SEC Form 8 filed

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 21, 2020

 

 

XL FLEET CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-38971		83-4109918
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

145 Newton Street Boston, MA		02135
(Address of principal executive offices)		(Zip Code)

(617) 718-0329

(Registrant’s telephone number, including area code)

Pivotal Investment Corporation II

c/o Graubard Miller

The Chrysler Building

405 Lexington Avenue, 11^th Floor

New York, New York 10174

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		XL		New York Stock Exchange
Redeemable Warrants, exercisable for shares of common stock at an exercise price of $11.50 per share		XL WS		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

INTRODUCTORY NOTE

Due to the large number of events reported under the specified items of Form 8-K, this Current Report on Form 8-K is being filed in two parts. An amendment to this Form 8-K is being submitted for filing on the same date to include additional matters under Items 5.03, 5.05, 5.07, and 9.01 of Form 8-K.

As previously announced, Pivotal Investment Corporation II (“Pivotal”), a Delaware corporation, previously entered into an Agreement and Plan of Reorganization, dated as of September 17, 2020 (the “Merger Agreement”), by and among Pivotal, PIC II Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of Pivotal (“Merger Sub”), and XL Hybrids, Inc., a Delaware corporation (“Legacy XL”).

On December 21, 2020 (the “Closing Date”), as contemplated by the Merger Agreement, Merger Sub merged with and into Legacy XL, with Legacy XL surviving as a wholly owned subsidiary of Pivotal (the “Business Combination”). On the Closing Date, each outstanding share of common stock of Legacy XL (including each share of Legacy XL’s common stock issued as a result of the conversion of Legacy XL’s preferred stock and any conversion or exchange of Legacy XL’s convertible promissory notes) was converted into the right to receive 0.75718950 shares (“Exchange Ratio”) of Pivotal’s common stock, par value $0.0001 per share. The Exchange Ratio was determined by dividing 100,000,000 (less 1,125,000 withheld for Legacy XL’s convertible debt that was redeemed in cash) by the fully-diluted number of shares of Legacy XL’s common stock outstanding immediately prior to the effective time of the Business Combination, including shares issuable or treated as issuable upon the conversion of Legacy XL’s preferred stock and the exercise, conversion or exchange of Legacy XL’s convertible promissory notes, options and warrants (as determined in accordance with the Merger Agreement and as more fully described in the Proxy Statement, as defined below).

In connection with the consummation of the Business Combination, each outstanding share of Pivotal’s Class B common stock, par value $0.0001 per share (“Pivotal Class B Common Stock”), was converted into one share of Pivotal Class A Common Stock. Each outstanding warrant of Pivotal entitles the holder to purchase shares of Pivotal Class A Common Stock at a price of $11.50 per share beginning 30 days after the Closing Date.

A description of the Business Combination and the terms of the Merger Agreement are included in the proxy statement/prospectus filed with the Securities and Exchange Commission (the “SEC”) on December 8, 2020 (the “Proxy Statement”) in the sections entitled “Business Combination Proposal” beginning on page 76 and “The Merger Agreement” beginning on page 99 of the Proxy Statement.

Immediately prior to the filing of the Certificate of Merger with the Delaware Secretary of State on the Closing Date, Pivotal filed its Second Amended and Restated Certificate of Incorporation (the “A&R Certificate”) with the Secretary of State of the State of Delaware, pursuant to which, among other things, Pivotal (i) changed its name to “XL Fleet Corp.”, (ii) increased the number of shares of Pivotal Class A Common Stock it is authorized to issue to 350,000,000 shares, (iii) removed the provisions for the Pivotal Class B Common Stock (all such shares of Pivotal Class B Common Stock converted into shares of Pivotal Class A Common Stock in connection with the Business Combination) so that the Pivotal Class B Common Stock ceased to exist and the Company now has a single class of common stock (such resulting stock, the “Common Stock”), and (iv) removed the various provisions applicable only to special purpose acquisition corporations. The material terms of the A&R Certificate and the general effect upon the rights of holders of the Company’s capital stock are set forth in the Proxy Statement in the section entitled “The Charter Proposals” beginning on page 123 of the Proxy Statement, which information is incorporated herein by reference. A copy of the A&R Certificate is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Additionally, in connection with the Business Combination, on September 17, 2020, Pivotal entered into subscription agreements (“Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to which such PIPE Investors purchased on the Closing Date an aggregate of 15,000,000 shares of Common Stock in a private placement (“PIPE”) at a price of $10.00 per share for gross proceeds to the Company of $150,000,000.

Each of the options to purchase Legacy XL’s common stock, whether or not exercisable and whether or not vested, and each of the warrants to purchase Legacy XL’s common stock, in each case that was outstanding immediately prior to the effective time of the Business Combination, were assumed by Pivotal on the Closing Date and converted into an option or warrant, as the case may be, to purchase a number of shares of Common Stock equal to the number of shares subject to such option or warrant immediately prior to the effective time multiplied by the Exchange Ratio, at an exercise price equal to the exercise price immediately prior to the effective time divided by the Exchange Ratio.

Holders of Legacy XL’s outstanding convertible promissory notes were entitled to elect conversion or repayment of the principal amount of such notes, with accrued interest to be converted into shares of Legacy XL common stock. Immediately prior to the consummation of the Business Combination, the holders of such notes elected to have Legacy XL pay in cash an aggregate principal amount of $11,250,000 of such notes within three business days of the Closing Date, and issued an aggregate of 2,266,158 shares of Legacy XL common stock upon conversion of the remaining outstanding principal amount and accrued interest, which shares were exchanged for Common Stock as described above.

The foregoing descriptions of the Business Combination and the PIPE do not purport to be complete and are qualified in their entirety by the full text of the Merger Agreement and the form of Subscription Agreements, respectively, which are attached hereto as Exhibits 2.1 and 10.4, respectively, and are incorporated herein by reference.

In connection with the consummation of the Business Combination, Pivotal changed its name to XL Fleet Corp. Unless the context otherwise requires, references in this Current Report on Form 8-K to “we,” “us,” “our” and the “Company” refer to XL Fleet Corp. and its subsidiaries following the Business Combination, and references to “Legacy XL” and “Pivotal” refer to XL Hybrids, Inc. and Pivotal Investment Corporation II and their subsidiaries, respectively, prior to the Business Combination.

Item 1.01 Entry into a Material Definitive Agreement.

Lock-Up Agreement

In connection with the consummation of the Business Combination, certain of Legacy XL’s stockholders and each initial stockholder of Pivotal entered into a Lock-Up Agreement dated September 17, 2020 (“Lock-Up Agreement”) with Pivotal which provides that the Common Stock issued to such holders in the Business Combination is subject to a 12-month lock-up period during which the holders have agreed, subject to certain restrictions, not to, directly or indirectly, sell, transfer or otherwise dispose of their shares to be issued in the Business Combination, which period may be earlier terminated if the reported closing sale price of the Common Stock equals or exceeds $15.00 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations or other similar transactions) for a period of 20 trading days during any 30-trading day period commencing at least 150 days following the consummation of the Business Combination, subject to certain exceptions.

Additionally, in connection with the Business Combination, the insider letter between such initial stockholders of Pivotal and Pivotal terminated pursuant to its terms, such that, in lieu of the transfer restrictions contained in the insider letter, the terms of the Lock-Up Agreement will govern.

The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by the full text of the Lock-Up Agreement, which is attached hereto as Exhibit 10.6 and is incorporated herein by reference.

Registration Rights Agreement

In connection with the consummation of the Business Combination and as contemplated by the Merger Agreement, certain stockholders of Legacy XL and certain stockholders of Pivotal, including the holders of the Pivotal Class B Common Stock (such Pivotal Class B Common Stock was converted on the Closing Date into Pivotal Class A Common Stock on a one-for-one basis and such Pivotal Class A Common Stock then became the Common Stock through the filing of the A&R Certificate immediately prior to the consummation of the Business Combination) entered into a Registration Rights Agreement with Pivotal dated September 17, 2020 (the “Registration Rights Agreement”). The material terms of the Registration Rights Agreement are described in the section of the Proxy Statement beginning on page 76 entitled “The Business Combination Proposal—Related Agreements—Registration Rights Agreement.”

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the full text of the Registration Rights Agreement, which is attached hereto as Exhibit 10.5 and is incorporated herein by reference.

Indemnification Agreements

On December 21, 2020, in connection with the consummation of the Business Combination, and as contemplated by the Merger Agreement, the Company entered into indemnification agreements with each of its directors and executive officers. These indemnification agreements require the Company to indemnify its directors and executive officers for certain expenses, including reasonable attorneys’ fees, judgments (including any pre and post-judgment interest) penalties, fines, liabilities, and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of the Company’s directors or executive officers or any other company or enterprise to which the person provides services at the Company’s request.

The foregoing description of the indemnification agreements is qualified in its entirety by the full text of the form of indemnification agreement, which is attached hereto as Exhibit 10.11 and is incorporated herein by reference.

Item 1.02 Termination of a Material Definitive Agreement.

Existing Registration Rights Agreement

In connection with the consummation of the Business Combination and as contemplated by the Merger Agreement, the Company and its officers and directors, and each holder of the shares of Pivotal Class B Common Stock agreed to terminate the existing registration rights agreement dated as of July 11, 2019 by and among Pivotal and the other parties named therein (the “Existing Registration Rights Agreement”) and to terminate their rights and obligations thereunder. Accordingly, upon entry into the Registration Rights Agreement the Existing Registration Rights Agreement was terminated.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference.

At an annual meeting of stockholders held on December 21, 2020 (the “Annual Meeting”), Pivotal’s stockholders approved the Business Combination. The Business Combination was completed on December 21, 2020.

As of the Closing Date and following the completion of the Business Combination, the Company had the following outstanding securities:

 

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approximately 129,996,978 shares of Common Stock;

 

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approximately 11,900,000 warrants, each exercisable beginning 30 days after the Closing Date for one share of Common Stock at a price of $11.50 per share (the “Warrants”);

 

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approximately 1,620,039 warrants, each exercisable for one share of Common Stock at a weighted average exercise price of $0.54 per share; and

 

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options to purchase an aggregate of 10,996,991 shares of Common Stock at a weighted average exercise price of $0.57 per share.

FORM 10 INFORMATION

Prior to the Closing Date, the Company was a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. On the Closing Date and after the consummation of the Business Combination, the Company became a holding company whose only assets consist of equity interests in Legacy XL.

Cautionary Note Regarding Forward-Looking Statements

The Company makes forward-looking statements in this Current Report on Form 8-K and in documents incorporated herein by reference. All statements, other than statements of present or historical fact included in or incorporated by reference in this Current Report on Form 8-K, regarding the Company’s future financial performance, as well as the Company’s strategy, future operations, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Current Report on Form 8-K, the words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,”

“will,” “would,” and the negative of such terms and other similar expressions, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations, assumptions, hopes, beliefs, intentions and strategies regarding future events and are based on currently available information as to the outcome and timing of future events. The Company cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company, incident to its business.

These forward-looking statements are based on information available as of the date of this Current Report on Form 8-K, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements in this Current Report on Form 8-K and in any document incorporated herein by reference should not be relied upon as representing the Company’s views as of any subsequent date, and the Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

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our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of the combined business to grow and manage growth profitably;

 

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our financial and business performance following the Business Combination, including financial projections and business metrics;

 

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our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;

 

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the implementation, market acceptance and success of our business model;

 

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our ability to scale in a cost-effective manner;

 

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developments and projections relating to our competition and industry;

 

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the impact of health epidemics, including the novel coronavirus (“COVID-19”) pandemic, on our business and the actions we may take in response thereto;

 

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our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others;

 

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our ability to obtain funding for our operations;

 

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our business, expansion plans and opportunities; and

 

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the outcome of any known and unknown litigation and regulatory proceedings.

These statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected or otherwise implied by the forward-looking statements, including the following:

 

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the outcome of any legal proceedings;

 

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our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of the combined business to grow and manage growth profitably;

 

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costs related to the Business Combination;

 

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our success in retaining or recruiting, or changes required in, officers, key employees or directors following the Business Combination;

 

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changes in applicable laws or regulations;

 

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our ability to execute our business model, including market acceptance of our planned products and services;

 

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that we have identified a material weakness in our internal control over financial reporting which, if not corrected, could affect the reliability of our consolidated financial statements;

 

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the possibility that the COVID-19 pandemic may adversely affect our results of operations, financial position and cash flows;

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

 

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other risks and uncertainties set forth in the Proxy Statement in the section entitled “Risk Factors” beginning on page 37 of the Proxy Statement, which is incorporated herein by reference.

Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Additional cautionary statements or discussions of risks and uncertainties that could affect our results or the achievement of the expectations described in forward-looking statements may also be contained in any accompanying prospectus supplement.

Business and Properties

The business and properties of Pivotal and Legacy XL prior to the Business Combination are described in the Proxy Statement in the sections entitled “Other Information Related to Pivotal” beginning on page 148 and “Business of XL” beginning on page 157 of the Proxy Statement, which are incorporated herein by reference.

Risk Factors

The risks associated with the Company’s business are described in the Proxy Statement in the section entitled “Risk Factors” beginning on page 37 of the Proxy Statement, which is incorporated herein by reference.

Selected Historical Financial Information

The selected historical consolidated financial information and other data for the nine months ended September 30, 2020 and the years ended December 31, 2018 and 2019 for Legacy XL is included in the Proxy Statement in the section entitled “Selected Historical Financial Information” beginning on page 30 of the Proxy Statement, which is incorporated herein by reference.

Unaudited Condensed Financial Statements

The unaudited condensed financial statements as of and for the nine months ended September 30, 2020 of Legacy XL have been prepared in accordance with U.S. generally accepted accounting principles and pursuant to the regulations of the SEC and are included in the Proxy Statement beginning on page F-34 of the Proxy Statement, which are incorporated herein by reference.

These unaudited condensed financial statements should be read in conjunction with the historical audited financial statements of Legacy XL as of and for the year ended December 31, 2019 and the related notes included in the Proxy Statement beginning on page F-48 of the Proxy Statement, which are incorporated herein by reference.

Unaudited Pro Forma Condensed Combined Financial Information

The unaudited pro forma condensed combined balance sheet as of September 30, 2020, and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2019 and the nine months ended September 30, 2020, are included in the Proxy Statement in the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 108 of the Proxy Statement, which is incorporated herein by reference.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of the financial condition and results of operation of the Company is included in the Proxy Statement in the section entitled “XL’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 170 of the Proxy Statement, which is incorporated herein by reference.

Directors and Executive Officers

Information with respect to the Company’s directors and executive officers after the Business Combination is set forth in the Proxy Statement in the sections entitled “The Director Election Proposal” beginning on page 125 and “Executive Compensation” beginning on page 136 of the Proxy Statement, which are incorporated herein by reference.

Directors

Effective as of the Closing Date, and in connection with the closing of the Business Combination, the size of the board of directors of the Company (the “Board”) was increased from four to nine members. Each of Efrat Epstein and Katrina Adams resigned as directors of Pivotal effective as of the Closing Date. Effective as of the Closing Date, Dimitri N. Kazarinoff, Thomas J. Hynes, III, Debora M. Frodl, Declan P. Flanagan, Kevin Griffin, Christopher Hayes, Jonathan J. Ledecky, Niharika Ramdev, and Sarah Sclarsic were appointed to serve as directors on the Board, with Ms. Frodl serving as chair of the Board.

Mses. Frodl and Sclarsic, and Mr. Flanagan were appointed to serve as Class A directors, with terms expiring at the Company’s 2021 annual meeting of stockholders; Ms. Ramdev, and Messrs. Griffin and Hayes were appointed to serve as Class B directors, with terms expiring at the Company’s 2022 annual meeting of stockholders; and Messrs. Ledecky, Hynes, III and Kazarinoff were appointed to serve as Class C directors, with terms expiring at the Company’s 2023 annual meeting of stockholders. Biographical information for these individuals is set forth in the Proxy Statement in the section entitled “The Director Election Proposal” beginning on page 125 of the Proxy Statement, which is incorporated herein by reference.

Independence of Directors

The Board has determined that each of the directors of the Company, other than Mr. Hynes, III and Mr. Kazarinoff, qualify as an independent director, as defined under the listing rules of the New York Stock Exchange (the “NYSE listing rules”), and that the Board consists of a majority of “independent directors,” as defined under the rules of the SEC and NYSE listing rules relating to director independence requirements.

Committees of the Board of Directors

Effective as of as of the Closing Date, the standing committees of the Board consist of an audit committee (the “Audit Committee”), a compensation committee (the “Compensation Committee”), and a nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”). Each of the committees reports to the Board.

Effective as of the Closing Date, the Board appointed Mses. Frodl, Ramdev and Sclarsic to serve on the Audit Committee, with Ms. Ramdev as chair of the Audit Committee. The Board appointed Ms. Ramdev, and Messrs. Flanagan and Hayes to serve on the Compensation Committee, with Mr. Hayes as chair of the Compensation Committee. The Board appointed Ms. Frodl, and Messrs. Flanagan and Hayes to serve on the Nominating and Corporate Governance Committee, with Mr. Flanagan as chair of the Nominating and Corporate Governance Committee.

Executive Officers

Effective as of the Closing Date, in connection with the Business Combination, the Board appointed Dimitri N. Kazarinoff to serve as Chief Executive Officer, Principal Financial Officer and Principal Accounting Officer, and Thomas J. Hynes, III to serve as President. Each of Jonathan J. Ledecky and James H.R. Brady resigned as the Chief Executive Officer and Chief Financial Officer, respectively, effective as of the Closing Date. Biographical information for the Company’s executive officers is set forth in the Proxy Statement in the section entitled “The Director Election Proposal” beginning on page 125 of the Proxy Statement, which is incorporated herein by reference.

Director Compensation

Information with respect to the compensation of the Company’s directors is set forth in the Proxy Statement in the sections entitled “Executive Compensation” beginning on page 136 of the Proxy Statement, which is incorporated herein by reference.

As of the date of this Current Report on Form 8-K, the compensation arrangements for the Board have not been determined. Any such arrangement will be reviewed and approved by the Compensation Committee of the Company and will be publicly disclosed by the Company when such arrangements are approved.

Executive Compensation

Information with respect to the compensation of the Company’s executive officers is set forth in the Proxy Statement in the sections entitled “Executive Compensation” beginning on page 136 of the Proxy Statement, which is incorporated herein by reference.

The foregoing description of the compensation of the Company’s executive officers is qualified in its entirety by the full text of the employment agreement of Mr. Kazarinoff, a copy of which is attached hereto as Exhibit 10.2, and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information known to the Company regarding the beneficial ownership of the Common Stock as of the Closing Date, after giving effect to the Business Combination, by:

 

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each person who is known by the Company to be the beneficial owner of more than 5% of the outstanding shares of the Common Stock;

 

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each current named executive officer and director of the Company; and

 

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all current executive officers and directors of the Company, as a group.

Beneficial ownership is determined according to the rules of the SEC, which generally provide th