Item 1.01 Entry Into A Material Definitive Agreement.
Merger Agreement
This section describes the material provisions of the Merger Agreement (as
defined below), but does not purport to describe all of the terms thereof. The
following summary is qualified in its entirety by reference to the complete text
of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1.
Shareholders of Americas Technology Acquisition Corp. and other interested
parties are urged to read the Merger Agreement in its entirety. Unless otherwise
defined herein, the capitalized terms used below have the meanings given to them
in the Merger Agreement.
General Terms and Effects; Merger Consideration
On June 1, 2022, Americas Technology Acquisition Corp., a Cayman Islands
exempted company (together with its successors, "ATAC" or the "Purchaser"),
entered into an Agreement and Plan of Merger (the "Merger Agreement") with Rally
Communitas Corp., a Delaware corporation ("Rally" or the "Company"), Americas
Technology Acquisition Holdings Inc., a Delaware corporation and a wholly-owned
subsidiary of ATAC ("Pubco"), Americas Technology Purchaser Merger Sub Inc., a
Delaware corporation and a wholly-owned subsidiary of Pubco (the "Purchaser
Merger Sub"), Americas Technology Company Merger Sub Inc., a Delaware
corporation and a wholly-owned subsidiary of Pubco (the "Company Merger Sub" and
together with Purchaser Merger Sub, the "Merger Subs"), Jorge E. Marcos, in the
capacity as the representative from and after the effective time of the Merger
(as defined below) (the "Effective Time") of the stockholders of Pubco (other
than the Rally Security Holders and their successors and assignees) (the
"Purchaser Representative"), and Numaan Akram, in the capacity as the
representative of the Rally Security Holders from and after the Effective Time
(the "Seller Representative").
Pursuant to the Merger Agreement, subject to the terms and conditions set forth
therein, (i) prior to the Effective Time, ATAC will continue out of the Cayman
Islands and into the State of Delaware to re-domicile and become a Delaware
corporation (the "Domestication"), (ii) following the Domestication, Purchaser
Merger Sub will merge with and into ATAC, with ATAC continuing as the surviving
entity (the "Purchaser Merger"), in connection with which all of the existing
securities of ATAC will be exchanged for rights to receive securities of Pubco
as follows: (a) each share of common stock of ATAC outstanding immediately prior
to the Effective Time shall automatically be converted into the right to receive
(A) one share of Pubco common stock and (B) one contingent value right ("CVR")
with rights and terms substantially similar to these set forth in the form of
Contingent Value Rights Agreement attached as an exhibit to the Merger Agreement
(in such form or forms, when executed, the "CVR Agreement") and further
described below, except that each share of common stock of ATAC held by ATAC
Limited Partnership, a Delaware limited partnership ("Sponsor") shall
automatically convert solely into one share of Pubco common stock; and (b) each
warrant to purchase shares of ATAC shall automatically convert into a warrant to
purchase shares of Pubco common stock with substantially the same terms and
conditions; (iii) prior to the Effective Time, the holders of Rally preferred
stock and instruments convertible into equity of Rally (the "Rally Convertible
Instruments") shall either exchange or convert all of their issued and
outstanding shares of Rally preferred stock or Rally Convertible Instruments, as
the case may be, for shares of Rally common stock in accordance with their terms
and the terms of the Merger Agreement (the "Company Exchanges"); (iv) following
the Company Exchanges, Company Merger Sub will merge with and into Rally, with
Rally continuing as the surviving entity (the "Company Merger", and together
with the Purchaser Merger, the "Mergers"), pursuant to which (a) all shares of
Rally common stock issued and outstanding immediately prior to the Effective
Time (after giving effect to the Company Exchanges) will be converted into the
right to receive the applicable portion of the Merger Consideration (as defined
below), and (b) all options exercisable for Rally common stock shall be assumed
by Pubco (with equitable adjustments to the number and exercise price of such
assumed options) and replaced with options exercisable for shares of Pubco
common stock. As a result of the Mergers, ATAC and Rally will become
wholly-owned subsidiaries of Pubco and Pubco will become a publicly traded
company.
The aggregate merger consideration to be paid pursuant to the Merger Agreement
to holders of Rally securities outstanding as of immediately prior to the
Effective Time (the "Rally Security Holders") will be an amount equal to
$165,000,000, subject to adjustments for Rally's closing debt and accrued but
unpaid expenses of Rally related to the transactions contemplated by the Merger
Agreement (the "Merger Consideration"). The portion of the Merger Consideration
payable to the holders of outstanding Rally shares (the "Rally Stockholders")
will be allocated among the Rally Stockholders pro rata based on the number of
shares of Rally common stock owned by such Rally Stockholder immediately prior
to the Effective Time.
1
2,250,000 shares of Pubco common stock otherwise issuable to Rally Stockholders
at the Closing as Merger Consideration shall be held back and deposited into an
escrow account ("Escrow Account"), subject to release upon the occurrence of
certain events on or about the eighteen (18)-month anniversary of the Closing
(the "Settlement Date"), in accordance with the terms of the CVR Agreements,
either to holders of CVRs as of the Settlement Date (which may include former
holders of ATAC ordinary shares that did not redeem at the Closing and Support
Subscription Investors (defined below)), or, alternatively, to the Rally
Stockholders or to the Sponsor, as applicable. In addition to the portion of the
Merger Consideration deposited into the Escrow Account, 750,000 Purchaser shares
held by the Sponsor prior to the Effective Time (or an equivalent number of
Pubco shares) will be contributed to the Escrow Account at Closing, such that
the total number of shares of Pubco common stock contained in the Escrow Account
(the "Escrow Shares") and available for contingent distribution to holders of
CVRs (or others, as applicable) at the Settlement Date, is 3,000,000 shares, to
satisfy obligations to the holders of the CVRs after the Closing.
In addition to the Merger Consideration, Rally Stockholders shall have the
contingent right to receive additional shares of Pubco common stock as earnout
consideration after the Closing (the "Earnout Consideration") after the Closing
as follows: (A) (i) 1,500,000 additional shares of Pubco common stock upon the
achievement of a share price target of $17.00 during the period of six (6)
months after the Closing until the third (3rd) anniversary of the Closing and
(ii) 1,500,000 additional shares of Pubco common stock upon the achievement of a
share price target of $20.00 during the period of six (6) months after the
Closing until the third (3rd) anniversary of the Closing (together, the "VWAP
. . .
Item 7.01 Regulation FD Disclosure
Attached as Exhibit 99.1 and 99.2 to this Current Report on Form 8-K and
incorporated into this Item 7.01 by reference are an investor presentation (the
"Investor Presentation") that will be used by ATAC in connection with the
transactions contemplated by the Merger Agreement described above and a
transcript of management commentary on the Investor Presentation.
Exhibits 99.1 and 99.2 are intended to be 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 the liabilities of that
section, nor shall they be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, except as expressly
set forth by specific reference in such filing.
Item 8.01 Other Events
On June 7, 2022, ATAC and Rally issued a joint press release announcing the
release of the Investor Presentation via webcast. A copy of the press release is
furnished as exhibit 99.3 to this Current Report on Form 8-K.
7
Forward-Looking Statements
This report contains, and certain oral statements made by representatives of
ATAC and Rally and their respective affiliates, from time to time may contain,
"forward-looking statements" within the meaning of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995. ATAC's and Rally'
actual results may differ from their expectations, estimates and projections and
consequently, you should not rely on these forward-looking statements as
predictions of future events. Words such as "expect," "estimate," "project,"
"budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could,"
"should," "believes," "predicts," "potential," "might" and "continues," and
similar expressions are intended to identify such forward-looking statements.
These forward-looking statements include, without limitation, statements
regarding Rally's industry and market sizes, financial condition and performance
of Pubco, including the anticipated benefits, the implied enterprise value, the
expected financial impacts of the Transaction, the satisfaction of closing
conditions to the Transaction, potential level of redemptions of ATAC's public
shareholders, the financial condition, liquidity, results of operations, the
products, the expected future performance and market opportunities of Pubco, the
expected Transaction and ownership structure and the likelihood, timing and
ability of the parties to successfully consummate the proposed Transaction. Such
forward-looking statements are based upon the current beliefs and expectations
of the management and are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are difficult to
predict and generally beyond the management's control. Actual results and the
timing of events may differ materially from the results anticipated in these
forward-looking statements These forward-looking statements involve significant
risks and uncertainties that could cause actual results to differ materially
from expected results. Most of these factors are outside the control of ATAC and
are difficult to predict. In addition to factors previously disclosed in ATAC's
reports filed with the Securities and Exchange Commission (the "SEC") and those
identified elsewhere in this communication, the following factors, among others,
could cause actual results and the timing of events to differ materially from
the anticipated results or other expectations expressed in the forward-looking
statements: the risk that the Transaction may not be completed in a timely
manner or at all, which may adversely affect the price of the securities of
Pubco; the risk that the transaction may not be completed by ATAC's business
combination deadline and the potential failure to obtain an extension of the
business combination deadline if sought by ATAC; inability to meet the closing
conditions to the Transaction, including the occurrence of any event, change,
legal proceedings instituted against Rally or against ATAC related to the Merger
Agreement or the management team, or other circumstances that could give rise to
the termination of the Merger Agreement; the inability to complete the
Transaction contemplated by the Merger Agreement due to the failure to obtain
approval of ATAC's shareholders and the receipt of certain governmental and
regulatory approvals; changes in Pubco's capital structure; redemptions
exceeding a maximum threshold or the failure to maintain the listing of ATAC's
securities or failure of Pubco to meet The New York Stock Exchange's initial
listing standards in connection with the consummation of the contemplated
Transaction; costs related to the Transaction contemplated by Merger Agreement
and the failure to realize anticipated benefits of the Transaction or to realize
estimated pro forma results and underlying assumptions, including with respect
to estimated shareholder redemptions; a delay or failure to realize the expected
benefits from the proposed Transaction including Rally's ability to effectively
develop and successfully market new products, solutions and services, and to
effectively address cost reductions and other changes in its industry; risks
related to disruption of management's time from ongoing business operations due
to the proposed Transaction; changes in the middle mile mobility markets in
which Rally competes, including with respect to its competitive landscape,
technology evolution or the impact of regulatory changes on solutions, services,
labor matters, international economic, political, legal, compliance and business
factors; developments and uncertainties in domestic and foreign trade policies
and regulations, and other regulations which may cause contractions or affect
growth rates and cyclicality of markets Rally serve; disruptions relating to
war, terrorism, widespread protests and civil unrest, man-made and natural
disasters, public health issues and other events; changes in domestic and global
general economic conditions; risk that Rally may not be able to execute its
growth strategies; security breaches or other disruptions of Rally information
technology systems or violations of data privacy laws; Rally's inability to
adequately protect its intellectual property; risks related to the ongoing
COVID-19 pandemic and response, including new variants of the virus; the pace of
recovery in the markets in which Rally operates; global supply chain disruptions
and potential staffing shortages at potential customers which may have a
trickle-down effect on Rally; the risk that Rally may not be able to develop and
maintain effective internal controls; changes in interest rates; increased
competition and the ability to generate sufficient cash to fulfill obligations;
loss of certain key officers; loss of continued relationships with customers or
bus operators; and Pubco's success at managing the foregoing items. The
forward-looking statements are based upon management's beliefs and assumptions;
and other risks and uncertainties to be identified in the registration/proxy
statement (when available) relating to the Transaction, including those under
"Risk Factors" therein, and in other filings with the SEC made by ATAC or Pubco.
You should carefully consider the foregoing factors and the other risks and
uncertainties described in the "Risk Factors" section of the registration
statement on Form S-4 discussed above and other documents filed by ATAC and
Pubco from time to time with the SEC. Rally and ATAC caution that the foregoing
list of factors is not exclusive. These forward-looking statements are provided
for illustrative purposes only, and must not be relied on by any investor as, a
guarantee, an assurance, a prediction or a definitive statement of fact or
probability. None of ATAC or Rally undertakes or accepts any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements to reflect any change in its expectations or any change in events,
conditions or circumstances on which any such statement is based, subject to
applicable law. Actual results, performance or achievements may differ
materially, and potentially adversely, from any projections and forward-looking
statements and the assumptions on which those forward-looking statements are
based. There can be no assurance that the data contained herein is reflective of
future performance to any degree. You are cautioned not to place undue reliance
on forward-looking statements as a predictor of future performance as projected
financial information and other information are based on estimates and
assumptions that are inherently subject to various significant risks,
uncertainties and other factors, many of which are beyond the management's
control. All information set forth herein speaks only as of the date hereof in
the case of information about ATAC and Rally or the date of such information in
the case of information from persons other than ATAC or Rally, and except to the
extent required by applicable law, we disclaim any intention or obligation to
update or revise any forward-looking statements as a result of new information,
future events and developments or otherwise occurring after the date of this
communication. Forecasts and estimates regarding Rally's industry and markets
are based on sources we believe to be reliable, however there can be no
assurance these forecasts and estimates will prove accurate in whole or in part.
Annualized, pro forma, projected and estimated numbers are used for illustrative
purpose only, are not forecasts and may not reflect actual results. Neither ATAC
nor Rally gives any assurance that either of them or the combined company will
meet its expectations.
8
Important Information About the Transactions and Where to Find It
ATAC and Pubco will file relevant materials with the SEC, which are expected to
include a registration statement on Form S-4 which will include a prospectus
with respect to the Pubco securities to be issued in connection with the
proposed Transaction and a proxy statement of ATAC with respect to ATAC's
shareholder meeting at which ATAC's shareholders will be asked to vote on the
proposed Transaction and related matters. ATAC'S SHAREHOLDERS AND OTHER
INTERESTED PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, THE S-4 AND THE
AMENDMENTS THERETO AND OTHER INFORMATION FILED WITH THE SEC IN CONNECTION WITH
THE TRANSACTION, AS THESE MATERIALS WILL CONTAIN IMPORTANT INFORMATION ABOUT
ATAC, PUBCO, RALLY AND THE TRANSACTION. When available, the Proxy Statement
contained in the S-4 and other relevant materials for the Transaction will be
mailed to shareholders of ATAC as of a record date to be established for voting
on the proposed merger and related matters. The preliminary S-4 and Proxy
Statement, the final S-4 and definitive Proxy Statement and other relevant
materials in connection with the Transaction (when they become available), and
any other documents filed by ATAC with the SEC, may be obtained free of charge
at the SEC's website (www.sec.gov) or by writing to ATAC at 16500 Dallas Pkwy,
#305, Dallas, TX 75248. Information filed with the SEC is also available on the
SEC's website at www.sec.gov.
Participants in the Solicitation
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
2.1* Agreement and Plan of Merger, dated as of June 1, 2022, by and among
Americas Technology Acquisition Corp., Rally Communitas Corp., Americas
Technology Acquisition Holdings Inc., Americas Technology Purchaser
Merger Sub Inc., Americas Technology Company Merger Sub Inc., Jorge E.
Marcos, in the capacity as the Purchaser Representative thereunder, and
Numaan Akram, in the capacity as the Seller Representative thereunder.
10.1 Form of Voting Agreement, dated as of June 1, 2022, by and among
Americas Technology Acquisition Corp., Rally Communitas Corp., and the
Rally Security Holder party thereto.
10.2 Form of Lock-Up Agreement, dated as of June 1, 2022, by and between
Americas Technology Acquisition Holdings Inc., Jorge E. Marcos, in the
capacity as the Purchaser Representative and the shareholder of Rally
party thereto.
10.3 Form of CVR Agreement, effective as of [], 2022, by and among Americas
Technology Acquisition Holdings Inc., Jorge E. Marcos, in the capacity
as the Purchaser Representative, Numaan Akram, in the capacity as the
Seller Representative, ATAC Limited Partnership, and Continental Stock
Transfer & Trust Company, as rights agent.
99.1 Investor Presentation, dated June 7, 2022.
99.2 Transcript of Management Commentary to Investor Presentation.
99.3 Press Release, dated June 7, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* The exhibits and schedules to this Exhibit have been omitted in accordance with
Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish
supplementally to the SEC a copy of all omitted exhibits and schedules upon its
request.
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