FlexJet SPAC Presentation Deck
Risk Factors (Cont'd)
Risks Relating to Conflicts of Interest (Cont'd)
There are significant business relationships between Eldridge Persons and the Company or Management Persons, including the following:
Eldridge Persons have been significant providers of debt financing to the Company in the past, including secured financing of aircraft. The principal amount of such financing outstanding as of September 30, 2022 is approximately $640
million. Eldridge Persons in their capacities as such providers have the right to act in their own best interests and not in the best interests of New PubCo.
Eldridge Persons are significant commercial clients of the Company.
Mr. Ricci is a member of the board of managers of Stonebriar, which is an Eldridge Person.
Risks Relating to Control of the Company and New PubCo
Management Persons and Eldridge Persons (the "Specified Owners") will control New PubCo following the De-SPAC Transaction, and their interests may conflict with New PubCo's or yours in the future. They will be able to determine the composition of
New PubCo's board of directors and actions requiring stockholder approval, including a sale of New PubCo (including in an unsolicited transaction, which they will be able to block). In particular: Immediately following the closing of the De-SPAC
Transaction, the Specified Owners will control between approximately 59% (no redemptions) and 70% (maximum redemptions) of the voting power of the voting power of New PubCo's common stock based on the assumptions set forth above. This
means that, based on its percentage voting power controlled after the De-SPAC Transaction, Specified Owners will control the vote of all matters submitted to a vote of New PubCo's stockholders. This control will enable them to control the election of
the members of the New PubCo board of directors and all other corporate decisions.
Immediately following the closing of the De-SPAC Transaction, the Specified Owners will control between approximately 59% (no redemptions) and 70% (maximum redemptions) of the voting power of the voting power of New PubCo's
common stock based on the assumptions set forth above. This means that, based on its percentage voting power controlled after the De-SPAC Transaction, Specified Owners will control the vote of all matters submitted to a vote of New
PubCo's stockholders. This control will enable them to control the election of the members of the New PubCo board of directors and all other corporate decisions.
At the closing of the De-SPAC Transaction, Specified Owners will enter into a Stockholders' Agreement that will provide them with the right to nominate all seven of the members of the Company's board of directors, four of which will qualify as
"independent" directors. Four directors may be nominated by Management Persons and three by Eldridge Persons. The directors so nominated will therefore be all the members of the board of directors, assuming that the nominees are
elected by the Company's stockholders (of which the Specified Owners will then have a requisite majority for such election). Thereafter, the number of directors Specified Owners are entitled to nominate will be based on their respective
defined beneficial ownership percentages of the common stock, as follows:
Management Persons: Beneficial ownership of at least 17.5%-four nominees; at least 12.5% but less than 17.5%-three nominees; and at least 7.5% but less than 12.5%-two nominees; and at least 5.0%-one nominee.
Eldridge Persons: Beneficial ownership of at least 12.5%-three nominees; and at least 7.5% but less than 12.5%-two nominees; and at least 5.0%-one nominee.
Even if Specified Owners cease to control a majority of the total voting power, for so long as they continue to own a significant percentage of New PubCo's common stock, they will still be able to significantly influence the composition of New PubCo's
board of directors and actions requiring stockholder approval, including a sale of New PubCo (including in an unsolicited transaction), a change of control of New PubCo and the composition of the board of directors.
Concentration of ownership and control in the Specified Persons could deprive you of an opportunity to realize certain amounts with respect to your investment in New PubCo and could affect the market price of New PubCo's common stock.
Risks Relating to the Post De-SPAC Transaction Nature of New PubCo and its Common Stock
The benefits of the proposed De-SPAC Transaction may not be realized to the extent wished for by Horizon and the Company, or at all. The ability to recognize any such benefits may be affected by, among other things, the ability of the Company to grow
and manage growth profitably, maintain relationships with clients and suppliers and retain its management and key employees.
New PubCo will incur increased costs as a result of operating as a public company, and its management will be required to devote substantial time to compliance with public company responsibilities and corporate governance practices.
Even if the Specified Owners cease to own a majority of New PubCo's common stock, anti-takeover provisions in New PubCo's charter documents and under Delaware law could make an acquisition of the Company difficult, limit attempts by its
stockholders to replace or remove current management and adversely affect the market price of its common stock.
The price of New PubCo's common stock may be volatile and may decline. Unlike Horizon, New PubCo will have no trust account to provide downside protection to its investors.
New PubCo does not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of your investment and on your ability to sell it.
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