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Item 2.01
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Completion of Acquisition or Disposition of Assets.
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The disclosure set forth in the “Introductory
Note” above is incorporated into this Item 2.01 by reference. On December 21, 2020, Monocle held a special meeting
at which the Monocle stockholders considered and approved, among other matters, the Business Combination (the “Special
Meeting”). On December 22, 2020, the parties consummated the Business Combination.
In connection with the Special Meeting,
no shares of Monocle Common Stock sold in its initial public offering were redeemed. Prior to the consummation of the Business
Combination, in connection with the special meeting of stockholders of Monocle held on November 6, 2020, 16,153,589 shares
of Monocle Common Stock sold in its initial public offering were redeemed at a per share price of approximately $10.265.
As of the date of the Closing and following
the completion of the Business Combination, the Company had the following outstanding securities:
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·
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41,046,216 shares of Company Common Stock;
and
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·
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18,000,000 Company Warrants, each exercisable
for one share of Company Common Stock at a price of $11.50 per share.
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The issuance of the
Company Common Stock pursuant to the Business Combination was registered under the Securities Act of 1933, as amended (the “Securities
Act”), pursuant to Monocle Holding Inc.’s registration statement on Form S-4, as amended (File No. 333-235766)
(the “Registration Statement”) filed with the SEC and declared effective on October 16, 2020. The definitive
proxy statement/prospectus dated December 17, 2020 that forms a part of the Registration Statement contains additional information
about the Business Combination. In connection with the Business Combination, Monocle Holdings Inc. changed its legal name to AerSale
Corporation. Pursuant to Rule 12g-3(a) under the Exchange Act, the Company has become a successor registrant to Monocle Acquisition
Corporation under the Exchange Act and the Company Common Stock is deemed to be registered under Section 12(b) of the Exchange
Act. The Company Common Stock has been approved for listing on the Nasdaq Capital Market (“Nasdaq”) and began
trading under the symbol “ASLE” on December 23, 2020.
FORM 10 INFORMATION
Item 2.01(f) of Form 8-K states
that, if the predecessor registrant was a shell company, as Monocle was immediately before the Business Combination, then the registrant
must disclose the information that would be required if the registrant were filing a general form for registration of securities
on Form 10. Accordingly, the Company, as the successor issuer to Monocle, is providing the information below that would be
included in a Form 10 if the Company were to file a Form 10. Please note that the information provided below relates
to the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context
otherwise requires.
Forward-Looking Statements
This Form 8-K contains forward-looking
statements. Forward-looking statements include statements about the Company’s expectations, beliefs, plans, objectives, intentions,
assumptions and other statements that are not historical facts. Forward-looking statements in this Form 8-K include, but are
not limited to, statements about:
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·
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the benefits of the Business Combination;
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·
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the future financial performance of the
Company and its subsidiaries, including AerSale Aviation, following the Business Combination;
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·
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the impact of the COVID-19 pandemic on
the Company;
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·
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changes in the market for AerSale Aviation’s
services ;
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·
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expansion plans and opportunities;
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·
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the Company’s ability to raise financing
in the future;
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·
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the Company ability to maintain the listing
of Company Common Stock on Nasdaq following the Business Combination;
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·
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other factors detailed under the section
titled “Risk Factors” of the Company’s Prospectus, dated October 16, 2020, as amended by Prospectus
Supplement No. 1, dated October 19, 2020, Prospectus Supplement No. 2, dated December 1, 2020, Prospectus Supplement
No. 3, dated December 11, 2020, and Prospectus Supplement No. 4, dated December 17, 2020 (as amended, the “Prospectus”),
and incorporated herein by reference; and
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·
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other statements preceded by, followed
by or that include the words “may,” “can,” “should,” “will,” “estimate,”
“plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,”
“believe,” “seek,” “target” or similar expressions.
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Forward-looking statements are based on
information available as of the date of this Form 8-K, and current expectations, forecasts and assumptions, and involve a
number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views
as of any subsequent date, and we do 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.
In addition, statements that the Company
“believes” and similar statements reflect its beliefs and opinions on the relevant subject. These statements are based
upon information available as of the date of this Form 8-K, and while the Company believes such information forms a reasonable
basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that
the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements
are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should not place undue reliance on
these forward-looking statements. 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.
Business
The business of the Company is described
in the Prospectus in the section titled “Information About AerSale” and that information is incorporated herein
by reference.
Risk Factors
The risks associated with the Company’s
business are described in the Prospectus in the section titled “Risk Factors” and are incorporated herein by
reference.
Financial Information
The information set forth in Item 9.01
of this Form 8-K concerning the financial information of the Company is incorporated herein by reference. The information
set forth in the Prospectus in the sections titled “Selected Historical Financial Information of Monocle,” “Selected
Historical Consolidated Financial Information of AerSale,” “Selected Unaudited Pro Forma Condensed Combined
Financial Information,” “Monocle Management’s Discussion and Analysis of Financial Condition and Results
of Operations” and “AerSale Management’s Discussion and Analysis of Financial Condition and Results of
Operations” is incorporated herein by reference.
Unaudited Pro Forma Condensed Financial Information
The information set forth in Exhibit 99.4
to this Form 8-K is incorporated herein by reference.
Management’s Discussion and Analysis of Financial
Condition and Operations
The information set forth in the Prospectus
in the sections entitled “Monocle Management’s Discussion and Analysis of Financial Condition and Results of Operations”
is incorporated herein by reference.
Properties
The properties of the Company are described
in the Prospectus in the section titled “Information about AerSale — Facilities,” which is incorporated
herein by reference.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information
regarding the beneficial ownership of the Company Common Stock as of the Closing by:
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·
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each person known by the Company to be
the beneficial owner of more than 5% of the Company Common Stock upon the Closing;
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·
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each of the Company’s officers and
directors; and
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·
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all executive officers and directors of
the Company as a group upon the Closing.
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Beneficial ownership is determined according
to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses
sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or
exercisable within 60 days.
The beneficial ownership percentages set
forth in the table below are generally based on 41,046,216 shares of Company Common Stock issued and outstanding as of December 22,
2020. To calculate a stockholder’s percentage of beneficial ownership of Company Common Stock, we must include in the numerator
and denominator those shares of Company Common Stock underlying Company Warrants that such stockholder is considered to beneficially
own. Shares of Company Common Stock underlying warrants held by other stockholders, however, are disregarded in this calculation.
Therefore, the denominator used in calculating beneficial ownership of each of the stockholders may be different.
The following table gives effect to the
shares of Company Common Stock issuable within 60 days of December 22, 2020, upon the exercise of all Company Warrants held
by the indicated stockholders. Unless otherwise indicated, the persons named in the table have sole voting and sole investment
control with respect to all shares beneficially owned. Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all shares of Company Common Stock beneficially owned by them.
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Beneficial Ownership
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Name and Address of Beneficial Owner(1)
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Number of
Shares
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Percentage
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Directors and Officers
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Nicolas Finazzo
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2,022,140
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(2)
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4.93
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%
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Robert B. Nichols
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2,022,140
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(3)
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4.93
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%
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Martin Garmendia
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4,730
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*
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Basil Barimo
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32,372
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*
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Craig Wright
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24,493
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*
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Iso Nezaj
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24,200
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*
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Gary Jones
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-
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*
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Eric J. Zahler
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1,992,219
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(4),(5)
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4.78
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%
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Sai S. Devabhaktuni
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1,992,219
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(4),(5)
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4.78
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%
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Richard J. Townsend
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1,992,219
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(4),(5)
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4.78
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%
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C. Robert Kehler
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15,000
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*
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Jonathan Seiffer
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26,050,506
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(6)
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63.47
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%
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Peter Nolan
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-
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(7)
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*
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Michael Kirton
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26,050,506
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(6)
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63.47
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%
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All
Directors and Officers as a Group (14 individuals)
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Greater than 5% Stockholders
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33,187,800
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77.24
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%
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Green Equity Investors V, L.P., Green Equity Investors Side V, L.P. and LGP Parts Coinvest LLC
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26,050,506
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(6)
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63.47
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%
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George P. Bauer Revocable Trust, dated 7/20/1990
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4,022,529
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(8)
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9.8
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%
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* Less
than 1%.
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1
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Unless otherwise noted, the business address of each of the following individuals is 121 Alhambra
Plaza, Suite 1700, Coral Gables, Florida 33134.
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2
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Represents shares of Company Common Stock held by Enarey, L.P. Nicolas Finazzo is the sole member
and manager of Enarey, LLC, the sole general partner of Enarey, L.P. Accordingly, all of the shares held by Enarey, L.P. may be
deemed to be beneficially held by Mr. Finazzo. Mr. Finazzo disclaims beneficial ownership of such securities.
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3
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Represents shares of Company Common Stock held by ThoughtValley L.P. Robert B. Nichols is the sole
member and manager of ThoughtValley, LLC, the sole general partner of ThoughtValley L.P. Accordingly, all of the shares held by
ThoughtValley L.P. may be deemed to be beneficially held by Mr. Nichols. Mr. Nichols disclaims beneficial ownership of
such securities.
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4
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Represents shares of Company Common Stock held by Monocle’s sponsor, Monocle Partners, LLC
(the “Sponsor”). Eric J. Zahler, Sai S. Devabhaktuni, and Richard J. Townsend are managers of the Sponsor. Accordingly,
all of the shares held by the Sponsor may be deemed to be beneficially held by Messrs. Zahler, Devabhaktuni, and Townsend.
Each of Messrs. Zahler, Devabhaktuni, and Townsend disclaims beneficial ownership of such securities. The address for Monocle
Partners, LLC is 750 Lexington Avenue, Suite 1501, New York, New York 10022.
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5
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The interests shown consist of 1,368,385 shares of Company Common Stock (including 656,250 shares
subject to vesting pursuant to the Amended and Restated Founder Shares Agreement, under which the Sponsor retained the right to
vote prior to vesting) and 623,834 shares of Company Common Stock issuable upon the exercise of 623,834 Company Warrants held by
the Sponsor with an exercise price of $11.50 per share. The Company Warrants are exercisable within 60 days.
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6
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Represents shares of Company Common Stock held by Green Equity Investors V, L.P. and Green Equity
Investors Side V, L.P. (collectively, the “Green Funds”) and LGP Parts Coinvest LLC (“Parts Coinvest”).
Voting and investment power with respect to the shares held by the Green Funds and Parts Coinvest is shared. Voting and investment
power may also be deemed to be shared with certain affiliated entities and investors of such persons. Messrs. Seiffer and
Kirton may be deemed to share voting and investment power with respect to such shares due to their positions or relationships with
affiliates of the Green Funds, and each disclaims beneficial ownership of such shares except to the extent of his pecuniary interest
therein. Each of the foregoing entities’ and individuals’ address is c/o Leonard Green & Partners, L.P., 11111
Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025.
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7
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The address for Mr. Nolan is c/o Nolan Capital, Inc., 58 11th Street, Hermosa Beach, CA 90254.
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8
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The interests shown consist of 2,125,000 shares of Company Common
Stock and 1,897,529 shares of Company Common Stock issuable upon the exercise of 2,103,690 Company Warrants held by the George
P. Bauer Revocable Trust, dated 7/20/1990 (the “Bauer Trust”), with an exercise price of $11.50 per share. The
Company Warrants are exercisable within 60 days. The Bauer Trust is the holder of a total of 3,800,000 Company Warrants, but has
exercised a provision under the Warrant Agreement pursuant to which the Bauer Trust does not have the right to exercise any Company
Warrants held by it to the extent that after giving effect to such exercise it would beneficially own more than 9.8% of the shares
of Common Stock outstanding immediately after giving effect to such exercise. The address for the George P. Bauer Revocable Trust,
dated 7/20/1990 is 499 Silvermine Rd, New Canaan, Ct 06840.
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Directors and Executive Officers
The Company’s directors and executive
officers after the Closing are described in the Prospectus in the section titled “Management After the Business Combination,”
and that information is incorporated herein by reference.
Director Independence
Nasdaq listing standards require that a
majority of the Company’s board of directors (the “Board”) be independent. An “independent director”
is defined generally as a person other than an officer or employee of the Company or its subsidiaries or any other individual having
a relationship that, in the opinion of the Board, would interfere with the director’s exercise of independent judgment in
carrying out the responsibilities of a director. The Board has affirmatively determined that Messrs. Zahler, Devabhaktuni,
Townsend, Seiffer, Kirton and Nolan, and Gen. Kehler, representing seven of the Company’s nine directors, qualify as independent
directors in accordance with the Nasdaq listing rules.
Committees of the Board of Directors
Upon the consummation of the Business Combination,
the Company established three committees of the Board and adopted charters for such committees: Audit Committee, Compensation Committee
and Nominating and Corporate Governance Committee. Messrs. Townsend, Kirton, and Devabhaktuni were appointed to serve on the
Company’s Audit Committee, with Mr. Townsend serving as the chair and qualifying as an audit committee financial expert,
as such term is defined in Item 407(d)(5) of Regulation S-K. Messrs. Seiffer and Zahler, and Gen. Kehler were appointed
to serve on the Company’s Compensation Committee, with Mr. Seiffer serving as the chair. Messrs. Seiffer, Nolan,
and Devabhaktuni were appointed to serve on the Company’s Nominating and Corporate Governance Committee, with Mr. Seiffer
serving as the chair. Each of the committee charters are available on the Company’s website at www.aersale.com.
Code of Business Conduct and Ethics
Upon consummation of the Business Combination,
the Company adopted a Code of Business Conduct and Ethics that applies to all the Company’s directors, officers and employees.
The Code of Business Conduct and Ethics covers areas such as conflicts of interest, insider trading and compliance with laws and
regulations. The Code of Business Conduct and Ethics is available on the Company’s website at www.aersale.com.
Executive Compensation
The executive
compensation of the Company’s executive officers is described in the Prospectus in the section titled “Executive
Compensation — AerSale”
and that information is incorporated herein by reference.
At the Special Meeting, the Monocle stockholders
approved the 2020 Equity Incentive Plan (the “Incentive Plan”). The description of the Incentive Plan is set
forth in the Prospectus in the section entitled “The Incentive Plan Proposal” and is incorporated herein by
reference. A copy of the full text of the Incentive Plan is filed as Exhibit 10.14 to this Form 8-K and is incorporated
herein by reference. Following the consummation of the Business Combination, the Company expects that the Board or the Compensation
Committee will make grants of awards under the Incentive Plan to eligible participants.
At the Special Meeting, the Monocle stockholders
also approved the 2020 Employee Stock Purchase Plan (the “Employee Purchase Plan”). The description of the Employee
Purchase Plan is set forth in the Prospectus in the section entitled “The Employee Purchase Plan Proposal” and
is incorporated herein by reference. A copy of the full text of the Employee Purchase Plan is filed as Exhibit 10.15 to this
Form 8-K and is incorporated herein by reference. Following the consummation of the Business Combination, the Company expects
that the Board or the Compensation Committee will make grants of rights to purchase shares under the Employee Purchase Plan to
eligible participants.
Certain Relationships and Related Transactions
Certain relationships and related party
transactions of the Company are described in the Prospectus in the section titled “Certain Relationships and Related Person
Transactions” and that information is incorporated herein by reference.
Legal Proceedings
The information regarding legal proceedings
described in the Prospectus in the section titled “Information about AerSale — Legal Proceedings”
and that information is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s
Common Equity and Related Stockholder Matters
The Company’s Common Stock
began trading on Nasdaq under the symbol “ASLE” and its warrants began trading on the Nasdaq under the symbol
“ASLEW” on December 23, 2020, subject to ongoing review of the Company’s satisfaction of all listing
criteria post-Business Combination. The Company has not paid any cash dividends on its Common Stock to date and does not
intend to pay any cash dividends in the foreseeable future.
Information regarding the Company’s
Common Stock, the Company Warrants and related stockholder matters are described in the Prospectus in the section titled “Price
Range and Dividends” and such information is incorporated herein by reference.
Recent Sales of Unregistered Securities
The description of the stock consideration
set forth in the “Introductory Note” above, the disclosure in Item 1.01 of this Form 8-K under the headings
“Amended and Restated Registration Rights Agreement” and “Lock-Up Agreement” and the disclosure
in Item 3.02 of this Form 8-K are incorporated herein by reference.
The issuances of the shares of Company
Common Stock issued to the AerSale Aviation Stockholders as stock consideration and to the Investors in the Private Placements
were not registered under the Securities Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the
Securities Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering without
any form of general solicitation or general advertising.
Description of the Company’s Securities
The description of the Company’s
securities is contained in the Prospectus in the section titled “Description of NewCo Securities” and is incorporated
herein by reference.
Indemnification of Directors and Officers
The description of the indemnification
provisions of the Company’s Amended and Restated Certificate of Incorporation is contained in the Prospectus in the section
titled “Description of NewCo Securities — Limitations of Liability
and Indemnification”, and is incorporated herein by reference.
Financial Statements and Supplementary Data
The information set forth under Item 9.01
of this Form 8-K concerning the financial statements and supplementary data of the Company and its subsidiaries is incorporated
herein by reference.
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
Not applicable.