiary of Embraer. EAH is a holding company which was formed for the purpose of holding the interests of the Embraer operating companies in the United States. As such, EAH currently owns all of the issued and outstanding Eve Interests. Upon completion of the business combination, assuming no redemptions and excluding (i) the exercise of any warrants that will vest at Closing and (ii) the issuance of any equity awards which are expected to be issued at Closing, EAH will own approximately 85% of the outstanding shares of common stock of Eve Holding.

Embraer

Embraer is the leading manufacturer of jets with up to 150 seats in the world, based on the number of deliveries over the last decade. Embraer is a franchise footprint represented by its global customer base.

 

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Embraer’s focus is to achieve customer satisfaction with a range of products and services addressing the commercial airline, executive jets and defense and security markets. Embraer has grown from a government-controlled company established to develop and produce products for the Brazilian Armed Forces into a publicly held company that produces aircraft for commercial and executive aviation, and for defense and security purposes and related services.

Embraer is a publicly held corporation (sociedade anônima) duly incorporated under the laws of Brazil. Embraer’s principal executive office is located at Avenida Dra. Ruth Cardoso, 8,501, 30th floor (part), Eldorado Business Tower, Pinheiros 05425-070, city of São Paulo, state of São Paulo, Brazil. Embraer’s telephone number is +55-11- 3040-6874, and internet address is ri.embraer.com.br. Until consummation of the business combination, Eve will be wholly owned by EAH, which in turn is wholly owned (other than the non-voting preferred stock sold to the Unaffiliated Investor) by Embraer.

The Business Combination and the Business Combination Agreement

The terms and conditions of the business combination are contained in the Business Combination Agreement, which is attached as Annex A to this proxy statement. We encourage you to read the Business Combination Agreement carefully and in its entirety, as it is the legal document that governs the business combination.

If the Business Combination Agreement is approved and adopted and the business combination is consummated, EAH, as the sole beneficial and record holder of all of the issued and outstanding equity interests of Eve at such time, will contribute and transfer to Zanite, and Zanite will receive from EAH, all of the issued and outstanding equity interests of Eve, as consideration and in exchange for the issuance and transfer by Zanite to EAH of 220,000,000 shares of common stock, at the Closing.

Structure of the Business Combination

Pursuant to the terms of the Business Combination Agreement, the business combination will be effected in three steps, as follows:

 

  1.

The Pre-Closing Restructuring: Pursuant to the Contribution Agreement, Embraer has effected a series of transactions that resulted in certain assets and liabilities related to the UAM Business being owned by Eve and its subsidiaries in exchange for the issuance to Embraer of a number of Eve Interests. In connection with such contribution of the UAM Business, Embraer transferred all of the Eve Interests held by it to EAH in exchange for the issuance of shares of common stock and non-voting preferred stock of EAH.

 

  2.

The Preferred Stock Sale: Embraer has sold to the Unaffiliated Investor all such shares of EAH non-voting preferred stock for an aggregate purchase price of $9,973,750.

 

  3.

The Equity Exchange: At the Closing, EAH will contribute and transfer to Zanite all of the Eve Interests held by it in exchange for the issuance to EAH of 220,000,000 shares of common stock.

Upon consummation of the Equity Exchange, Eve will become a wholly-owned subsidiary of the Company. In addition, immediately prior to the consummation of the business combination, the Company will amend and restate the Current Charter to be the Proposed Charter which will, among other things, change the name of the Company to “Eve Holding, Inc.”, as described in the sections of this proxy statement titled “Description of Securities” and “The Charter Amendment Proposal.”

It is intended that, for U.S. federal income tax purposes, the transfer of the Eve Interests by Embraer to EAH is intended to be integrated with the Preferred Stock Sale and, accordingly, the transfer of the Eve Interests to EAH is intended to be treated as a taxable disposition described in Section 1001 of the Code.

 

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The following diagrams illustrate in simplified terms the current structure of Zanite and Eve and the expected structure of the Company upon the Closing.

Simplified Pre-Business Combination Structure

The following diagram depicts a simplified version of the current ownership structure of Zanite.

 

LOGO

Simplified Ownership Structure of Eve Following the Pre-Closing Restructuring

The following diagram depicts a simplified version of the ownership structure of Eve, after giving effect to the Pre-Closing Restructuring but before giving effect to the Preferred Stock Sale.

 

LOGO

 

(1)

For more information about the ownership interests of initial stockholders, including the Sponsor, prior to the business combination, please see the section entitled “Beneficial Ownership of Securities.

 

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Simplified Ownership Structure of Eve Following the Preferred Stock Sale

The following diagram depicts a simplified version of Eve’s organizational structure after giving effect to the Preferred Stock Sale and immediately before the consummation of the Equity Exchange.

 

LOGO

 

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Simplified Post-Business Combination Structure

The diagram below depicts a simplified version of the Company’s organizational structure immediately following the consummation of the PIPE and the Equity Exchange, assuming no redemptions by Zanite’s public stockholders.

 

LOGO

Business Combination Consideration

In accordance with the terms and subject to the conditions of the Business Combination Agreement, Zanite has agreed to pay consideration in the form of 220,000,000 shares of common stock valued at $10.00 per share to EAH in exchange for all of the issued and outstanding equity interests of Eve.

 

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The following table summarizes the sources and uses of funds for the business combination. These figures assume that (i) no public stockholders of Zanite exercise their redemption rights in connection with the business combination and (ii) that Zanite issues 31,500,000 shares of common stock to the PIPE Investors pursuant to the PIPE Investment. If the actual facts are different from these assumptions, the below figures will be different.

 

Sources

   

Uses

 
                   

Cash and investment held in trust account

   $ 236,920,000 (1)    Cash to balance sheet    $ 511,360,000  

PIPE Investment Amount

   $ 315,000,000     Estimated transaction costs(2)    $ 19,400,000  
           Cash disbursement(3)    $21,160,000  
  

 

 

      

 

 

 

Total sources

   $ 551,920,000     Total uses    $ 551,920,000  
  

 

 

      

 

 

 

 

(1)

Assumes no shares of Class A common stock are redeemed by the public stockholders in connection with the business combination. For every 100,000 shares of Class A common stock that are redeemed, the total sources and total uses would be reduced by $1.03 million to satisfy such redemption obligations to Zanite’s public stockholders.

(2)

Includes deferred underwriting commissions of $8,050,000 due to the underwriters of Zanite’s IPO and Zanite’s estimated transaction expenses of $11,350,000.

(3)

Reflects a disbursement of cash to Embraer, pursuant to the terms of the Business Combination Agreement, in the amount of $21,160,000 as payment for incurred transaction expenses which are unrelated to Eve or Eve’s subsidiaries and which are payable upon Closing.

The PIPE Investment

The Company entered into Subscription Agreements with the PIPE Investors, including EAH and the Sponsor, pursuant to which, among other things, the Company agreed to issue and sell to such PIPE Investors in private placements to close immediately prior to the Closing, an aggregate of 31,500,000 shares of Class A common stock at $10.00 per share, for an aggregate purchase price of $315,000,000. In connection with the PIPE Investment, EAH has entered into arrangements with certain of such strategic investors to provide them with price protections in the amount of up to their $30 million aggregate commitments in the form of credits for parts and services or cash in exchange for the transfer of their shares to EAH following the Closing. The obligations of each party to consummate the PIPE Investment are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Business Combination Agreement. Pursuant to the terms of the Subscription Agreements, a PIPE Investor, including the Sponsor and EAH, may assign all or a portion of its obligation to purchase its shares of Common Stock in the PIPE Investment with Zanite’s prior consent.

The PIPE Investment is expected to close substantially concurrently with the Closing. In connection with the Closing, all of the issued and outstanding shares of Class A common stock, including the shares of Class A common stock issued to the PIPE Investors, will be exchanged, on a one-for-one basis, for shares of the Company’s common stock.

Ownership of the Company following the Business Combination

As of the date of this proxy statement, there are 28,750,000 shares of common stock issued and outstanding, which includes 5,750,000 shares of Class B common stock held by the Sponsor and the directors of Zanite and 23,000,000 shares of Class A common stock held by the public stockholders. As of the date of this proxy statement, there is an aggregate of 25,750,000 warrants issued and outstanding (including warrants underlying the units), which includes the 14,250,000 private placement warrants held by the Sponsor and 11,500,000 public warrants. As of the date of this proxy statement, there are 1,100 Eve Interests issued and outstanding, all of which are held by EAH.

 

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In connection with the business combination, Embraer has transferred all of the issued and outstanding Eve Interests to EAH in exchange for the issuance of shares of common stock and shares of non-voting preferred stock of EAH and has sold all such non-voting preferred stock to the Unaffiliated Investor. Immediately prior to the Equity Exchange, each share of Class B common stock that is issued and outstanding as of such time will automatically convert into one (1) share of Class A common stock. At the Closing Date, EAH will contribute and transfer to Zanite, and Zanite will receive from EAH, all of the issued and outstanding Eve Interests, as consideration and in exchange for the issuance and transfer to EAH of 220,000,000 shares of common stock. Following the Equity Exchange, Eve will be a direct wholly owned subsidiary of Zanite.

It is anticipated that, immediately following the Equity Exchange and related transactions, (1) existing public stockholders of Zanite will own approximately 8.21% of all outstanding common stock, (2) EAH will own approximately 84.75% of all outstanding common stock, (3) the Sponsor will own approximately 2.94% of all outstanding common stock (assuming the 5,750,000 shares of common stock converted from Class B common stock), (4) the PIPE Investors (other than EAH and the Sponsor) will own approximately 4.10% of all outstanding common stock, and (5) the Company will own 100% of all Eve Interests. These percentages assume (i) that no public stockholders of Zanite exercise their redemption rights in connection with the business combination (ii) that Zanite issues 31,500,000 shares of common stock to the PIPE Investors pursuant to the PIPE Investment, (iii) that the new warrants that will become exercisable at Closing will not be exercised immediately thereafter and (iv) that no equity awards will be issued Closing. The PIPE Investors have agreed to purchase 31,500,000 shares of common stock, at $10.00 per share, for approximately $315,000,000 of gross proceeds. If the actual facts are different from these assumptions, the percentage ownership in Zanite immediately following the consummation of the business combination will be different.

The following table illustrates varying ownership levels in Zanite immediately following the consummation of the business combination based on the assumptions above.

 

Stockholder

   Assuming No
Zanite Share Redemption(1)
    Assuming Maximum
Zanite Share Redemption(2)
 
   Shares      %     Shares      %  

EAH

     237,500,000 (3)       84.75     237,500,000 (3)       91.12

Zanite Public Stockholders

     23,000,000        8.21     3,398,058        1.30

Zanite Initial Stockholders

     8,250,000 (4)        2.94     8,250,000 (4)       3.17

Third-Party PIPE Investors

     11,500,000        4.10     11,500,000        4.41

Total

     280,250,000        100     260,648,058        100

 

(1)

For every 1,000,000 shares of common stock of Zanite redeemed by a Zanite public stockholder, (i) the percentage of shares of common stock of Zanite held by the Zanite public stockholders will be reduced by 0.36% and (ii) the percentage of shares of common stock of Zanite held by each of EAH, Zanite’s initial stockholders and the PIPE Investors (excluding the Sponsor and EAH) will be increased by 0.36%.

(2)

This presentation assumes 19,601,942 shares of Class A common stock are redeemed for their pro rata share of the funds in Zanite’s trust account, which amount is approximately $236.92 million as of December 27, 2021. This scenario gives effect to Zanite’s public stockholder redemptions of 19,601,942 shares for a per share redemption price of $10.30, representing an aggregate redemption payment of $201.90 million, and is based on the Minimum Cash Condition that the amount of cash available in Zanite’s trust account, after deducting the amount required to satisfy Zanite’s obligations to its stockholders (if any) that exercise their rights to redeem their public shares (but prior to the payment or reimbursement, as applicable, of any (a) deferred underwriting commissions being held in the Zanite’s trust account and (b) transaction expenses of Embraer and its subsidiaries (including Eve) and Zanite), plus the PIPE Investment Amount is at least $350,000,000. The Minimum Cash Condition is waivable by Embraer, Eve and EAH, and if so waived, the maximum amount of redemptions could exceed the 19,601,942 public share redemption scenario presented herein.

 

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(3)

Includes the 17,500,000 shares of common stock EAH committed to purchase in connection with the PIPE Investment at a purchase price of $10.00 per share.

(4)

Includes the 2,500,000 shares of common stock the Sponsor committed to purchase in connection with the PIPE Investment at a purchase price of $10.00 per share.

Ancillary Agreements

In connection with the transactions contemplated by the Business Combination Agreement, the parties have also entered into, or will enter into in connection with the Closing, the following ancillary agreements.

Contribution Agreement

On December 10, 2021, Embraer, EAH and Eve entered into a Contribution Agreement, pursuant to which Embraer and its Subsidiaries (other than Eve and its Subsidiaries) have effected the Pre-Closing Restructuring through a series of transactions that resulted in, among other things, Eve owning, directly or indirectly through its Brazilian Subsidiary, certain assets and liabilities related to the UAM Business.

For more information about the Contribution Agreement, see the section entitled “The Business Combination Proposal — Ancillary Agreements —Contribution Agreement.

Services Agreements

On December 14, 2021, Eve entered into three Services Agreements: one with Embraer, one with Atech and one with the Brazilian Subsidiary. Pursuant to the Master Services Agreements with Embraer and Atech, the Embraer Entities supply certain products and perform certain services relating to the development, certification, manufacturing and support of eVTOL to Eve and its subsidiaries. Pursuant to the Master Services Agreement with the Brazilian Subsidiary, the Brazilian Subsidiary develops and facilitates the execution of a commercial business plan for the strategic development of the UAM Business on behalf of Eve. The initial term of each Services Agreement is expected to end on the 15th anniversary of its respective effective date.

In addition, on December 14, 2021, Eve and the Brazilian Subsidiary entered into a Shared Services Agreement with Embraer and EAH, pursuant to which the Embraer Entities provide certain corporate and administrative services to Eve and the Brazilian Subsidiary. The initial term of the Shared Services Agreement is expected to end on the 15th anniversary of its effective date.

For more information about the Services Agreements, see the section entitled “The Business Combination Proposal — Ancillary Agreements — Services Agreements.”

Data Access Agreement

In connection with the completion of the business combination, on December 14, 2021, Embraer, Eve and the Brazilian Subsidiary entered into a Data Access Agreement, pursuant to which Embraer has agreed to provide the Brazilian Subsidiary with access to certain of its intellectual property and proprietary information in order to facilitate the execution of the specific activities that are set out in certain of the statements of work entered into pursuant to the Services Agreements.

For more information about the Data Access Agreement, see the section entitled “The Business Combination Proposal — Ancillary Agreements — Data Access Agreement.”

 

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Stockholders Agreement

In connection with the completion of the business combination, at the Closing, the Company, EAH and the Sponsor will enter into a Stockholders Agreement pursuant to which, among other things, (a) EAH will have the right to nominate five directors to our initial board of directors, three of whom shall satisfy the independence requirements of Nasdaq, (b) the Sponsor will have the right to nominate one director to our initial board of directors, and (c) EAH and Sponsor will jointly nominate one director to our initial board of directors, who shall satisfy the independence requirements of the NYSE. In addition, for so long as EAH directly or indirectly through any of its affiliates holds at least 10% of the outstanding shares of common stock of the Company, EAH will also have the right to: (i) nominate a number of directors to our board of directors at least proportional to the number of shares of common stock owned by EAH; and (ii) appoint a number of representatives to each committee of our board of directors that is at least proportional to the number of outstanding shares of common stock owned by EAH directly or indirectly through any of its affiliates. For so long as EAH directly or indirectly through any of its affiliates holds at least 20% of the outstanding shares of common stock of Zanite, EAH will also have the right to designate the chairperson of our board of directors (who need not be a nominee of EAH).

In addition, for so long as EAH directly or indirectly through any of its affiliates holds at least 35% of the outstanding shares of common stock, the following actions may not be taken (or agreed to be taken) by the Company without the prior written consent of EAH: (a) the sale of greater than 30% of the assets or voting securities of the Company (with certain exceptions); (b) the voluntary liquidation or dissolution of the Company; (c) any amendment of the Company’s organizational documents that materially and adversely affects EAH in its capacity as a stockholder; (d) the relocation of the Company’s domicile; (e) any change to the Company’s corporate name; or (f) any change to the size of the Company’s board of directors.

For additional information, see the section entitled, “The Business Combination Proposal — Ancillary Agreements — Stockholders Agreement.

Sponsor Support Agreement

In connection with the entry into the Business Combination Agreement, the Sponsor, John B. Veihmeyer, Larry R. Flynn, Gerard J. DeMuro and Ronald D. Sugar (collectively, the “Sponsor Parties”), the Company, Embraer and EAH entered into the Sponsor Support Agreement, in the form attached as Annex B to this proxy statement. Pursuant to the terms of the Sponsor Support Agreement, the Sponsor Parties agreed to, among other things, (i) vote all of its or his shares of common stock in favor of the Business Combination Proposal and each of the other proposals presented by the Company at the special meeting, (ii) waive their redemption rights with respect to their shares of common stock in connection with the business combination, (iii) not transfer any securities of the Company until the Closing or termination of the Business Combination Agreement (except in limited circumstances) and (iv) waive any adjustment to the conversion ratio set forth in the Current Charter or any other anti-dilution or similar protection with respect to the founder shares (whether resulting from the PIPE Investment or otherwise).

Amended and Restated Registration Rights Agreement

The Business Combination Agreement contemplates that, at the Closing, EAH, the Sponsor and Zanite and certain other parties thereto will enter into the Amended and Restated Registration Rights Agreement, which provides customary demand and piggyback registration rights. Pursuant to Amended and Restated Registration Rights Agreement, Zanite will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of common stock of Zanite and other equity securities of Zanite that are held by the parties thereto from time to time. The Amended and Restated Registration Rights Agreement will contain a three-year lock-up period, pursuant to which, subject to certain exceptions, EAH, the Sponsor and certain other parties thereto will be

 

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restricted from transferring the shares of common stock of Zanite and warrants they own immediately following the Closing until the date that is three years after the Closing Date. The Amended and Registration Rights Agreement amends and restates the registration rights agreement that was entered into by Zanite, the Sponsor and the other parties thereto in connection with Zanite’s IPO.

For additional information, see the section entitled, “The Business Combination Proposal — Ancillary Agreements — Amended and Restated Registration Rights Agreement.

Tax Receivable Agreement

The Business Combination Agreement contemplates that, at the Closing, we will enter into the Tax Receivable Agreement, substantially in the form attached as Annex P to this proxy statement, with EAH. The Tax Receivable Agreement will generally provide for the payment by us to EAH of 75% of the cash tax savings realized (or deemed realized) in periods after the closing of the business combination as a result of certain tax assets and attributes of the UAM Business existing or created in the Pre-Closing Restructuring. We expect to retain the benefit of the remaining 25% of these cash tax savings.

For additional information, see the section entitled, “The Business Combination Proposal — Ancillary Agreements — Tax Receivable Agreement.

Tax Sharing Agreement

The Business Combination Agreement and the Stockholders Agreement contemplate that, at the Closing, the Company will enter into a tax sharing agreement (the “Tax Sharing Agreement”) with EAH or an affiliate of EAH. The Tax Sharing Agreement will generally provide that it will be effective for taxable periods when the Company is treated as a member of a consolidated, combined, affiliated or other group for U.S. federal or state income tax purposes of which EAH or an affiliate of EAH is the common parent. In the event the Company is a member of such a group, generally the parent of such group would be liable for the income taxes of the group members (including the Company), rather than the Company being required to pay such income taxes itself. The Tax Sharing Agreement provides for payments from the Company to such parent based on the increase to parent’s income tax liability as a result of the Company being a member of such group (which calculations are determined in a manner that takes into account the intended sharing of the benefits of the tax attributes created in the Pre-Closing Restructuring that otherwise would have been governed by the Tax Receivable Agreement if the Company were not treated as a member of a consolidated, combined affiliated or other group of which EAH or an affiliate of EAH is the parent).

For additional information, see the section entitled, “The Business Combination Proposal — Ancillary Agreements — Tax Sharing Agreement.

Preferred Sale Agreement

On December 9, 2021, Embraer entered into a preferred stock purchase agreement with the Unaffiliated Investor pursuant to which, on December 13, 2021, the Unaffiliated Investor acquired from Embraer all of the issued and outstanding shares of non-voting preferred stock of EAH for an aggregate purchase price of $9,973,750.

For additional information, see the section entitled, “The Business Combination Proposal — Ancillary Agreements — Preferred Sale Agreement.

 

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Strategic Warrant, Lock-Up Agreements and Put-Option Agreements

On December 21, 2021, concurrently with the execution of the Business Combination Agreement, Zanite entered into the Strategic Warrant Agreements, pursuant to which, subject to the consummation of the business combination, Zanite has agreed to issue to the Strategic Investors new warrants to acquire an aggregate of (i) 14,150,000 shares of common stock, each with an exercise price of $0.01 per share, which warrants will be issued at the Closing or in connection with the achievement of certain UAM Business milestones following the Closing, (ii) 12,000,000 shares of common stock, each with an exercise price of $15.00 per share, which warrants will be issued at the Closing, and (iii) 5,000,000 shares of common stock each with an exercise price of $11.50 per share, which warrants will be issued at the Closing. In general, each warrant is exercisable for a period of five or ten years following its issuance or first permitted exercise date. In addition, certain Strategic PIPE Investors entered into lock-up agreements with Zanite pursuant to which such Strategic PIPE Investors will be restricted from transferring certain new warrants issued at the Closing and the shares of common stock of Zanite issued upon exercise of such new warrants until the date that is three or five years after the Closing Date. In addition, certain Strategic PIPE Investors entered into put option agreements with EAH pursuant to which EAH has agreed to provide such strategic investors with price protections in the amount of up to their $30 million aggregate commitments in the form of credits for parts and services or cash in exchange for the transfer of their shares of common stock to EAH following the Closing.

For additional information, see the section entitled, “The Business Combination Proposal — Ancillary Agreements — Strategic Warrant, Lock-Up Agreements and Put Option Agreements.

Special Meeting of Stockholders and the Proposals

The special meeting will convene on [●] at [●] a.m., Eastern Time, exclusively in virtual format. Stockholders may attend, vote and examine the list of the Company’s stockholders entitled to vote at the special meeting by visiting https://www.cstproxy.com/zaniteacquisition/2022 and entering the control number found on their proxy card, voting instruction form or notice they previously received. The purpose of the special meeting is to consider and vote on the Business Combination Proposal, the Charter Amendment Proposals, the Advisory Charter Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal.

Approval of the Condition Precedent Proposals is a condition to the obligations of the parties to complete the business combination.

Only holders of record of issued and outstanding common stock as of the close of business on [●], the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting or any adjournment or postponement of the special meeting. The Company’s stockholders are entitled to one vote for each share of our common stock that they owned as of the close of business on the record date. If their shares are held in “street name” or are in a margin or similar account, they should contact their broker, bank or other nominee to ensure that votes related to the shares they beneficially own are properly counted. On the record date, there were 28,750,000 shares of common stock outstanding, of which 23,000,000 are public shares and 5,750,000 are founder shares held by the Sponsor.

A quorum of stockholders is necessary to hold a valid meeting. A quorum will exist at the special meeting with respect to each matter to be considered at the special meeting if the holders of a majority of the outstanding shares of common stock as of the record date present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting. All shares represented by proxy are counted as present for purposes of establishing a quorum. As of the record date for the special meeting, 14,375,001 shares of common stock would be required to achieve a quorum. For Charter Amendment Proposal B, a quorum will be

 

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present at the special meeting if the holders of a majority of the Class A common stock outstanding and entitled to vote at the special meeting is represented in person (which would include presence at a virtual meeting) or by proxy at the special meeting.

Approval of the Business Combination Proposal requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

Approval of each of the Charter Amendment Proposals requires the affirmative vote of holders of a majority of the outstanding shares of our Class A common stock and Class B common stock entitled to vote thereon at the special meeting, voting as a single class. In addition, Charter Amendment Proposal B requires the affirmative vote of holders of a majority of the outstanding shares of Class A common stock, voting as a class. Abstentions and broker non-votes have the same effect as a vote “AGAINST” the proposal.

Approval of each of the Advisory Charter Proposals, each of which is a non-binding vote, requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

Approval of the Stock Issuance Proposal requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

Approval of the Incentive Plan Proposal requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that each of the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors. Abstentions and broker non-votes have no effect on the outcome of the proposal.

Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

With respect to each proposal in this proxy statement, you may vote “FOR,” “AGAINST” or “ABSTAIN.”

Recommendation of Zanite’s Board of Directors

The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We sought to do this by utilizing the networks and industry experience of our management team and the Sponsor to identify and acquire one or more target businesses. Our board of directors considered and evaluated several factors in

 

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evaluating and negotiating the business combination and the Business Combination Agreement. After careful consideration, our board of directors has unanimously approved the Business Combination Agreement and the transactions contemplated thereby and determined that each of the Business Combination Proposal, the Charter Amendment Proposals, the Advisory Charter Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal is in the best interests of the Company and its stockholders, and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals and “FOR” each of the director nominees. For additional information relating to our board of directors’ evaluation of the business combination and the factors it considered in connection therewith, please see the section entitled “The Business Combination Proposal  Zanite’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Regulatory Matters

Under the HSR Act and the rules that have been promulgated thereunder, certain transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (“Antitrust Division”) and the Federal Trade Commission (“FTC”), and certain waiting period requirements have been satisfied. The business combination is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the parties’ respective Notification and Report Forms with the Antitrust Division and the FTC, unless early termination is granted. Zanite and Eve will file the required forms under the HSR Act with respect to the business combination with the Antitrust Division and the FTC by January 13, 2022.

At any time before or after consummation of the business combination, notwithstanding termination of the respective waiting periods under the HSR Act, the Department of Justice or the FTC, or any state or foreign governmental authority could take such action under applicable antitrust laws as such authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the business combination, conditionally approving the business combination upon divestiture of assets, subjecting the completion of the business combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. Zanite cannot assure you that the Antitrust Division, the FTC, any state attorney general or any other government authority will not attempt to challenge the business combination on antitrust grounds, and, if such a challenge is made, Zanite cannot assure you as to its result.

Neither Zanite nor Eve are aware of any material regulatory approvals or actions that are required for completion of the business combination other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

Conditions to the Completion of the Business Combination

The business combination is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Condition Precedent Proposals by Zanite’s stockholders, (ii) the expiration or early termination of the waiting period or periods under the HSR Act, (iii) the completion of the Pre-Closing Restructuring (which has been effected as of December 10, 2021) in all material respects and (vi) the absence of any injunctions.

Conditions to Zanite’s obligations to consummate the business combination include, among others, that as of the Closing Date, there will not have occurred a UAM Material Adverse Effect after the signing of the Business Combination Agreement, and that Embraer, EAH and/or Eve, as applicable, shall have delivered or

 

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cause to be delivered all of the certificates, instruments, Contracts and other documents (including all Ancillary Agreements) specified by Section 2.3(a) of the Business Combination Agreement to be delivered and duly executed by each such party.

Conditions to Embraer’s, EAH’s and Eve’s obligations to consummate the business combination include, among other things, that as of the Closing Date, there will not have occurred a Zanite Material Adverse Effect after the signing of the Business Combination Agreement; and the Minimum Cash Condition shall have been satisfied. The Minimum Cash Condition is for the sole benefit of Embraer, EAH and Eve. If such condition is not met, and such condition is not or cannot be waived under the terms of the Business Combination Agreement, then the Business Combination Agreement could terminate and the business combination may not be consummated. In addition, pursuant to the Current Charter, in no event will Zanite redeem public shares in an amount that would result in the Company having net tangible assets of less than $5,000,001.

For additional information, see the section entitled, “The Business Combination Proposal — Conditions to the Completion of the Business Combination.

Termination

The Business Combination Agreement may be terminated and the Equity Exchange abandoned at any time prior to the Closing:

 

   

by mutual written consent of Embraer and Zanite;

 

   

by written notice of Embraer or Zanite if any Governmental Authority having jurisdiction over the Parties with respect to the Transactions will have enacted, issued, promulgated, enforced or entered any Governmental Order that has become final and nonappealable and has the effect of making consummation of the Equity Exchange illegal or otherwise preventing or prohibiting consummation of the Equity Exchange or if there will be adopted any law that permanently makes consummation of the Equity Exchange illegal or otherwise prohibited;

 

   

by written notice of Embraer or Zanite if the approval of the Condition Precedent Proposals will not have been obtained by reason of the failure to obtain the required vote at Zanite Stockholders’ Meeting duly convened therefor or at any adjournment or postponement thereof;

 

   

by Embraer if the Zanite Board of Directors withdraw, amend, qualify or modify its recommendation to the Zanite Stockholders that they vote in favor of the Transaction Proposals;

 

   

by Embraer or Zanite, if the Closing has not occurred on or before June 21, 2022;

 

   

by written notice to Embraer from Zanite if there is any material breach of any representation, warranty, covenant or agreement on the part of Embraer, EAH or Eve set forth in the Business Combination Agreement, such that the conditions specified in Section 8.2(a) or Section 8.2(b) of the Business Combination Agreement would not be satisfied at the Closing;

 

   

by written notice to Zanite from Embraer if there is any material breach of any representation, warranty, covenant or agreement on the part of Zanite set forth in the Business Combination Agreement, such that the conditions specified in Section 8.3(a) and Section 8.3(b) of the Business Combination Agreement would not be satisfied at the Closing; or

 

   

by written notice to Embraer from Zanite if the written consents of Embraer, as the sole stockholder of EAH and as the sole member of Eve, will not have been delivered to Zanite by the end of the day following the date of the Business Combination Agreement.

For additional information, see the section entitled, “The Business Combination Proposal — Termination; Effectiveness.

 

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Redemption Rights

Pursuant to the Current Charter, a holder of public shares may demand that Zanite redeem such public shares for cash if the business combination is consummated. Holders of public shares or units who wish to exercise their redemption rights must, (i) if they hold their public shares through units, elect to separate their units into the underlying public shares and warrants and (ii) prior to [●], Eastern Time, on [●], (A) submit a written request to the Transfer Agent that Zanite redeem their public shares for cash and (B) deliver their public shares to the Transfer Agent physically or electronically using DTC’s DWAC (Deposit and Withdrawal at Custodian) system. Any holder of public shares will be entitled to demand that such holder’s public shares be redeemed for a full pro rata portion of the amount then in the trust account, including interest earned on the trust account (which, for illustrative purposes, was approximately $236,920,000, or $10.30 per public share, as of December 27, 2021). Such amount, less any owed but unpaid taxes on the funds in the trust account, will be paid promptly upon consummation of the business combination.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the deadline to submitting redemption requests and thereafter, with Zanite’s consent, until the Closing. If a holder delivers their public shares for redemption to the Transfer Agent and later decides to withdraw such request prior to the deadline for submitting redemption requests, the holder may request that the Transfer Agent return the shares (physically or electronically).

Any corrected or changed written demand of redemption rights must be received by the Transfer Agent prior to the vote taken on the Business Combination Proposal at the special meeting. No demand for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to the Transfer Agent prior to the deadline for submitting redemption requests.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash, without our prior consent.

See the section entitled “Special Meeting of Zanite Stockholders — Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Holders of our warrants will not have redemption rights with respect to the warrants.

No Delaware Appraisal Rights

Appraisal rights are statutory rights under the DGCL that enable stockholders who object to certain extraordinary transactions to demand that the corporation pay such stockholders the fair value of their shares instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. However, appraisal rights are not available in all circumstances. Appraisal rights are not available to Zanite’s stockholders or warrant holders in connection with the business combination.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. Zanite has engaged Morrow to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares at the special meeting if it revokes its proxy before the special meeting. A stockholder also may change its vote by submitting a later-dated proxy as described in the section entitled “The Special Meeting  Revoking Your Proxy”.

 

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Interests of Zanite’s Directors and Officers in the Business Combination

When you consider the recommendation of our board of directors that you vote in favor of approval of the business combination, you should be aware that the initial stockholders, including the Company’s directors and officers, have interests in the business combination that may be different from, or in addition to, the interests of the Company’s other stockholders and warrant holders. These interests include:

 

   

The Sponsor and our officers and directors will lose their entire investment in us if we do not complete a business combination within the completion window.

On August 7, 2020, the Sponsor paid $25,000 in consideration for 5,750,000 founder shares, or approximately $0.004 per share, to cover certain of our offering costs in connection with the IPO. On October 15, 2020, the Sponsor transferred 250,000 founder shares to Ronald D. Sugar, our senior advisor, and 150,000 founder shares to each of John B. Veihmeyer, Larry R. Flynn and Gerard J. DeMuro, our then directors, resulting in the Sponsor holding 5,050,000 founder shares. The 5,750,000 founder shares have an aggregate market value of approximately $58,420,000 based upon the closing per share price of $10.16 on Nasdaq on December 27, 2021.

On November 19, 2020, in connection with the closing of the IPO, the Sponsor purchased 9,650,000 private placement warrants from the Company at a price of $1.00 per private placement warrant, for an aggregate purchase price of $9,650,000. Each private placement warrant entitles the holder thereof to purchase one share of common stock at $11.50 per share. On May 18, 2021, the Sponsor purchased 2,300,000 private placement warrants from the Company at a price of $1.00 per private placement warrant, for an aggregate purchase price of $2,300,000, to extend the period of time it the Company has to consummate its initial business combination by 6 months from the prior deadline of May 19, 2021 until November 19, 2021. On November 16, 2021, the Sponsor purchased 2,300,000 private placement warrants from the Company at a price of $1.00 per private placement warrant, for an aggregate purchase price of $2,300,000, to extend the period of time it the Company has to consummate its initial business combination by 6 months from the prior deadline of November 19, 2021 until May 19, 2022. The 14,250,000 private placement warrants have an aggregate market value of approximately $14,837,100 based upon the closing per warrant price of $1.04 on Nasdaq on December 27, 2021. We would need to seek and obtain the requisite consent of our stockholders to extend the period of time Zanite has to consummate its initial business combination beyond May 19, 2022.

On December 21, 2021, the Sponsor committed to purchase 2,500,000 shares of common stock for $25,000,000 at a purchase price of $10.00 per share in connection with the PIPE Investment. Such shares would have an aggregate market value of approximately $25,400,000 based upon the closing per share price of $10.16 on Nasdaq on December 27, 2021.

 

   

The initial stockholders and our officers and directors have agreed to waive their redemption rights with respect to their founder shares and any public shares they hold in connection with the completion of the business combination. In addition, the initial stockholders and our officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if the Company fails to complete a business combination within the completion window. There will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless if we fail to complete our initial business combination within the completion window.

 

   

The nominal purchase price paid by the Sponsor and our officers and directors for the founder shares may result in significant dilution to the implied value of the public shares upon consummation of the business combination. In addition, the value of the founder shares following the Closing is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common stock is substantially less than $10.00 per share. As a result, the Sponsor and our officers and directors are likely able to recoup their investment in us and make a substantial profit on that investment, even if our public shares have lost significant value. Accordingly, the Sponsor and our officers and directors

 

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may have an economic incentive that differs from that of our public stockholders to pursue and consummate an initial business combination rather than to liquidate and to return all of the cash in the trust account to the public stockholders, even if that business combination were with a riskier or less-established target business.

 

   

Following the consummation of the business combination, we will continue to indemnify our existing directors and officers and will maintain a directors’ and officers’ liability insurance policy.

 

   

Upon the Closing, Kenneth C. Ricci is expected to serve on the Company’s board of directors and Gerard J. DeMuro, a former member of our board of directors and Eve’s Co-Chief Executive Officer, is expected to serve as the Co-Chief Executive Officer of the Company. As such, in the future they may receive any cash fees, stock options or stock awards that the Company and its board of directors determines to pay to its directors and/or officers.

 

   

In connection with the Closing, we will enter into the Amended and Restated Registration Rights Agreement, which will provide certain of the Company’s stockholders, including the holders of the founder shares, private placement warrants and shares of common stock issuable upon conversion of the founder shares and private placement warrants, with registration rights.

 

   

Upon the Closing, subject to the terms and conditions of the Business Combination Agreement, the Company’s officers and directors are entitled to reimbursement for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Such reimbursable out-of-pocket expenses, if any, are not expected to be material.

 

   

In connection with the Closing, the Sponsor and our officers and directors would be entitled to the repayment of any working capital loans and advances that have been made to the Company and remain outstanding. As of the date of this proxy statement, there are no such loans or advances outstanding. If we do not complete an initial business combination within the completion window, we may use a portion of our working capital held outside the trust account to repay the working capital loans, but no proceeds held in the trust account would be used to repay any working capital loans.

 

   

In order to protect the amounts held in the trust account, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.10 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

Stock Exchange Listing

Our Class A common stock and warrants are currently listed on Nasdaq under the symbols “ZNTE” and “ZNTEW,” respectively. Certain of our shares of Class A common stock and warrants currently trade as units consisting of one share of Class A common stock and one-half of one redeemable warrant, and are listed on Nasdaq under the symbol “ZNTEU.” The units will automatically separate into their component securities upon consummation of the business combination and, as a result, will no longer trade as an independent security. Upon consummation of the transactions contemplated by the Business Combination Agreement, we will change our name to “Eve Holding, Inc.” We intend to apply to obtain the listing of our common stock and warrants on the NYSE under the symbols “EVEX” and “EVEXW,” respectively, upon the Closing.

 

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Accounting Treatment

This business combination is expected to be accounted for as a reverse recapitalization, equivalent to the issuance of shares by Eve for the net monetary assets of Zanite accompanied by a recapitalization. Accordingly, the consolidated assets, liabilities and results of operations of the UAM Business will become the historical financial statements of Eve, and the assets, liabilities and results of operations of Zanite will be consolidated with Eve beginning on the Closing Date. For accounting purposes, the financial statements of Eve will represent a continuation of the financial statements of the UAM Business. The net assets of Zanite will be stated at historical costs, with no goodwill or other intangible assets recorded. Operations prior to the transaction will be presented as those of UAM Business in future reports of Eve.

Comparison of Stockholders’ Rights

Following the consummation of the business combination, the rights of the Company’s stockholders who remain stockholders following the business combination will no longer be governed by the Current Charter and instead will be governed by the Proposed Charter. See the section entitled “Comparison of Stockholders’ Rights” for further details.

Summary of Risk Factors

You should consider all the information contained in this proxy statement in deciding how to vote for the proposals presented in the proxy statement. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may harm Zanite’s and Eve’s business, financial condition and operating results. Such risks include, but are not limited to:

 

   

The market for Urban Air Mobility (UAM) has not been established with precision, is still emerging and may not achieve the growth potential we expect, or may grow more slowly than expected.

 

   

There may be reluctance by consumers to adopt this new form of mobility, or unwillingness to pay our projected prices.

 

   

There may be rejection of eVTOL operation in certain localities due to a perceived risk of safety or burden on local communities from eVTOL operations.

 

   

If current airspace regulations are not modified to increase air traffic capacity, Eve’s business could be subject to considerable capacity limitations.

 

   

Urban Air Traffic Management (UATM) may not be able to provide adequate situational awareness and equitable airspace access to eVTOLs or may not allow industrial scalability.

 

   

Risk that the regulatory environment for third-party service and technology providers (which UATM could be labeled as) may not be specific enough to support Eve’s UATM solution, or may delay its adoption.

 

   

Eve’s UATM solution may underperform if it has a defect or it is not delivered on the projected timeline.

 

   

Eve may not be able to launch its eVTOL and related services on the timeline projected.

 

   

Eve may be unable to secure third parties to provide aerial ridesharing services and to make the necessary changes to, and operate, vertiports using our aircrafts, or otherwise make the services sufficiently convenient to drive customer adoption.

 

   

Eve’s customers’ perception of Eve and Eve’s reputation may be impacted by the broader industry and customers may not differentiate Eve’s aircraft and Eve’s services from our competitors.

 

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Eve’s prospects and operations may be adversely affected by changes in consumer preferences, discretionary spending and other economic conditions that affect demand for UAM services, including changes resulting from the COVID-19 pandemic.

 

   

Neither Eve nor Embraer have manufactured or delivered any eVTOL aircraft to customers, which makes evaluating its business and future prospects difficult and increases the risk of investment.

 

   

Eve’s eVTOL aircraft may not perform at the level we expect, and may have potential defects, such as higher than expected noise profile, lower payload than initially estimated, shorter range, higher unit cost, higher cost of operation, perceived discomfort during transition phase and/or shorter useful lives than we anticipate.

 

   

Eve may not be able to produce aircraft in the volumes and on the timelines projected.

 

   

Crashes, accidents or incidents of eVTOL aircraft or involving UATM solutions, lithium batteries involving Eve or its competitors could have a material adverse effect on its business, financial condition, and results of operations.

 

   

Eve currently relies and will continue to rely on Embraer to provide services, products, parts and components required to develop and certify our aircraft and to supply critical services, components and systems necessary for our operations, which exposes us to a number of risks and uncertainties outside our control.

 

   

We currently do not have a defined strategy for the manufacturing of our aircraft following type certification, which exposes us to a number of risks and uncertainties outside our control.

 

   

Eve’s agreements with its customers are non-binding and constitutes all of the current orders for our aircraft. If Eve does not enter into definitive agreements with its customers, or the conditions to its customer’s order (if any) are not met, or if such orders (if any) are cancelled, modified or delayed, its prospects, results of operations, liquidity and cash flow will be harmed.

 

   

Eve may be unable to obtain relevant regulatory approvals for the commercialization of our aircraft, including Type Certification, Production Certification, and Operating Certification approvals for permitting new infrastructure or access existing infrastructure or otherwise.

 

   

Changes in government regulation imposing additional requirements and restrictions on Eve’s operations could increase its operating costs and result in service delays and disruptions.

 

   

If conflicts arise between Eve and its strategic partners, Eve’s business could be adversely affected or these parties may act in a manner adverse to Eve.

 

   

The failure of certain advances in technology such as autonomy or battery density to mature at the rates Eve projects may impact its ability to increase the volume of its service and/or drive down end-user pricing at the rates it projects.

 

   

Eve has incurred significant losses since inception, it expects to incur losses in the future and it may not be able to achieve or maintain profitability.

 

   

Eve is subject to cybersecurity risks to its operational systems, security systems, infrastructure, integrated software in its aircraft and customer data processed by its third-party vendors.

 

   

Eve’s available capital resources may not be sufficient to meet the requirements for additional capital.

 

   

Brazilian political and economic conditions have a direct impact on our business, and such conditions could adversely affect our business, financial condition and results of operations.

 

   

Our stockholders will experience immediate dilution as a consequence of the issuance of common stock as consideration in the business combination. Having a minority share position may reduce the influence that our current stockholders have on the management of the Company.

 

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Our actual financial position and results of operations may differ materially from the unaudited pro forma financial information included in this proxy statement.

 

   

The business combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all.

Emerging Growth Company

Zanite is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Section 102(b)(1) of the JOBS Act. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. Zanite has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, Zanite, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of Zanite’s financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Upon completion of the business combination, Eve Holding will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of Zanite’s IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

U.S. Material Federal Income Tax Considerations

For a discussion summarizing the United States material federal income tax considerations of an exercise of redemption rights, please see “U.S. Material Federal Income Tax Considerations.

 

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COMPARATIVE SHARE INFORMATION

The following table sets forth:

 

   

the historical comparative share information for Zanite as of and for the nine months ended September 30, 2021 and for the year ended December 31, 2020 on a stand-alone basis;

 

   

the historical comparative share information of the UAM Business as of and for the nine months ended September 30, 2021 and for the year ended December 31, 2020 on a stand-alone basis; and

 

   

pro forma combined per share information after giving effect to the business combination, assuming two redemption scenarios as following:

 

  (1)

assuming no Zanite stockholders exercise redemption rights with respect to their shares of Class A common stock upon the consummation of the Equity Exchange; and

 

  (2)

assuming 19,601,942 shares of Class A common stock are redeemed for their pro rata share of the funds in Zanite’s trust account, which amount is approximately $236.92 million as of December 27, 2021. This scenario gives effect to Zanite’s public stockholder redemptions of 19,601,942 shares for a per share redemption price of $10.30, representing an aggregate redemption payment of $201.90 million, and is based on the Minimum Cash Condition that the amount of cash available in Zanite’s trust account, after deducting the amount required to satisfy Zanite’s obligations to its stockholders (if any) that exercise their rights to redeem their public shares (but prior to the payment or reimbursement, as applicable, of any (a) deferred underwriting commissions being held in the Zanite’s trust account and (b) transaction expenses of Embraer and its subsidiaries (including Eve) and Zanite), plus the PIPE Investment Amount is at least $350,000,000. The Minimum Cash Condition is waivable by Embraer, Eve and EAH, and if so waived, the maximum amount of redemptions could exceed the 19,601,942 public share redemption scenario presented herein.

The Combined Financial Statements of the UAM Business have been prepared on a carve-out basis from the consolidated financial statements of Embraer in accordance with GAAP and in its presentation currency of United States dollars. The UAM Business did not in the past form a separate legal group and therefore it is not possible to show issued share capital or a full analysis of reserves. The historical financial statements of Zanite have been prepared in accordance with GAAP in its functional and presentation currency of United States dollars.

The information is only a summary and should be read in conjunction with the historical financial statements of Zanite and the UAM Business included elsewhere in this proxy statement. The pro forma combined per share information is derived from, and should be read in conjunction with, the information contained in the section of this proxy statement entitled “The Business Combination — Unaudited Pro Forma Condensed Combined Financial Information.”

 

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The pro forma combined share information below does not purport to represent what the actual results of operations or the earnings per share would have been had the companies been combined during the periods presented, nor to project Zanite’s or Eve’s results of operations or earnings per share for any future date or period following the business combination. The pro forma combined shareholders’ equity per share information below does not purport to represent what the value of Zanite and Embraer would have been had the companies been combined during the periods presented.

 

                   Pro Forma Combined  
     UAM Business
(Historical)
     Zanite
(Historical)
     No
Redemptions
     Maximum
Redemptions
 

As of and for the Nine Months Ended September 30, 2021

           

Book value per share

     —        $ (1.32    $ 1.81      $ 1.18  

Cash dividends per share

     —          —          —          —    

Weighted averages unit:

           

Weighted average shares outstanding of Zanite Class A common stock -basic and diluted

     —          23,000,000        286,776,600        267,174,658  

Loss per share:

           

Earnings (loss) per outstanding shares, basic and diluted

     —        $ 0.62      $ (0.27    $ (0.28
                   Pro Forma Combined  
     UAM Business
(Historical)
     Zanite
(Historical)
     No
Redemptions
     Maximum
Redemptions
 

As of and for the Year Ended December 31, 2020

           

Book value per share

     —        $ (0.76    $ 0.55      $ 0.85  

Cash dividends per share

     —          —          —          —    

Weighted averages unit:

           

Weighted average shares outstanding of Zanite Class A common stock -basic and diluted

     —          23,000,000        286,776,600        267,174,658  

Loss per share:

           

Earnings (loss) per outstanding shares, basic and diluted

     —        $ 0.00      $ (0.36    $ (0.39

 

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MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION

The Company

Market Price and Ticker Symbol

The Company’s units, common stock and warrants are currently listed on Nasdaq Capital Market under the symbols “ZNTEU,” “ZNTE,” and “ZNTEW,” respectively.

On December 20, 2021, the trading date before the public announcement of the business combination, the Company’s units, Class A common stock and warrants closed at $10.45, $10.15 and $0.65, respectively. On December 29, 2021, the trading date immediately prior to the date of this proxy statement, the Company’s units, common stock and warrants closed at $10.57, $10.16 and $0.96, respectively.

Holders

As of December 27, 2021, there was 1 holder of record of our units, 6 holders of record of our common stock, and 2 holders of record of our warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose units, common stock and warrants are held of record by banks, brokers and other financial institutions.

Dividend Policy

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of the business combination. The payment of any cash dividends subsequent to the business combination will be within the discretion of the post-combination company’s board of directors at such time. We currently expect that the post-combination company will retain future earnings to finance operations and grow its business, and we do not expect the post-combination company to declare or pay cash dividends for the foreseeable future.

 

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RISK FACTORS

Risks Related to Eve’s Business and Industry

Unless the context otherwise requires, references in this subsection “— Risks Related to Eve’s Business and Industry” to “we”, “us”, “our”, and the “Company” generally refer to Eve in the present tense or the Company from and after the business combination, as applicable.

You should carefully consider the following risks. However, the risks set forth below are not the only risks that we face, and we face other risks which have not yet been identified or which are not yet otherwise predictable. If any of the following risks occur or are otherwise realized, our business, financial condition, and results of operations could be materially adversely affected. You should carefully consider the risks described below and all other information in this filing, including our consolidated financial statements and the related notes to consolidated financial statements and schedules thereto.

Market & Service

The market for Urban Air Mobility (UAM) has not been established with precision, is still emerging and may not achieve the growth potential we expect, or may grow more slowly than expected.

The UAM market is still emerging and has not been established with precision. It is uncertain to what extent market acceptance will grow, if at all. We intend to initially launch operations in a limited number of metropolitan areas. The success of these markets and the opportunity for future growth in these markets may not be representative of the potential market for UAM in other metropolitan areas. Our success will depend to a substantial extent on regulatory approval and availability of eVTOL technology, investments and development of the ecosystem infrastructure, community acceptance, as well as the willingness of commuters and travelers to widely-adopt air mobility as an alternative for ground transportation. If the public does not perceive UAM as beneficial, or chooses not to adopt UAM as a result of concerns regarding safety, affordability, value proposition or for other reasons, then the market for our offerings may not develop, may develop more slowly than we expect or may not achieve the growth potential we expect. As a result, the number of potential fliers using our eVTOL cannot be predicted with any degree of certainty, and we cannot assure you that we will be able to operate in a profitable manner in any of our current or targeted future markets. Any of the foregoing could materially adversely affect our business, financial condition and results of operations.

Growth of our business will require significant investments in the development of the UAM ecosystem, infrastructure, technology and marketing and sales efforts. Our current cash flow has not been sufficient to support these needs. If our business does not generate the level of available cash flow required to support these investments, our results of operations will be negatively affected. Further, our ability to effectively manage growth and expansion of our operations will also require us to enhance our research and development, manufacturing, operational systems, internal controls and infrastructure, human resources policies and reporting systems. These enhancements will require significant capital expenditures and allocation of valuable management and employee resources.

There may be reluctance by consumers to adopt this new form of mobility, or unwillingness to pay our projected prices.

Our growth is highly dependent upon the adoption by consumers of an entirely new form of mobility offered by eVTOL aircraft and the UAM market. If consumers do not adopt this new form of mobility or are not willing to pay the prices shared for aerial ridesharing services, our business may never materialize and our prospects, financial condition and operating results will be harmed. This market is new, rapidly evolving, and characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, new aircraft announcements and changing consumer demands and behaviors.

 

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Our success in a given market will depend on the local infrastructure and regulations, on our partners’ ability to develop a network of passengers and accurately assess and predict passenger demand and price sensitivity. Demand and price sensitivity may fluctuate based on a variety of factors, including macroeconomic factors, quality of service, negative publicity, safety incidents, corporate reporting related to safety, quality of customer support, perceived political or geopolitical affiliations, or dissatisfaction with our brand, products and offerings in general. If our commercial partners fail to attract passengers or fail to accurately predict demand and price sensitivity, it would harm our financial performance and our competitors’ products may achieve greater market adoption and may grow at a faster rate than our business.

We expect that a large driver of passenger demand for aerial ridesharing services will be time savings when compared with alternative modes of transportation. Should we or our commercial partners be unable to deliver a sufficient level of time savings for our eVTOL passengers or if expected time savings are impacted by delays or cancellations, it could reduce demand for aerial ridesharing services. If we or our commercial partners are unable to generate demand or demand falls, our business, financial conditions, and results of operations could be adversely affected.

There may be rejection of eVTOL operation in certain localities due to a perceived risk of safety or burden on local communities from eVTOL operations.

We are developing eVTOL to a level of safety that is higher than that of a light aircraft, a level that is perceived by us and the regulators to be adequate for the safe operation of eVTOLs in urban centers. However, the safety record of the fleet will also depend on factors external to the vehicle and the understanding of which is currently being constructed, such as the integration of eVTOL fleets with other aircraft operating in the same urban airspace. If the prediction of important characteristics of the system, such as route placement, vehicle separation and communication protocols, is not accurate, or if these considerations are not properly taken into account, the safety level of the fleet operation may be negatively affected.

The approval of local authorities of the operation of the eVTOLs will be influenced by the public opinion about the burden imposed on that community by the vehicle operations. Local populations, being potential users of the eVTOL service or not, may perceive the external noise of the vehicles, visual pollution and changes in the neighborhood provoked by vertiport operations to be unreasonable with respect to the benefits brought by the vehicles in terms of traffic congestion reduction and decrease in travel times. If that is the case, the demand for the vehicles and its operations may be negatively affected.

If current airspace regulations are not modified to increase air traffic capacity, our business could be subject to considerable capacity limitations.

A failure to increase air traffic capacity at and in the airspace serving key markets, including around major airports, in the United States or overseas, could create capacity limitations for our future operations and could have a material adverse effect on our business, results of operations and financial condition. Weaknesses in airspace and air traffic control system worldwide, including the National Airspace System and the Air Traffic Control (“ATC”) system, such as outdated procedures and technologies, could result in capacity constraints during peak travel periods or adverse weather conditions in certain markets, resulting in delays and disruptions to our service. While our aircraft is designed to operate in the National Airspace System under existing rules, our business at scale will likely require airspace allocation for UAM operations. Our inability to obtain sufficient access to the National Airspace System could increase our costs and reduce the attractiveness of our service.

Urban Air Traffic Management (UATM) may not be able to provide adequate situational awareness and equitable airspace access to eVTOLs or may not allow industrial scalability.

Urban Air Traffic Management (UATM) is a system that will enable UAM scalability and will mature over time to support market requirements. The UATM systems will provide traffic management services to the

 

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UAM ecosystem, including to vehicles, fleet operators, vertiports, pilots, fleet managers, network operating centers and air navigation service providers, with the objective of improving the efficiency and safety of UAM operations. The UATM systems are therefore perceived as an enabler to allow the safe scalability of the industry as the quantity of eVTOL operations increases over time.

An accident or incident resulting from the low performance of one of the UATM systems or its inability to provide adequate safety levels may negatively affect public perception and the UAM industry as whole.

Additionally, if UATM systems do not target appropriate services, it may affect its ability to support increased traffic volume and therefore impact the ability for industrial scalability. This may be the result of collecting the wrong data necessary to support future safety cases required for airspace authorities to approve new regulations and/or the inability to manage traffic equitably for all airspace users, including airspace access for eVTOLs.

There is a risk that the regulatory environment for third-party service and technology providers (which UATM could be labeled as) may not be specific enough to support Eve’s UATM solution, or may delay its adoption.

Every country is on a different journey with a corresponding timetable towards establishing the regulatory environment that will support third-party technology and service providers to buttress the air traffic management industry. As more varied and unique aircraft, each with unique operating characteristics (for instance, drones as compared to general aviation aircraft), are all vying for access to dense, low altitude airspace. Solutions like UATM seek to standardize the way in which such airspace can be safely managed. However, as technology development usually outpaces regulation, it is foreseeable that a certain degree of business risk or regulatory risk is inherent in the investment and deployment of this new technology. Therefore, a lack of necessary regulations to help the industry understand how it may commercialize such third-party offerings, such as UATM, may result in a poor business environment that may make it difficult to achieve the deployment of UATM based on each country’s progress towards regulating similar service providers.

Additionally, competing systems or solution providers may use the lack of regulation to their advantage, leading to an unsafe operating environment that would cause Eve and its UATM solution to consider suspending operations until such time when clarity and an appropriate safety case with the local regulator could be established. This may negatively impact the financial results of the UATM product, its ability to provide a return on its investment, and therefore damage the business model of Eve’s UATM solution.

Eve’s UATM solution may underperform if it has a defect or it is not delivered on the projected timeline.

Eve is developing its own UATM solution. Our UATM systems will include urban aeronautical information management, vertiport information management, flight planning and authorization, traffic flow management, weather management, and collaborative or common situation awareness and any other feature identified during the interaction with stakeholders.

The underperformance of the UATM systems could result from improperly defining the system requirements and system architecture. The inability to accurately define the system requirements would result in an undesirable product by the target users and customers, including but not limited to the fleet operators, vertiport operators and air navigation service providers. By not providing the necessary services at the required time, UATM may negatively impact the ability of UAM to scale at the desired pace. Additionally, by not providing the right services, there is a heightened risk that competitors will capture additional market share. Failing to define and implement the right system architecture will make it more difficult for UATM systems to scale and evolve over time with new requirements and to integrate with other systems.

There can be no assurance that we will be able to detect and fix all defects in the UATM system prior to its entry into service. Defects could occur as a result of incorrectly identifying the standards that the UATM

 

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software must be built towards. By failing to build towards the correct standards, the impacted UATM system will not be allowed to enter into service, resulting in significant re-work to meet the qualification with the project incurring schedule delays, cost overrun or, ultimately, causing eVTOL accidents.

Schedule delays of UATM systems may result in losing near-term market share to the competition. Competing service providers will begin generating hours of in-service experience earlier and become more established and desirable to the market, making it more difficult for us to become an established service provider in the future. Additionally, delays of UATM systems currently under development and systems to be developed in the future may impede the industrial scalability of UAM, impacting the volume of vehicle sales and service and support contracts.

We may not be able to launch our eVTOL and related services on the timeline projected.

We will need to address significant regulatory, political, operational, logistical, and other challenges in order to launch our eVTOLs. We do not currently have infrastructure in place to operate the service and such infrastructure may not be available or may be occupied on an exclusive basis by competitors. We also have not yet received U.S. Federal Aviation Administration (“FAA”), the National Civil Aviation Agency of Brazil (Agência Nacional de Aviação Civil – “ANAC”), the European Aviation Safety Agency (“EASA”) or other certifications of our aircraft or other required airspace or operational authority and government approvals, which is essential for aircraft production and operation. In addition, our pre-certification operations may increase the likelihood of discovering issues with our aircraft, which could result in delays to the certification of our aircraft. Any delay in the financing, design, manufacture and launch of our aircraft could materially damage our brand, business, prospects, financial condition and operating results. Aircraft manufacturers often experience delays in the design, manufacture and commercial release of new aircraft. These delays may result in additional costs and adverse publicity for our business. If we are not able to overcome these challenges, our business, prospects, operating results and financial condition will be negatively impacted and our ability to grow our business will be harmed.

Our competitors may commercialize their technology before us, either in general or in specific markets.

We expect this industry to be increasingly competitive and it is possible that our competitors could get to market before us, either generally or in specific markets. Even if we are first to market, we may not fully realize the benefits we anticipate, and we may not receive any competitive advantage or may be overcome by other competitors. If new companies or existing aerospace companies launch competing solutions in the markets in which we intend to operate and obtain large scale capital investment, we may face increased competition. Additionally, our competitors may benefit from our efforts in developing a UATM solution, making it easier for them to obtain the permits and authorizations required to manufacture or operate eVTOL aircrafts in the markets in which we intend to launch or in other markets.

Many of our current and potential competitors are larger and have substantially greater resources than we have and expect to have in the future. They may also be able to devote greater resources to the development of their current and future technologies or the promotion and sale of their offerings, or offer lower prices. In particular, our competitors may be able to receive airworthiness certificates or production certificates for their aircraft prior to us receiving such certificates. Our current and potential competitors may also establish cooperative or strategic relationships amongst themselves or with third parties that may further enhance their resources and offerings. Further, it is possible that domestic or foreign companies or governments, some with greater experience in the aerospace industry or greater financial resources than we possess, will seek to provide products or services that compete directly or indirectly with ours in the future.

 

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We may be unable to secure third parties to provide aerial ridesharing services and to make the necessary changes to, and operate, vertiports using our aircrafts, or otherwise make the services sufficiently convenient to drive customer adoption.

Our business will heavily depend on third-party operators to develop and launch aerial ride sharing services and to make the necessary changes to vertiport infrastructure, including installation of necessary charging equipment, to enable adoption of our eVTOL aircraft. While we expect to be able to develop strategic partnerships with third-parties fleet and vertiport operators to provide a comprehensive UAM passenger service, we cannot guarantee that we will be able to do so effectively, at prices that are favorable to us, or at all. While we do not intend to own or operate vertiports or aerial ride sharing services, our business will rely on such services. Our business and our brand will be affiliated with these third-party ground operators and we may experience harm to our reputation if our third-party ground operators suffer from poor service, negative publicity, accidents, or safety incidents. The foregoing risks could adversely affect our business, financial conditions and results of operations.

Our customers’ perception of us and our reputation may be impacted by the broader industry and customers may not differentiate our aircraft and our services from our competitors.

Customers and other stakeholders may not differentiate between us and the broader aviation industry or, more specifically, the UAM service industry. If our competitors or other participants in this market have problems in a wide range of issues, including safety, technology development, engagement with aircraft certification bodies or other regulators, engagement with communities, target demographics or other positioning in the market, security, data privacy, flight delays, or bad customer service, such problems could impact the public perception of the entire industry, including our business. We may fail to adequately differentiate our brand, our services and our aircraft from others in the market which could impact our ability to attract passengers or engage with other key stakeholders. The failure to differentiate ourselves and the impact of poor public perception of the industry could have an adverse impact on our business, financial condition, and results of operations.

Our prospects and operations may be adversely affected by changes in consumer preferences, discretionary spending and other economic conditions that affect demand for UAM services, including changes resulting from the COVID-19 pandemic.

Our business will be primarily concentrated on commercializing our eVTOL aircraft, providing agnostic UAM capacity by operating a fleet of eVTOLs together with partners and providing a suite of services including maintenance, technical support and training to our and third parties’ eVTOL aircrafts, which we expect may be vulnerable to changes in consumer preferences, discretionary spending and other market changes impacting discretionary purchases. The global economy has in the past, and will in the future, experience recessionary periods and periods of economic instability, including the current business disruption and related financial impact resulting from the global COVID-19 health crisis. During such periods, eVTOL passengers may choose not to make discretionary purchases or may reduce overall spending on discretionary purchases. Such changes could result in reduced consumer demand for air transportation, including UAM services, or could shift demand from our UAM services to other methods of air or ground transportation for which we do not offer a competing service. If we are unable to generate demand or there is a future shift in consumer spending away from UAM services, our business, financial condition and results of operations could be adversely affected.

Aircraft and Production

Neither we nor Embraer have yet manufactured or delivered to customers any eVTOL aircraft, which makes evaluating Eve’s business and future prospects difficult and increases the risk of investment.

The UAM Business was launched by Embraer in 2017 and Embraer has a limited operating history in the urban air mobility industry, which is continuously evolving. Our eVTOL aircraft is in the development stage and

 

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we do not expect our first serial vehicle to be produced until 2026, if at all. We have no experience in an organization in high volume manufacturing of the planned eVTOL aircraft. We cannot assure you that we or our partners will be able to develop efficient, automated, cost-efficient manufacturing capability and processes, and reliable sources of component supplies that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully mass market our aircraft. You should consider our business and prospects in light of the risks and significant challenges we face as a new entrant into the UAM industry, including, among other things, with respect to our ability to:

 

   

design and produce safe, reliable and quality eVTOL aircraft on an ongoing basis;

 

   

obtain the necessary regulatory approvals in a timely manner, including receipt of governmental authority for manufacturing the equipment and, in turn, marketing, selling and operating our UAM services;

 

   

develop a UATM solution;

 

   

build a well-recognized and respected brand;

 

   

establish and expand our customer base and strategic partners;

 

   

successfully market not just our eVTOL aircraft but also the other services we intend to provide, such as maintenance, materials, technical support and training services;

 

   

successfully service our eVTOL aircraft after sales and maintain a good flow of spare parts and customer goodwill;

 

   

improve and maintain our operational efficiency;

 

   

successfully execute our manufacturing and production model and maintain a reliable, secure, high-performance and scalable technology infrastructure; predict our future revenues and appropriately budget for our expenses;

 

   

attract, retain and motivate talented employees;

 

   

anticipate trends that may emerge and affect our business;

 

   

anticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape; and

 

   

navigate an evolving and complex regulatory environment.

If we fail to adequately address any or all of these risks and challenges, its business may be harmed.

Our eVTOL aircraft may not perform at the level we expect, and may have potential defects, such as higher than expected noise profile, lower payload than initially estimated, shorter range, higher unit cost, higher cost of operation, perceived discomfort during transition phase of flight and/or shorter useful lives than we anticipate.

Our eVTOL aircraft may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair. For example, our eVTOL aircraft may have a higher noise profile than we expect or carry a lower payload or have shorter maximum range than we estimate. Our eVTOL aircraft also uses a substantial amount of software code to operate. Software products are inherently complex and often contain defects and errors when first introduced. The ability of our eVTOL aircraft to perform as expected depends on the development of certain components, such as batteries, the technology of which is currently under development and therefore not yet proven in operation.

While we have performed initial tests with flying vehicles and components in test rigs, in some instances we are still relying on projections and models to validate the projected performance of our aircraft. To date, we have

 

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been unable to validate the performance of our eVTOL aircraft over the expected lifetime of the aircraft. There can be no assurance that we will be able to detect and fix any defects in the eVTOL aircraft prior to their use in our service. For example, a flight in an eVTOL aircraft will be unlike anything passengers have experienced before, and due to the aircraft characteristics (including a comparatively light weight, multiple rotors, vertical takeoff, and transition to forward flight) and operation characteristics (flying at low altitudes close to buildings, likely to frequently encounter turbulence), passengers may be susceptible to motion sickness during the transitioning phases.

We expect to introduce new and additional features and capabilities to the aircraft and our service over time. One important example is that the vehicle will begin its operation with a pilot onboard and will evolve to become an autonomous vehicle over time. This will reduce the cost of operation related to hiring the crew, although part of the cost reduction will be offset by the need to introduce additional equipment and sensors needed for autonomous flights. As with other areas of the vehicle, we expect to improve the solutions through testing and simulations throughout the vehicle development process, since this is a technology and capability not available for vehicles of this nature. We may be unable to develop or certify these upgrades in a timely manner, or at all.

Our business will initially rely on a single aircraft type. Our dependence on our aircraft makes us particularly vulnerable to any design defects or mechanical problems associated with our aircraft or its component parts. Any product defects or any other failure of our aircraft to perform as expected could harm our reputation and result in adverse publicity, delays in or inability to obtain certification, lost revenue, delivery delays, product recalls, product liability claims, harm to our brand and reputation, and significant warranty and other expenses, and could have a material adverse impact on our business, financial condition, operating results and prospects.

We may not be able to produce aircraft in the volumes and on the timelines projected.

There are significant challenges associated with mass producing aircraft in the volumes that we are projecting. The aerospace industry has traditionally been characterized by significant barriers to entry, including large capital requirements, investment costs of designing and manufacturing aircraft, long lead times to bring aircraft to market from the concept and design stage, the need for specialized design and development expertise, extensive regulatory requirements and establishing a brand name and image and the need to establish maintenance and service locations. As a manufacturer of electric aircraft, we face a variety of added challenges to entry that a traditional aircraft manufacturer would not encounter including additional costs of developing and producing an electric powertrain, regulations associated with the transport of lithium-ion batteries and unproven high-volume customer demand for a fully electric aerial mobility service. Additionally, we are relying on Embraer to develop production lines for components and at volumes for which there is little precedent within the traditional aerospace industry. The ability to reach high vehicle production volumes also depend on the supply of components and systems reliably at adequate rates, components which are not manufactured at scale at this moment. Additionally, there may be competition between markets for related products that may affect the ability of suppliers to provide equipment, for example in the case of batteries, which are in high demand by the automotive industry. In addition, as our eVTOL cannot fly longer distances to be delivered, it is pivotal to have the ability to successfully execute the in-factory disassembling just after a unit production. Tests, transportation and assembly close to customer operations need to follow high standards of safety and efficiency in order to deliver the products to different geographic regions. If we are not able to overcome these barriers, our business, prospects, operating results and financial condition will be negatively impacted and our ability to grow our business will be harmed.

We are relying on the Embraer Entities to manufacture and assemble our eVTOL aircraft pursuant to our Master Services Agreements with Embraer and Atech. The initial terms of the Master Services Agreements with Atech and Embraer are expected to end on the 10th and 15th anniversaries of the Closing Date, respectively. If Embraer or Atech terminates, or fails to renew or to comply with the terms of, the Master Services Agreements, we may not be able to engage other manufacturers and suppliers in a timely manner, at an acceptable price or in the necessary quantities.

 

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In addition, our eVTOL will be subject to regulation in Brazil, the U.S., the European Union and in each jurisdiction where our customers are located. ANAC, as well as Civil Aviation Authorities (CAA) in other countries in which our potential customers are located, most notably FAA and the EASA, must certify or validate the design (Type Certificate) of our eVTOL before we can start delivering it to any customers. As a result, we will also need to do extensive testing to ensure that the aircraft is in compliance with applicable local civil aviation regulation (e.g., ANAC, FAA, EASA), safety regulations and other relevant regulations prior to entry into service. In addition to certification of the aircraft (Type Certificate), we will be required to obtain approval from the ANAC, or from local Civil Aviation Authorities where the manufacturing facilities will be located to produce the aircraft according to the approved type design. Our plan involves manufacturing the vehicle in Brazil (under ANAC’s regulations) and, according to the evolution of market demand, other production facilities shall be implemented, which may be located in other countries outside Brazil, such as the U.S. or Europe. Production approval involves local authority manufacturing approval and extensive ongoing oversight of mass-produced aircraft. If we are unable to obtain production approval for the aircraft, or the ANAC, the FAA, the EASA or local Civil Aviation Authority imposes unanticipated restrictions as a condition of approval, our projected costs of production could increase substantially.

The timing of our production ramp is dependent upon finalizing certain aspects of the design, engineering, component procurement, testing, build out, and manufacturing plans in a timely manner and upon our ability to execute these plans within the current timeline. It is also dependent on being able to timely obtain Production Certification from the respective local Civil Aviation Authority.

Crashes, accidents or incidents of eVTOL aircraft or involving UATM solutions, or lithium batteries involving us or our competitors could have a material adverse effect on our business, financial condition, and results of operations.

Test flying prototype aircraft is inherently risky, and crashes, accidents or incidents involving our aircraft are possible. Any such occurrence would negatively impact our development, testing and certification efforts, and could result in re-design, certification delay and/or postponements or delays to our commercial service launch.

The operation of aircraft is subject to various risks, and we expect demand for our eVTOL aircraft and our UAM services to be impacted by accidents or other safety issues regardless of whether such accidents or issues involve our aircraft. Such accidents or incidents could also have a material impact on our ability to obtain ANAC, FAA and EASA certifications for our aircraft, or to obtain such certifications in a timely manner. Such events could impact confidence in a particular aircraft type or the air transportation services industry as a whole, particularly if such accidents or disasters were due to a safety fault. We believe that the regulators and the general public are still forming their opinions about the safety and utility of aircraft that are highly reliant on lithium ion batteries, and/or advanced flight control software capabilities. An accident or incident involving either our aircraft or a competitor’s aircraft during these early stages of opinion formation could have a disproportionate impact on the longer-term view of the emerging UAM market.

We are at risk of adverse publicity stemming from any public incident involving our company, our controlling stockholder, our people, our brand or other companies in our industry. Such an incident could involve the actual or alleged behavior of any of our employees or third-party contractors, including Embraer and its other subsidiaries. Further, if our personnel, our aircraft, or other types of aircraft, including Embraer’s aircrafts, are involved in a public incident, accident, catastrophe or regulatory enforcement action, we could be exposed to significant reputational harm and potential legal liability. The insurance we carry may be inapplicable or inadequate to cover any such incident, accident, catastrophe or action. In the event that our insurance is inapplicable or inadequate, we may be forced to bear substantial losses from an incident or accident. In addition, any such incident, accident, catastrophe or action involving our employees, our aircraft, or other types of aircraft could create an adverse public perception, which could harm our reputation, result in passengers being reluctant to use our services, and adversely impact our business, results of operations and financial condition.

 

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Unsatisfactory safety performance of our aircraft could have a material adverse effect on our business, financial condition, and results of operation.

While we are building operational processes designed to ensure that the design, testing, manufacture, performance, operation and servicing of our aircraft meet rigorous quality standards, there can be no assurance that we will not experience operational or process failures and other problems, including through flight test accidents or incidents, manufacturing or design defects, pilot error, cyber-attacks or other intentional acts, that could result in potential safety risks. Any actual or perceived safety issues may result in significant reputational harm to our businesses, in addition to tort liability, maintenance, increased safety infrastructure and other costs that may arise. Such issues could result in delaying or cancelling planned flights, increased regulation or other systemic consequences. Our inability to meet our safety standards or adverse publicity affecting our reputation as a result of accidents, mechanical or operational failures, or other safety incidents could have a material adverse effect on our business, financial condition and results of operation. In addition, our aircraft may be grounded by regulatory authorities due to safety concerns that could have a material adverse impact on our business, financial condition, operating results and prospects.

We currently rely and will continue to rely on Embraer to provide services, products, parts and components required to develop and certify our aircraft and to supply critical services, components and systems necessary for our operations, which exposes us to a number of risks and uncertainties outside our control.

While we will have our own engineering capabilities, we will be substantially reliant on Embraer, our controlling stockholder, to provide us with development, certification and other services and supply our aircrafts, at least initially, pursuant to the Master Services Agreements. Additionally, Embraer will rely on its suppliers and service providers for the parts and components in our aircraft. Embraer is currently our sole supplier of aircraft development and certain other services. We or Embraer are also, in some cases, subject to sole source suppliers for certain parts and other components for which we rely on, or may be reliant on, to achieve our projected type certification. While we believe that we may be able to establish alternate supply relationships and can obtain replacement components, we may be unable to do so in the short term or at all at prices that are favorable to us. These disruptions in our supply chain could lead to delays in aircraft development, type certification and production, which could materially adversely affect our business, prospects and operating results.

We currently do not have a defined strategy for the manufacturing of our aircraft following type certification, which exposes us to a number of risks and uncertainties outside our control.

We have not decided a strategy for the manufacturing of our aircraft following type certification. We may rely on Embraer to provide services, products, parts and components required to manufacture our aircraft to sell to final customers. Depending on our defined manufacturing strategy, we may be subject to sole source suppliers for certain parts and other components for which we may be reliant on to achieve our projected high-volume production numbers. This supply chain may expose us to multiple potential sources of delivery failure or component shortages for our aircraft. While we believe that we may be able to establish alternate supply relationships and can obtain replacement components, we may be unable to do so in the short term or at all at prices that are favorable to us.

If any of our suppliers or service partners were to experience delays, disruptions, capacity constraints or quality control problems in its manufacturing operations, or if they choose to not do business with us, we would have significant difficulty in procuring, producing and delivering our aircraft, and our business prospects would be significantly harmed. These disruptions in our supply chains may cause delays in our production process for both prototype and commercial production aircraft which would negatively impact our revenues, competitive position and reputation. Outside the markets where the manufacturing takes place, we will rely on third parties to transport and reassemble the aircraft close to customer operations. In addition, our suppliers or service partners may rely on certain state tax incentives that may be subject to change or elimination in the future, which could result in additional costs and delays in production if a manufacturing site must be obtained. Further, if we are

 

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unable to manage successfully our relationship with our suppliers or service partners, the quality and availability of our aircraft may be harmed. Our suppliers or service partners could, under some circumstances, decline to accept new purchase orders from or otherwise reduce their business with us. If our suppliers or service partners stop manufacturing our aircraft components for any reason or reduced manufacturing capacity, we may be unable to replace the lost manufacturing capacity on a timely and comparatively cost-effective basis, which would adversely impact its operations.

The manufacturing facilities of our suppliers or service partners and the equipment used to manufacture our aircraft would be costly and could require substantial lead time to replace and qualify for use. The manufacturing facilities of our suppliers or service partners may be harmed or rendered inoperable by natural or human-made disasters, including earthquakes, flooding, fire and power outages, or by health epidemics, such as the recent COVID-19 pandemic, which may render it difficult or impossible for us to manufacture our aircraft for some period of time. The inability to manufacture our aircraft, our aircraft components or the backlog that could develop if the manufacturing facilities of our suppliers or service partners are inoperable for even a short period of time may result in the loss of customers or harm our reputation.

We do not control Embraer or our other suppliers or service partners or such parties’ labor and other legal compliance practices, including their environmental, health and safety practices. If Embraer or our other current suppliers or service partners, or any other suppliers or service partners which we may use in the future, violates U.S. or foreign laws or regulations, we may be subjected to extra duties, significant monetary penalties, adverse publicity, the seizure and forfeiture of products that we are attempting to import or the loss of our import privileges. The effects of these factors could render the conduct of our business in a particular country undesirable or impractical and have a negative impact on our operating results.

Furthermore, if we experience significant increased demand, or need to replace our existing suppliers, there can be no assurance that additional supplies of aircraft manufacturing or other services or products, parts or other components will be available when required on terms that are acceptable to us, or at all, or that any supplier would allocate sufficient supplies to us in order to meet our requirements or fill our orders in a timely manner. These disruptions in our supply chain could lead to delays in aircraft development and production, which could materially adversely affect our business, prospects and operating results.

Our agreements with our customers and strategic partners are non-binding and constitute all of the current orders for our aircraft. If we do not enter into definitive agreements with our customers, or the conditions to our customer’s order (if any) are not met, or if such orders (if any) are cancelled, modified or delayed, our prospects, results of operations, liquidity and cash flow will be harmed.

Our agreements with potential customers and strategic partners for our eVTOL aircraft are non-binding and constitute all of the current orders for our aircraft. Such orders and agreements are subject to conditions, including the parties reaching mutual agreement on certain material terms, such as aircraft specifications, warranties, usage and transfer of the aircraft, performance guarantees, delivery periods and other matters, and entering into definitive agreements. The obligations of such potential customers and strategic partners to consummate any order will arise only after all of such material terms are agreed in the discretion of each party and we enter into definitive agreements with such potential customers. Further, such definitive agreements (if any) will likely be subject to several conditions, including, for example, certification of our aircraft by the ANAC, FAA, EASA or other aviation authorities, and will likely be subject to termination rights. If we do not enter into definitive agreements with our potential customers and strategic partners or, if after entering into definitive agreements, we do not meet any of the agreed conditions or any orders for our aircraft are cancelled, modified or delayed, or otherwise not consummated, or we are otherwise unable to convert our strategic relationships or collaborations into sales revenue, our prospects, results of operations, liquidity and cash flow will be affected.

 

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Our business may be adversely affected by union activities.

Most of our employees will be located in Brazil. It is common throughout the aerospace and airline industries generally and in Brazil for many employees to belong to a union, which can result in higher employee costs and increased risk of work stoppages. Our Brazilian employees are currently represented by one or more labor unions. As we expand our business there can be no assurances that more of our employees will not join or form a labor union or that we will not be required to become a union signatory. We are also directly or indirectly dependent upon companies with unionized work forces, such as Embraer and parts suppliers. Work stoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or operating results. If a work stoppage occurs, it could delay the manufacture and sale of our performance electric vehicles and have a material adverse effect on our business, operating results or financial condition.

Regulatory & Airspace

We may be unable to obtain relevant regulatory approvals for the commercialization of our aircraft, including Type Certification, Production Certification, and Operating Certification, approvals for permitting new infrastructure or access existing infrastructure or otherwise.

The commercialization of new aircraft requires certain regulatory authorizations and certifications, including Type Certification issued by the FAA under 14 CFR Part 23 (ANAC RBAC 23, EASA SC-VTOL) with 14 CFR Part 135 (ANAC RBAC 135) operations specifications. While we anticipate being able to meet the requirements of such authorizations and certificates, we may be unable to obtain such authorizations and certifications, or to do so on the timeline we project. Should we fail to obtain any of the required authorizations or certificates, or do so in a timely manner, or any of these authorizations or certificates are modified, suspended or revoked after we obtain them, we may be unable to launch our eVTOL and related services or do so on the timelines we project, which would have adverse effects on our business, prospects, financial condition and/or results of operations.

Changes in government regulation imposing additional requirements and restrictions on our operations could increase our operating costs and result in service delays and disruptions.

Aerospace manufacturers are subject to extensive regulatory and legal requirements that involve significant compliance costs. The ANAC, FAA, EASA and other regulators may issue regulations relating to the operation of eVTOL aircraft that could require significant expenditures. Implementation of the requirements created by such regulations may result in increased costs for our customers and us. Additional laws, regulations, taxes and airport rates and charges have been proposed from time to time that could significantly increase the cost of UAM operations or reduce the demand for air travel. If adopted, these measures could have the effect of raising fares and reducing demand. We cannot assure you that these and other laws or regulations enacted in the future will not harm our business.

The UAM Business is subject to stringent U.S. export and import control laws and regulations. Unfavorable changes in these laws and regulations or U.S. government licensing policies, our failure to secure timely U.S. government authorizations under these laws and regulations, or our failure to comply with these laws and regulations could have a material adverse effect on our business, financial condition and results of operation.

Our business is subject to stringent U.S. import and export control laws and regulations as well as economic sanctions laws and regulations. We are required to import and export our products, software, technology and services, as well as run our operations in the United States, in full compliance with such laws and regulations, which may include the EAR, the ITAR, and economic sanctions administered by the Department of State and the Treasury Department’s Office of Foreign Assets Control (OFAC). Similar laws that impact our business exist in other jurisdictions. These foreign trade controls prohibit, restrict, or regulate our ability to, directly or indirectly, export, deemed export, re-export, deemed re-export or transfer certain hardware, technical data, technology, software, or services to certain countries and territories, entities, and individuals, and for end users or uses. If we

 

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are found to be in violation of these laws and regulations, it could result in civil and criminal, monetary and non-monetary penalties, the loss of export or import privileges, debarment and reputational harm. While none of our current technologies require us to maintain a registration under ITAR, we may become subject to ITAR in the future, which could have a material adverse effect on our business, financial condition and results of operations.

Pursuant to these international trade control laws and regulations, we are required, among other things, to (i) determine the proper licensing jurisdiction and export classification of products, software, and technology, and (ii) obtain licenses or other forms of U.S. government authorization to engage in the conduct of our business. The authorization requirements may include the need to get permission to release controlled technology to certain foreign person employees and other foreign persons. The authorization requirements further include the need to ensure compliance with trade controls as they apply to the cross-border release of products, software, and technology among our personnel located in the U.S. and abroad. Changes in U.S. foreign trade control laws and regulations, or reclassifications of our products or technologies, may restrict our operations. The inability to secure and maintain necessary licenses and other authorizations could negatively impact our ability to compete successfully or to operate our business as planned. Any changes in the export control regulations or U.S. government licensing policy, such as those necessary to implement U.S. government commitments to multilateral control regimes, may restrict our operations. Given the great discretion the government has in issuing or denying such authorizations to advance U.S. national security and foreign policy interests, there can be no assurance we will be successful in our future efforts to secure and maintain necessary licenses, registrations, or other U.S. government regulatory approvals.

We will be subject to rapidly changing and increasingly stringent laws, regulations, industry standards, and other obligations relating to privacy, data protection, and data security. The restrictions and costs imposed by these requirements, or our actual or perceived failure to comply with them, could harm our business.

We are subject to or are affected by a number of federal, state and local laws and regulations, as well as contractual obligations and industry standards, that impose certain obligations and restrictions with respect to data privacy and security, and govern our collection, storage, retention, protection, use, processing, transmission, sharing and disclosure of personal information including that of our employees, customers and others. Most jurisdictions have enacted laws requiring companies to notify individuals, regulatory authorities and others of security breaches involving certain types of data. Such laws may be inconsistent or may change or additional laws may be adopted. In addition, our agreements with certain customers may require Eve to notify them in the event of a security breach. Such mandatory disclosures are costly, could lead to negative publicity, result in penalties or fines, result in litigation, may cause our customers to lose confidence in the effectiveness of our security measures and require Eve to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach.

The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. Privacy, data protection and consumer protection laws may change or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory and governing bodies and such changes or developments may be contrary to our existing practices. In addition, we may not be able to monitor and react to all developments in a timely manner. For example, the California Consumer Privacy Act of 2018, which took effect on January 1, 2020, gives California residents expanded rights related to their personal information, including the right to access and delete their personal information, and receive detailed information about how their personal information is used and shared. Other laws relating to privacy, data protection, and data security have been passed or been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. Compliance with any applicable privacy and data security laws and regulations is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms to comply with such laws and regulations. In addition, the enactment of such laws could impose conflicting requirements that would make compliance challenging.

 

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Despite our efforts, we may not be successful in complying with the rapidly evolving privacy, data protection, and data security requirements discussed above. Any actual or perceived non-compliance with such requirements could result in litigation and proceedings against us by governmental entities, passengers, or others, fines, civil or criminal penalties, limited ability or inability to operate our business, offer services, or market our platform in certain jurisdictions, negative publicity and harm to our brand and reputation. We could be required to expend significant capital and other resources to address any such actual or perceived non-compliance which may not be covered or fully covered by our insurance. Such actual or perceived non-compliance could have a material adverse effect on our business, financial condition or results of operations.

Macroeconomic

The eVTOL aircraft industry may not continue to develop, eVTOL aircraft may not be adopted by the market or our independent third-party aircraft operators, eVTOL aircraft may not be certified by transportation authorities or eVTOL aircraft may not deliver the expected reduction in operating costs, any of which could adversely affect our prospects, business, financial condition and results of operations.

eVTOL aircraft involve a complex set of technologies, which we must continue to further develop and rely on our independent third-party aircraft operators to adopt. However, before eVTOL aircraft can fly passengers, we must receive requisite approvals from federal transportation authorities. No eVTOL aircraft are currently certified by the FAA for commercial operations in the United States, by ANAC for commercial operations in Brazil or by the EASA for commercial operations in the European Union, and there is no assurance that our research and development will result in government-certified aircraft that are market-viable or commercially successful in a timely manner or at all. In order to gain government certification, the performance, reliability and safety of eVTOL aircraft must be proven, none of which can be assured. Even if eVTOL aircraft are certified, individual operators must conform eVTOL aircraft to their licenses, which requires FAA approval in the U.S., ANAC approval in Brazil and EASA approval in the European Union, and individual pilots also must be licensed and approved by the FAA, ANAC and EASA to fly eVTOL aircraft in the U.S., Brazil and Europe, respectively, which could contribute to delays in any widespread use of eVTOL aircraft and potentially limit the number of eVTOL aircraft operators available to partner with us.

Additional challenges to the adoption of eVTOL aircraft, all of which are outside of our control, include:

 

   

market acceptance of eVTOL aircraft;

 

   

state, federal or municipal licensing requirements and other regulatory measures;

 

   

third party operators to develop and launch aerial ride sharing services;

 

   

urban air traffic management system availability;

 

   

necessary changes to Vertiport infrastructure to enable adoption, including installation of necessary charging equipment; and

 

   

public perception regarding the noise and safety of eVTOL aircraft.

There are a number of existing laws, regulations and standards that may apply to eVTOL aircraft, including standards that were not originally intended to apply to electric aircraft. Regulatory changes that address eVTOL aircraft more specifically could delay our ability to receive type certification by transportation authorities and thus delay our independent third-party aircraft operators’ ability to utilize eVTOL aircraft for their flights. In addition, there can be no assurance that the market will accept eVTOL aircraft, that we will be able to execute on our business strategy, or that our offerings utilizing eVTOL aircraft will obtain the necessary government operating authority or be successful in the market. There may be heightened public skepticism to this nascent technology and its adopters. In particular, there could be negative public perception surrounding eVTOL aircraft, including the overall safety and the potential for injuries or death occurring as a result of accidents involving eVTOL aircraft, regardless of whether any such safety incidents occur involving us. Any of the foregoing risks and challenges could adversely affect our prospects, business, financial condition and results of operations.

 

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We may be unable to protect our intellectual property rights from unauthorized use by third parties.

Failure to adequately protect our intellectual property rights could result in our competitors offering similar products or services, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue, which could adversely affect our business, prospects, financial condition and operating results. Our success depends, in part, on our ability to protect our proprietary intellectual property rights, including certain technologies deployed in our aircraft or that we utilize in arranging air transportation. To date, we have relied primarily on patents and trade secrets (including know-how), employee and third-party nondisclosure agreements, copyrights, trademarks, intellectual property licenses and other contractual rights to establish and protect our proprietary technology. Our software may also be subject to certain protection under copyright law, though we have chosen not to register any of our copyrights in our software. We routinely enter into non-disclosure agreements with our employees, consultants, volunteers in usability tests or collaborative sessions, third parties and other relevant persons and take other measures to protect our intellectual property rights, such as limiting access to our trade secrets and other confidential information. We intend to continue to rely on these and other means, including patent protection, in the future. The protection of our intellectual property rights will be important to our future business opportunities. However, the steps we take to protect our intellectual property from unauthorized use by others may not be effective for various reasons, including the following:

 

   

as noted below, any patent applications we submit may not result in the issuance of patents (and some utility patents have not yet been issued to us based on our pending applications);

 

   

the scope of our utility patents that may subsequently issue may not be broad enough to protect our proprietary rights;

 

   

any of our patents that have issued or may issue may be challenged or invalidated by third parties;

 

   

our employees, volunteers or business partners may breach their confidentiality, non-disclosure and non-use obligations to us;

 

   

third parties may independently develop technologies that are the same or similar to ours;

 

   

unauthorized parties may attempt to copy aspects of our intellectual property or obtain and use information that we regard as proprietary;

 

   

intellectual property, trade secrets or other proprietary or competitively sensitive information may be improperly obtained through a cyber-attack or other breach of our systems or our vendor’s systems;

 

   

our non-disclosure agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to ours, and there can be no assurance that our competitors or third parties will comply with the terms of these agreements, or that we will be able to successfully enforce such agreements or obtain sufficient remedies if they are breached;

 

   

the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make enforcement impracticable; and

 

   

current and future competitors may challenge or circumvent or otherwise design around our patents.

Further, obtaining and maintaining patent, copyright, and trademark protection can be costly, and we may choose not to, or may fail to, pursue or maintain such forms of protection for our technology in the United States, Brazil or other foreign jurisdictions, which could harm our ability to maintain our competitive advantage in such jurisdictions. It is also possible that we will fail to identify patentable aspects of our technology before it is too late to obtain patent protection, that we will be unable to devote the resources to file and prosecute all patent applications for such technology, or that we will inadvertently lose protection for failing to comply with all procedural, documentary, payment, and similar obligations during the patent prosecution process. The laws of some countries do not protect proprietary rights to the same extent as the laws of the United States, and mechanisms for enforcement of intellectual property rights in some foreign countries may be inadequate to

 

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prevent other parties from infringing our proprietary technology. To the extent we expand our international activities, our exposure to unauthorized use of our technologies and proprietary information may increase. We may also fail to detect unauthorized use of our intellectual property, or be required to expand significant resources to monitor and protect our intellectual property rights, including engaging in litigation, which may be costly, time-consuming, and divert the attention of management and resources, and may not ultimately be successful.

Also, while we have registered and applied for trademarks in an effort to protect our investment in our brand and goodwill with customers, competitors may challenge the validity of those trademarks and other brand names in which we have invested. Such challenges can be expensive and may adversely affect our ability to maintain the goodwill gained in connection with a particular trademark. If we fail to meaningfully establish, maintain, protect and enforce our intellectual property rights, our business, financial condition and results of operations could be adversely affected.

We may need to defend ourselves against intellectual property infringement claims or misappropriation claims, which may be time-consuming and expensive and, if adversely determined, could limit our ability to commercialize our aircraft.

Companies, organizations or individuals, including our competitors, may own or obtain patents, trademarks or other proprietary rights that could prevent or limit our ability to make, use, develop or deploy our aircraft and UAM services, which could make it more difficult for us to operate our business. We may receive inquiries from patent, copyright or trademark owners inquiring whether we infringe upon their proprietary rights. We may also be the subject of more formal allegations that we have misappropriated such parties’ trade secrets or other proprietary rights.

Companies owning patents or other intellectual property rights relating to battery packs, electric motors, aircraft configurations, fly-by-wire flight control software or electronic power management systems may allege infringement or misappropriation of such rights. In response to a determination that we have infringed upon or misappropriated a third-party’s intellectual property rights, we may be required to do one or more of the following:

 

   

cease development, sales or use of its products that incorporate the asserted intellectual property;

 

   

pay substantial damages;

 

   

obtain a license from the owner of the asserted intellectual property right, which license may not be available on reasonable terms or available at all; or

 

   

re-design one or more aspects or systems of our aircraft or other offerings.

A successful claim of infringement or misappropriation against us could harm our business, prospects, financial condition and operating results. Even if we are successful in defending against these claims, litigation could result in substantial costs and demand on management resources.

We may not be able to secure adequate insurance policies, or secure insurance policies at reasonable prices.

Through Embraer, we maintain general liability insurance, aviation flight testing insurance, aircraft liability coverage, directors and officers insurance and other insurance policies and we believe our level of coverage is customary in the industry and adequate to protect against claims. However, there can be no assurances that it will be sufficient to cover potential claims, that present levels of coverage will be available in the future at reasonable cost or that we will continue to be able to maintain insurance coverage through Embraer. Further, we expect our insurance needs and costs to increase as we manufacture aircraft, establish commercial operations and expand into new markets, and it is too early to determine what impact, if any, the commercial operation of eVTOLs will have on our insurance costs.

 

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If our relations with our strategic partners were to deteriorate or terminate, Eve’s business could be adversely affected or such third parties could act in a manner adverse to Eve.

If our relations with our strategic partners were to deteriorate or terminate, the other party may act in a manner adverse to us and could limit our ability to implement our strategies. Our collaborators or strategic partners may develop, either alone or with others, products in related fields that are competitive with our products. Specifically, conflicts with Embraer may adversely impact our ability to manufacture aircraft or scale production, while conflicts with Atech may adversely impact our ability to successfully provide UAM services. While Embraer has agreed in the Business Combination Agreement not to compete with the Company with respect to certain actions related to the UAM market following the business combination, such non-compete only applies for three years with respect to activities in the European Union and five years with respect to activities elsewhere in the world, and Embraer may still pursue certain investment opportunities related to the UAM Business under the terms of the Business Combination Agreement. Such conflicts with our strategic partners may result in adverse effects on our business, financial condition and results of operations.

The failure of certain advances in technology such as autonomy or battery density to mature at the rates we project may impact our ability to increase the volume of our service and/or drive down end-user pricing at the rates we project.

Our projections rely in part on future advancement of technology, such as aerial and ground-based autonomy and an increase in energy density in batteries. Should these technologies fail to develop, mature or be commercially available within the periods that we project, we may underperform our financial projections, which would materially and adversely affect our business, prospects, operating results and financial condition.

We are an early stage company with a history of losses, and we expect to incur significant losses for the foreseeable future and we may not be able to achieve or maintain profitability.

We have incurred significant losses since inception. We incurred net losses of $7.97 million, $9.63 million, $7.69 million and $5.04 million for the nine months ended September 30, 2021 and the years ended December 31, 2020, 2019 and 2018, respectively. We have not yet started commercial operations, and it is difficult for us to predict our future operating results. We believe that we will continue to incur operating and net losses each quarter until at least the time we begin significant deliveries of our eVTOL aircraft, which are not expected to begin until late 2026 and may occur later or not at all. Even if we are able to successfully develop and sell our aircraft, there can be no assurance that they will be financially successful. Our potential profitability is dependent upon the successful development and successful commercial introduction and acceptance of our aircraft, which may not occur. As a result, our losses may be larger than anticipated, and we may not achieve profitability when expected, or at all, and even if we do, we may not be able to maintain or increase profitability.

We expect our operating expenses to increase over the next several years as we:

 

   

continue to design, develop, manufacture and move towards marketing our aircraft;

 

   

expand our production capabilities through Embraer, including costs associated with outsourcing the manufacturing of our aircraft;

 

   

build up inventories of parts and components for our aircraft;

 

   

manufacture an inventory of our aircraft;

 

   

expand our design, development and servicing capabilities;

 

   

develop commercial and strategic partnerships for fleet operations for a fleet of our eVTOL and/or third parties;

 

   

continue to develop our air traffic management system;

 

   

hire more employees;

 

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continue research and development efforts relating to new products and technologies;

 

   

increase our sales and marketing activities and develop our distribution infrastructure; and

 

   

increase our general and administrative functions to support its growing operations and to operate as a public company.

Because we will incur the costs and expenses from these efforts before we receive any revenue with respect thereto, our losses in future periods will be significant. In addition, these efforts may be costlier than we expect and may not result in any revenue or growth in our business. Any failure to generate revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving or maintaining profitability or positive cash flow. Furthermore, if our future growth and operating performance fail to meet investor or analyst expectations, or if we have future negative cash flow or losses resulting from our investment in acquiring customers or expanding our operations, this could have a material adverse effect on our business, financial condition and results of operations.

We may in the future invest significant resources in developing new offerings and exploring the application of our proprietary technologies for other uses and those opportunities may never materialize.

While our primary focus is on the design, manufacture and operation of our eVTOL aircraft and related UAM services, we may invest significant resources in developing new technologies, services, products and offerings. However, we may not realize the expected benefits of these investments. Relatedly, if such technologies become viable offerings in the future, we may be subject to competition from our competitors within the aviation industry or other industries, some of which may have substantially greater monetary and knowledge resources than we have and expect to have in the future to devote to the development of these technologies. Such competition or any limitations on our ability to take advantage of such technologies could impact our market share, which could have a material adverse effect on our business, financial condition and results of operations.

Such research and development initiatives may also have a high degree of risk and involve unproven business strategies and technologies with which we have limited operating or development experience. They may involve claims and liabilities, expenses, regulatory challenges and other risks that we may not be able to anticipate. There can be no assurance that consumer demand for such initiatives will exist or be sustained at the levels that we anticipate, or that any of these initiatives will gain sufficient traction or market acceptance to generate sufficient revenue to offset any new expenses or liabilities associated with these new investments. Further, any such research and development efforts could distract management from current operations and would divert capital and other resources from our more established technologies. Even if we were to be successful in developing new products, services, offerings or technologies, regulatory authorities may subject us to new rules or restrictions in response to our innovations that may increase our expenses or prevent us from successfully commercializing new products, services, offerings or technologies.

We may be unable to make certain advances in technology, such as autonomous flying technologies, or such technologies may not mature or be commercially available at the rates projected, which could adversely affect our business, financial condition and results of operations.

Our projections rely in part on future advancement of technology, such as autonomous flying technologies. Should these technologies fail to develop, mature or be commercially available within the periods that we project, we may underperform our financial projections, which would materially and adversely affect our business, financial condition and results of operations.

We are subject to cybersecurity risks to our operational systems, security systems, infrastructure, integrated software in its aircraft and customer data processed by our or third-party vendors.

We are at risk for interruptions, outages and breaches of our: (a) operational systems, including business, financial, accounting, product development, data processing or production processes, owned by us or our third-

 

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party vendors or suppliers; (b) facility security systems, owned by us or our third-party vendors or suppliers; (c) aircraft technology including powertrain and avionics and flight control software, owned by us or our third-party vendors or suppliers; (d) the integrated software in our aircraft; or (e) customer data that we process or our third-party vendors or suppliers process on our behalf. Such incidents could: disrupt our operational systems; result in loss of intellectual property, trade secrets or other proprietary or competitively sensitive information; result in a loss of competitive advantage over others in our industry; compromise certain information of customers, employees, suppliers, or others; jeopardize the security of our facilities; or affect the performance of in-product technology and the integrated software in our aircraft.

We plan to include avionics and flight control software services and functionality that utilize data connectivity to monitor aircraft performance and to enhance safety and enable cost-saving preventative maintenance. The availability and effectiveness of our services depend on the continued operation of information technology and communications systems. Our systems will be vulnerable to damage or interruption from, among others, physical theft, fire, terrorist attacks, natural disasters, power loss, war, telecommunications failures, viruses, denial or degradation of service attacks, ransomware, social engineering schemes, insider theft or misuse or other attempts to harm our systems. We intend to use our avionics and flight control software and functionality to log information about each aircraft’s use in order to aid us in aircraft diagnostics and servicing. Our customers may object to the use of this data, which may increase our vehicle maintenance costs and harm its business prospects.

Our aircraft contains complex information technology systems and built-in data connectivity to share aircraft data with ground operations infrastructure. We plan to design, implement and test security measures intended to prevent unauthorized access to our information technology networks, its aircraft and related systems. However, hackers may attempt to gain unauthorized access to modify, alter and use such networks, aircraft and systems to gain control of or to change our aircraft’s functionality, performance characteristics, or to gain access to data stored in or generated by the aircraft. A significant breach of our third-party service providers’ or vendors’ or our own network security and systems could have serious negative consequences for our business and future prospects, including possible fines, penalties and damages, reduced customer demand for its aircraft or urban aerial ride sharing services and harm to our reputation and brand.

Moreover, there are inherent risks associated with developing, improving, expanding and updating our current systems, such as the disruption of our data management, procurement, production execution, finance, supply chain and sales and service processes. These risks may affect our ability to manage its data and inventory, procure parts or supplies or manufacture, deploy, deliver and service our aircraft, adequately protect our intellectual property or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. We cannot be sure that these systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned. If we do not successfully implement, maintain or expand these systems as planned, our operations may be disrupted, our ability to accurately and timely report our financial results could be impaired. Moreover, our proprietary information or intellectual property could be compromised or misappropriated, and our reputation may be adversely affected. If these systems do not operate as we expect them to, we may be required to expend significant resources to make corrections or find alternative sources for performing these functions.

We are dependent on our senior management team and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our success depends, in significant part, on the continued services of our senior management team and on our ability to attract, motivate, develop and retain a sufficient number of other highly skilled personnel, including technology, finance, marketing, sales, aftermarket, and support personnel. The loss of any one or more members of our senior management team, for any reason, including resignation or retirement, could impair our ability to execute our business strategy and harm our business, financial condition and results of operations. Additionally,

 

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our financial condition and results of operations may be adversely affected if we are unable to attract and retain skilled employees to support our operations and growth.

If we or our third-party service providers experience a security breach, or if unauthorized parties otherwise obtain access to our customers’ data, our reputation may be harmed, demand for services may be reduced, and we may incur significant liabilities.

Our services involve the storage, processing and transmission of data, including certain confidential and sensitive information. Any security breach, including those resulting from a cybersecurity attack, phishing attack, or any unauthorized access, unauthorized usage, virus or similar breach or disruption could result in the loss or destruction of or unauthorized access to, or use, alteration, disclosure, or acquisition of, data, damage to our reputation, litigation, regulatory investigations, or other liabilities. These attacks may come from individual hackers, criminal groups, and state-sponsored organizations. If our security measures are breached as a result of third-party action, employee error, a defect or bug in our products or those of our third-party service providers, malfeasance or otherwise and, as a result, someone obtains unauthorized access to our data, including our confidential, sensitive, or other information about individuals, or any of these types of information is lost, destroyed, or used, altered, disclosed, or acquired without authorization, our reputation may be damaged, our business may suffer, and we could incur significant liability. Even the perception of inadequate security may damage our reputation and negatively impact our ability to win new customers and retain and receive timely payments from existing customers. Further, we could be required to expend significant capital and other resources to address any data security incident or breach, which may not be covered or fully covered by our insurance and which may involve payments for investigations, forensic analyses, legal advice, public relations advice, system repair or replacement, or other services.

We engage third-party vendors and service providers to store and otherwise process some of our and our data, including confidential, sensitive, and other information about individuals. Our vendors and service providers may also be the targets of cyberattacks, malicious software, phishing schemes, and fraud. Our ability to monitor our vendors and service providers’ data security is limited, and, in any event, third parties may be able to circumvent those data security measures, resulting in the unauthorized access to, misuse, acquisition, disclosure, loss, alteration, or destruction of our data, including confidential or sensitive information, such as intellectual property and trade secrets, and personal information.

Techniques used to sabotage or obtain unauthorized access to systems or networks are constantly evolving and, in some instances, are not identified until after they have been launched against a target. We and our service providers may be unable to anticipate these techniques, react in a timely manner, or implement adequate preventative and mitigating measures. If we are unable to efficiently and effectively maintain and upgrade our system safeguards, we may incur unexpected costs and certain of our systems may become more vulnerable to unauthorized access or disruption.

We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.

If our operations grow as planned, for which there can be no assurance, we will need to expand our sales, marketing, operations, and the number of partners with whom we do business. Our continued growth could increase the strain on its resources, and we could experience operating difficulties, including difficulties in hiring, training and managing an increasing number of employees. These difficulties may result in the erosion of our brand image, divert the attention of management and key employees and impact financial and operational results. The continued expansion of our business may also require additional space for administrative support. If we are unable to drive commensurate growth, these costs, which include lease commitments, marketing costs and headcount, could result in decreased margins, which could have an adverse effect on our business, financial condition and results of operations.

 

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We have been, and may in the future be, adversely affected by health epidemics and pandemics, including the ongoing global COVID-19 pandemic, the duration and economic, governmental and social impact of which is difficult to predict, which may significantly harm our business, prospects, financial condition and operating results.

We face various risks related to public health issues, including epidemics, pandemics and other outbreaks, including the recent pandemic of respiratory illness caused by a novel coronavirus known as COVID-19. The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. The spread of COVID-19 has also created a disruption in the manufacturing, delivery and overall supply chain of aircraft manufacturers and suppliers, and has led to a global decrease in aircraft sales and usage in markets around the world. The duration and long-term impact of COVID-19 on our business is currently unknown.

The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns. These measures may adversely impact our employees and operations and the operations of our suppliers, vendors and business partners, and may negatively impact our sales and marketing activities and the production schedule of our aircraft. In addition, various aspects of our business cannot be conducted remotely, including the testing and manufacturing of our aircraft. These measures by government authorities may remain in place for a significant period of time and they are likely to continue to adversely affect our testing, manufacturing plans, sales and marketing activities, business and results of operations.

The spread of COVID-19 has caused us and many of our contractors and service providers to modify our business practices (including employee travel, recommending that all non-essential personnel work from home and cancellation or reduction of physical participation in meetings, events and conferences), and we and our contractors and service providers may be required to take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, suppliers, vendors and business partners. There is no certainty that such actions will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities. If significant portions of our workforce or contractors and service providers are unable to work effectively, including due to illness, quarantines, social distancing, government actions or other restrictions in connection with the COVID-19 pandemic, our operations will be impacted.

The extent to which the COVID-19 pandemic impacts our business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain the virus or treat its impact and how quickly and to what extent normal economic and operating activities can resume. The COVID-19 pandemic could limit the ability of our customers, suppliers, vendors and business partners to perform, including third-party suppliers’ ability to provide components and materials used in our aircraft. We may also experience an increase in the cost of raw materials used in the commercial production of our aircraft. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of COVID-19’s global economic impact, including any recession that has occurred or may occur in the future.

There are no comparable recent events which may provide guidance as to the effect of the spread of COVID-19 and a pandemic, and, as a result, the ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of COVID-19’s impact on our business, operations, or the global economy as a whole. However, the effects could have a material impact on our results of operations, and we will continue to monitor the situation closely.

 

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We will incur increased costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives.

If we complete the business combination and become a public company, we will incur significant legal, accounting and other expenses that we would not incur as a private company, and these expenses may increase even more after we are no longer an emerging growth company, as defined in Section 2(a) of the Securities Act. As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and the NYSE. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, we expect these rules and regulations to substantially increase our legal and financial compliance costs and may make other activities more time-consuming and costlier, which may increase our net loss. For example, we expect these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

We are or may be subject to risks associated with strategic alliances or acquisitions and may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, in the future.

We have entered into strategic alliances and may in the future enter into additional strategic alliances or joint ventures or minority equity investments, in each case with various third parties for the production of our aircraft, development of an Urban Air Traffic Management solution, development of agnostic fleet operations and aftermarket services, as well as with other collaborators with capabilities on data and analytics, industrial design and manufacture, user experience and engineering. These alliances subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third-party and increased expenses in establishing new strategic alliances, any of which may adversely affect our business. We may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to its reputation by virtue of our association with any such third-party.

Strategic business relationships will be an important factor in the growth and success of our business. However, there are no assurances that we will be able to continue to identify or secure suitable business relationship opportunities in the future or our competitors may capitalize on such opportunities before we do. Moreover, identifying such opportunities could require substantial management time and resources, and negotiating and financing relationships involves significant costs and uncertainties. If we are unable to successfully source and execute on strategic relationship opportunities in the future, our overall growth could be impaired, and our business, prospects, financial condition and operating results could be adversely affected.

When appropriate opportunities arise, we may acquire additional assets, products, technologies or businesses that are complementary to our existing business. In addition to possible stockholder approval, we may need approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay and costs, and may disrupt our business strategy if we fail to do so. Furthermore, acquisitions and the subsequent integration of new assets and businesses into our own require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations. Acquired assets or businesses may not generate the financial results we expect. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.

 

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If we or Embraer experience harm to our or its reputation and brand, our business, financial condition and results of operations could be adversely affected.

Continuing to increase the strength of our reputation and brand for high-performing, sustainable, safe and cost-effective urban air mobility is critical to our ability to attract and retain customers and partners. Because Embraer is our controlling stockholder and we are highly reliant on Embraer to provide us certain services and products, parts and other components for our eVTOL under the Master Services Agreement, the strength of the “Embraer” brand is also critical to our ability to attract and retain customers. In addition, our growth strategy includes plans for international expansion through joint ventures, minority investments or other partnerships with local companies, as well as event activations and cross-marketing with other established brands, all of which benefit from our reputation and brand recognition. The successful development of our reputation and brand and the maintenance of Embraer’s reputation and brand will depend on a number of factors, many of which are outside its control. Negative perception of our platform or company or of our controlling stockholder and key supplier may harm our reputation and brand, including as a result of:

 

   

complaints or negative publicity or reviews about us, Embraer, independent third-party aircraft operators, fliers, our air mobility services or other brands or events we associate with, even if factually incorrect or based on isolated incidents;

 

   

changes to our operations, safety and security, privacy or other policies that users or others perceive as overly restrictive, unclear or inconsistent with our values;

 

   

illegal, negligent, reckless or otherwise inappropriate behavior by Embraer, fliers, independent or other third parties involved in the operation of our business or by our management team or other employees;

 

   

actual or perceived disruptions or defects in our flight control software, such as data security incidents, platform outages, payment processing disruptions or other incidents that impact the availability, reliability or security of our offerings;

 

   

litigation over, or investigations by regulators into, our operations or those of Embraer or our independent third-party aircraft operators;

 

   

a failure to operate our business in a way that is consistent with our values;

 

   

negative responses by independent third-party aircraft operators or fliers to new mobility offerings;

 

   

perception of our treatment of employees, contractors or independent third-party aircraft operators and our response to their sentiment related to political or social causes or actions of management; or

 

   

any of the foregoing with respect to our competitors, to the extent such resulting negative perception affects the public’s perception of us or our industry as a whole.

In addition, changes we may make to enhance and improve our offerings and balance the needs and interests of our independent third-party aircraft operators and fliers may be viewed positively from one group’s perspective (such as fliers) but negatively from another’s perspective (such as independent third-party aircraft operators), or may not be viewed positively by either independent third-party aircraft operators or fliers. If we fail to balance the interests of independent third-party aircraft operators and fliers or make changes that they view negatively, independent third-party aircraft operators and fliers may stop purchasing our aircraft or stop using our platform or take fewer flights, any of which could adversely affect our reputation, brand, business, financial condition and results of operations.

Operations and Infrastructure

There is a shortage of pilots and mechanics which could increase our operating costs and reduce our ability to deploy our service at scale.

There is a shortage of pilots that is expected to exacerbate over time as more pilots in the industry approach mandatory retirement age. Similarly, trained and qualified aircraft mechanics are also in short supply. This will

 

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affect the aviation industry, including UAM services and more specifically, our business. Our business is dependent on our operating partners’ ability to recruit and retain pilots qualified to operate our aircraft and mechanics qualified to perform the requisite maintenance activities, either or both of which may be difficult due to the corresponding personnel shortages. If our partners which will operate our fleet of eVTOLs are unable to hire, train, and retain qualified pilots and qualified mechanics, our business could be harmed, and we may be unable to implement our growth plans.

Our aircraft utilization may be lower than expected and our aircraft may be limited in its performance during certain weather conditions.

Our aircraft may not be able to fly safely in poor weather conditions, including snowstorms, thunderstorms, lightning, hail, known icing conditions and/or fog. Our inability to operate in these conditions will reduce our aircraft utilization and cause delays and disruptions in our services. We intend to maintain a high daily aircraft utilization rate which is the amount of time our aircraft spend in the air carrying passengers. High daily aircraft utilization is achieved in part by reducing turnaround times at vertiports so we can fly more hours on average in a day. Aircraft utilization is reduced by delays and cancellations from various factors, many of which are beyond our control, including adverse weather conditions, security requirements, air traffic congestion and unscheduled maintenance events. The success of our business is dependent, in part, on the utilization rate of our aircraft and reductions in utilization will adversely impact our financial performance as well as cause passenger dissatisfaction.

Our aircraft may require maintenance at frequencies or at costs which are unexpected and could adversely impact our business and operations.

Our aircraft are highly technical products that require maintenance and support. We are still developing our understanding of the long-term maintenance profile of the aircraft, and if useful lifetimes are shorter than expected, this may lead to greater maintenance costs than previously anticipated. If our aircraft and related equipment require maintenance more frequently than we plan for or at costs that exceed our estimates, that would disrupt the operation of our service and have a material adverse effect on our business, financial condition, and results of operations.

We are subject to risks associated with climate change, including the potential increased impacts of severe weather events on our operations and infrastructure.

The potential physical effects of climate change, such as increased frequency and severity of storms, floods, fires, fog, mist, freezing conditions, sea-level rise and other climate-related events, could affect our operations, infrastructure and financial results. We could incur significant costs to improve the climate resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate such physical effects of climate change. We are not able to accurately predict the materiality of any potential losses or costs associated with the physical effects of climate change.

We are subject to many hazards and operational risks that can disrupt our business, including interruptions or disruptions in service at our facilities, which could have a material adverse effect on our business, financial condition and results of operations.

Our operations are subject to many hazards and operational risks inherent to our business, including general business risks, product liability and damage to third parties, our infrastructure or properties that may be caused by fires, floods and other natural disasters, power losses, telecommunications failures, terrorist attacks (including hijacking, use of the aircraft as a weapon, or use of the aircraft to disperse a chemical or biological agent), catastrophic loss due to security related incidents, human errors and similar events. Additionally, our manufacturing operations are hazardous at times and may expose us to safety risks, including environmental risks and health and safety hazards to our employees or third parties.

 

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Financial

We have broad discretion in how we use the net proceeds from the business combination, and we may not use them effectively.

We cannot specify with any certainty the particular uses of the net proceeds that we will receive from the business combination. Our management will have broad discretion in applying the net proceeds we receive upon consummation of the business combination. We may use the net proceeds for general corporate purposes, including working capital, operating expenses, and capital expenditures, and we may use a portion of the net proceeds to acquire complementary businesses, products, offerings, or technologies. We may also spend or invest these proceeds in a way with which our stockholders disagree. If our management fails to use these funds effectively, our business could be seriously harmed.

If securities or industry analysts either do not publish research about us, or publish inaccurate or unfavorable research about us, our business, or our market, or, if such analysts change their recommendations regarding our common stock adversely, the trading price or trading volume of our common stock could decline.

The trading market for our common stock will be influenced in part by the research and reports that securities or industry analysts may publish about us, our business, our market, or our competitors. If one or more of the analysts initiate research with an unfavorable rating or downgrade our common stock, provide more favorable recommendations about our competitors, or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the trading price or trading volume of our common stock to decline.

Our available capital resources may not be sufficient to meet the requirements for additional capital.

Prior to the consummation of the business combination, our operations and capital expenditures have been financed primarily with Embraer’s available cash. In the future, we could be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business. For example, the global COVID-19 health crisis and related financial impact has resulted in, and may continue to result in, significant disruption and volatility of global financial markets that could adversely impact our ability to access capital. We may sell equity securities or debt securities in one or more transactions at prices and in a manner as we may determine from time to time. If we sell any such securities in subsequent transactions, our current investors may be materially diluted. Any debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility or profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures.

Brazil

Developments and the perception of risk in Brazil and other countries, especially other emerging markets, may adversely affect our business, financial condition and results of operations.

While we will be a Delaware corporation following the consummation of the business combination, Embraer, our controlling stockholder and main supplier, as well as our operating subsidiary, will both be Brazilian companies. As a result, the market value of securities issued by us may be affected by economic and market conditions in Brazil and other countries, including European Union and Latin American countries and other emerging market countries. Although economic conditions in those countries may differ significantly from economic conditions in the U.S., investors’ reactions to developments in other countries may have an adverse effect on the market value of our securities. Crises elsewhere may diminish investor interest in securities of companies with strong ties to Brazil, like us. This could adversely affect the trading price of our securities and could also make it more difficult for us to access the capital markets and finance our operations in the future on acceptable terms, or at all.

 

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To the extent the conditions of the global markets or economy deteriorate, our business may be adversely affected. The weakness in the global economy has been marked by, among other adverse factors, lower levels of consumer and corporate confidence, decreased business investment and consumer spending, increased unemployment, reduced income and asset values in many areas, currency volatility and limited availability of credit and access to capital. Developments or economic conditions in other emerging countries have at times significantly affected the availability of credit to companies with significant operations in Brazil and resulted in considerable outflows of funds from Brazil, decreasing the amount of foreign investments in Brazil, impacting overall growth expectations for the Brazilian economy.

Crises and political instability in other emerging market countries, as well as the United States, Europe or other countries, including increased international trade tensions and protectionist policies, could decrease investor demand for securities offered by companies with significant operations in Brazil, such as ours. Additionally, growing economic uncertainty and news of a potentially recessive economy in the United States may also create uncertainty in the Brazilian economy. These developments, as well as potential crises and other forms of political instability arising therefrom or any other unforeseen development, may adversely affect the United States and the global economy and capital markets, which may, in turn, materially adversely affect our business, financial condition and results of operations.

Brazilian political and economic conditions have a direct impact on our business, and such conditions could adversely affect our business, financial condition and results of operations.

The Brazilian federal government has frequently intervened in the Brazilian economy and occasionally has made significant changes to policy and regulations, including its monetary, fiscal, credit and tariff policies and rules. The Brazilian government’s actions to control inflation and other policies and regulations have often involved, among other measures, increases or decreases in interest rates, changes in tax policies, wage and price controls, blocking access to bank accounts, foreign exchange rate controls, currency exchange and remittance controls, devaluations, capital controls and import and export restrictions. We have no control over and cannot predict what measures or policies the Brazilian government may take in the future and how these could impact us and our business. Our business, financial condition and results of operations may be adversely affected by changes in policy and regulations at the federal, state or municipal level involving factors such as:

 

   

expansion or contraction of the Brazilian economy, as measured by gross domestic product, or GDP, rates;

 

   

interest rates;

 

   

exchange rates;

 

   

currency fluctuations;

 

   

monetary policies;

 

   

inflation;

 

   

liquidity of capital and lending markets;

 

   

import and export controls;

 

   

exchange control and restrictions on remittances abroad;

 

   

modifications to laws and regulations according to political, social and economic interests;

 

   

economic, political and social instability, including general strikes and mass demonstrations;

 

   

the regulatory framework governing the aeronautical sector;

 

   

commodity prices;

 

   

public health, including as a result of epidemics and pandemics, such as the COVID-19 pandemic;

 

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fiscal policies and changes in tax laws;

 

   

labor and social security regulations;

 

   

energy and water shortages and rationing; and

 

   

other political, diplomatic, social and economic developments in or affecting Brazil.

Uncertainty over whether the Brazilian government would implement changes in policy, regulation or legislation affecting the above mentioned factors and others creates instability in the Brazilian economy, increasing the volatility of the Brazilian market. These uncertainties and other future developments in the Brazilian economy may adversely affect our activities, and consequently our operating results. We cannot predict which policies the Brazilian government will adopt or whether these newly adopted policies or changes in current policies may have an adverse effect on us or the Brazilian economy. These factors are compounded as Brazil emerges from a prolonged recession after a period of a slow recovery, with only meager GDP growth in 2019 and contraction again in 2020.

Since 2011, Brazil’s economy has been weak. The GDP had a contraction rate of (4.1)% in 2020, driven by the COVID-19 pandemic, and growth rates of 1.1% in 2019, 1.3% in 2018, 1.3% in 2017, compared to contraction rates of 3.3% in 2016 and 3.5% in 2015, and GDP growth of 0.5% in 2014, 3.0% in 2013, 1.9% in 2012 and 4.0% in 2011, compared to a GDP growth of 7.5% in 2010. According to the Focus bulletin dated April 1, 2021, the consensus of Brazilian economists was that Brazilian GDP would increase 3.2% in 2021, but we can’t confirm that such results will occur.

Our results of operations and financial condition have been, and will continue to be, affected by the growth rate of the Brazilian GDP. Developments in the Brazilian economy may affect Brazil’s growth rates and, consequently, the use of our products and services.

Further, Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. The recent economic instability in Brazil has contributed to a decline in market confidence in the Brazilian economy as well as to a deteriorating political environment.

As has been true in the past, the current political and economic environment in Brazil has affected and is continuing to affect the confidence of investors and the general public, which has historically resulted in economic deceleration and heightened volatility in the securities offered by companies with significant operations in Brazil, which may adversely affect the price of our common stock.

Political instability, including as a result of ongoing corruption investigations, may adversely affect our business, financial condition and results of operations.

Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crises have affected, and continue to affect, the confidence of investors and that of the public in general, resulting in economic downturn and heightened volatility of securities issued by Brazilian companies, like Embraer.

Brazilian markets have experienced heightened volatility due to uncertainties derived from ongoing investigations on money laundering and corruption conducted by the Brazilian Federal Police and the Federal Prosecutor’s Office, and the impact of these investigations on the Brazilian economy and political environment.

The ultimate outcome of these investigations is uncertain, but they had an adverse impact on the image and reputation of the implicated companies, and on the general market perception of the Brazilian economy. We cannot predict the effects of further political developments on the Brazilian economy, including the policies that the Brazilian government may adopt or the outcome and development of any of these investigations, which has affected and may continue to adversely affect the Brazilian economy and may adversely affect our business and results of operations.

 

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In addition, during the month of April 2020, the President of Brazil became involved in political discussions that culminated in the dismissal of the then Minister of Health, Luiz Henrique Mandetta, and the request for exoneration of the then Minister of Justice, Sergio Moro. These former Ministers were considered reliable individuals of the current Brazilian government and, therefore the cabinet changes caused further instability in the Brazilian economy and capital markets. As of the date of this proxy statement, the Brazilian President Jair Bolsonaro is also under investigation by the Brazilian Supreme Court for alleged improprieties based on accusations made by former Justice Minister Sergio Moro. According to the former minister, the president tried to unduly influence the appointment of Brazilian federal police officers. If the president is found to have committed such acts, then any ensuing consequences, including a potential impeachment, may have adverse effects on the political and economic environment in Brazil, as well as businesses operating in Brazil, including us.

Furthermore, Brazilian President Jair Bolsonaro’s COVID-19 responses have been strongly criticized in Brazil and abroad. COVID-19 disruptive effects have enhanced political uncertainty in Brazil, especially considering political discussions that culminated in the dismissal or resignation of Brazilian Federal Ministers, as well as the corruption accusations against President Jair Bolsonaro.

On April 14th, 2021, the Brazilian Senate established a parliamentary commission (Comissão Parlamentar de Inquértio, or CPI), to investigate the alleged mishandling of public funds assigned to combat COVID-19 effects in Brazil. Endorsed by the Brazilian Supreme Court Minister, Luis Roberto Barroso, CPI’s purpose it to investigate actions and omissions by the Federal Government while fighting the pandemic, as well as the healthcare system collapse in the State of Amazonas of early 2021.

In addition, the Brazilian Supreme Court has recently annulled the criminal convictions against former Brazilian President Luiz Inácio Lula da Silva, and subsequently reinstated his political rights, which may enable him to run for presidency in the next election.

There can be no assurance that other political events will not cause further instability in the Brazilian economy, in capital markets and in the trading price of securities issued by us. We cannot guarantee that, as these events unfold, they will not have additional adverse impacts on the economic and political situation in Brazil.

The recent economic instability in Brazil, especially as impacted by the COVID-19 outbreak, has contributed to a decline in market confidence as well as a deterioration in the political environment. The current administration promised during the electoral campaign to be committed to a strong anticorruption agenda and a liberal economic view. However, due to the fragmented legislation and different views within the administration, there are uncertainties in the market regarding the future of these two branches of the government, which can lead to increase in volatility and risks to the economy.

A failure by the Brazilian government to implement necessary economic and structural reforms may result in diminished confidence in the Brazilian government’s budgetary condition and fiscal standing, which could result in downgrade of Brazil’s sovereign foreign credit rating by credit rating agencies, negatively impact Brazil’s economy, and lead to further depreciation of the currency and an increase in inflation and interest rates, which could adversely affect our business, financial condition and results of operations.

Inflation and government efforts to combat inflation may adversely affect the Brazilian economy and lead to heightened volatility in the Brazilian capital markets and, consequently, may adversely affect our business, financial condition and results of operations.

Historically, Brazil has experienced high inflation rates. Inflation and certain actions taken by the Central Bank to curb it have had significant negative effects on the Brazilian economy. According to the National Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo), or IPCA, which is published by the IBGE, Brazilian inflation rates were 4.52%, 4.3% and 3.7% in 2020, 2019 and 2018, respectively. Brazil may

 

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experience high levels of inflation in the future and inflationary pressures may lead to the Brazilian government intervening in the economy and introducing policies that could harm our business and the price of our common stock. In the past, Brazilian government’s interventions included the maintenance of a restrictive monetary policy with high interest rates that restricted credit availability and reduced economic growth, causing volatility in interest rates. For example, the official interest rate in Brazil oscillated from 7.00% as of December 31, 2017 to 2.00% as of December 31, 2020, as established by the Monetary Policy Committee (Comitê de Política Monetária do Banco Central do Brasil—COPOM) in a meeting on August 5th, 2020. In May 2021, these rates increased again to 3.5%. As of the date of this proxy statement, the official Brazilian interest rate is 9.25%. Conversely, more lenient government and Central Bank policies and interest rate decreases have triggered and may continue to trigger increases in inflation, and, consequently, growth volatility and the need for sudden and significant interest rate increases, which could negatively affect us and increase our indebtedness.

Given that up to 10% of our future revenues are expected to be in reais, we are particularly affected by increased inflation in Brazil, and we may not be able to increase the amount charged to our customers at the same rate as the increase in inflation. Therefore, inflation and the Brazilian government’s measures to combat inflation have had, and may continue to have, significant effects on the Brazilian economy and on our business. Strict monetary policies, with high interest rates and high requirements for compulsory deposits, can restrict Brazil’s growth and the availability of credit. On the other hand, softer government and central bank policies and declining interest rates may trigger increases in inflation and, consequently, the volatility of economic growth and the need for sudden and significant increases in interest rates.

Inflationary pressures may result in government intervention in the economy, including policies that may adversely affect the overall performance of the Brazilian economy, which could, in turn, adversely affect our operations and the price of our common stock. Inflation, measures to contain inflation and speculation about potential measures can also contribute to significant uncertainty in relation to the Brazilian economy and weaken investor confidence, which can affect our ability to access finance, including access to equity of international capital markets.

Future measures by the Brazilian government, including reductions in interest rates, intervention in the foreign exchange market and actions to adjust or fix the value of the real, may trigger increases in inflation, adversely affecting the overall performance of the Brazilian economy.

Inflation can also increase our costs and expenses, and we may not be able to transfer such costs to customers, reducing our profit and net profit margins. In addition, high inflation rates generally increase Brazilian interest rates and, therefore, the debt service of the portion in reais of our debt, which is indexed to floating rates, may also increase. Due to this, net profit may decrease. Inflation and its effects related to Brazilian interest rates could, in addition, reduce liquidity in the Brazilian capital and financial markets, which would affect the ability to refinance our indebtedness in those markets.

Exchange rate volatility may have adverse effects on the Brazilian economy, our business, financial condition and results of operations.

The Brazilian currency (Brazilian real) has, during the last decades, experienced frequent and substantial variations in relation to the U.S. dollar and other foreign currencies. In 2018, the real depreciated against the U.S. dollar in comparison to December 31, 2017, reaching R$3.8748 per US$1.00 as of December 31, 2018. In 2019, the real depreciated against the U.S. dollar in comparison to December 31, 2018, reaching R$4.0307 per US$1.00 as of December 31, 2019. In 2020, the real depreciated against the U.S. dollar in comparison to December 31, 2019, reaching R$5.1967 per US$1.00 as of December 31, 2020. As of September 30, 2021, the real had further depreciated against the U.S. Dollar, reaching R$5.6973 per US$1.00. There can be no assurance that the real will not appreciate or depreciate further against the U.S. dollar or other currencies.

Depreciation of the real against the U.S. dollar creates inflationary pressures in Brazil and causes increases in interest rates, which negatively affects the growth of the Brazilian economy as a whole, curtails access to

 

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foreign financial markets and may prompt government intervention, including recessionary governmental policies. Depreciation of the real against the U.S. dollar has also, including in the context of an economic slowdown, led to decreased consumer spending, deflationary pressures and reduced growth of the economy as a whole. On the other hand, appreciation of the real relative to the U.S. dollar and other foreign currencies could lead to a deterioration of the Brazilian foreign exchange current accounts, as well as dampen export-driven growth. Depending on the circumstances, either depreciation or appreciation of the real may materially and adversely affect us.

Depreciation of the real relative to the prevailing rate of inflation, may adversely affect us, mainly due to the fact that Eve has a good amount of its labor and engineering development costs in Brazil linked to the real and fluctuations of the real relative to the inflation, could result in different than expected engineering and SG&A expenses.

Depreciations of the real relative to the U.S. dollar could also adversely affect us, mainly due to the fact that Eve will maintain the majority of its cash denominated in US dollars at the same time that a significant portion of its development costs are linked to the Brazilian real currency. A significant fluctuation of the Brazilian real versus the US dollar may result in different than expected development expenses in dollar terms.

On the other hand, an appreciation of the real relative to the U.S. dollar and other foreign currencies may deteriorate the Brazilian foreign exchange current accounts. We and certain of our suppliers purchase goods and services from countries outside Brazil, and thus changes in the value of the U.S. dollar compared to other currencies may affect the costs of goods and services that we purchase. Depending on the circumstances, either devaluation or appreciation of the real relative to the U.S. dollar and other foreign currencies could restrict the growth of the Brazilian economy, as well as our business, results of operations and profitability. As a result, we may be materially and adversely affected by exchange rate variations.

Infrastructure and workforce deficiency in Brazil may impact economic growth and have a material adverse effect on our business, financial condition and results of operations.

Our performance is affected by the overall health and growth of the global economy, specifically in Brazil. In Brazil, GDP growth has fluctuated over the past few years, with contractions of 3.5% and 3.3% in 2015 and 2016, respectively, followed by growth of 1.1% in both 2017 and 2018. In 2019, Brazilian GDP grew by 1.0%, and in 2020, it contracted 4.1%. In the first quarter of 2021, Brazilian GDP grew by 1.2%. Growth is limited by inadequate infrastructure, including potential energy shortages and deficient transportation, logistics and telecommunication sectors, general strikes, the lack of a qualified labor force (particularly in information technology sectors), and the lack of private and public investments in these areas, which limit productivity and efficiency. Additionally, despite the business continuity and crisis management policies currently in place, travel restrictions or potential impacts on personnel due to the COVID-19 pandemic may disrupt our business and the markets in which we operate. Any of these factors could lead to labor market volatility and generally impact income, purchasing power and consumption levels, which could limit growth and ultimately have a material adverse effect on us.

Any further downgrading of Brazil’s credit rating could adversely affect the market price of our common stock and debt instruments.

Given the current significance of our Brazil operations to our results of operations as a whole, we may be harmed by investors’ perceptions of risks related to Brazil’s sovereign debt credit rating. Rating agencies regularly evaluate Brazil and its sovereign credit ratings, which are based on a number of factors including macroeconomic trends, fiscal and budgetary conditions, indebtedness metrics and the perspective of changes in any of these factors.

 

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The rating agencies began to review Brazil’s sovereign credit rating in September 2015. Subsequently, the three major rating agencies downgraded Brazil’s investment-grade status:

 

   

In 2015, Standard & Poor’s initially downgraded Brazil’s credit rating from BBB-negative to BB-positive and subsequently downgraded it again from BB-positive to BB, maintaining its negative outlook, citing a worse credit situation since the first downgrade. On January 11, 2018, Standard & Poor’s further downgraded Brazil’s credit rating from BB to BB-negative, and on December 11, 2019, the agency affirmed the rating at BB- and revised the outlook on Brazil to positive. In the last update, on April 7, 2020, the rating was reaffirmed as BB- with stable outlook, reflecting uncertainties stemming from the coronavirus pandemic, along with how extraordinary government spending will adversely affect the fiscal performance in 2020.

 

   

In December 2015, Moody’s placed Brazil’s Baa3’s issue and bond ratings under review for downgrade and subsequently downgraded the issue and bond ratings to below investment grade, at Ba2 with a negative outlook, citing the prospect of a further deterioration in Brazil’s debt indicators, taking into account the low growth environment and the challenging political scenario. On April 9, 2018, Moody’s revised the outlook to stable, reaffirming the Ba2 rating.

 

   

Fitch downgraded Brazil’s sovereign credit rating to BB-positive with a negative outlook, citing the rapid expansion of the country’s budget deficit and the worse-than-expected recession. In February 2018, Fitch downgraded Brazil’s sovereign credit rating again to BB-negative, citing, among other reasons, fiscal deficits, the increasing burden of public debt and an inability to implement reforms that would structurally improve Brazil’s public finances.

 

   

In May 2020, Fitch Ratings confirmed Brazil’s long-term foreign currency sovereign credit rating at BB- and revised Brazil’s outlook from stable to negative. In April 2020, Standard & Poor’s confirmed Brazil’s long-term foreign currency sovereign credit rating at BB- and changed the outlook to stable from positive. In May 2020, Fitch revised the outlook from neutral to negative, citing the deterioration of Brazil’s economic and fiscal conditions, renewed political uncertainty and uncertainty over the duration and intensity of COVID-19.

Brazil’s sovereign credit rating is currently rated below investment grade by the three main credit rating agencies. Consequently, the prices of securities offered by companies with significant operations in Brazil have been negatively affected. A prolongation or worsening of the current Brazilian recession and continued political uncertainty, among other factors, could lead to further ratings downgrades. Any further downgrade of Brazil’s sovereign credit ratings could heighten investors’ perception of risk and, as a result, cause the trading price of our common shares to decline.

Additionally, a downgrade of the sovereign credit rating of Brazil may affect our own credit rating, hindering our ability to secure loans at competitive rates compared to our competitors, which may impact our ability to grow our business and consequently, affect the price of our common shares.

Any decrease in Brazilian government-sponsored customer financing, or increases in government-sponsored financing that benefits our competitors, may decrease the competitiveness of our aircraft.

Traditionally, aircraft original equipment manufacturers, or OEMs have received support from governments through governmental export credit agencies, or ECAs, in order to offer competitive financing conditions to their customers, especially in periods of credit tightening from the traditional lending market.

Government support may constitute unofficial subsidies causing market distortions, which may rise to disputes among governments at the World Trade Organization, or WTO. Since 2007, an agreement known as the Aircraft Sector Understanding, or ASU, developed by the Organization for Economic Co-operation and Development, or OECD, has provided guidelines for the predictable, consistent and transparent use of government-supported export financing for the sale or lease of civil aircraft, in order to establish a “level-playing

 

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field.” ECAs from signatory countries are required to offer terms and conditions no more favorable than those contained in the ASU’s base financial agreement when financing sales of aircraft that compete with those produced by the OEMs of their respective countries. The effect of the agreement is to encourage aircraft purchasers to focus on the price and quality of aircraft products offered by OEMs rather than on the financial packages offered by their respective governments.

The Brazilian ECA, Brazilian Social and Economic Development Bank (Banco Nacional de Desenvolvimento Econômico e Social), or BNDES, together with the Brazilian National Treasury Export Guarantee Fund, offer financing and export credit insurance to our customers under terms and conditions required by the ASU. Any reduction or restriction to the Brazilian export financing program, and any increase in our customers’ financing costs for participation in this program, above those provided in the ASU’s base financial agreement, may cause the cost-competitiveness of our aircraft to decline. Other external factors may also impact our competitiveness in the market, including, but not limited to, aircraft OEMs from countries which are not signatories to the ASU agreement offering attractive financing packages, or any new government subsidies supporting any of our major competitors.

We may not have enough qualified employees.

Periodically, there is a strong competition in the aerospace sector for qualified employees, especially engineers. Whenever this demand occurs, we may not be able to recruit and retain the necessary number of engineers and other qualified employees. If we are unable to timely coordinate our resources or attract and retain qualified employees, our development efforts could slow down and cause aircraft production and delivery delays, which may adversely affect us.

Risks Related to Zanite and the Business Combination

Unless the context otherwise requires, references in this subsection “— Risks Related to Zanite and the Business Combination” to “we”, “us”, “our”, and the “Company” generally refer to Zanite in the present tense or the Company from and after the business combination.

We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition, results of operations or reputation. The risks described below are not the only risks we face. Additional risks not presently known to us or that we currently believe are not material may also significantly affect our business, financial condition, results of operations or reputation. Our business could be harmed by any of these risks. In assessing these risks, you should also refer to the other information contained in this proxy statement, including our consolidated financial statements and related notes.

There are material risks to unaffiliated investors presented by taking Eve public through a business combination rather than through an underwritten offering.

Eve will become a publicly listed company upon the completion of the business combination. The business combination and the transactions described in this proxy statement are not an underwritten initial public offering. Unaffiliated investors are subject to certain material risks as a result of the target going public through a merger rather than through a traditional underwritten offering. These risks include the absence of operational diligence by an underwriter, the absence of financial diligence by an underwriter and the absence of liability for any material misstatements or omissions in a registration statement. All of these differences from an underwritten public offering of Eve’s securities could result in a more volatile price for the post-business combination Company’s common stock. Accordingly, unaffiliated investors in Eve will not receive the benefit of these protections that would be present in a traditional underwritten offering.

Further, we will not conduct a traditional “roadshow” with underwriters prior to the opening of initial post-Closing trading of Eve’s common stock on the NYSE. There can be no guarantee that any information made

 

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available in this proxy statement and/or otherwise disclosed or filed with the SEC will have the same impact on investor education as a traditional “roadshow” conducted in connection with an underwritten initial public offering. As a result, there may not be efficient or sufficient price discovery with respect to the Eve’s common stock or sufficient demand among potential investors immediately after the closing, which could result in a more volatile price for the Company’s common stock.

In addition, the Sponsor and our officers and directors as well as their respective affiliates have interests in the business combination that are different from or are in addition to our stockholders and that would not be present in an underwritten public offering of Eve’s securities. Such interests may have influenced our board of directors in making their recommendation that you vote in favor of the approval of the Business Combination Proposal and the other proposals described in this proxy statement.

Such differences from an underwritten public offering may present material risks to unaffiliated investors that would not exist if Eve became a publicly listed company through an underwritten initial public offering instead of upon completion of the business combination.

The initial stockholders, including the Company’s officers and directors, have interests in the business combination that are different from, or in addition to, the interests of the Company’s other stockholders and warrant holders in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement.

When you consider the recommendation of our board of directors that you vote in favor of approval of the business combination, you should be aware that the initial stockholders, including the Company’s directors and officers, have interests in the business combination that may be different from, or in addition to, the interests of the Company’s other stockholders and warrant holders. These interests include:

 

   

The Sponsor and our officers and directors will lose their entire investment in us if we do not complete a business combination within the completion window.

On August 7, 2020, the Sponsor paid $25,000 in consideration for 5,750,000 founder shares, or approximately $0.004 per share, to cover certain of our offering costs in connection with the IPO. On October 15, 2020, the Sponsor transferred 250,000 founder shares to Ronald D. Sugar, our senior advisor, and 150,000 founder shares to each of John B. Veihmeyer, Larry R. Flynn and Gerard J. DeMuro, our then directors, resulting in the Sponsor holding 5,050,000 founder shares. In September 2021, in connection with his appointment to the board of directors, Patrick M. Shanahan was made a member of the Sponsor, pursuant to which Mr. Shanahan may be entitled to distributions of the Company’s securities held by the Sponsor following the consummation of the business combination. The 5,750,000 founder shares have an aggregate market value of approximately $58,420,000 based upon the closing per share price of $10.16 on Nasdaq on December 27, 2021.

On November 19, 2020, in connection with the closing of the IPO, the Sponsor purchased 9,650,000 private placement warrants from the Company at a price of $1.00 per private placement warrant, for an aggregate purchase price of $9,650,000. Each private placement warrant entitles the holder thereof to purchase one share of common stock at $11.50 per share. On May 18, 2021, the Sponsor purchased 2,300,000 private placement warrants from the Company at a price of $1.00 per private placement warrant, for an aggregate purchase price of $2,300,000, to extend the period of time it the Company has to consummate its initial business combination by 6 months from the prior deadline of May 19, 2021 until November 19, 2021. On November 16, 2021, the Sponsor purchased 2,300,000 private placement warrants from the Company at a price of $1.00 per private placement warrant, for an aggregate purchase price of $2,300,000, to extend the period of time it the Company has to consummate its initial business combination by 6 months from the prior deadline of November 19, 2021 until May 19, 2022. The 14,250,000 private placement warrants have an aggregate market value of approximately $14,837,100 based upon the closing per warrant price of $1.04 on Nasdaq on December 27, 2021.

 

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On December 21, 2021, the Sponsor committed to purchase 2,500,000 shares of common stock for $25,000,000 at a purchase price of $10.00 per share in connection with the PIPE Investment. Such shares would have an aggregate market value of approximately $25,400,000 based upon the closing per share price of $10.16 on Nasdaq on December 27, 2021.

 

   

The initial stockholders and our officers and directors have agreed to waive their redemption rights with respect to their founder shares and any public shares they hold in connection with the completion of the business combination. In addition, the initial stockholders and our officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if the Company fails to complete a business combination within the completion window. There will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless if we fail to complete our initial business combination within the completion window.

 

   

The nominal purchase price paid by the Sponsor and our officers and directors for the founder shares may result in significant dilution to the implied value of the public shares upon consummation of the business combination. In addition, the value of the founder shares following the Closing is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common stock is substantially less than $10.00 per share. As a result, the Sponsor and our officers and directors are likely able to recoup their investment in us and make a substantial profit on that investment, even if our public shares have lost significant value. Accordingly, the Sponsor and our officers and directors may have an economic incentive that differs from that of our public stockholders to pursue and consummate an initial business combination rather than to liquidate and to return all of the cash in the trust account to the public stockholders, even if that business combination were with a riskier or less-established target business.

 

   

Following the consummation of the business combination, we will continue to indemnify our existing directors and officers and will maintain a directors’ and officers’ liability insurance policy.

 

   

Upon the Closing, Kenneth C. Ricci is expected to serve on the Company’s board of directors and Gerard J. DeMuro, a former member of our board of directors and Eve’s Co-Chief Executive Officer, is expected to serve as the Co-Chief Executive Officer of the Company. As such, in the future they may receive any cash fees, stock options or stock awards that the Company and its board of directors determines to pay to its directors and/or officers.

 

   

In connection with the Closing, we will enter into the Amended and Restated Registration Rights Agreement, which will provide certain of the Company’s stockholders, including the holders of the founder shares, private placement warrants and shares of common stock issuable upon conversion of the founder shares and private placement warrants, with registration rights.

 

   

Upon the Closing, subject to the terms and conditions of the Business Combination Agreement, the Company’s officers and directors are entitled to reimbursement for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Such reimbursable out-of-pocket expenses, if any, are not expected to be material.

 

   

Upon the completion of the business combination, BTIG and I-Bankers Securities, Inc., who acted as Zanite’s underwriters in the IPO, will be entitled to an aggregate deferred underwriting commission of $8,050,000. Additionally, Jefferies and Raymond James will receive customary financial advisory fees for a transaction of this nature, and Jefferies, BTIG, Bradesco BBI and Itau are entitled to receive customary placement agent and referral fees, as applicable, for a transaction of this nature. As of December 30, 2021, the total aggregate amount of transaction expenses expected to be paid or repaid by Zanite upon consummation of the business combination is approximately $40.56 million, inclusive of financial advisory, placement agent and referral fees and the deferred underwriting commission payable to Zanite’s underwriters in the IPO. If we were to fail to complete a business combination by

 

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May 19, 2022, BTIG, I-Bankers, Jefferies, Banco Itaú International and its affiliates, and Raymond James would not receive their expected compensation for their respective roles as underwriters, financial advisor, placement agent and/or referee, as applicable, unless we seek and obtain the requisite consent of our shareholders to extend the period of time Zanite has to consummate its initial business combination.

 

   

In connection with the Closing, the Sponsor and our officers and directors would be entitled to the repayment of any working capital loans and advances that have been made to the Company and remain outstanding. As of the date of this proxy statement, there are no such loans or advances outstanding. If we do not complete an initial business combination within the completion window, we may use a portion of our working capital held outside the trust account to repay the working capital loans, but no proceeds held in the trust account would be used to repay any working capital loans.

 

   

In order to protect the amounts held in the trust account, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.10 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

These financial interests of the initial stockholders and our officers and directors may have influenced their decision to approve the business combination. You should consider these interests when evaluating the business combination and the recommendation of the proposal to vote in favor of the business combination and other proposals to be presented to the Company’s stockholders.

The initial stockholders have agreed to vote in favor of the business combination, regardless of how our public stockholders vote.

The initial stockholders and our other officers and directors entered into a letter agreement at the time of the IPO, and the initial stockholders have entered into the Sponsor Support Agreement, pursuant to which they agreed to vote the founder shares purchased by them, as well as any public shares purchased by them during or after the IPO, in favor of the business combination. As of the date hereof, our initial stockholders own 20% of our total outstanding shares of common stock. Accordingly, it is more likely that the necessary stockholder approval for the business combination will be received than would be the case if the initial stockholders agreed to vote their founder shares in accordance with the majority of the votes cast by the Company’s public stockholders.

The Sponsor, the initial stockholders and our directors, officers, advisors and their affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on the business combination and reduce the public “float” of the common stock.

The Sponsor, the initial stockholders and our directors, officers, advisors and their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of the business combination, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions.

In the event that the Sponsor, the initial stockholders and our directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to

 

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exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their public shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in the Business Combination Agreement, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding. Any such purchases of our securities may result in the completion of the business combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of Class A common stock or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on the NYSE.

Warrants will become exercisable for the Company’s common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Following the business combination, there will be 11,500,000 outstanding public warrants to purchase 11,500,000 shares of common stock at an exercise price of $11.50 per share, which warrants will become exercisable commencing the later of 30 days following the Closing and 12 months from the closing of the IPO, which occurred on November 19, 2020. In addition, there will be 14,250,000 private placement warrants outstanding exercisable for 14,250,000 shares of common stock at an exercise price of $11.50 per share. Moreover, on or after the Closing Date, there will be certain new warrants outstanding exercisable for (i) 14,150,000 shares of common stock at an exercise price of $0.01 per share, (ii) 12,000,000 shares of common stock at an exercise price of $15.00 per share and (iii) 5,000,000 shares of common stock at an exercise price of $11.50 per share. To the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the holders of the Company’s common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of the Company’s common stock, the impact of which is increased as the value of our stock price increases.

To the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the holders of the Company’s common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of the Company’s common stock, the impact of which is increased as the value of our stock price increases.

The Company may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

The Company has the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to proper notice of such redemption provided that on the date we give notice of redemption. We will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the

 

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outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us for cash so long as they are held by their initial purchasers or their permitted transferees.

Even if we consummate the business combination, there can be no assurance that our public warrants will be in the money at the time they become exercisable, and they may expire worthless.

The exercise price for the outstanding public warrants is $11.50 per share of common stock. There can be no assurance that such warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the warrants may expire worthless.

We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then-outstanding warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of our common stock purchasable upon exercise of a warrant could be decreased, all without your approval.

Our warrants have been issued in registered form under the Warrant Agreement. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.

Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of common stock purchasable upon exercise of a warrant.

Our stockholders will experience immediate dilution as a consequence of the issuance of common stock as consideration in the business combination. Having a minority share position may reduce the influence that our current stockholders have on the management of the Company.

Assuming that no public stockholders exercise their redemption rights in connection with the business combination, immediately after the consummation of the business combination, the initial stockholders and the Company’s public stockholders will hold 31,250,000 shares of common stock, or 11.15% of the outstanding common stock. Assuming that our public stockholders holding 19,601,942 public shares exercise their redemption rights in connection with the business combination (which is based on the Minimum Cash Condition that the amount of cash available in Zanite’s trust account, after deducting the amount required to satisfy Zanite’s obligations to its stockholders that exercise their rights to redeem their public shares (but prior to the payment or reimbursement, as applicable, of any (a) deferred underwriting commissions being held in the Zanite’s trust account and (b) transaction expenses of Embraer and its subsidiaries (including Eve) and Zanite), plus the PIPE Investment Amount is at least $350,000,000), immediately after the consummation of the business combination, the initial stockholders and the Company’s public stockholders will hold 11,648,058 shares of common stock, or 4.47% of the outstanding common stock.

There are currently outstanding an aggregate of 25,750,000 warrants to acquire common stock, which is comprised of 14,250,000 private placement warrants held by the Sponsor and 11,500,000 public warrants. Each of the Company’s outstanding warrants is exercisable commencing the later of 30 days following the Closing and 12 months from the closing of the IPO, which occurred on November 19, 2020, for one share of common stock in accordance with its terms. Therefore, as of the date of this proxy statement, assuming that each outstanding whole warrant is exercised and one share of common stock is issued as a result of such exercise, with payment of

 

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the exercise price of $11.50 per share, our fully-diluted share capital would increase by a total of 25,750,000 shares, with approximately $269,675,000 paid to us to exercise the warrants.

We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.

Following the issuance of the SEC Staff Statement, our management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020. We identified a material weakness in our internal controls over financial reporting related to the accounting for certain financial instruments issued in connection with the IPO in November 2020.

As a result of such material weakness, the restatement of our financial statements, the change in accounting for the warrants, forward contract to issue additional warrants, and the Class A common stock, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of September 30, 2021, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on the business of the combined company and its results of operations and financial condition.

Subsequent to the consummation of the business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and share price, which could cause you to lose some or all of your investment.

Although we have conducted due diligence on Eve, we cannot assure you that this diligence revealed all material issues that may be present in its business, that it would be possible to uncover all material issues through a customary amount of due diligence or that factors outside of our or Eve’s control will not later arise. As a result, the Company may be forced to later write-down or write-off assets, restructure its operations or incur impairment or other charges that could result in losses. Even if the due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that the Company reports charges of this nature could contribute to negative market perceptions about the Company or its securities. In addition, charges of this nature may cause the Company to violate net worth or other covenants to which it may be subject. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their ordinary shares of the Company. Such stockholders are unlikely to have a remedy for such reduction in value, unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation materials, relating to the business combination contained an actionable material misstatement or material omission.

If the benefits of the business combination do not meet the expectations of investors or securities analysts, the market price of our securities may decline.

If the benefits of the business combination do not meet the expectations of investors or securities analysts, the market price of the Company securities prior to the Closing may decline. The market values of the Company’s securities at the time of the business combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement, or the date on which the Company’s stockholders vote on the business combination. Because the number of shares to be issued pursuant to the Business Combination Agreement will not be adjusted to reflect any changes in the market price of the

 

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Company’s common stock, the market value of the Company’s common stock issued in the business combination may be higher or lower than the values of these shares on earlier dates.

In addition, following the business combination, fluctuations in the price of the Company’s securities could contribute to the loss of all or part of your investment. Prior to the business combination, there has not been a public market for the stock of Eve and trading in the shares of the Company’s common stock has not been active. Accordingly, the valuation ascribed to Eve in the business combination may not be indicative of the price that will prevail in the trading market following the business combination. If an active market for our securities develops and continues, the trading price of the Company’s securities following the business combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities and the Company’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of the Company’s securities may include:

 

   

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

 

   

changes in the market’s expectations about the Company’s operating results;

 

   

success of competitors;

 

   

operating results failing to meet the expectations of securities analysts or investors in a particular period;

 

   

changes in financial estimates and recommendations by securities analysts concerning the Company or the industry in which the Company’s operates in general;

 

   

operating and stock price performance of other companies that investors deem comparable to the Company;

 

   

ability to market new and enhanced products and services on a timely basis;

 

   

changes in laws and regulations affecting our business;

 

   

commencement of, or involvement in, litigation involving the Company;

 

   

changes in the Company’s capital structure, such as future issuances of securities or the incurrence of debt;

 

   

the volume of shares of the Company’s common stock available for public sale;

 

   

any major change in the Company’s board or management;

 

   

sales of substantial amounts of the Company’s common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your securities at or above the price at which it was acquired. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to the Company could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

 

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Our actual financial position and results of operations may differ materially from the unaudited pro forma financial information included in this proxy statement.

The unaudited pro forma condensed combined financial information included in this proxy statement is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the business combination been completed on the dates indicated. See “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

There can be no assurance that our common stock will be approved for listing on the NYSE following the Closing, or that we will be able to comply with the listing standards of the NYSE.

Our Class A common stock, units and public warrants are currently listed on Nasdaq. Following the Closing, we intend to list our common stock and warrants to be listed on the NYSE. Our eligibility for listing may depend on, among other things, the number of our shares that are redeemed. If, after the business combination, the NYSE does not list our common stock from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant adverse consequences including:

 

   

a limited availability of market quotations for our securities;

 

   

reduced liquidity for our securities;

 

   

a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

   

a limited amount of news and analyst coverage; and

 

   

decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Class A common stock, units and public warrants are listed on Nasdaq, they are covered securities under the statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state, other than the state of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on the NYSE, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities, including in connection with the business combination.

Our directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to the Company’s public stockholders.

In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share; or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and up to $100,000 for dissolution expenses, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against the Sponsor to enforce its indemnification obligations to the Company, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular

 

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instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.

If, before distributing the proceeds in the trust account to its public stockholders, the Company files a bankruptcy petition or an involuntary bankruptcy petition is filed against the Company that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to its public stockholders, the Company files a bankruptcy petition or an involuntary bankruptcy petition is filed against the Company that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in the Company’s bankruptcy estate and subject to the claims of third-parties with priority over the claims of the Company’s stockholders. To the extent any bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If our stockholders fail to comply with the redemption requirements specified in this proxy statement, they will not be entitled to redeem their shares of Class A common stock for a pro rata portion of the trust account.

Holders of public shares are not required to affirmatively vote against the Business Combination Proposal in order to exercise their rights to redeem their shares for a pro rata portion of the trust account. In order to exercise their redemption rights, they are required to submit a request in writing, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, and deliver their stock (either physically or electronically) to our transfer agent prior to [●], New York City time, on [●] (two business days prior to the scheduled vote at the special meeting). Stockholders electing to redeem their shares will receive their pro rata portion of the funds held in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, calculated as of two business days prior to the anticipated consummation of the business combination.

The business combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all.

The completion of the business combination is subject to a number of conditions. The completion of the business combination is not assured and is subject to risks, including the risk that approval of the business combination by our stockholders is not obtained, subject to certain terms specified in the Business Combination Agreement (as described under “The Business Combination Proposal — The Business Combination Agreement — Conditions to the Completion of the Business Combination”), or that other closing conditions are not satisfied. If we do not complete the business combination, it could be subject to several risks, including:

 

   

the parties may be liable for damages to one another under the terms and conditions of the Business Combination Agreement;

 

   

negative reactions from the financial markets, including declines in the price of our common stock due to the fact that current prices may reflect a market assumption that the business combination will be completed; and

 

   

the attention of its management will have been diverted to the business combination rather than its own operations and pursuit of other opportunities that could have been beneficial to us.

Delaware law and provisions in the Proposed Charter and Proposed Bylaws could make a takeover proposal more difficult.

If the business combination is consummated, the Company’s organizational documents will be governed by Delaware law. Certain provisions of Delaware law and of the Proposed Charter and Proposed Bylaws could

 

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discourage, delay, defer or prevent a merger, tender offer, proxy contest or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares of common stock held by our stockholders. These provisions provide for, among other things:

 

   

the ability of the Company’s board of directors to issue one or more series of preferred stock;

 

   

certain limitations on convening special stockholder meetings; and

 

   

advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings.

These anti-takeover provisions as well as certain provisions of Delaware law could make it more difficult for a third party to acquire the Company, even if the third party’s offer may be considered beneficial by many of the Company’s stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares. If prospective takeovers are not consummated for any reason, we may experience negative reactions from the financial markets, including negative impacts on the price of our common stock. These provisions could also discourage proxy contests and make it more difficult for our stockholders to elect directors of their choosing and to cause us to take other corporate actions that our stockholders desire. See “Description of Securities”.

Eve’s ability to operate its business effectively depends in large part on certain administrative and other support functions provided to it by Embraer pursuant to the Services Agreements. Following the expiration or termination of the Services Agreements, Eve’s ability to operate its business effectively may suffer if it is unable to cost-effectively establish its own administrative and other support functions in order to operate as a stand-alone company.

Eve will rely on certain administrative and other resources of Embraer, including information technology, financial reporting, tax, treasury, human resources, procurement, insurance and risk management and legal services, to operate its business. In connection with the Pre-Closing Restructuring, on or prior to the Closing Date, Eve will enter into three MSAs, including one by and between Eve and Embraer and another by and between Eve and Atech. Pursuant to such MSAs, the Embraer Entities (other than Eve and its Subsidiaries) will supply products and perform certain services, relating to the development, certification, manufacturing and support of eVTOL. The initial term of the MSAs is expected to end on the 10th anniversary, in the case of the MSA with Atech, on the 15th anniversary, and in the case of the MSA with Embraer, of the effective date. Eve will also enter into a Master Services Agreement with the Brazilian Subsidiary pursuant to which the Brazilian Subsidiary will develop and facilitate the execution of a commercial business plan for the strategic development of the UAM Business on behalf of Eve. In addition, Eve and the Brazilian Subsidiary will enter into a Shared Services Agreement with Embraer and EAH pursuant to which the Embraer Entities (other than Eve and its Subsidiaries) will provide certain corporate and administrative services to Eve and the Brazilian Subsidiary. The initial term of the Shared Services Agreement is expected to end on the 15th anniversary of the effective date .See the section entitled ” The Business Combination Proposal — Ancillary Agreements — Services Agreements.” These services may not be sufficient to meet Eve’s needs and may not be provided at the same level as when the entities comprising Eve was part of Embraer. Eve and Embraer will each rely on the other to perform its obligations under the Services Agreements. If Embraer was unable to satisfy its material obligations under the agreement, or if the agreement is terminated as to any services or entirely, Eve may not be able to obtain such services at all or obtain the services on terms as favorable as those in the Services Agreements, and could as a result suffer operational difficulties or significant losses.

In addition, prior to the date on which the Services Agreements were entered into, Eve and its Subsidiaries have received informal support from Embraer as wholly owned subsidiaries of Embraer, and the level of this informal support may diminish following the business combination and as Eve becomes a more independent company. Any failure or significant interruption of Eve’s own administrative systems or in Embraer’s administrative systems during the term of the Services Agreements could result in unexpected costs, impact Eve’s results or prevent it from paying its suppliers or employees and performing other administrative services on a timely basis.

 

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Eve may have received better terms from unaffiliated third parties than the terms it has received in the Services Agreements with Embraer.

The terms of the Services Agreements were agreed while Eve was a wholly owned subsidiary of Embraer and in the context that Embraer will have a controlling interest of Eve following the business combination. Accordingly, during the period in which the Services Agreements were prepared, Eve did not have an independent board of directors or a management team that was independent of Embraer. As a result, the terms of the agreement may not reflect terms that would have resulted from arms-length negotiations between unaffiliated third parties and any such arms-length negotiations with an unaffiliated third party may have resulted in more favorable terms to Eve.

Eve does not have a history as a separate public company.

In the past, Eve’s operations have been a part of Embraer and Embraer provided it with certain financial, operational and managerial resources for conducting its business. Following the business combination, while a number of these resources will continue to be at Embraer and used to provide services to Eve under the Services Agreements, Eve will perform certain of its own financial, operational and managerial functions. There are no assurances that Eve will be able to successfully put in place the financial, operational and managerial resources necessary to perform these functions.

UAM Business’ historical financial results and Combined Financial Statements may not be representative of Eve’s results as a separate company.

UAM Business’ historical financial information included in this proxy statement has been derived on a carve-out basis from the consolidated financial statements and accounting records of Embraer and does not necessarily reflect what Eve’s financial position, results of operations or cash flows would have been had it been a separate company during the periods presented. The historical costs and expenses reflected in the Combined Financial Statements include an allocation for certain corporate functions historically provided by Embraer, most of which will continue to be provided pursuant to the Services Agreements. These allocations were based on what management considered to be reasonable reflections of the historical utilization levels of these services required in support of Eve’s business. The historical information does not necessarily reflect what the cost to Eve of these functions will be in the future, pursuant to the Services Agreements or otherwise. For additional information in relation to materially significant related party transactions during the nine months ended September 30, 2021 and during the years ended December 31, 2020, 2019 and 2018, see Note 4 to the Unaudited Financial Statements as of and for the nine months ended September 30, 2021 and Note 4 to the Combined Financial Statements as of and for the fiscal years ended December 31, 2020, 2019 and 2018 included elsewhere in this proxy statement. Any further related party transactions during the nine months ended September 30, 2021 and in the fiscal years ended December 31, 2020, 2019 and 2018 were both immaterial and no more than incidental in nature.

The Proposed Charter includes a forum selection clause, which could discourage claims or limit stockholders’ ability to make a claim against us, our directors, officers, other employees or stockholders.

The Current Charter includes, and the Proposed Charter will also include, a forum selection clause. The Proposed Charter provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery lacks jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) and any appellate court thereof (the “chosen courts”) will be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on behalf of the Company, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of the Company to the Company or to the Company’s stockholders, (iii) any action, suit or proceeding asserting a claim against the Company or any current or former director, officer, other employee, agent or stockholder arising pursuant to any provision of the DGCL or the Proposed Charter or Proposed Bylaws (as either may be amended from time to time), (iv) any action, suit or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of

 

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Delaware, or (v) any action, suit or proceeding asserting a claim against the Company or any current or former director, officer, other employee, agent or stockholder governed by the internal affairs doctrine. If any such action, suit or proceeding is filed in a court other than a chosen court in the name of any stockholder, such stockholder will be deemed to have consented to (a) the personal jurisdiction of the chosen courts in connection with any action brought in any such court to enforce the provisions of the immediately preceding sentence and (b) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel as agent for such stockholder.

Unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under federal securities laws, including the Securities Act. Under the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. This forum selection clause may also discourage claims or limit stockholders’ ability to submit claims in a judicial forum that they find favorable and may result in additional costs for a stockholder seeking to bring a claim. While we believe the risk of a court declining to enforce this forum selection clause is low, if a court were to determine the forum selection clause to be inapplicable or unenforceable in an action, we may incur additional costs in conjunction with our efforts to resolve the dispute in an alternative jurisdiction, which could have a negative impact on our results of operations and financial condition. Notwithstanding the foregoing, the forum selection clause will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America have exclusive jurisdiction.

Our Warrant Agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.

Our Warrant Agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to our warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of our warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of, and to have consented to, the forum provisions in our Warrant Agreement.

If any action, the subject matter of which is within the scope of the forum provisions of our warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder of our warrants shall be deemed to have consented to (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such holder of our warrants in any such enforcement action by service upon such holder’s counsel in the foreign action as agent for such holder of our warrants.

This choice-of-forum provision may limit the ability of a holder of our warrants to bring a claim in a judicial forum that it finds favorable for disputes with us, which may discourage such lawsuits. Alternatively, if a court

 

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were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

We have not registered the shares of common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws, and registration may not be in place when an investor desires to exercise warrants, thus precluding the investor from being able to exercise his, her or its warrants except on a cashless basis and potentially causing such warrants to expire worthless.

We have not registered the shares of common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the Warrant Agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the Closing of the business combination, we will use best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of common stock issuable upon exercise of the warrants and thereafter will use best efforts to cause to become effective within 60 business days following the business combination and to maintain a current prospectus relating to common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares of common stock issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the Warrant Agreement, holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. If holders exercise their warrants on a cashless basis, they would pay the warrant exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the excess of the “fair market value” of our shares of common stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported closing price of the shares of common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, they would receive fewer shares of common stock from such exercise than if you were to exercise such warrants for cash.

In no event will warrants be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration or qualification is available.

Notwithstanding the above, if our shares of common stock are at the time of any exercise of a warrant not listed on a national securities exchange and are not “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, if we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and if we do not so elect, we will use commercially reasonable efforts to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available. Exercising the warrants on a cashless basis could have the effect of reducing the potential “upside” of the holder’s investment in our company because

 

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the warrant holder will hold a smaller number of shares of common stock upon a cashless exercise of the warrants they hold than they would have upon a cash exercise. In no event will we be required to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in exchange for the warrants if we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of the warrant shall not be entitled to exercise the warrant and the warrant may have no value and expire worthless. In that event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of common stock included in the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in the IPO. In such an instance, our initial stockholders and their permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants and sell the shares of common stock underlying the warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying shares of common stock. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of common stock for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.

You may only be able to exercise your public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of common stock from such exercise than if you were to exercise such warrants for cash.

The Warrant Agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the shares of common stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we have so elected and the shares of common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption. If you exercise your public warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the excess of the “fair market value” of our shares of common stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported closing price of the shares of common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer shares of common stock from such exercise than if you were to exercise such warrants for cash.

The board of directors did not obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination.

The board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the business combination. In analyzing the business combination, the board of directors and management conducted due diligence on Eve and researched the industry in which Eve operates and concluded that the business combination was in the best interests of our stockholders. Accordingly, investors will be relying solely on the judgment of the board of directors in valuing Eve’s businesses, and the board of directors may not have properly valued such businesses. The lack of a third-party valuation or fairness opinion may also lead an increased number of stockholders to vote against the business combination or demand redemption of their public shares for cash, which could potentially impact our ability to consummate the business combination.

 

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The only principal asset of the Company following the business combination will be its interest in Eve and accordingly, it will depend on distributions from Eve to pay taxes and expenses.

Upon consummation of the business combination, the Company will be a holding company and will have no material assets other than its interests in Eve. The Company is not expected to have independent means of generating revenue or cash flow, and its ability to pay taxes and operating expenses, as well as dividends in the future, if any, will be dependent upon the financial results and cash flows of Eve. There can be no assurance that Eve will generate sufficient cash flow to distribute funds to the Company, or that applicable law and contractual restrictions, including negative covenants under any debt instruments, if applicable, will permit such distributions. If Eve does not distribute sufficient funds to the Company to pay its taxes or other liabilities, the Company may default on contractual obligations or have to borrow additional funds. In the event that the Company is required to borrow funds, it could adversely affect the Company’s liquidity and subject it to additional restrictions imposed by lenders.

Pursuant to the Tax Receivable Agreement, the Company will be required to pay to EAH, 75% of the net income tax savings that the Company realizes as a result of increases in tax basis in the assets of the Company or certain of its subsidiaries resulting from the Pre-Closing Restructuring and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement, and those payments may be substantial.

The Pre-Closing Restructuring is expected to result in increases in the Company’s tax basis of its tangible and intangible assets. These increases in tax basis may increase (for income tax purposes) depreciation and amortization deductions and therefore reduce the amount of income or franchise tax that the Company would otherwise be required to pay in the future had such tax basis increase never occurred.

In connection with the business combination, the Company will enter into the Tax Receivable Agreement, which generally provides for the payment by it of 75% of certain net tax benefits, if any, that the Company realizes (or in certain cases is deemed to realize) as a result of these increases in tax basis and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. The timing of any payments under the Tax Receivable Agreement will vary depending upon a number of factors, including the amount and timing of the recognition of the Company’s income. The Company expects that the payments the Company will make under the Tax Receivable Agreement will be substantial and could have a material adverse effect on the Company’s financial condition.

Any payments made by the Company under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to the Company. To the extent that the Company is unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid; however, nonpayment for a specified period and/or under certain circumstances may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, as further described below. Furthermore, the Company’s future obligation to make payments under the Tax Receivable Agreement could make it a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that may be deemed realized under the Tax Receivable Agreement.

In certain cases, payments under the Tax Receivable Agreement may exceed the actual tax benefits the Company realizes or be accelerated.

Payments under the Tax Receivable Agreement will be based on the tax reporting positions that the Company determines, and the IRS or another taxing authority may challenge all or any part of the tax basis increases, as well as other tax positions that the Company takes, and a court may sustain such a challenge. In the event that any tax benefits initially claimed by the Company are disallowed, EAH will not be required to reimburse the Company for any excess payments that may previously have been made under the Tax Receivable

 

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Agreement, for example, due to adjustments resulting from examinations by taxing authorities. Rather, excess payments made to EAH will be applied against and reduce any future cash payments otherwise required to be made by the Company, if any, after the determination of such excess. However, a challenge to any tax benefits initially claimed by the Company may not arise for a number of years following the initial time of such payment and, even if challenged earlier, such excess cash payment may be greater than the amount of future cash payments that the Company might otherwise be required to make under the terms of the Tax Receivable Agreement and, as a result, there might not be future cash payments against which such excess can be applied. As a result, in certain circumstances the Company could make payments under the Tax Receivable Agreement in excess of the Company’s actual income or franchise tax savings, which could materially impair the Company’s financial condition.

Moreover, the Tax Receivable Agreement provides that, in the event that (i) the Company exercises its early termination rights under the Tax Receivable Agreement, or (ii) the Company in certain circumstances, materially breaches any of its material obligations under the Tax Receivable Agreement, whether as a result of failure to make any payment when due (except for all or a portion of such payment that is being validly disputed in good faith under this Agreement, and then only with respect to the amount in dispute) or failure to honor any other material obligation required hereunder to the extent not cured within 30 calendar days following receipt by the Company of written notice of such failure from EAH or by operation of law as a result of the rejection of this Agreement in a case commenced under the U.S. Bankruptcy Code or otherwise, unless with respect to clauses (ii) certain liquidity exceptions apply, the Company’s payment obligations will accelerate and the Company will be required to make a lump-sum cash payment to EAH equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement based on certain assumptions (including those relating to the Company’s future taxable income). Additionally, in the case of actions or transactions constituting a change of control or a divestiture of certain assets, the payments due under the Tax Receivable Agreement would be determined using certain valuation assumptions, including that the Company will generate sufficient taxable income to fully utilize the applicable tax assets and attributes covered under the Tax Receivables Agreement and as a result the Company may be required to make payments under the Tax Receivable Agreement prior to the time when the Company actually realizes cash tax savings. Such lump-sum payment and other advance payments could be substantial and could exceed the actual tax benefits that the Company realizes subsequent to such payment because such payment would be calculated assuming, among other things, that the Company would have certain assumed tax benefits available to it and that the Company would be able to use the assumed and potential tax benefits in future years.

There may be a material negative effect on the Company’s liquidity if the payments under the Tax Receivable Agreement exceed the actual income or franchise tax savings that the Company and its direct or indirect subsidiaries realize. Furthermore, the Company’s obligations to make payments under the Tax Receivable Agreement could also have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control.

If we are unable to complete the business combination with Eve or another business combination within the completion window, we will cease all operations except for the purpose of winding up, dissolving and liquidating. In connection with winding up, we would redeem the public shares and liquidate the trust account in which case, our public stockholders may only receive approximately $10.30 per share and their warrants will expire worthless. In addition, third-parties may bring claims against us and, as a result, the proceeds held in the trust account could be reduced, and the per share liquidation price received by stockholders could be less than $10.00 per share.

Unless we amend the Current Charter to extend the life of the Company and certain other agreements into which we have entered, if we do not complete the business combination within the completion window, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest not released to the Company to pay

 

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taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including trust account assets) will be less than the initial public offering price per unit in the IPO. In addition, if we fail to complete the business combination within the completion window, there will be no redemption rights or liquidating distributions with respect to our public warrants or the private placement warrants, which will expire worthless, unless we amend the Current Charter to extend the life of the Company and certain other agreements into which we have entered.

The Company and Eve will be subject to business uncertainties and contractual restrictions while the business combination is pending.

Uncertainty about the effect of the business combination on employees and third parties may have an adverse effect on the Company and Eve. These uncertainties may impair the Company’s or Eve’s ability to retain and motivate key personnel and could cause third parties that deal with any of us or them to defer entering into contracts or making other decisions or seek to change existing business relationships. If key employees depart because of uncertainty about their future roles and the potential complexities of the business combination, the Company’s or Eve’s business could be harmed.

We may waive one or more of the conditions to the business combination.

We may agree to waive, in whole or in part, one or more of the conditions to our obligations to complete the business combination, to the extent permitted by the Current Charter and Current Bylaws and applicable laws. We may not waive the condition that our stockholders approve the business combination. Please see the section entitled “The Business Combination Proposal — The Business Combination Agreement — Conditions to the Completion of the Business Combination” for additional information.

The exercise of our directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination Agreement may result in a conflict of interest when determining whether such changes to the terms of the Business Combination Agreement or waivers of conditions are appropriate and in our stockholders’ best interests.

In the period leading up to the closing of the business combination, events may occur that, pursuant to the Business Combination Agreement, would require us to agree to amend the Business Combination Agreement, to consent to certain actions taken by Eve or to waive rights that we are entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of Eve’s businesses, a request by Eve to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Eve’s business and would entitle us to terminate the Business Combination Agreement. In any of such circumstances, it would be at our discretion, acting through our board of directors, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors described in this proxy statement may result in a conflict of interest on the part of one or more of the directors between what he, she or they may believe is best for us and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement, we do not believe there will be any material changes or waivers that our directors and officers would be likely to make after the mailing of this proxy statement. We will circulate a new or amended proxy statement if changes to the terms of the Business Combination Agreement would have a material impact on its stockholders are required prior to the vote on the Business Combination Proposal.

 

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We are not required to obtain and have not obtained an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you will have no assurance from an independent source that the terms of the business combination are fair to our company from a financial point of view.

We are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent valuation or appraisal firm that the consideration we are paying is fair to the Company from a financial point of view. Our board of directors did not obtain a fairness opinion in connection with their determination to approve the business combination. In analyzing the business combination, our board of directors and our management conducted due diligence on Eve and researched the industry in which Eve operates and concluded that the business combination was in the best interest of our stockholders. Accordingly, our stockholders will be relying solely on the judgment of our board of directors in determining the value of the business combination, and our board of directors may not have properly valued the business. The lack of third-party fairness opinion may also lead to an increased number of stockholders to vote against the business combination or demand redemption of their shares, which could potentially impact our ability to consummate the business combination. For more information about our decision-making process, see the section entitled “The Business Combination Proposal — Zanite’s Board of Directors’ Reasons for the Approval of the Business Combination“

We will incur significant transaction and transition costs in connection with the business combination.

We have incurred and expect to incur significant, non-recurring costs in connection with consummating the business combination and recurring costs in connection with operating as a public company following the consummation of the business combination. We may incur additional costs to retain key employees. All expenses incurred in connection with the Business Combination Agreement and the transactions contemplated thereby (including the business combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of the Company, which will be incurring these fees, expenses and costs.

The Company’s transaction expenses as a result of the business combination are currently estimated at approximately $40.56 million, including $8,050,000 in deferred underwriting commissions to the underwriters of the IPO.

Members of our management team and board of directors have significant experience as founders, board members, officers or executives of other companies. As a result, certain of those persons have been, may be, or may become, involved in proceedings, investigations and litigation relating to the business affairs of the companies with which they were, are, or may in the future be, affiliated. This may have an adverse effect on us, which may impede our ability to consummate the business combination.

During the course of their careers, members of our management team and board of directors have had significant experience as founders, board members, officers or executives of other companies. As a result of their involvement and positions in these companies, certain persons were, are now, or may in the future become, involved in litigation, investigations or other proceedings relating to the business affairs of such companies or transactions entered into by such companies. Any such litigation, investigations or other proceedings may negatively affect our reputation, which may impede our ability to complete the business combination.

We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required

 

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to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, we are, and following the business combination it is expected that we will initially be, a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K and consequently may take advantage of certain reduced disclosure obligations. However, if the business combination is consummated before June 30, 2021, we will lose our smaller reporting company status as of such date, since, following the business combination, we will be a majority-owned subsidiary of a parent that is not a smaller reporting company and therefore fail to meet the eligibility requirements to be considered a smaller reporting company. To the extent we take advantage of such reduced disclosure obligations while we remain a smaller reporting company, it may also make comparison of our financial statements with other public companies difficult or impossible.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete the business combination.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete the business combination.

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

 

   

restrictions on the nature of our investments; and

 

   

restrictions on the issuance of securities, each of which may make it difficult for us to complete the business combination.

In addition, we may have imposed upon us burdensome requirements, including:

 

   

registration as an investment company;

 

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adoption of a specific form of corporate structure; and

 

   

reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.

In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.

We do not believe that our principal activities and the business combination will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. An investment in our securities is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination (which shall be the business combination should it occur); (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the existing governing documents (A) to modify the substance or timing of our obligation to provide holders of our public shareholders the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or (B) with respect to any other provision relating to the rights of public shareholders; or (iii) absent our completing an initial business combination within the completion window, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares.

If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we have not consummated our initial business combination within the completion window, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders or warrant holders do not agree.

The Current Charter does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. As a result, we may be able to complete the business combination even if a substantial portion of our public stockholders or warrant holders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to the Sponsor or our directors, officers or advisors, or any of their respective affiliates. As of the date of this proxy statement, there have not been agreements that were entered into with respect to the private purchase of public shares by the Company or the persons described above with any such investor or holder. We will file a Current Report on Form 8-K with the

 

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SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals (as described in this proxy statement) at the special meeting.

If the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Business Combination Agreement exceeds the aggregate amount of cash available to us, we may not complete the business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

If you or a “group” of stockholders of which you are a part are deemed to hold an aggregate of more than 15% of our common stock issued in the IPO, you (or, if a member of such a group, all of the members of the group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of our common stock issued in the IPO without the prior consent of the Company.

The Current Charter provides that a public stockholder, together with any affiliate of that stockholder or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of common stock included in the units sold in our IPO (the “excess shares”) without the prior consent of the Company. In order to determine whether that stockholder is acting in concert or as a group with another stockholder, the Company will require each public stockholder seeking to exercise redemption rights to certify to the Company whether the stockholder is acting in concert or as a group with any other stockholder. These certifications, together with other public information relating to stock ownership available to the Company at that time, such as Schedule 13D, Schedule 13G and Section 16 filings under the Exchange Act, will be the sole basis on which the Company makes the above-referenced determination. Your inability to redeem any excess shares will reduce your influence over our ability to consummate the business combination and you could suffer a material loss on your investment in us if you sell these excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to any excess shares if we consummate the business combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the shares sold in our IPO and, in order to dispose of excess shares, would be required to sell your stock in open market transactions, potentially at a loss. We cannot assure you that the value of the excess shares will appreciate over time following the business combination or that the market price of our common stock will exceed the per-share redemption price. Notwithstanding the foregoing, stockholders may challenge the Company’s determination as to whether a stockholder is acting in concert or as a group with another stockholder in a court of competent jurisdiction.

However, our stockholders’ ability to vote all of their shares (including any excess shares) for or against the business combination is not restricted by this limitation on redemption.

There is no guarantee that your decision whether to redeem your shares for a pro rata portion of the trust account will put you in a better future economic position.

We can give no assurance as to the price at which you may be able to sell your public shares in the future following the completion of the business combination or any alternative business combination. Certain events following the consummation of the business combination may cause an increase in our share price, and may result in a lower value realized now than you might realize in the future had you not redeemed your shares. Similarly, if you do not redeem your shares, you will bear the risk of ownership of the public shares after the consummation of the business combination, and there can be no assurance that you can sell your shares in the future for a greater amount than the redemption price set forth in this proxy statement. You should consult your own tax and/or financial advisor for assistance on how this may affect your individual situation.

 

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If we are unable to complete the business combination, our public stockholders may receive only approximately $10.30 per share on the liquidation of the trust account (or less than $10.30 per share in certain circumstances where a third party brings a claim against us that the Sponsor is unable to indemnify), and our warrants will expire worthless.

If we are unable to complete the business combination within the completion window, our public stockholders may receive only approximately $10.30 per share on the liquidation of the trust account (or less than $10.30 per share in certain circumstances where a third-party brings a claim against us that the Sponsor is unable to indemnify (as described below)) and our warrants will expire worthless.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.30 per share.

Our placing of funds in the trust account may not protect those funds from third-party claims against us. These parties may not execute the agreements, or even if they execute the agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving claims to the funds held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver if management believes that such the party’s engagement would be significantly more beneficial to us than any alternative. WithumSmith+Brown, PC, our independent registered public accounting firm, and the underwriters of the IPO, have not executed agreements with us waiving claims to the monies held in the trust account.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that these entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.30 per share initially held in the trust account, due to claims of these creditors. The Sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have entered into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.10 per public share due to reductions in the value of the trust assets, less taxes payable, provided, that, this liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not the waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, we have not asked the Sponsor to reserve for these indemnification obligations, nor have we independently verified whether the Sponsor has sufficient funds to satisfy their indemnity obligations and believe that the Sponsor’s only assets our securities. Therefore, we cannot assure you that the Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for the business combination and redemptions could be reduced to less than $10.30 per public share. In such event, we may not be able to complete the business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 

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Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete the business combination within the completion window may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of the stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the end of the completion window if we do not complete our business combination and, therefore, we do not intend to comply with the foregoing procedures.

Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the ten years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of the stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution.

We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of that date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares if we do not complete the business combination within the completion window is not considered a liquidating distribution under Delaware law and the redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover the proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

The following unaudited pro forma condensed combined financial information provides additional information regarding the financial aspects of the business combination and related transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”.

Description of the Business Combination

On December 21, 2021, Embraer, Eve, EAH and Zanite entered into the Business Combination Agreement, which contains customary representations and warranties, covenants, closing conditions, termination provisions and other terms relating to the transactions contemplated thereby.

As contemplated by the Business Combination Agreement and the Contribution Agreement, on December 10, 2021, Embraer transferred the Contributed Assets and associated liabilities, in the context of the Pre-Closing Restructuring, to Eve and subsidiaries of Eve, in exchange for the issuance of a certain number of Eve Interests. These transactions will be accounted for as a common control transaction.

Following such transactions, Embraer then transferred all of the Eve Interests held by it to EAH in exchange for the issuance of EAH Common Stock and EAH Preferred Stock. Embraer has also entered into the Preferred Stock Purchase Agreement with the Unaffiliated Investor, and, pursuant to the terms and conditions set forth therein, has sold and transferred to the Unaffiliated Investor such shares of EAH Preferred Stock. As a result of these Pre-Closing Restructuring activities, Eve is now a wholly owned subsidiary of EAH.

Subject to the receipt of the Zanite stockholder approval and the satisfaction or (to the extent permitted by law) waiver of certain other closing conditions set forth in the Business Combination Agreement, at the Closing, EAH will contribute and transfer to Zanite, and Zanite will receive from EAH, all of the issued and outstanding Eve Interests as consideration and in exchange for the issuance and transfer to EAH of 220,000,000 shares of the Company’s common stock. As a result, Eve will become a wholly owned subsidiary of Zanite, and Zanite will be controlled by EAH and indirectly by Embraer.

For more information about the business combination, please see the section entitled “The Business Combination Proposal.

Accounting Treatment of the Business Combination

This business combination is expected to be accounted for as a reverse recapitalization, equivalent to the issuance of shares by Eve for the net monetary assets of Zanite accompanied by a recapitalization. Accordingly, the consolidated assets, liabilities and results of operations of the UAM Business will become the historical financial statements of Eve; the assets, liabilities and results of operations of Zanite will be consolidated with Eve beginning on the Closing Date. For accounting purposes, the financial statements of Eve will represent a continuation of the financial statements of the UAM Business. The net assets of Zanite will be stated at historical costs, with no goodwill or other intangible assets recorded. Operations prior to the transaction will be presented as those of the UAM Business in future reports of Eve.

Basis of Pro Forma Presentation

The unaudited pro forma condensed combined balance sheet as of September 30, 2021, gives pro forma effect to the business combination as if it had been consummated as of September 30, 2021. The unaudited pro

 

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forma condensed combined statements of operations for the twelve months ended December 31, 2020 and for the nine months ended September 30, 2021, give pro forma effect to the business combination as if it had been consummated as of January 1, 2020. This information should be read in conjunction with the financial statements and notes of the UAM business, and the financial statements and notes of Zanite (as restated), the sections titled “Eve Management’s Discussion and Analysis of Financial Condition and Results of Operation,” “Zanite’s Management’s Discussion and Analysis of Financial Condition and Results of Operation,” “The Business Combination Proposal,” and other financial information included elsewhere in this proxy statement.

The following unaudited pro forma condensed combined financial information has been prepared to illustrate the estimated effects of the business combination and the related financing transactions. It sets forth and is derived from:

 

   

The UAM Business’s historical combined financial statements for the nine months ended September 30, 2021, and for the twelve months ended December 31, 2020, as included elsewhere in this proxy statement;

 

   

Zanite’s historical financial statem