Item 1.01. Entry into a Material Definitive Agreement.
Business Combination Agreement
On
The Avalon Merger
Following the Initial Recapitalization, Contribution and Conversion (each of
which is further described below), on the Closing, Avalon and Merger Sub I will
cause the Avalon Merger to be consummated by filing the Avalon Certificate of
Merger with the Secretary of State of the
At the Avalon Merger Effective Time, Merger Sub I and Avalon will consummate the
Avalon Merger, pursuant to which Merger Sub I will be merged with and into
Avalon, following which the separate corporate existence of Merger Sub I will
cease and Avalon will continue as the
Business Combination Consideration
At the Avalon Merger Effective Time, the following transactions are expected to occur:
· Every issued and outstanding Avalon Unit outstanding immediately prior to the
Avalon Merger Effective Time will be automatically detached into one share of Avalon Class A Common Stock and three-fourths of a share of one Avalon Warrant.
· Each share of Avalon Common Stock issued and outstanding immediately prior to
the Avalon Merger Effective Time (other than certain excluded shares, such as redeemed shares and shares held in treasury) that is not redeemed and each share of Avalon Common Stock included in the Avalon Units that is not redeemed will be converted into, and the holders of Avalon Common Stock will be entitled to receive for each share of Avalon Common Stock, one Company Class A Common Share and one share of Company Series A Preferred Stock; provided, thatAvalon Acquisition Holdings LLC (the "Sponsor") and other holders of the Avalon Class B Common Stock will not be entitled to receive any Company Series A Preferred Stock in respect of such shares of Avalon Class B Common Stock.
· Each outstanding Avalon Warrant, including all Avalon Warrants that were
included in the Avalon Units, will, automatically and irrevocably, be modified to provide that such Avalon Warrant will no longer entitle the holder thereof to purchase one share of Avalon Common Stock as set forth therein and in substitution thereof such Avalon Warrant will entitle the holder thereof to acquire one Company Class A Common Share, subject to adjustments as provided in the Warrant Agreement, and one share of Company Series A Preferred Stock; provided, that if a Private Placement Warrant is exercised before the Company Series A Preferred Stock Conversion Date, the holder of such Private Placement Warrant shall only receive Company Class A Common Shares and shall not receive any Company Series A Preferred Stock.
· Each issued and outstanding share of common stock of Merger Sub I will be
converted into and become one validly issued, fully paid and nonassessable share of Avalon Class A Common Stock, of theAvalon Merger Surviving Corporation . From and after the Avalon Merger Effective Time, all certificates representing the common stock of Merger Sub I will be deemed for all purposes to represent the number of shares of Class A Common Stock of theAvalon Merger Surviving Corporation into which they were converted in accordance with the immediately preceding sentence.
· No fractional Company Common Shares will be issued upon the surrender for
exchange of the Avalon Common Stock or Non-Sponsor Avalon Warrants and the number of Company Common Shares to be issued to each holder in respect of the Avalon Common Stock or Non-Sponsor Avalon Warrants will be rounded down to the nearest whole share.
Company Series A Preferred Stock
The Series A Preferred Stock shall be nonvoting and have a liquidation
preference equal to its par value of
Additional Terms of the Business Combination Agreement
Under Avalon's Amended and Restated Certificate of Incorporation, and in connection with obtaining the approval of the Avalon Merger by Avalon's stockholders, Avalon is required to provide an opportunity for its stockholders to redeem all or a portion of their outstanding shares of Avalon Class A Common Stock as set forth therein (the "Avalon Stockholder Redemption"), with the Avalon Stockholder Redemption to be effected no later than two business days prior to the special meeting of the holders of Avalon Common Stock.
The parties to the Business Combination Agreement have made customary
representations, warranties, and covenants in the Business Combination
Agreement, including, among others, covenants with respect to the conduct of
each of Avalon and BCG and its subsidiaries prior to the consummation of the
Avalon Merger and other Transactions (the "Closing") and a covenant providing
for Avalon and BCG to jointly prepare, agree upon, and file a registration
statement on Form S-4 (the "Registration Statement") with the
The consummation of the Transactions is subject to certain customary conditions,
including, among other things: (i) the expiration or termination of the waiting
period (or any extension thereof) applicable under the Hart-Scott Rodino
Antitrust Improvements Act of 1976, (ii) after giving effect to the Transactions
(including the Avalon Stockholder Redemption), Avalon shall have at least
Item 7.01. Regulation FD Disclosure.
On
A copy of the investor presentation relating to the Mergers and used for the Conference Call is attached hereto as Exhibit 99.4 and incorporated herein by reference.
The information in this Item 7.01, including Exhibits 99.3 and 99.4, is furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of Avalon under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information of the information in this Item 7.01, including Exhibits 99.3 and 99.4.
Additional Information and Where to Find It
In connection with the proposed Avalon Merger, BCG intends to file with the
Participants in the Solicitation
Avalon, and its respective directors and executive officers, and BCG, and its
general partner, other members of management and the members of the board of
directors of its general partner, and employees may be considered participants
in the solicitation of proxies with respect to the potential transaction
described in this communication under the rules of the
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the "safe harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally relate to
future events, including, without limitation, statements regarding the
anticipated timing and benefits of the Mergers, and Avalon's or BCG's future
financial or operating performance. In some cases, you can identify
forward-looking statements by terminology such as "may," "should," "expect,"
"intend," "will," "estimate," "anticipate," "believe," "predict," "potential,"
or "continue," or the negatives of these terms or variations of them or similar
terminology. In addition, these forward-looking statements include, without
limitation, statements regarding Avalon's and BCG's expectations with respect to
future performance and anticipated financial impacts of the Mergers, the
satisfaction of the closing conditions to the Mergers, and the timing of the
completion of the Mergers. Such forward-looking statements are subject to risks,
uncertainties (some of which are beyond the control of BCG and/or Avalon), and
other factors which could cause actual results to differ materially from those
expressed or implied by such forward-looking statements. These forward-looking
statements are based upon estimates and assumptions that, while considered
reasonable by Avalon and its management, and BCG and its general partner and
management, as the case may be, are inherently uncertain. Factors that may cause
actual results to differ materially from current expectations include, without
limitation: (1) the occurrence of any event, change, or other circumstances that
could give rise to the termination of the definitive agreements respecting the
Mergers; (2) the outcome of any legal proceedings that may be instituted against
Avalon, BCG, or others following the announcement of the Mergers; (3) the
inability to complete the Mergers due to the failure to obtain approval of the
stockholders of Avalon or the
No Offer or Solicitation
This Current Report on Form 8-K is not a proxy statement or solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the potential transaction and shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Exhibit 2.1* Business Combination Agreement, dated as ofSeptember 21, 2022 , by and amongAvalon Acquisition, Inc. ,The Beneficient Company Group, L.P. ,Beneficient Merger Sub I, Inc. , andBeneficient Merger Sub II, LLC . 10.1 Form of Amendment to Letter Agreement ofOctober 5, 2021 , dated as ofSeptember 21, 2022 , to be executed by and among the Company,Avalon Acquisition, Inc. and certain Sponsor Persons. 10.2 Founder Voting and Support Agreement, dated as ofSeptember 21, 2022 , by and amongThe Beneficient Company Group, L.P. , Avalon and certain holders named therein. 99.1 Sponsor Lock-Up Agreement, dated as ofSeptember 21, 2022 , by and betweenThe Beneficient Company Group, L.P. and Sponsor. 99.2 Sponsor Voting and Support Agreement, dated as ofSeptember 21, 2022 , by and betweenThe Beneficient Company Group, L.P. and Sponsor. 99.3 Press Release, datedSeptember 21, 2022 . 99.4 Investor Presentation. 104 Cover Page Interactive Data File.
* Certain of the exhibits and schedules to this Exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish
a copy of all omitted exhibits and schedules to the
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