CUSIP
No. 030382105
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SCHEDULE
13D
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Page
1 of 7 Pages
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1
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NAME
OF REPORTING PERSONS
Pensare
Sponsor Group, LLC
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2
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CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ☒
(b) ☐
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3
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SEC USE ONLY
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4
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SOURCE
OF FUNDS
Not
applicable
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
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☐
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6
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CITIZENSHIP
OR PLACE OF ORGANIZATION
Delaware
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NUMBER
OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH
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7
|
SOLE
VOTING POWER
-
0 -
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8
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SHARED
VOTING POWER
16,278,433*
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9
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SOLE
DISPOSITIVE POWER
-
0 -
|
10
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SHARED
DISPOSITIVE POWER
16,278,433*
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11
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH PERSON
16,278,433*
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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☐
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13
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PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5(a))
54.1%*
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14
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TYPE
OF REPORTING PERSON
OO
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* Certain of the shares that may be deemed to be beneficially
owned by the Reporting Person are subject to the Conversion Limitation, as defined in Item 4 of this Schedule 13D.
CUSIP
No. 030382105
|
SCHEDULE
13D
|
Page
2 of 7 Pages
|
1
|
NAME
OF REPORTING PERSONS
Darrell
J. Mays
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2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) ☒
(b) ☐
|
3
|
SEC USE ONLY
|
4
|
SOURCE
OF FUNDS
Not
applicable
|
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
☐
|
6
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CITIZENSHIP
OR PLACE OF ORGANIZATION
USA
|
NUMBER
OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH
|
7
|
SOLE
VOTING POWER
-
0 -
|
8
|
SHARED
VOTING POWER
16,375,897*
|
9
|
SOLE
DISPOSITIVE POWER
-
0 -
|
10
|
SHARED
DISPOSITIVE POWER
16,375,897*
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH PERSON
16,375,897*
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
☐
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5(a))
54.2%*
|
14
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TYPE
OF REPORTING PERSON
IN
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* Certain of the shares that may be deemed to be beneficially
owned by the Reporting Person are subject to the Conversion Limitation, as defined in Item 4 of this Schedule 13D.
CUSIP
No. 030382105
|
SCHEDULE
13D
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Page
3 of 7 Pages
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Item
1.
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Security
and Issuer.
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This
statement on Schedule 13D (the “Schedule 13D”) relates to the common stock, $0.0001 par value per share (the “Common
Stock”), of American Virtual Cloud Technologies, Inc., a Delaware corporation (the “Issuer”). The principal
executive offices of the Issuer are located at 1720 Peachtree Street, Suite 629, Atlanta, GA 30309.
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Item
2.
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Identity
and Background.
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(a)
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This
Schedule 13D is filed by Pensare Sponsor, LLC (the “Sponsor”), and Darrell
J. Mays (collectively, the “Reporting Persons”).
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(b)
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The
principal business address of the Reporting Persons is 1720 Peachtree Street, Suite 629,
Atlanta, GA 30309.
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(c)
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Mr.
Mays is the managing member of the Sponsor. The Sponsor’s sole business is to act
as the Issuer’s sponsor in connection with its initial public offering and initial
business combination. Mr. Mays is the Chief Executive Officer of the Issuer.
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(d)
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During
the last five years, none of the Reporting Persons has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
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(e)
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During
the last five years, none of the Reporting Persons has been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgement, decree or final order enjoining future violations
of or prohibiting or mandating activities subject to, federal or state securities laws
or finding violation with respect to such laws.
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(f)
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Mr.
Mays is a citizen of the United States of America. The Sponsor was formed under Delaware
law.
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Item
3.
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Source
and Amount of Funds or Other Consideration.
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Funds
for the purchase of securities reported herein were derived from available working capital of the Sponsor. The Sponsor paid the
Issuer $25,000 for the Founder Shares (as defined below) and $7,017,290 for the Private Placement Warrants (as defined below).
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Item
4.
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Purpose
of Transaction.
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Founder
Shares
Pursuant
to the terms of a securities subscription agreement with the Issuer effective as of May 18, 2017 (the “Securities Subscription
Agreement”), the Sponsor purchased 6,952,500 shares of Common Stock (the “Founder Shares”) for an aggregate
purchase price of $24,217 in cash, or approximately $0.003 per share. Pursuant to the terms of securities assignment agreement
(the “Securities Assignment Agreement”), on June 23, 2017, the Sponsor transferred 1,575,000 Founder Shares to MasTec,
Inc. for a price of approximately $0.003 per share. On July 27, 2017, the Sponsor transferred 27,000 of the Founder Shares to
each of the Issuer’s five independent directors.
Private
Placement Warrants
Pursuant
to a warrant purchase agreement dated as of July 27, 2018 (the “Private Placement Warrants Purchase Agreement”), the
Sponsor purchased 7,017,290 warrants (the “Private Placement Warrants”) for an aggregate price of $7,017,290 in private
placements occurring on August 1, 2017 and August 4, 2017. Each Private Placement Warrant entitles the holder to purchase one
share of Common Stock for $11.50 per share and is exercisable beginning on May 7, 2020 and may be exercised on a cashless basis.
The Private Placement Warrants will expire on April 7, 2025.
CUSIP
No. 030382105
|
SCHEDULE
13D
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Page
4 of 7 Pages
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Warrant
Agreement
The
Private Placement Warrants are governed by the terms of the Warrant Agreement (the “Warrant Agreement”), dated July
27, 2017, between the Company and Continental Stock Transfer & Trust Company (the “Warrant Agent”). Each Private
Placement Warrant entitles the registered holder to purchase one share of the Common Stock at a price of $11.50 per share, subject
to adjustment described therein, at any time commencing on May 7, 2020, and terminating at 5:00 p.m., New York City time on April
7, 2020, or other than with respect to the Private Placement Warrants then held by the Sponsor and EarlyBird Capital, Inc. or
their permitted transferees, the date the Company elects to redeem all of the warrants.
Registration
Rights
Concurrently
with the closing of the Issuer’s initial business combination, on April 7, 2020, the Issuer, the Sponsor and certain other
initial stockholders of the Issuer, as well as Stratos Management Systems Holdings, LLC, a Delaware limited liability company,
and certain other investors, entered into a Registration Rights Agreement (the “Registration Rights Agreement”). The
Registration Rights Agreement amended, restated and replaced the registration rights agreement entered into among the Issuer,
the Sponsor and certain other initial stockholders of Issuer on July 27, 2017. Pursuant to the terms of the Registration Rights
Agreement, the holders of certain of the Issuer’s securities, including the Issuer’s founder shares, the shares of
the Issuer’s common stock underlying the Private Placement Warrants and the shares of common stock underlying the securities
issued in the Private Placement (as defined below) are entitled to certain registration rights under the Securities Act of 1933,
as amended (the “Securities Act”) and applicable state securities laws with respect to such shares of the Issuer’s
common stock, including up to eight demand registrations in the aggregate and customary “piggy-back” registration
rights.
Securities
Purchase Agreement
On
April 3, 2020, the Issuer, the Sponsor and certain investors (each, an “Investor”) entered into a Securities Purchase
Agreement (the “Securities Purchase Agreement”) pursuant to which the Investors agreed to purchase, and the Issuer
agreed to sell to the Investors, in a private placement (the “Private Placement”), units of securities of the Issuer
(“Units”), each Unit consisting of (i) $1,000 in principal amount of Pensare’s Series A convertible debentures
(the “Debentures”) and (ii) a warrant to purchase 100 shares of the Issuer’s common stock at an exercise price
of $0.01 per whole share (the “PIPE Warrants”). On April 7, 2020 the Issuer consummated the Private Placement. The
issuances of such securities were not registered under the Securities Act, in reliance on the exemption from registration provided
by Section 4(a)(2) of the Securities Act.
Debentures
At
the closing of the Issuer’s business combination on April 7, 2020, the Company issued to Investors Debentures having an
aggregate principal amount of approximately $43.4 million, of which approximately $8.8 million in aggregate principal amount was
issued to the Sponsor as part of Units issued in exchange for the cancellation of indebtedness previously incurred by the Issuer
to the Sponsor). The Debentures bear interest at a rate of 10% per annum, payable quarterly on the last day of each calendar quarter
in the form of additional Debentures, except upon maturity in which case accrued and unpaid interest is payable in cash. The entire
principal amount of each Debenture, together with accrued and unpaid interest thereon, is due and payable on the earlier of (i)
such date, commencing on or after October 7, 2022, as the holder thereof, at its sole option, upon not less than 30 days’
prior written notice to the Issuer, demands payment thereof and (ii) the occurrence of a Change in Control (as defined in the
Debentures).
Each Debenture is convertible, in whole or in part, at any time
at the option of the holder thereof into that number of shares of Common Stock calculated by dividing the principal amount being
converted, together with all accrued but unpaid interest thereon, by the applicable conversion price, initially $3.45. Therefore,
at the time of issuance, the 2,559,586 shares of Common Stock were underlying the Debentures issued to the Sponsor. However, provided
that the Common Stock remains listed for trading on the Nasdaq Stock Market or other national securities exchange, the aggregate
number of shares of Common Stock issuable upon conversion of the Debentures, together with the aggregate number of shares of Common
Stock issued upon exercise of the Warrants, may not exceed 19.9% of either (i) the total number of shares of Common Stock outstanding
on April 7, 2020 or (b) the total voting power of the Company’s securities outstanding on April 7, 2020 that are entitled
to vote on a matter being voted on by holders of the Common Stock, until the 21st day after the date that the Company provides
an information statement to the Company’s stockholders in accordance with Regulation 14C under the Act, notifying such stockholders
of action taken by certain of the stockholders by written consent to approve the issuance of the shares underlying the Debentures
and Warrants for purposes of the rules of the Nasdaq Stock Market (the “Conversion Limitation”). The conversion price
is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and is also subject to price-based
adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable
or exchangeable for, Common Stock at a price below the then-applicable conversion price (subject to certain exceptions). The Debentures
are subject to mandatory conversion if the closing price of the Common Stock exceeds $6.00 for any 40 trading days within a consecutive
60 trading day-period, subject to the satisfaction of certain other conditions. The Debentures are subordinated to all Senior Indebtedness
(as defined in the Debentures), including indebtedness under the Credit Agreement.
CUSIP
No. 030382105
|
SCHEDULE
13D
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Page
5 of 7 Pages
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PIPE
Warrants
On April 7, 2020, the Issuer issued to Investors PIPE Warrants to
purchase an aggregate of up to 4,343,432 shares of Common Stock (including warrants to purchase up to 883,057 shares of Common
Stock issued to the Sponsor, as part of the Units), at an exercise price of $0.01 per share. The PIPE Warrants are exercisable
at any time through the fifth anniversary of the date of issuance, subject to the Conversion Limitation. The number of shares issuable
upon exercise of each PIPE Warrant is subject to customary adjustments for stock dividends, stock splits, reclassifications and
the like.
Guaranty
At
the Closing, the Issuer and its subsidiaries issued to the Investors a Guaranty, pursuant to which such entities jointly and severally
guaranteed the obligations of the Issuer under the Debentures.
The
foregoing summary of certain terms of the Securities Subscription Agreement, the Securities Assignment Agreement, the Private
Placement Warrants Purchase Agreement, the Warrant Agreement, the Registration Rights Agreement, the Securities Purchase Agreement,
the Debentures, the PIPE Warrants and the guaranty is not complete and is qualified in its entirety by reference to the full text
of the documents, which are referenced as Exhibits 1-9 to this Schedule 13D.
Except
as set forth herein, the Reporting Persons have no present plan or proposal that would relate to or result in any of the matters
set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D. The Reporting Persons intend to review their investment in the
Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s financial position
and strategic direction, actions taken by the board of directors, price levels of the Common Stock, other investment opportunities
available to the Reporting Persons, conditions in the securities market and general economic and industry conditions, the Reporting
Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including,
without limitation, purchasing additional Common Stock or selling some or all of their Common Stock or warrants and, alone or
with others, pursuing discussions with the management, the board of directors, other shareholders of the Issuer and third parties
with regard to its investment in the Issuer, and/or otherwise changing their intention with respect to any and all matters referred
to in Item 4 of Schedule 13D.
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Item
5.
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Interest
in Securities of the Issuer.
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(a)
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As described in Item 4, the Reporting Persons may be deemed the beneficial
owners of 16,375,897 shares of Common Stock representing approximately 54.2% of the outstanding shares of Common Stock. This includes
the following securities held directly by the Sponsor and indirectly by Mr. Mays, who is the managing member of the Sponsor: (i)
5,818,500 shares of Common Stock, of the Issuer, (ii) 7,017,290 shares of Common Stock underlying warrants which may be exercised
commencing on May 7, 2020, (iii) 883,057 shares of Common Stock underlying the PIPE Warrants included within 8,830.57 Units purchased
by the Sponsor from the Issuer for $1,000 per Unit (which are subject to the Conversion Limitation) and (iv) 2,559,586 shares of
Common Stock underlying the Issuer’s Series A convertible debentures in the principal amount of $8,830,570 (which are subject
to the Conversion Limitation). In addition, these figures include the following securities held by Mr. Mays’ daughter: (i)
25,000 shares of Common Stock underlying warrants included within 250 Units purchased by Mr. Mays’ daughter from the Issuer
for $1,000 per Unit, and (ii) 72,464 shares of Common Stock underlying the Issuer’s Series A convertible debentures in the
principal amount of $250,000 (which are subject to the Conversion Limitation).
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The
aggregate percentage of Common Stock beneficially owned by the Reporting Persons is calculated based upon 19,635,830 shares of
Common Stock reported to be outstanding in the Issuer’s Current Report on Form 8-K, filed with the Securities and Exchange
Commission April 14, 2020.
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(b)
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By virtue of his control of the Sponsor, Mr. Mays has the power to
(i) vote or direct the voting and (ii) dispose or direct the disposition of all of the 16,278,433 shares of Common Stock which
may be deemed to be beneficially owned by the Sponsor.
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CUSIP
No. 030382105
|
SCHEDULE
13D
|
Page
6 of 7 Pages
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(c)
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Other
than the transactions described in Items 3 and 4 above, the Reporting Persons have not
effected any transactions in the Common Stock in the past 60 days.
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(d)
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Except
as described in this paragraph, as of the date of this Schedule 13D, no person other
than the Reporting Persons is known to the Reporting Persons to have the right to receive
or the power to direct the receipt of dividends from, or the proceeds from the sale of,
the shares of Common Stock covered by this Schedule 13D. Mr. Mays, as the managing member
of the Sponsor, has the right to direct the receipt of dividends in respect of, and proceeds
from the sale of, the Founder Shares in accordance with the terms of the Amended and
Restated Limited Liability Company Agreement of the Sponsor.
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Item
6.
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Contracts,
Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
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Other
than the agreements described in Item 4, as of the date hereof, there are no contracts, arrangements, understandings or relationships
(legal or otherwise) among the persons named in Item 2 hereof and between such persons and any person with respect to any securities
of the Issuer.
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Item
7.
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Material
to be Filed as Exhibits
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1
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Securities
Subscription Agreement, dated as of May 18, 2017, between the Issuer and the Sponsor (filed as Exhibit 10.7 to the Issuer’s
Registration Statement on Form S-1 SEC File No. 333-219162 on July 6, 2017 (the “Registration Statement”), and
incorporated by reference herein).
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2
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Securities Assignment Agreement, dated as of June 23, 2017, the Issuer, the Sponsor and MasTec, Inc. (filed as Exhibit 10.11 to the Registration Statement, and incorporated by reference herein).
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3
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Warrant Purchase Agreement,
dated as of July 27, 2017, between the Issuer and the Sponsor (filed as Exhibit 10.5(b) to the Issuer’s Current Report
on Form 8-K on August 2, 2017, and incorporated by reference herein).
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4
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Warrant Agreement, dated
as July 27, 2017, between the Issuer and Continental Stock Transfer & Trust Company (filed as Exhibit 4.1 to the Issuer’s
Current Report on Form 8-K on August 2, 2017, and incorporated by reference herein).
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5
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Registration Rights
Agreement, dated April 7, 2020, among the Issuer, Sponsor, and the other parties thereto (filed as Exhibit 10.3 to the Issuer’s
Current Report on Form 8-K filed on April 14, 2020, and incorporated by reference herein).
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6
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Securities Purchase
Agreement, dated as of April 3, 2020, among the Issuer, the Sponsor and the other parties thereto (filed as Exhibit 10.1 to
the Issuer’s Current Report on Form 8-K filed on April 14, 2020, and incorporated by reference herein).
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7
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Form of Convertible
Debenture (filed as Exhibit 10.5 to the Issuer’s Current Report on Form 8-K filed on April 14, 2020, and incorporated
by reference herein).
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8
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Form of Warrant
(filed as Exhibit 10.6 to the Issuer’s Current Report on Form 8-K filed on April 14, 2020, and incorporated by reference
herein).
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9
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Guaranty, dated
as of April 7, 2020, issued by the Issuer, Stratos Management Systems, Inc., Computex, Inc., First Byte Computers, Inc. and
eNETSolutions, LLC. (filed as Exhibit 10.7 to the Issuer’s Current Report on Form 8-K filed on April 14, 2020, and incorporated
by reference herein).
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10
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Joint Filing Agreement, dated as of April 17, 2020, among the Reporting Persons.*
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11
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Power of Attorney of the Sponsor (filed as Exhibit 24.1 to the Form 3 filed by the Sponsor on July 27, 2017 and incorporated by reference herein).
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12
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Power of Attorney of Darrell Mays (filed as Exhibit 24.1 to the Form 3 filed by Mr. Mays on July 27, 2017 and incorporated by reference herein).
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*
Filed herewith.
CUSIP
No. 030382105
|
SCHEDULE
13D
|
Page
7 of 7 Pages
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SIGNATURES
After
reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information
set forth in this statement is true, complete and correct.
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Date: April
17, 2020
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PENSARE
SPONSOR, LLC
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By:
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/s/ Darrell J. Mays*
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Name:
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Darrell J. Mays
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Title:
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Managing Member
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/s/
Darrell J. Mays*
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Name:
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Darrell J. Mays
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*By:
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/s/
Alan I. Annex
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Name:
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Alan I. Annex
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Attorney-in-Fact
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