CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
The
information discussed in this prospectus includes “forward-looking statements” within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
All statements, other than statements of present or historical fact, included in this prospectus regarding our 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 prospectus, including any oral statements made in connection therewith, the
words “could,” “should,” “will,” “may,” “believe,” “anticipate,”
“intend,” “estimate,” “expect,” “project,” 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 and assumptions about
future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise
required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified
by the statements in this section, to reflect events or circumstances after the date of this prospectus. We caution 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 our control, incident to the development, production, gathering and sale of oil, natural gas and natural gas
liquids.
In
addition, we caution you that the forward-looking statements regarding our business, which are contained in this prospectus, are
subject to the following factors:
|
●
|
our
ability to execute our business strategies;
|
|
●
|
the
volatility of realized oil and natural gas prices;
|
|
●
|
the
level of production on our properties;
|
|
●
|
regional
supply and demand factors, delays or interruptions of production;
|
|
●
|
our
ability to replace our oil and natural gas reserves;
|
|
●
|
our
ability to identify, complete and integrate acquisitions of properties or businesses,
including our recent and pending acquisitions;
|
|
●
|
general
economic, business or industry conditions;
|
|
●
|
competition
in the oil and natural gas industry;
|
|
●
|
the
ability of our operators to obtain capital or financing needed for development and exploration
operations;
|
|
●
|
title
defects in the properties in which we invest;
|
|
●
|
uncertainties
with respect to identified drilling locations and estimates of reserves;
|
|
●
|
the
availability or cost of rigs, equipment, raw materials, supplies, oilfield services or
personnel;
|
|
●
|
the
availability of transportation facilities;
|
|
●
|
the
ability of our operators to comply with applicable governmental laws and regulations
and to obtain permits and governmental approvals; and
|
|
●
|
future
operating results.
|
For
additional information regarding known material factors that could affect our operating results and performance, please read the
section entitled “Risk Factors” in this prospectus, in our proxy statement filed with the SEC on August 3, 2018 and
in any applicable prospectus supplement, as well as all risk factors described in the documents incorporated by reference herein.
Should one or more of the risks or uncertainties described in this prospectus made in connection therewith occur, or should underlying
assumptions prove incorrect, actual results and plans could different materially from those expressed in any forward-looking statements.
Reserve
engineering is a process of estimating underground accumulations of oil, natural gas and natural gas liquids (“NGLs”)
that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation
of such data and the price and cost assumptions made by reserve engineers. In addition, the results of drilling, completion and
production activities may justify revisions of estimates that were made previously. If significant, such revisions would change
the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from
the quantities of oil, natural gas and NGLs that are ultimately recovered.
INFORMATION
ABOUT THE COMPANY
Our
Company
We
were originally formed on June 13, 2016 as a Delaware corporation for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On August 23, 2018,
we consummated the acquisition of the equity interests in certain of the subsidiaries of Royal Resources L.P. (the “Business
Combination”) pursuant to the Contribution Agreement for an aggregate consideration of approximately $800 million, consisting
of $400 million of cash and 40 million Common Units (and a corresponding number of shares of Class C common stock).
In
connection with the Business Combination, we issued and sold 11,480,000 shares of Class A common stock in the PIPE Investment
to certain qualified institutional buyers and accredited investors (the “PIPE Investors”) for gross proceeds of $114,800,000.
The proceeds of the PIPE Investment were used to fund a portion of the cash consideration required to effect the Business Combination.
Following
the Business Combination, we changed our name from “Osprey Energy Acquisition Corp.” to “Falcon Minerals Corporation”
and continued the listing of our Class A common stock and our warrants on the NASDAQ under the symbols “FLMN”
and “FLMNW,” respectively. Prior to the consummation of the Business Combination, our Class A common stock, warrants
and units were listed on the NASDAQ under the symbols “OSPR,” “OSPRW” and “OSPRU,” respectively.
Business
Overview
We
are an oil and gas minerals company that owns and seeks to acquire royalty interests, mineral interests, non-participating royalty
interests and overriding royalty interests (“Royalties”) in high-growth, top-tier, unconventional, oil-weighted basins
in North America. Our primary business objective is to provide strong total stockholder returns through growing our intrinsic
value and increasing cash dividends to stockholders over time. We expect our free cash flow to increase as a result of organic
development on our properties in what we believe is the “core-of-the-core” Eagle Ford Shale. Also, we intend to grow
intrinsic value and free cash flow per share by making accretive acquisitions from third parties while maintaining financial flexibility
and a strong balance sheet. We intend to target acquisitions in highly economic basins with oil-weighted producing assets and
substantial upside potential from undeveloped resources. We are led by an experienced management team in partnership with Blackstone
Management Partners, L.L.C. (“Blackstone”), both of whom have highly successful, multi-year track records of building
energy companies organically and through acquisitions.
Company
Information
Our
principal executive offices are located at 1845 Walnut Street, 10
th
Floor, Philadelphia, Pennsylvania 19103 and our
telephone number is (215) 832-4161. Our website is www.falconminerals.com. The information found on our website is not part of
this prospectus.
THE
OFFERING
We
are registering (i) shares of Class A common stock, shares of preferred stock and New Warrants from time to time in such
amounts as shall result in an aggregate offering price not to exceed $400,000,000, (ii) up to 7,500,000 shares of Class A common
stock upon the exercise of the Private Placement Warrants and (iii) up to 13,750,000 shares of Class A common stock
upon the exercise the Public Warrants. We are also registering the resale by the selling security holders named in this prospectus
or their permitted transferees of up to 7,500,000 Private Placement Warrants and up to 78,355,000 shares of Class A common
stock. Our Class A common stock and warrants are currently listed on NASDAQ under the symbol “FLMN” and “FLMNW,”
respectively. Any investment in the securities offered hereby is speculative and involves a high degree of risk. You should carefully
consider the information set forth under “Risk Factors” on page 6 of this prospectus.
Issuance
of Class A common stock, preferred stock and New Warrants
We
may offer and sell shares of Class A common stock, shares of preferred stock and New Warrants from time to time in amounts, at
prices and on terms to be determined by market conditions and other factors at the time of the offering, such that the maximum
aggregate offering price does not exceed $400,000,000. Unless we inform you otherwise in a prospectus supplement or free writing
prospectus, we intend to use the net proceeds of such offerings for general corporate purposes. Please read “Use of Proceeds.”
As of August 23, 2018, we had 45,855,000 shares of Class A common stock, 40,000,000 shares of Class C common stock
and 21,250,000 Existing Warrants outstanding. The number of shares of Class A common stock does not include the 8,600,000 shares
of Class A common stock available for future issuances under the Falcon Minerals 2018 Long-Term Incentive Plan.
Issuance
of Class A Common Stock Underlying the Existing Warrants
Shares
of Class A common stock to be issued
upon exercise of all Existing Warrants
|
|
21,250,000
shares of Class A common stock.
|
|
|
|
Shares
of Class A common stock outstanding prior to exercise of all Existing Warrants(1)
|
|
45,855,000
shares of Class A common stock.
|
|
|
|
Shares
of Class A common stock outstanding assuming exercise of all Existing Warrants(1)(2)
|
|
67,105,000
shares of Class A common stock.
|
|
|
|
Terms
of the Existing Warrants
|
|
Each
Existing Warrant entitles the holder to purchase one share of Class A common stock for $11.50 per share. The Existing
Warrants expire at 5:00 p.m., New York time, on August 23, 2023 (which is five years after the consummation of the Business
Combination), or earlier upon redemption or liquidation.
|
|
|
|
Use
of proceeds
|
|
We
will receive up to an aggregate of approximately $244.38 million from the exercise of Warrants, assuming the exercise in full
of all the Existing Warrants for cash. Unless we inform you otherwise in a prospectus supplement or free writing prospectus,
we intend to use the net proceeds from the exercise of the Existing Warrants for general corporate purposes.
|
Resale
of Private Placement Warrants and Class A Common Stock by Selling Security Holders
Private
Placement Warrants offered by the selling security holders
|
|
We
are registering 7,500,000 Private Placement Warrants to be offered by the selling security holders named herein. Each Private
Placement Warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share,
subject to adjustment. The Private Placement Warrants will expire on August 23, 2023 (which is five years after the completion
of the Business Combination) or earlier upon redemption or liquidation.
|
|
|
|
Class A
common stock offered by the selling security holders
|
|
We
are registering 78,355,000 shares of Class A common stock, which includes (i) 6,875,000 shares of Class A common
stock that were issued upon the automatic conversion of all shares of Class B common stock upon the consummation of the
Business Combination, (ii) 11,480,000 shares of Class A common stock that have been sold in the PIPE Investment,
(iii) 40,000,000 shares of Class A common stock that may be issuable upon the redemption of an equal number of Common
Units together with a corresponding number of shares of Class C common stock and (iv) up to 20,000,000 shares of shares of
Class A common stock that that may be issued from time to time upon redemption or exchange of an equal number of Common Units
together with a corresponding number of shares of Class C common stock, if earn-out consideration is issued pursuant to the
Contribution Agreement.
|
|
|
|
Terms
of the offering
|
|
The
selling security holders will determine when and how they will dispose of the securities registered under this prospectus
for resale.
|
|
|
|
Use
of proceeds
|
|
We
will not receive any proceeds from the sale of securities to be offered by the selling security holders.
|
|
|
|
Trading
market and ticker symbol
|
|
Our
Class A common stock and warrants are currently listed on NASDAQ under the symbol “FLMN” and “FLMNW,”
respectively.
|
(1)
|
The number of shares of Class A common stock does
not include the 8,600,000 shares of Class A common stock available for future issuance under the Falcon Minerals 2018 Long-Term
Incentive Plan.
|
|
|
(2)
|
The number of shares of Class A common stock assumes
the holders of all our Existing Warrants exercise all of their Existing Warrants for cash at the $11.50 exercise price per share.
|
For additional information concerning the offering, see “Plan of Distribution” beginning on page 18.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Before you invest in our securities, you should carefully consider
those risk factors described under the heading “Risk Factors” in our definitive proxy statement filed with the SEC
on August 3, 2018 (our “Proxy Statement”), as well as our most recent Annual Report on Form 10-K and any subsequently
filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (other than, in each case, information furnished
rather than filed), which are incorporated by reference herein, and those risk factors that may be included in any applicable
prospectus supplement, together with all of the other information included in this prospectus, any prospectus supplement and the
documents we incorporate by reference, in evaluating an investment in our securities. Our business, prospects, financial condition
or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently
consider immaterial. The trading price of our securities could decline due to any of these risks, and, as a result, you may lose
all or part of your investment. Before deciding whether to invest in our securities, you should also refer to the other information
contained in or incorporated by reference into this prospectus, including the section entitled “Cautionary Note Regarding
Forward Looking Statements.”
USE
OF PROCEEDS
Unless
we inform you otherwise in a prospectus supplement or free writing prospectus, we intend to use the net proceeds from the sale
of securities we are offering for general corporate purposes. This may include, among other things, additions to working capital,
repayment or refinancing of existing indebtedness or other corporate obligations and acquisitions and investment in existing and
future projects. Any specific allocation of the net proceeds of an offering of securities to a specific purpose will be determined
at the time of the offering and will be described in an accompanying prospectus supplement or free writing prospectus.
We
will not receive any proceeds from the sale of the Private Placement Warrants or shares of Class A common stock to be offered
by the selling security holders pursuant to this prospectus. With respect to the issuance of shares of Class A common stock
underlying the Existing Warrants, we will not receive any proceeds from the sale of such shares except with respect to amounts
received by us due to the exercise of the Existing Warrants to the extent the Existing Warrants are exercised for cash. We will
receive up to an aggregate of approximately $244.38 million from the exercise of Existing Warrants, assuming the exercise in full
of all of the Existing Warrants for cash. Unless we inform you otherwise in a prospectus or free writing prospectus, we intend
to use the net proceeds from any such exercise of the Existing Warrants for general corporate purposes, which includes, among
other things, the repurchase of outstanding shares of Class A common stock.
RATIOS
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Prior
to August 23, 2018, we were a special purpose acquisition company with no material fixed charges or preferred stock. As such,
a calculation of our historical ratio of consolidated earnings to combined fixed charges and preferred stock dividends is not
meaningful. Further, because neither we nor the business we acquired in the Business Combination have had any shares of preferred
stock outstanding and because, prior to August 23, 2018, the business we acquired in the Business Combination had no outstanding
indebtedness, a calculation of the historical ratio of consolidated earnings to combined fixed charges and preferred stock dividends
of such business would also not be meaningful.
SELLING
SECURITY HOLDERS
The
selling security holders may offer and sell, from time to time, up to 7,500,000 Private Placement Warrants and up to 78,355,000
shares of Class A common stock, which includes (i) 6,875,000 shares of Class A common stock that were issued upon
the automatic conversion of all shares of Class B common stock upon the consummation of the Business Combination, (ii) 11,480,000
shares of Class A common stock that have been sold in the PIPE Investment, (iii) 40,000,000 shares of Class A common
stock that may be issuable upon the redemption of an equal number of Common Units together with a corresponding number of shares
of Class C common stock and (iv) up to 20,000,000 shares of shares of Class A common stock that that may be issued from time to
time upon redemption or exchange of an equal number of Common Units together with a corresponding number of shares of Class C
common stock, if earn-out consideration is issued pursuant to the Contribution Agreement. The term “selling security holders”
includes the stockholders listed in the table below and their permitted transferees.
The
following table provides, as of August 31, 2018, information regarding the beneficial ownership of Private Placement Warrants
and Class A common stock held by each of the selling security holders, the number of Private Placement Warrants and shares
of Class A common stock that may be sold by each selling security holder under this prospectus and that each selling security
holder will beneficially own after this offering.
Because
each selling security holder may dispose of all, none or some portion of their securities, no estimate can be given as to the
number of securities that will be beneficially owned by a selling security holder upon termination of this offering. For purposes
of the table below, however, we have assumed that after termination of this offering none of the securities covered by this prospectus
will be beneficially owned by the selling security holders and further assumed that the selling security holders will not acquire
beneficial ownership of any additional securities during the offering. In addition, the selling security holders may have sold,
transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, our securities
in transactions exempt from the registration requirements of the Securities Act after the date on which the information in the
table is presented.
We
may amend or supplement this prospectus from time to time in the future to update or change this selling security holders list
and the securities that may be resold.
Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to shares
of Class A common stock and the right to acquire such voting or investment power within 60 days through the exercise of any
option, warrant or other right. Unless otherwise indicated below, to our knowledge, all persons named in the table have sole voting
and investment power with respect to the shares of Class A common stock beneficially owned by them. Except as described in
the footnotes to the following table and under “Material Relationships with the Selling Security Holders” below, none
of the persons named in the table has held any position or office or had any other material relationship with us or our affiliates
during the three years prior to the date of this prospectus. The inclusion of any Private Placement Warrants or shares of Class A
common stock in this table does not constitute an admission of beneficial ownership for the person named below.
Name of selling security holder
|
|
Existing Warrants Beneficially Owned Prior to Offering
|
|
|
Existing Warrants Available Pursuant to this Prospectus(1)
|
|
|
Existing Warrants Beneficially Owned After Offering
|
|
|
Percentage of Existing Warrants Beneficially Owned After Offering
|
|
|
Class A Common Stock Beneficially Owned Prior to Offering
|
|
|
Number of Shares Available Pursuant to this Prospectus(1)
|
|
|
Class A Common Stock Beneficially Owned After Offering
|
|
|
Percentage of Class A Common Stock Beneficially Owned After Offering
|
|
Royal Resources L.P.(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,197,643
|
|
|
55,197,643
|
|
|
—
|
|
|
—
|
|
Other limited partners of Falcon Opco(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,802,357
|
|
|
4,802,357
|
|
|
—
|
|
|
—
|
|
Funds managed by Corvex Management LP(4)
|
|
|
500,000
|
|
|
|
—
|
|
|
|
500,000
|
|
|
|
2.4
|
%
|
|
|
3,500,000
|
|
|
|
2,500,000
|
|
|
|
1,000,000
|
|
|
|
1.2
|
%
|
JANA Partners LLC(5)
|
|
|
1,250,000
|
|
|
|
—
|
|
|
|
1,250,000
|
|
|
|
5.9
|
%
|
|
|
3,500,000
|
|
|
|
1,000,000
|
|
|
|
2,500,000
|
|
|
|
2.9
|
%
|
Bruce Haggerty(6)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
Eric Mindich(7)
|
|
|
250,000
|
|
|
|
—
|
|
|
|
250,000
|
|
|
|
1.2
|
%
|
|
|
2,500,000
|
|
|
|
2,000,000
|
|
|
|
500,000
|
|
|
|
—
|
|
Blackwell Partners LLC – Series A(8)
|
|
|
213,386
|
|
|
|
—
|
|
|
|
213,386
|
|
|
|
1.0
|
%
|
|
|
553,733
|
|
|
|
126,960
|
|
|
|
426,733
|
|
|
|
*
|
|
Nantahala Capital Partners Limited Partnership(8)
|
|
|
85,338
|
|
|
|
—
|
|
|
|
85,338
|
|
|
|
*
|
|
|
|
225,576
|
|
|
|
54,900
|
|
|
|
170,676
|
|
|
|
*
|
|
Nantahala Capital Partners II Limited Partnership(8)
|
|
|
85,412
|
|
|
|
—
|
|
|
|
85,412
|
|
|
|
*
|
|
|
|
282,542
|
|
|
|
111,718
|
|
|
|
170,824
|
|
|
|
*
|
|
Silver Creek CS SAV, L.L.C.(8)
|
|
|
115,863
|
|
|
|
—
|
|
|
|
115,863
|
|
|
|
*
|
|
|
|
338,149
|
|
|
|
106,422
|
|
|
|
231,727
|
|
|
|
*
|
|
Funds managed by
HITE Hedge Asset Management LLC(9)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,013,671
|
|
|
|
1,000,000
|
|
|
|
3,013,671
|
|
|
|
3.5
|
%
|
Samlyn Offshore Master Fund, Ltd.(10)
|
|
|
916,250
|
|
|
|
—
|
|
|
|
916,250
|
|
|
|
4.3
|
%
|
|
|
2,575,220
|
|
|
|
742,720
|
|
|
|
1,832,500
|
|
|
|
2.1
|
%
|
Samlyn Onshore Fund, LP(11)
|
|
|
333,750
|
|
|
|
—
|
|
|
|
333,750
|
|
|
|
1.6
|
%
|
|
|
920,380
|
|
|
|
252,880
|
|
|
|
667,500
|
|
|
|
*
|
|
Samlyn Long Alpha Master Fund, Ltd.(12)
|
|
|
6,494
|
|
|
|
—
|
|
|
|
6,494
|
|
|
|
*
|
|
|
|
29,891
|
|
|
|
4,400
|
|
|
|
25,491
|
|
|
|
*
|
|
MSD Credit Opportunity Fund LP(13)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,000,000
|
|
|
|
2,000,000
|
|
|
|
—
|
|
|
|
—
|
|
Osprey Sponsor, LLC(14)
|
|
|
7,500,000
|
|
|
|
7,500,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,875,000
|
|
|
|
6,875,000
|
|
|
|
—
|
|
|
|
—
|
|
Edward E. Cohen(15)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
750,000
|
|
|
|
750,000
|
|
|
|
—
|
|
|
|
—
|
|
Jonathan Z. Cohen(16)
|
|
|
7,500,000
|
|
|
|
7,500,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,625,000
|
|
|
|
7,625,000
|
|
|
|
—
|
|
|
|
—
|
|
Jeffrey F. Brotman(17)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
Steven R. Jones(18)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30,000
|
|
|
|
30,000
|
|
|
|
—
|
|
|
|
—
|
|
*
|
Represents less than 1%.
|
(1)
|
Represents the number of shares being registered on
behalf of the selling security holder pursuant to this registration statement, which may be less than the total number of shares
held by the selling security holder.
|
(2)
|
Represents (i) 35,197,643
Common Units and an equal number of shares of Class C common stock, which are convertible, as a unit, into an equal number of
shares of Class A common stock of the Issuer and (ii) 20,000,000 Common Units and an equal number of shares of Class C common
stock that are issuable if the Class A common stock trades above certain thresholds (the “Earn-Out Shares”), in each
case held by Royal Resources L.P. The general partner of Royal Resources L.P. is Royal Resources GP L.L.C. The managing members
of Royal Resources GP L.L.C. are Blackstone Management Associates VI L.L.C. and Blackstone Energy Management Associates L.L.C.
The sole member of Blackstone Management Associates VI L.L.C. is BMA VI L.L.C. The sole member of Blackstone Energy Management
Associates L.L.C. is Blackstone EMA L.L.C. Blackstone Holdings III L.P. is the managing member of each of BMA VI L.L.C. and Blackstone
EMA L.L.C. The general partner of Blackstone Holdings III L.P. is Blackstone Holdings III GP L.P. The general partner of Blackstone
Holdings III GP L.P. is Blackstone Holdings III GP Management L.L.C. The sole member of Blackstone Holdings III GP Management
L.L.C. is The Blackstone Group L.P. The general partner of The Blackstone Group L.P. is Blackstone Group Management L.L.C. Blackstone
Group Management L.L.C. is wholly-owned by Blackstone’s senior managing directors and controlled by its founder, Stephen
A. Schwarzman.
|
|
|
(3)
|
Includes (i) 1,650,405
Common Units and an equal number of shares of Class C common stock held by HBC Promote LLC, a Delaware limited liability company,
(ii) 1,340,509 Common Units and an equal number of shares of Class C common stock held by Noble Royalties Holdings LP, (iii) 70,184
Common Units and an equal number of shares of Class C common stock held by Noble Royalties, Inc., (iv) 169,647 Common Units and
an equal number of shares of Class C common stock held by Arkoma Production Company of Texas, Inc., (v) 785,806 Common Units and
an equal number of shares of Class C common stock held by Margaret W. Molleston and (vi) 785,806 Common Units and an equal number
of shares of Class C common stock held by George H. Bishop.
|
(4)
|
Includes (i)
1,799,978 shares of Class A common stock held by Corvex Master Fund LP (“Master Fund”) and (ii) 700,022
shares of Class A common stock held by Corvex Select Equity Master Fund LP (“Select Master Fund”), and which
are being registered herein. Corvex Management LP, a Delaware limited partnership (“Corvex Management”)
whose general partner is controlled by Mr. Keith Meister, serves as investment adviser to the Master Fund and
Select Master Fund. Corvex Management and Mr. Meister may be deemed to beneficially own the securities held by the
Master Fund and the securities held by Select Master Fund.
|
(5)
|
JANA Partners LLC is a private money management firm which holds the shares and warrants in various
accounts under its management and control.
|
(6)
|
Represents 25,000 shares of Class A common stock acquired
by Mr. Haggerty as part of the PIPE Investment.
|
(7)
|
Represents (i) 250,000 Public Warrants held by Eric
Mindich, (ii) 500,000 shares of Class A common stock held by Eric Mindich and (iii)
2,000,000 shares of Class A common stock held by Everblue Osprey 2018 LLC (“Everblue 2018”), which are being
registered herein. Mr. Mindich may be deemed to beneficially own the shares held by Everblue 2018. Mr. Mindich disclaims beneficial
ownership over any securities owned by Everblue 2018 in which he does not have any pecuniary interest.
|
(8)
|
Nantahala Capital Management, LLC is a registered investment
adviser and has been delegated the legal power to vote and/or direct the disposition of securities on behalf of these entities
as a general partner or investment manager and would be considered the beneficial owner of such securities. The above shall not
be deemed to be an admission by the record owners or these selling security holders that they are themselves beneficial
owners of these shares of common stock or warrants for purposes of Section 13(d) of the Exchange Act or any other purpose.
|
(9)
|
Represents (i)
594,413 shares of Class A common stock held by HITE Hedge LP (“HITE Hedge”), of which 199,300 are being
registered herein, (ii) 521,963 shares of Class A common stock held by HITE Hedge QP (“QP”), of which
170,000 are being registered herein, (iii) 911,094 shares of Class A common stock held by HITE Hedge Offshore Ltd.
(“Offshore”), of which 304,100 are being registered herein, (iv) 499,010 shares of Class A common stock held
by HITE MLP Advantage LP (“Advantage”), of which 135,300 are being registered herein, (v) 223,405 shares of
Class A common stock held by HITE MLP Advantage Caymans Ltd. (“Advantage Caymans”), of which 71,200 are
being registered herein, (vi) 269,442 shares of Class A common stock held by HITE MLP LP (“MLP”), of
which 92,100 are being registered herein, (vii) 58,602 shares of Class A common stock held by HITE MLP Caymans, Ltd.
(“MLP Caymans”), of which 21,400 are being registered herein and (viii) 26,282 shares of Class A common
stock held by HITE Cherry LP (“Cherry”), of which 6,600 are being registered herein. HITE Hedge Asset
Management LLC is the investment manager of HITE Hedge, QP, Offshore, Advantage, Advantage Cayman, MLP, MLP Cayman
and Cherry. The above shall not be deemed to be an admission by the record owners or these selling security holders
that they are themselves beneficial owners of these shares of common stock or warrants for purposes of Section 13(d)
of the Exchange Act or any other purpose.
|
(10)
|
The shares may be deemed
to be indirectly beneficially owned by Samlyn Capital, LLC (“Samlyn Capital”), as the investment manager of Samlyn Offshore Master
Fund, Ltd. The reported securities may also be deemed to be indirectly beneficially owned by Robert Pohly as the manager of Samlyn
Capital and Director of Samlyn Offshore Master Fund, Ltd.
|
(11)
|
The shares may be deemed to be indirectly beneficially owned by Samlyn Capital, as the investment manager of Samlyn Onshore
Fund, LP, and Samlyn Partners, LLC (“Samlyn Partners”), as the general partner of Samlyn Onshore Fund, LP. The reported securities
may also be deemed to be indirectly beneficially owned by Robert Pohly as the manager of Samlyn Capital and Managing Member
of Samlyn Partners.
|
(12)
|
The shares may be deemed to be indirectly beneficially owned by Samlyn Capital, as the investment manager of Samlyn Long Alpha
Master Fund, Ltd. The reported securities may also be deemed to be indirectly beneficially owned by Robert Pohly as the manager
of Samlyn Capital and Director of Samlyn Long Alpha Master Fund, Ltd.
|
(13)
|
MSD Partners, L.P. is the investment manager of, and
may be deemed to beneficially own securities beneficially owned by MSD Credit Opportunity Fund, L.P. MSD Partners (GP), LLC is
the general partner of, and may be deemed to beneficially own securities beneficially owned by, MSD Partners, L.P. Each of Glenn
R. Fuhrman, John Phelan and Marc R. Lisker is a manager of, and may be deemed to beneficially own securities beneficially owned
by, MSD Partners (GP), LLC.
|
(14)
|
Represents (i) 7,500,000 Private Placement Warrants
and (ii) 6,875,000 shares of Class A common stock received upon the conversion of the shares of Class B common stock in connection
with the Business Combination, all of which are being registered herein. The manager of our Sponsor is Mr. J. Cohen who has sole
voting and dispositive power over the shares over shares held by the Sponsor. Mr. J. Cohen disclaims beneficial ownership over
any securities owned by Sponsor in which he does not have any pecuniary interest.
|
(15)
|
Mr. E. Cohen is the Vice Chairman of our board.
|
(16)
|
Represents all of the Private Placement Warrants and
the shares of Class A common stock held by the Sponsor, and 750,000 shares of Class A common stock held by Cohen 2018 OSPR/FALCON
GRAT (the “Cohen GRAT”), all of which are being registered herein. Mr. J. Cohen has sole voting and dispositive power
over the shares over shares held by the Sponsor. Mr. J. Cohen is the trustee of the Cohen GRAT. Mr. J. Cohen disclaims beneficial
ownership over any securities owned by the Sponsor in which he does not have any pecuniary interest. Mr. J. Cohen is the Chairman
of our board.
|
(17)
|
Mr. Brotman is our Chief Financial Officer, Chief Legal
Officer and Secretary, a role he also occupied prior to the Business Combination.
|
(18)
|
Mr. Jones is a member of the board.
|
Material
Relationships with the Selling Security Holders
Agreements
Related to the Business Combination
Subscription
Agreement
In
connection with our Business Combination, the Company entered into Subscription Agreements, each dated as of June 3, 2018, with
the PIPE Investors, pursuant to which, among other things, the Company agreed to issue and sell in the PIPE Investment an aggregate
of 11,480,000 shares of Class A common stock to the PIPE Investors for a purchase price of $10.00 per share, and aggregate
consideration of $114,800,000. The PIPE Investment closed concurrently with the Business Combination and the proceeds from the
PIPE Investment were used to fund a portion of the cash consideration required to effect the Business Combination. Edward E. Cohen,
Jonathan Z. Cohen, Jeffrey F. Brotman and Steven R. Jones who currently serve as directors and/or officers of the Company participated
in the PIPE Investment and executed Subscription Agreements to purchase, in the aggregate, $15,550,000 of Class A common
stock at $10.00 per share on the terms set forth in the Subscription Agreements. Certain of the Investors in the PIPE Investment
(including Messrs. E. Cohen, J. Cohen, Brotman and Jones) also indirectly hold shares of Class A common stock through their equity
interests in our Sponsor which were acquired in connection with our initial public offering.
Pursuant
to the Subscription Agreements, the Investors are entitled to certain registration rights, including a requirement for the Company
to register the resale of the shares of Class A common stock issued thereunder pursuant to a registration statement to be
filed within fifteen calendar days after consummation of the Business Combination, subject to customary limitations as set forth
therein. In addition, the Investors are entitled to liquidated damages payable by the Company in certain circumstances, including
in the event that (a) a registration statement for the shares of Class A common stock issued in the PIPE Investment
has not been declared effective by the SEC within ninety days (or one hundred twenty days in the event the SEC notifies the Company
that it will review the registration statement) following the consummation of the Business Combination (the “Closing”)
or seven days following the date that the SEC notifies the Company that the registration statement will not be reviewed or will
not be subject to further review, whichever date is earlier, (b) following the effectiveness of the registration statement,
the registration statement ceases to be effective or the Investors are not permitted to utilize the registration statement to
resell their acquired shares of Class A common stock, subject to a special grace period for post-effective amendments or
(c) after six months following the Closing, the Investors are unable to sell their acquired shares of Class A common
stock without restriction under Rule 144 of the Securities Act as a result of the Company failing to file with the SEC required
reports under Section 13 or Section 15(d) of the Exchange Act (each such event referred to in clauses (a) through
(c), a “Registration Default”). The Subscription Agreements provide that liquidated damages will be payable monthly
by the Company during the time of a Registration Default in the amount of 0.5% of the purchase price paid by the applicable Investor
for its acquired shares of Class A common stock, subject to a cap of 5.0%. The Subscription Agreements also contain customary
representations and warranties of the Company and the Investors.
Contribution
Agreement
The
Company is party to the Contribution Agreement pursuant to which, at Closing, the Company contributed cash to Falcon Opco in exchange
for (a) a number of Common Units representing limited partnership interests in Falcon Opco equal to the number of shares of the
Company’s Class A common stock outstanding as of the Closing and (b) a number of Falcon Opco warrants exercisable for Common
Units equal to the number of the Company’s warrants outstanding as of the Closing Date. The Company controls Falcon Opco
through Falcon Minerals GP, LLC, a Delaware limited liability company, a wholly owned subsidiary of the Company and the sole general
partner of Falcon Opco (“Opco GP”). At Closing, pursuant to the Contribution Agreement, the Contributors received
(i) $400 million of cash and (ii) 40 million Common Units. The Company also issued to the Contributors 40 million shares of non-economic
Class C common stock of the Company, which entitles each
holder to one vote per share.
Shareholders’
Agreement
In
connection and concurrently with the Closing, the Company, our Sponsor, Royal, the Contributors and Blackstone Management Partners,
L.L.C. (“Blackstone”) entered into the Shareholders’ Agreement (the “Shareholders’ Agreement”).
Under
the Shareholders’ Agreement, the parties agreed to use reasonable best efforts, and the Company agreed to take all permissible
actions necessary, to carry out the restructuring of the Company’s board of directors (the “board”) pursuant
to the Contribution Agreement such that the board would be comprised effective immediately following the Closing of up to eleven
directors, divided into three classes of directors, in accordance with the terms of the second amended and restated certificate
of incorporation of the Company (the “A&R Charter”), consisting of (a) six directors to be designated by
Royal prior to the Closing, (b) two directors to be designated by our Sponsor prior to the Closing, and (c) three independent
directors to be mutually selected by the parties to the Contribution Agreement prior to the Closing.
The
directors designated by our Sponsor will serve in the class of directors whose term expires on the third annual meeting of Company
stockholders following the Closing. Under the Shareholders’ Agreement, the parties agreed that, if either of our Sponsor’s
designees, or their successors, leaves the board during such term, then our Sponsor or its successor will be entitled to name
a replacement director to be appointed to the board to fill the resulting vacancy.
Blackstone
will have the right to designate a certain number of individuals for nomination by the board to be elected by the Company’s
stockholders, and a certain number of independent directors will serve on the board, based on the percentage of the voting power
of the outstanding Class A common stock and Class C common stock beneficially owned by Blackstone and its controlled
affiliates, in the aggregate, according to the schedule below.
Aggregate Blackstone
combined voting power
|
|
Aggregate number of
Blackstone designated directors
|
|
Number of independent directors serving on the Company board
|
More than 40%
|
|
Six Blackstone designated directors
|
|
Three independent directors
|
More than 20% up to 40%
|
|
Four Blackstone designated directors
|
|
Five independent directors
|
More than 10% up to 20%
|
|
Two Blackstone designated directors
|
|
Five independent directors
|
More than 5% up to 10%
|
|
One Blackstone designated director
|
|
Five independent directors
|
If
any director designated for nomination by Blackstone, or their successors, leaves the board, Blackstone will be entitled to name
a replacement director to be appointed to the board to fill the resulting vacancy. Directors designated for nomination by Blackstone
will not be required to resign or leave the board prior to the expiration of their term, even if the voting power of the outstanding
Class A common stock and Class C common stock beneficially owned by Blackstone and its controlled affiliates would not
entitle it to designate such person for nomination. Once Blackstone and its controlled affiliates beneficially own in the aggregate
less than 5% voting power of the outstanding Class A common stock and Class C common stock, it will no longer have any
rights to designate any individuals for nomination to be elected to the board under the Shareholders’ Agreement.
Until
the third annual meeting of the Company’s stockholders following the Closing, so long as Blackstone has the right to designate
any individuals for nomination, individuals to be nominated as independent directors by the board will be mutually agreed by Blackstone
and the Sponsor or its successor.
During
the term of the Shareholders’ Agreement, the size of the board is fixed based on the number of individuals Blackstone is
entitled to designate for nomination to be elected as directors and the number of independent directors then serving on the board,
as described above, plus the two directors designated by our Sponsor until the third annual meeting of the Company’s stockholders
following the Closing.
The
Shareholders’ Agreement will terminate upon the later of (x) the time Blackstone is no longer entitled to designate a director
for nomination to the board and (y) the third annual meeting of the Company’s stockholders following the Closing.
Registration
Rights Agreement with Royal and the Contributors
In
connection and concurrently with the Closing, the Company, Royal and the Contributors entered into the Registration Rights Agreement
(the “Registration Rights Agreement”). Under the Registration Rights Agreement, the Company has certain obligations
to register for resale under the Securities Act, all or any portion of the shares of Class A common stock that the holders
hold as of the date of the Registration Rights Agreement and that they may acquire thereafter, including upon the exchange or
redemption of any other security therefor (the “Registrable Securities”).
The
Company is required, within 30 calendar days of the Closing, to file a registration statement registering the resale of Registrable
Securities. Royal and the Contributors are entitled to an unlimited number of underwritten offerings, provided that the gross
proceeds of each underwritten offering is more than $30 million.
Royal
and the Contributors also have certain “piggy-back” registration rights with respect to registration statements and
rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company
will bear the expenses incurred in connection with the filing of any such registration statements.
Registration
Rights Agreement with Sponsor
Pursuant
to a registration rights agreement entered into on July 20, 2017, the holders of shares of Class A common stock through their
equity interests in our Sponsor, the Private Placement Warrants (and their underlying securities) and any warrants that may be
issued upon the conversion of the working capital loans (and their underlying securities) are entitled to registration rights.
The holders will be entitled to make up to three demands, excluding short form demands, that the Company register such securities.
In addition, the holders will have certain “piggy-back” registration rights with respect to registration statements
filed subsequent to the completion of the Business Combination and rights to require the Company to register for resale such securities
pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit
any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period.
The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Amended
and Restated Agreement of Limited Partnership of Falcon Minerals Operating Partnership, LP
The
Company operates its business through Falcon Opco. At Closing, the Company, Opco GP and the Contributors entered into the Amended
and Restated Agreement of Limited Partnership of Falcon Minerals Operating Partnership (the “Opco LPA”), which sets
forth, among other things, the rights and obligations of the general partner and limited partners of Falcon Opco.
General
Partner.
Under the Opco LPA, Opco GP, a wholly owned subsidiary of the Company, is the sole general partner of Falcon
Opco. As the sole general partner, Opco GP controls all of the day-to-day business affairs and decision-making of Falcon Opco
without the approval of any other partner, unless otherwise stated in the Opco LPA. For example, the Opco LPA provides that Opco
GP cannot take any action that would result in the failure of Falcon Opco to be taxable as a partnership for federal income tax
purposes without the approval of the other partners. As such, Opco GP, through its officers and directors, is responsible for
all operational and administrative decisions of Falcon Opco and the day-to-day management of Falcon Opco’s business. Pursuant
to the terms of the Opco LPA, Falcon Opco may not withdraw as the general partner of Falcon Opco and, subject to limited exceptions,
generally may only transfer or assign its general partner interest in connection with a “General Partner Change of Control”
(as defined in the Opco LPA).
Compensation;
Reimbursement.
Opco GP is not entitled to compensation for its services as general partner. Both the Company and Opco
GP is entitled to reimbursement by Falcon Opco for fees, expenses and costs incurred by Opco GP or the Company on behalf of Falcon
Opco, including all of our fees, expenses and costs of the Company being a public company (including public reporting obligations,
proxy statements, stockholder meetings, stock exchange fees, transfer agent fees, SEC and FINRA filing fees and offering expenses)
and maintaining the Company’s corporate existence.
Distributions.
Falcon
Opco will allow for distributions to be made by Falcon Opco to its limited partners on a pro rata basis out of “distributable
cash.” “Distributable cash” is defined in the Opco LPA as the amount of cash that could be distributed by Falcon
Opco for such purposes in accordance with any credit agreement of Opco or any of its subsidiaries. In addition, the Opco LPA generally
requires Falcon Opco to make pro rata distributions to its limited partners, including the Company, on a quarterly basis in an
amount equal to 50% of the total federal taxable income allocated by Falcon Opco to the limited partners.
Common
Unit Redemption Right.
The Opco LPA provides that each limited partner of Falcon Opco (other than the Company) has a
right to cause Opco to redeem from time to time, all or a portion of such partner’s common units in Opco (together with
an equal number of shares of Class C common stock) for newly issued shares of Class A common stock on a one-for-one
basis, provided that the ratio of the limited partner’s redeemed common units to the number of common units beneficially
held by such limited partner remains equal to that held by Blackstone and its affiliates (subject to customary adjustments, including
for stock splits, stock dividends and reclassifications). The Company may, at its option, effect a direct exchange of such shares
of Class A common stock for such Opco common units in lieu of such a redemption by Opco.
In
the event of a “reclassification event” (as defined in the Opco LPA), the general partner is to ensure that each common
unit is redeemable for the same amount and type of property, securities or cash that a share of Class A common stock becomes
exchangeable for or converted into as a result of such “reclassification event.” Upon the exercise of the redemption
right, the Contributor will surrender its common units to Opco for cancellation. The Opco LPA requires that the Company contribute
such property, securities or cash to Opco in exchange for a number of common units in Opco equal to the number of common units
to be redeemed from the Contributor. Opco will then distribute such property, securities or cash to such Contributor to complete
the redemption. Upon the exercise of the redemption right, the Company may, at our option, effect a direct exchange of property,
securities or cash for such common units in lieu of such a redemption. Upon the redemption or exchange of common units held by
an Contributor, a corresponding number of shares of Class C common stock held by such Contributor will be cancelled.
General
Partner Change of Control.
The Opco LPA provides that, in connection with the occurrence of a “general partner
change of control” (as defined below), the Company has the right to require each limited partner of Falcon Opco (other than
the Company) to effect a redemption of some or all of such limited partner’s common units and a corresponding number of
shares of Class C common stock, in each case, effective immediately prior to the consummation of the general partner change
of control. From and after the date of such redemption, the common units and shares of Class C common stock subject to such
redemption will be deemed to be transferred to the Company and each such limited partner will cease to have any rights with respect
to the common units and shares of Class C common stock subject to such redemption (other than the right to receive shares
of Class A common stock pursuant to such redemption). A “general partner change of control” will be deemed to
have occurred if: (i) both the Company’s stockholders and board of directors approve the sale, lease or transfer of
all or substantially all of the Company’s assets (determined on a consolidated basis) to any person or “group”
(as such term is used in Section 13(d)(3) of the Exchange Act), and such sale, lease or transfer is consummated, (ii) both
the Company’s stockholders and board of directors approve a merger or consolidation of the Company with any other person
(other than a merger or consolidation in which the Company’s voting securities outstanding immediately prior to such merger
or consolidation continue to represent at least 50.01% of the Company’s or the surviving entity’s total voting securities
following such merger or consolidation), and such merger or consolidation is consummated, or (iii) subject to certain exceptions,
there has been an acquisition by any person or “group” (as such term is used in Section 13(d)(3) of the Exchange
Act) of beneficial ownership of at least 50.01% of the Company’s voting securities, and such acquisition is recommended
or approved by the Company’s board of directors or determined by the Company’s board of directors to be in the best
interest of the Company and its stockholders.
Maintenance
of One-to-One Ratios.
The Opco LPA includes provisions intended to ensure that the Company at all times maintains a one-to-one
ratio between (a) the number of outstanding shares of common stock (other than Class C common stock) and the number
of common units owned by the Company (subject to certain exceptions for certain rights to purchase the Company’s equity
securities under a “poison pill” or similar stockholder rights plan, if any, certain convertible or exchangeable securities
issued under the Company’s equity compensation plans and certain equity securities issued pursuant to the Company’s
equity compensation plans (other than a stock option plan) that are restricted or have not vested thereunder) and (b) the
number of outstanding shares of our Class C common stock and the number of Falcon Opco common units owned by the Contributors.
This construct is intended to result in the Contributors having a voting interest in the Company that is identical to the Contributors’
economic interest in Falcon Opco.
Dissolution.
The
Opco LPA provides that the unanimous consent of all partners will be required to voluntarily dissolve Falcon Opco. In addition
to a voluntary dissolution, Falcon Opco will be dissolved upon a change of control transaction under certain circumstances, as
well as upon the entry of a decree of judicial dissolution or other circumstances in accordance with Delaware law. Upon a dissolution
event, the proceeds of a liquidation will be distributed in the following order: (i) first, to pay the expenses of winding
up Falcon Opco; (ii) second, to pay debts and liabilities owed to creditors of Falcon Opco; and (iii) third, to the
limited partners pro-rata in accordance with their respective percentage ownership interests in Falcon Opco (as determined based
on the number of common units held by a limited partner relative to the aggregate number of all outstanding common units).
Confidentiality.
Each
partner agrees to maintain the confidentiality of Falcon Opco’s confidential information. This obligation excludes (i) information
independently developed by the partners, (ii) information that is in the public domain or otherwise disclosed to a partner,
in either such case not in violation of a confidentiality obligation owed to Falcon Opco, (iii) information that is in the
possession of a partner at the time of disclosure by Falcon Opco or (iv) disclosures approved by our chief executive officer.
Indemnification
and Exculpation.
The Opco LPA provides for the indemnification of the partners and officers of Falcon Opco and their
respective subsidiaries or affiliates and provides that, except as otherwise provided therein, Opco GP, as the general partner
of Falcon Opco, has the same fiduciary duties to Falcon Opco and its partners as are owed to a corporation organized under Delaware
law and its stockholders by its directors.
Indemnity
Agreements
The
Company has entered into indemnification agreements with its directors. Each indemnity agreement provides that, subject to limited
exceptions, and among other things, the Company will indemnify the director party thereto to the fullest extent permitted by law
for claims arising in his or her capacity as a director of the Company.
Warrant
Agreement
The
Existing Warrants were issued under a warrant agreement (the “Warrant Agreement”), dated July 20, 2017, between Continental
Stock Transfer & Trust Company, as warrant agent and us. For more information regarding the Warrant Agreement, please read
“Description of Securities—Existing Warrants.”
PLAN
OF DISTRIBUTION
We
and the selling security holders may offer and sell all or a portion of the securities covered by this prospectus from time to
time, in one or more or any combination of the following transactions:
|
●
|
on
the NASDAQ, in the over-the-counter market or on any other national securities exchange
on which our securities are listed or traded;
|
|
●
|
in
privately negotiated transactions;
|
|
●
|
in
underwritten transactions;
|
|
●
|
in
a block trade in which a broker-dealer will attempt to sell the offered securities as
agent but may purchase and resell a portion of the block as principal to facilitate the
transaction;
|
|
●
|
through
purchases by a broker-dealer as principal and resale by the broker-dealer for its account
pursuant to this prospectus;
|
|
●
|
in
ordinary brokerage transactions and transactions in which the broker solicits purchasers;
|
|
●
|
through
the writing of options (including put or call options), whether the options are listed
on an options exchange or otherwise;
|
|
●
|
through
the distribution of the securities by any selling security holder to its partners, members
or stockholders;
|
|
●
|
in
short sales entered into after the effective date of the registration statement of which
this prospectus is a part; and
|
|
●
|
“at
the market” or through market makers or into an existing market for the securities.
|
We
and the selling security holders may sell the securities at prices then prevailing, related to the then prevailing market price
or at negotiated prices. The offering price of the securities from time to time will be determined by us and by the selling security
holders and, at the time of the determination, may be higher or lower than the market price of our securities on the NASDAQ or
any other exchange or market.
The
selling security holders may also sell our securities short and deliver these securities to close out their short positions, or
loan or pledge the securities to broker-dealers that in turn may sell these securities. The shares may be sold directly or through
broker-dealers acting as principal or agent, or pursuant to a distribution by one or more underwriters on a firm commitment or
best-efforts basis. We and the selling security holders may also enter into hedging transactions with broker-dealers. In connection
with such transactions, broker-dealers of other financial institutions may engage in short sales of our securities in the course
of hedging the positions they assume with us and with the selling security holders. We and the selling security holders may also
enter into options or other transactions with broker-dealers or other financial institutions, which require the delivery to such
broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or
other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). In
connection with an underwritten offering, underwriters or agents may receive compensation in the form of discounts, concessions
or commissions from the selling security holders or from purchasers of the offered securities for whom they may act as agents.
In addition, underwriters may sell the securities to or through dealers, and those dealers may receive compensation in the form
of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as
agents. The selling security holders and any underwriters, dealers or agents participating in a distribution of the securities
may be deemed to be “underwriters” within the meaning of the Securities Act, and any profit on the sale of the securities
by the selling security holders and any commissions received by broker-dealers may be deemed to be underwriting commissions under
the Securities Act.
We
and the selling security holders may agree to indemnify an underwriter, broker-dealer or agent against certain liabilities related
to the sale of the securities, including liabilities under the Securities Act. The selling security holders have advised us that
they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the
sale of their securities. Upon our notification by a selling security holder that any material arrangement has been entered into
with an underwriter or broker-dealer for the sale of securities through a block trade, special offering, exchange distribution,
secondary distribution or a purchase by an underwriter or broker-dealer, we will file a supplement to this prospectus, if required,
pursuant to Rule 424(b) under the Securities Act, disclosing certain material information, including:
|
●
|
the
name of the selling security holder;
|
|
●
|
the
number of securities being offered;
|
|
●
|
the
terms of the offering;
|
|
●
|
the
names of the participating underwriters, broker-dealers or agents;
|
|
●
|
any
discounts, commissions or other compensation paid to underwriters or broker-dealers and
any discounts, commissions or concessions allowed or reallowed or paid by any underwriters
to dealers;
|
|
●
|
the
public offering price; and
|
|
●
|
other
material terms of the offering.
|
In
addition, upon being notified by a selling security holder that a donee, pledgee, transferee or other successor-in-interest intends
to sell securities, we will, to the extent required, promptly file a supplement to this prospectus to name specifically such person
as a selling security holder.
We
and the selling security holders are subject to the applicable provisions of the Exchange Act and the rules and regulations under
the Exchange Act, including Regulation M. This regulation may limit the timing of purchases and sales of any of the securities
offered in this prospectus by the selling security holders. The anti-manipulation rules under the Exchange Act may apply to sales
of securities in the market and to the activities of the selling security holders and their affiliates. Furthermore, Regulation
M may restrict the ability of any person engaged in the distribution of the securities to engage in market-making activities for
the particular securities being distributed for a period of up to five business days before the distribution. The restrictions
may affect the marketability of the securities and the ability of any person or entity to engage in market-making activities for
the securities.
To
the extent required, this prospectus may be amended and/or supplemented from time to time to describe a specific plan of distribution.
Instead of selling the securities under this prospectus, the selling security holders may sell the securities in compliance with
the provisions of Rule 144 under the Securities Act, if available, or pursuant to other available exemptions from the registration
requirements of the Securities Act.
Issuance
of Class A Common Stock Underlying the Existing Warrants
Each
Existing Warrant entitles its holder to purchase one share of our Class A common stock at an exercise price of $11.50 per share.
We
are registering the issuance of shares of Class A common stock underlying the Existing Warrants. The prices at which the
shares of Class A common stock underlying the Existing Warrants covered by this prospectus may actually be disposed of may
be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying
prices determined at the time of sale or at negotiated prices. We will receive the proceeds from the exercise of the Existing
Warrants, but not from the sale of the underlying Class A common stock.
Pursuant
to the terms of the Existing Warrants, the shares of Class A common stock will be distributed to those holders of Existing
Warrants who surrender the Existing Warrants and provide payment of the exercise price to our warrant agent, Continental Stock
Transfer & Trust Company.
For
additional information with respect to the Existing Warrants, please read “Description of Securities—Existing Warrants.”
Resale
of Private Placement Warrants and Class A Common Stock by Selling Security Holders
We
are also registering the resale by the selling security holders of the Private Placement Warrants and shares of Class A common
stock. The selling security holders, which as used herein includes their permitted transferees, may, from time to time, sell,
transfer or otherwise dispose of any or all of their Private Placement Warrants and shares of Class A common stock on the
NASDAQ or any other stock exchange, market or trading facility on which such securities are traded or in private transactions.
These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing
market price, at varying prices determined at the time of sale or at negotiated prices.
The
selling security holders may use any one or more of the following methods, when and if permitted, when disposing of their Private
Placement Warrants and shares of Class A common stock:
|
●
|
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
|
●
|
block
trades in which the broker-dealer will attempt to sell the securities as agent, but may
position and resell a portion of the block as principal to facilitate the transaction;
|
|
●
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;
|
|
●
|
an
exchange distribution in accordance with the rules of the applicable exchange;
|
|
●
|
privately
negotiated transactions;
|
|
●
|
in
underwriting transactions;
|
|
●
|
through
the writing or settlement of options or other hedging transactions, whether through an
options exchange or otherwise;
|
|
●
|
broker-dealers
may agree with the selling security holders to sell a specified number of such securities
at a stipulated price;
|
|
●
|
distribution
to members, limited partners or stockholders of selling security holders;
|
|
●
|
a
combination of any such methods of sale; and
|
|
●
|
any
other method permitted pursuant to applicable law.
|
The
selling security holders may, from time to time, pledge or grant a security interest in some or all of the Private Placement Warrants
or shares of Class A common stock owned by them and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell their shares, from time to time, under this prospectus, or under an amendment to
this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling security
holders to include the pledgee, transferee or other successors in interest as selling security holders under this prospectus.
The selling security holders also may transfer their securities in other circumstances, in which case the transferees, pledgees
or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
In
connection with the sale of shares of Private Placement Warrants and Class A common stock or interests therein, the selling
security holders who are not subject to our insider trading policy may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of our securities in the course of hedging the positions
they assume. The selling security holders who are not subject to our insider trading policy may also sell their securities short
and deliver these securities to close out their short positions, or loan or pledge such securities to broker-dealers that in turn
may sell these securities. The selling security holders who are not subject to our insider trading policy may also enter into
option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of the securities offered by this prospectus,
which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or
amended to reflect such transaction).
The
aggregate proceeds to the selling security holders from the sale of the Private Placement Warrants and shares of Class A
common stock offered by them will be the purchase price of the share less discounts or commissions, if any. Each of the selling
security holder reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part,
any proposed purchase of their securities to be made directly or through agents. We will not receive any of the proceeds from
the resale of the Private Placement Warrants or shares of Class A common stock being offered by the selling security holders
named herein.
The
selling security holders also may resell all or a portion of their securities in open market transactions in reliance upon Rule 144
under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule.
In
connection with an underwritten offering, underwriters or agents may receive compensation in the form of discounts, concessions
or commissions from the selling security holders or from purchasers of the offered securities for whom they may act as agents.
In addition, underwriters may sell the securities to or through dealers, and those dealers may receive compensation in the form
of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as
agents. The selling security holders and any underwriters, dealers or agents participating in a distribution of the securities
may be deemed to be “underwriters” within the meaning of the Securities Act, and any profit on the sale of the securities
by the selling security holders and any commissions received by broker-dealers may be deemed to be underwriting commissions under
the Securities Act.
To
the extent required, the securities to be sold, the names of the selling security holders, the respective purchase prices and
public offering prices, the names of any agent, dealer or underwriter, and any applicable commissions or discounts with respect
to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment
to the registration statement that includes this prospectus.
Blue
Sky Restrictions on Resale
In
order to comply with the securities laws of some states, if applicable, our Private Placement Warrants and shares of Class A
common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states
our Private Placement Warrants or shares of Class A common stock may not be sold unless they have been registered or qualified
for sale or an exemption from registration or qualification requirements is available and is complied with.
If
a selling security holder wants to sell its Private Placement Warrants or shares of Class A common stock under this prospectus
in the United States, the selling security holders will also need to comply with state securities laws, also known as “Blue
Sky laws,” with regard to secondary sales. All states offer a variety of exemptions from registration for secondary sales.
Many states, for example, have an exemption for secondary trading of securities registered under Section 12 of the Exchange
Act or for securities of issuers that publish continuous disclosure of financial and non-financial information in a recognized
securities manual, such as Standard & Poor’s. The broker for a selling security holder will be able to advise a
selling security holder in which states our securities are exempt from registration for secondary sales.
Any
person who purchases securities from a selling security holder offered by this prospectus who then wants to sell such shares will
also have to comply with Blue Sky laws regarding secondary sales.
We
have advised the selling security holders that the anti-manipulation rules of Regulation M under the Exchange Act may apply
to sales of securities in the market and to the activities of the selling security holders and their affiliates. In addition,
we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling security
holders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling security holders
may indemnify any broker-dealer that participates in transactions involving the sale of their shares against certain liabilities,
including liabilities arising under the Securities Act.
We
have agreed to indemnify, to the extent permitted by law, the selling security holders (and each selling security holder’s
officers and directors and each person who controls such selling security holder) against liabilities caused by any untrue or
alleged untrue statement of material fact contained in this prospectus or the registration statement of which this prospectus
forms a part (including any amendment or supplement thereof) or any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained
in any information furnished in writing to the Company by such selling security holder expressly for use herein.
We
are required to pay all fees and expenses incident to the registration of the Private Placement Warrants and shares of Class A
common stock covered by this prospectus, including with regard to compliance with state securities or Blue Sky laws. Otherwise,
all discounts, commissions or fees incurred in connection with the sale of the Private Placement Warrants and shares of Class A
common stock offered hereby will be paid by the selling security holders.
DESCRIPTION
OF SECURITIES
The
following summary of certain material provisions of our common stock, preferred stock and warrants does not purport to be complete.
You should refer to our certificate of incorporation, as amended, our amended and restated by-laws and our warrant agreement,
which are included as exhibits to the registration statement of which this prospectus is a part. The summary below is also qualified
by reference to the applicable provisions of the Delaware General Corporation Law (the “DGCL”).
Our
A&R Charter authorizes the issuance of 240,000,000 shares of Class A common stock, 120,000,000 shares
of Class C common stock, and 1,000,000 shares of preferred stock, par value $0.0001 per share
(“preferred stock”). Class A common stockholders of record are entitled to one vote for each share held on
all matters to be voted on by stockholders. As of August 23, 2018, there were (a) 28 holders of record of
Class A common stock and 45,855,000 shares of Class A common Stock outstanding; (b) three holders of record of Class C common
stock and 40,000,000 shares of Class C common stock outstanding; and (c) no shares of preferred stock outstanding. All of the
Company’s shares of Class B common stock were converted into shares of Class A common stock on a one-for-one basis at
the Closing in accordance with the terms of the A&R Charter.
Common
Stock
Class A
common stock
Holders
of the Company’s Class A common stock are entitled to one vote for each share held on all matters to be voted on by the
Company’s stockholders. Holders of the Class A common stock and holders of the Class C common stock will vote together as
a single class on all matters submitted to a vote of the Company’s stockholders, except as required by law or the A&R
Charter. Notwithstanding the foregoing, except as otherwise required by law or the A&R Charter (including any preferred stock designation),
holders of shares of Class A common stock shall not be entitled to vote on any amendment to the A&R Charter (including any amendment
to any preferred stock designation) that relates solely to the terms of one or more outstanding series of preferred stock or other
series of common stock if the holders of such affected series of preferred stock or common stock, as applicable, are entitled,
either separately or together with the holders of one or more other such series, to vote thereon pursuant to the A&R Charter (including
any preferred stock designation) or as required by applicable provisions of the DGCL or applicable stock exchange rules.
In
the event of a liquidation, dissolution or winding up of the Company, the holders of the Class A common stock are entitled to
share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made
for each class of stock, if any, having preference over the Class A common stock.
The
shares of Class A common stock received and held by our Sponsor or its permitted transferees upon the conversion of the shares
of Class B common stock in connection with the Business Combination are subject to transfer restrictions pursuant to lock-up provisions
in the Letter Agreement (the “Letter Agreement”) by and among the Company, our Sponsor and certain other individuals
named therein. Those lock-up provisions provide that such securities may not be transferred, assigned or sold until the earlier
of (a) August 23, 2019, (b) the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for
stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading
day period commencing on or after January 20, 2019, or (c) the date following the closing on which the Company completes a liquidation,
merger, stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having
the right to exchange their shares of Class A common stock for cash, securities or other property, except in each case (i) to
our officers or directors, any affiliates or family members of any of our officers or directors, any members of our Sponsor, or
any affiliates of our Sponsor; (ii) in the case of an individual, by gift to a member of the individual’s immediate
family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person
or to a charitable organization; (iii) in the case of an individual, by virtue of laws of descent and distribution upon death
of the individual; (iv) in the case of an individual, pursuant to a qualified domestic relations order; (v) by private
sales or transfers made in connection with the consummation of a business combination (as defined in the Letter Agreement) at
prices no greater than the price at which the shares were originally purchased; (vi) in the event of our liquidation prior
to our completion of our initial business combination; (vii) by virtue of the laws of the state of Delaware or our Sponsor’s
limited liability company agreement upon dissolution of our Sponsor; or (viii) in the event of our liquidation, merger, capital
stock exchange, reorganization or other similar transaction which results in all of our stockholders having the right to exchange
their shares of common stock for cash, securities or other property subsequent to our completion of our initial business combination;
provided, however, that in the case of clauses (i) through (viii) these permitted transferees must enter into a written agreement
agreeing to be bound by these transfer restrictions.
Class C
common stock
In
connection with the Business Combination, the Company issued 40,000,000 shares of Class C common stock to the Contributors.
A holder of Class C common stock may transfer shares of Class C common stock to any transferee only if, and only to the
extent permitted by the Opco LPA, such holder also simultaneously transfers an equal number of such holder’s Common
Units to such transferee in compliance with the Opco LPA. Holders of our Class C common stock will vote together as a single
class with holders of our Class A common stock on all matters properly submitted to a vote of the stockholders. In addition,
holders of Class C common stock, voting as a separate class, are entitled to approve any amendment, alteration or repeal of
any provision of the A&R Charter (whether by merger, consolidation or otherwise), if such amendment, alteration or repeal
would alter or change, in a manner adverse to the holders of the Class C common stock, the powers, preferences or rights of
the Class C common stock, relative to the powers, preferences or rights of any other class of common stock, as such relative
powers, preferences or rights exist as of the date of the A&R Charter.
Under
the A&R Charter, no dividends may be declared or paid on shares of Class C common stock and holders of Class C common
stock do not receive any assets of the Company in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company. In addition, the Company may not enter into any agreement providing for (i) a merger,
consolidation or other business combination requiring the approval of the Company’s stockholders, (ii) any acquisition
of all or substantially all of the Company’s assets or (iii) any tender or exchange offer by the Company or any third
party to acquire stock of the Company (collectively, a “sale transaction”) in which it is proposed that (1) the
shares of Class C common stock are converted into the right to receive, directly or indirectly, in connection with such sale
transaction, any consideration or (2) each share of Class C common stock, together with each Common Unit, are converted into
the right to receive, in connection with a sale transaction, a different amount of consideration on a per share basis as that
received by each share of Class A common stock.
Holders
of Common Units will generally have the right to cause Falcon Opco to redeem all or a portion of their Common Units in exchange
for shares of Class A common stock; provided that the Company may, at its option, effect a direct exchange of such shares of Class
A common stock for such Common Units in lieu of such a redemption by Falcon Opco. Upon the future redemption or exchange of Common
Units held by a Contributor, a corresponding number of shares of Class C common stock will be cancelled. For more information
on the redemption and exchange rights related to the Class C common stock and Common Units, see the section of the Company’s
definitive proxy statement filed with the SEC on August 3, 2018 (the “Proxy Statement”) entitled “Proposal No.
1—The Business Combination Proposal” beginning on page 82 which is incorporated herein by reference.
Earn-Out
Consideration
Pursuant
to the Contribution Agreement, Royal is entitled to receive earn-out consideration to be paid in the form of Common Units (and
a corresponding number of shares of Class C common stock) if the 30-day volume-weighted average price (“30-Day VWAP”)
of the Class A common stock equals or exceeds certain hurdles set forth in the Contribution Agreement. If the 30-Day VWAP of the
Class A common stock is $12.50 or more per share at any time within the seven (7) years following the Closing Date, Royal will
receive (i) an additional 10 million Common Units (and an equivalent number of shares of Class C common stock), plus (ii) an amount
of Common Units (and an equivalent number of shares of Class C common stock) equal to (x) the amount by which annual cash dividends
paid on each share of Class A common stock exceeds $0.50 in each year between the Closing Date and the date the first earn-out
is achieved (with any dividends paid in the stub year in which the first earn-out is achieved annualized for purposes of determining
what portion of such dividends would have, on an annual basis, exceeded $0.50), multiplied by 10 million, (y) divided by $12.50.
If the 30-Day VWAP of the Class A common stock is $15.00 or more per share at any time within the seven (7) years following the
Closing Date (which $15.00 threshold is reduced by the amount by which annual cash dividends paid on each share of Class A common stock exceeds $0.50 in each year between the Closing Date and the date the earn-out is achieved, but not below $12.50), Royal
will receive an additional 10 million Common Units (and an equivalent number of Class C common stock).
Preferred
Stock
Our
A&R Charter authorizes 1,000,000 shares of preferred stock and provides that shares of preferred stock may be issued from
time to time in one or more series. Our board is authorized to fix the voting rights, if any, designations, powers, preferences,
the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable
to the shares of each series. Our board is able to, without stockholder approval, issue preferred stock with voting and other
rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover
effects. The ability of our board to issue preferred stock without stockholder approval could have the effect of delaying, deferring
or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date
hereof. You should refer to the prospectus supplement relating to a particular issue of the Preferred Stock for the terms and
information related to such shares.
New
Warrants
We
may issue New Warrants for the purchase of our Class A common stock, preferred stock or any combination of the foregoing securities.
New Warrants may be issued independently or together with our securities offered by any prospectus supplement and may be attached
to or separate from any such offered securities. Each series of New Warrants will be issued under a separate warrant agreement
to be entered into between us and a bank or trust company, as warrant agent, all as set forth in the prospectus supplement relating
to the particular issue of New Warrants. The warrant agent will act solely as our agent in connection with the New Warrants and
will not assume any obligation or relationship of agency or trust for or with any holders of the New Warrants or beneficial owners
of the New Warrants. The following summary of certain provisions of the New Warrants does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, all provisions of the warrant agreements.
You
should refer to the prospectus supplement relating to a particular issue of the New Warrants for the terms of and information
relating to the New Warrants, including, where applicable:
(1)
the number of securities purchasable upon exercise of the New Warrants and the price at which such securities may be purchased
upon exercise of the New Warrants;
(2)
the date on which the right to exercise the New Warrants commences and the date on which such right expires (the ” New Warrant
Expiration Date”);
(3)
the United States federal income tax consequences applicable to the New Warrants;
(4)
the amount of the New Warrants outstanding as of the most recent practicable date; and
(5)
any other terms of the New Warrants.
New
Warrants will be offered and exercisable for United States dollars only. New Warrants will be issued in registered form only.
Each New Warrant will entitle its holder to purchase such number of securities at such exercise price as is in each case set forth
in, or calculable from, the prospectus supplement relating to the New Warrants. The exercise price may be subject to adjustment
upon the occurrence of events described in such prospectus supplement. After the close of business on the New Warrant Expiration
Date (or such later date to which we may extend such New Warrant Expiration Date), unexercised New Warrants will become void.
The place or places where, and the manner in which, New Warrants may be exercised will be specified in the prospectus supplement
relating to such New Warrants.
Prior
to the exercise of any New Warrants, holders of the New Warrants will not have any of the rights of holders of securities, including
the right to receive payments of any dividends on the securities purchasable upon exercise of the New Warrants, or to exercise
any applicable right to vote.
Existing
Warrants
The
Existing Warrants include 7,500,000 Private Placement Warrants issued in a private placement in connection with our initial public
offering and 13,750,000 Public Warrants sold as part of the units in our initial public offering.
Public
Warrants
Each
Public Warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share,
subject to certain adjustments, at any time commencing on September 22, 2018. Public Warrants must be exercised for a whole share.
The Public Warrants will expire on September 23, 2023, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We
are obligated to deliver any shares of Class A common stock pursuant to the exercise of a Public Warrant and have no obligation
to settle such warrant exercise unless this registration statement with respect to the shares of Class A common stock underlying
the Public Warrants is then effective and a prospectus relating thereto is current, subject to the satisfaction of our obligations
described below with respect to registration. No Public Warrant will be exercisable for cash or on a cashless basis and we are
not be obligated to issue any shares to holders seeking to exercise their Public Warrants unless the issuance of the shares upon
such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.
In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Public Warrant,
the holder of such Public Warrant will not be entitled to exercise such Public Warrant and such Public Warrant may have no value
and expire worthless.
We
agreed to use our best efforts to file with the SEC this registration statement for the registration, under the Securities Act,
of the shares of Class A common stock issuable upon exercise of the Public Warrants. We will use our best efforts to cause
the same to become effective and to maintain the effectiveness of this registration statement, and a current prospectus relating
thereto, until the expiration of the Public Warrants in accordance with the provisions of the Warrant Agreement. Notwithstanding
the above, if our Class A common stock is at the time of any exercise of a Public Warrant not listed on a national securities
exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities
Act, we may, at our option, require holders of public warrants who exercise their Public Warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event that we so elect, we will not be
required to file or maintain in effect a registration statement, but will use our best efforts to register or qualify the shares
under applicable Blue Sky laws to the extent an exemption is not available.
Subject
to the restrictions described below, once the Public Warrants become exercisable, we may redeem the Public Warrants:
|
●
|
in
whole and not in part;
|
|
●
|
at
a price of $0.01 per Public Warrant;
|
|
●
|
upon
not less than 30 days’ prior written notice of redemption to each warrant holder;
and
|
|
●
|
if,
and only if, the reported last sale price of the Class A common stock equals or
exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within a 30 trading day period
ending on the third trading day prior to the date we send the notice of redemption to
the warrant holders.
|
If
and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or
qualify the underlying securities for sale under all applicable state securities laws. As described further below under “—
Private Placement Warrants,” the Private Placement Warrants will not be redeemable by the Company so long as they are held
by our Sponsor or its permitted transferees.
We
have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time
of the call a significant premium to the Public Warrant exercise price. If the foregoing conditions are satisfied and we issue
a notice of redemption of the Public Warrants, each warrant holder will be entitled to exercise his, her, or its Public Warrant
prior to the scheduled redemption date. However, the price of the Class A common stock may fall below the $18.00 redemption
trigger price as well as the $11.50 warrant exercise price after the redemption notice is issued.
If
we call the Public Warrants for redemption as described above, our management will have the option to require any holder that
wishes to exercise his, her or its Public Warrant to do so on a “cashless basis.” In determining whether to require
all holders to exercise their Public Warrants on a “cashless basis,” our management will consider, among other factors,
our cash position, the number of Public Warrants that are outstanding and the dilutive effect on our stockholders of issuing the
maximum number of shares of Class A common stock issuable upon the exercise of its Public Warrants. If our management takes
advantage of this option, all holders of Public Warrants would pay the exercise price by surrendering their Public Warrants for
that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number
of shares of Class A common stock underlying the Public Warrants, multiplied by the excess of the “fair market value”
(defined below) over the exercise price of the Public Warrants by (y) the fair market value. The “fair market value”
shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading
day prior to the date on which the notice of redemption is sent to the holders of Public Warrants. If our management takes advantage
of this option, the notice of redemption will contain the information necessary to calculate the number of shares of Class A
common stock to be received upon exercise of the Public Warrants, including the “fair market value” in such case.
Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect
of a redemption. We believe this feature is an attractive option to us if it does not need the cash from the exercise of the Public
Warrants. If we call the Public Warrants for redemption and our management does not take advantage of this option, our Sponsor
and its permitted transferees would still be entitled to exercise their Private Placement Warrants for cash or on a cashless basis
using the same formula described above that other warrant holders would have been required to use had all warrant holders been
required to exercise their Public Warrants on a cashless basis, as described in more detail below.
A
holder of a Public Warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will
not have the right to exercise such Public Warrant, to the extent that after giving effect to such exercise, such person (together
with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8%
(or such other amount as a holder may specify) of the shares of Class A common stock outstanding immediately after giving
effect to such exercise.
If
the number of outstanding shares of Class A common stock is increased by a stock dividend payable in shares of Class A
common stock, or by a split-up of shares of Class A common stock or other similar event, then, on the effective date of such
stock dividend, split-up or similar event, the number of shares of Class A common stock issuable on exercise of each Public
Warrant will be increased in proportion to such increase in the outstanding shares of Class A common stock. A rights offering
to holders of Class A common stock entitling holders to purchase shares of Class A common stock at a price less than
the fair market value will be deemed a stock dividend of a number of shares of Class A common stock equal to the product
of (i) the number of shares of Class A common stock actually sold in such rights offering (or issuable under any other
equity securities sold in such rights offering that are convertible into or exercisable for Class A common stock) multiplied
by (ii) one (1) minus the quotient of (x) the price per share of Class A common stock paid in such rights offering
divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into
or exercisable for Class A common stock, in determining the price payable for Class A common stock, there will be taken
into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion
and (ii) fair market value means the volume weighted average price of Class A common stock as reported during the 10
trading day period ending on the trading day prior to the first date on which the shares of Class A common stock trade on
the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In
addition, if we, at any time while the Public Warrants are outstanding and unexpired, pay a dividend or makes a distribution in
cash, securities or other assets to the holders of Class A common stock on account of such shares of Class A common
stock (or other shares of the Company’s capital stock into which the Public Warrants are convertible), other than (a) as
described above or (b) certain ordinary cash dividends, then the warrant exercise price will be decreased, effective immediately
after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid
on each share of Class A common stock in respect of such event.
If
the number of outstanding shares of Class A common stock is decreased by a consolidation, combination, reverse stock split
or reclassification of shares of Class A common stock or other similar event, then, on the effective date of such consolidation,
combination, reverse stock split, reclassification or similar event, the number of shares of Class A common stock issuable
on exercise of each Public Warrant will be decreased in proportion to such decrease in outstanding shares of Class A common
stock.
Whenever
the number of shares of Class A common stock purchasable upon the exercise of the Public Warrants is adjusted, as described
above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment
by a fraction (x) the numerator of which will be the number of shares of Class A common stock purchasable upon the exercise
of the Public Warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares
of Class A common stock so purchasable immediately thereafter.
In
case of any reclassification or reorganization of the outstanding shares of Class A common stock (other than those described
above or that solely affects the par value of such shares of Class A common stock), or in the case of any merger or consolidation
of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that
does not result in any reclassification or reorganization of our outstanding shares of Class A common stock), or in the case
of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially
as an entirety in connection with which we are dissolved, the holders of the Public Warrants will thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions specified in the Public Warrants and in lieu of the shares
of our Class A common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented
thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Public
Warrants would have received if such holder had exercised their Public Warrants immediately prior to such event. If less than
70% of the consideration receivable by the holders of Class A common stock in such a transaction is payable in the form of
Class A common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in
an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the
registered holder of the Public Warrants properly exercises the warrant within thirty days following public disclosure of such
transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes value
(as defined in the Warrant Agreement) of the Public Warrant. The Public Warrants were issued in registered form under the Warrant
Agreement. The Warrant Agreement provides that the terms of the Public Warrants may be amended without the consent of any holder
to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then-outstanding
Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
The
Public Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of
the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated,
accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check
payable to us, for the number of Public Warrants being exercised. The warrant holders do not have the rights or privileges of
holders of Class A common stock and any voting rights until they exercise their Public Warrants and receive shares of Class A
common stock. After the issuance of shares of Class A common stock upon exercise of the Public Warrants, each holder will
be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
Private
Placement Warrants
The
Private Placement Warrants (including the Class A common stock issuable upon exercise of the Private Placement Warrants)
will not be transferable, assignable or salable until September 22, 2018 and they will not be redeemable by the Company so long
as they are held by the Sponsor or its permitted transferees. Otherwise, the Private Placement Warrants have terms and provisions
that are identical to those of the Public Warrants sold as part of the units in our initial public offering. If the Private Placement
Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable
by the Company and exercisable by the holders on the same basis as the Public Warrants included in the units sold in our initial
public offering.
If
holders of the Private Placement Warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering
his, her or its Private Placement Warrants for that number of shares of Class A common stock equal to the quotient obtained
by dividing (x) the product of the number of shares of Class A common stock underlying the Private Placement Warrants,
multiplied by the excess of the “fair market value” (defined below) over the exercise price of the Private Placement
Warrants by (y) the fair market value. The “fair market value” shall mean the average reported last sale price
of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice
of warrant exercise is sent to the warrant agent. The reason that we have agreed that these Private Placement Warrants will be
exercisable on a cashless basis so long as they are held by the Sponsor and its permitted transferees is because it was not known
at the time whether they will be affiliated with us following an initial business combination. If they remain affiliated with
us, their ability to sell our securities in the open market will be significantly limited. We have policies in place that prohibit
insiders from selling their securities except during specific periods of time. Even during such periods of time when insiders
will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material
non-public information. Accordingly, unlike public stockholders who could exercise their Public Warrants and sell the shares of
Class A common stock issuable upon exercise of the Public Warrants freely in the open market in order to recoup the cost
of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing
the holders to exercise such Private Placement Warrants on a cashless basis is appropriate.
The
Private Placement Warrants and any shares of Class A common stock issued upon conversion or exercise thereof are each subject
to transfer restrictions pursuant to lock-up provisions in the Letter Agreement. Those lock-up provisions provide that such securities
are not transferable, assignable or salable until September 22, 2018, except in each case (a) to our officers or directors,
any affiliates or family members of any of our officers or directors, any members of our Sponsor, or any affiliates of our Sponsor,
(b) in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary
of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization;
(c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in
the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection
with the consummation of a business combination (as defined in the Letter Agreement) at prices no greater than the price at which
the shares were originally purchased; (f) in the event of our liquidation prior to our completion of our initial business
combination; (g) by virtue of the laws of the state of Delaware or our Sponsor’s limited liability company agreement
upon dissolution of our Sponsor; or (h) in the event of our liquidation, merger, capital stock exchange, reorganization or
other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for
cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in
the case of clauses (a) through (e) these permitted transferees must enter into a written agreement agreeing to be bound by these
transfer restrictions.
The
Private Placement Warrants were sold in a private placement pursuant to a purchase agreement between the Company and the Sponsor
and have the terms set forth in the Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent,
and us.
Certain
Anti-Takeover Provisions of Delaware Law
Special
Meeting of Stockholders
Our
bylaws provide that special meetings of our stockholders may be called only by our board pursuant to a majority vote of our board
and the ability of our stockholders to call a special meeting is specifically denied.
Advance
Notice Requirements for Stockholder Proposals and Director Nominations
Our
bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates
for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be
timely, a stockholder’s notice will need to be received by the company secretary at our principal executive offices not
later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the anniversary
date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking
inclusion in our annual proxy statement must comply with the notice periods contained therein. Our bylaws also specify certain
requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from
bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.
Exclusive
Forum
The
A&R Charter provides that a stockholder bringing a claim subject to the proposed Article X of the A&R Charter will be
required to bring that claim in the Delaware Court of Chancery, subject to the Delaware Court of Chancery having personal jurisdiction
over the defendants.
Restrictions
on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144
is not available for the resale of securities initially issued by shell companies (other than business combination related shell
companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important
exception to this prohibition if the following conditions are met:
|
●
|
the
issuer of the securities that was formerly a shell company has ceased to be a shell company;
|
|
●
|
the
issuer of the securities is subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act;
|
|
●
|
the
issuer of the securities has filed all Exchange Act reports and material required to
be filed, as applicable, during the preceding 12 months (or such shorter period that
the issuer was required to file such reports and materials), other than current reports
on Form 8-K; and
|
|
●
|
at
least one year has elapsed from the filing of our Current Report on Form 8-K, filed
with the SEC on August 29, 2018, reflecting our status as an entity that is not a shell
company.
|
As
a result, if we have filed all Exchange Act reports and materials as set forth in the third bullet of the preceding paragraph,
then any holder of restricted shares of our Class A common stock will be able to sell such shares pursuant to Rule 144
without registration after August 29, 2019.
Transfer
Agent and Warrant Agent
The
transfer agent for our Class A common stock and warrant agent for our Existing Warrants and New Warrants is Continental Stock
Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer
agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all liabilities, including
judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its activities in that capacity,
except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES
The
following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S. Holders (as defined
below) of the purchase, ownership and disposition of our Class A common stock issued pursuant to this offering, but it
does not purport to be a complete analysis of all potential tax considerations that may be relevant to a particular holder of
our Class A common stock. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any
applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the Code, Treasury
regulations promulgated thereunder (“Treasury Regulations”), judicial decisions, and published rulings and
administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), in each case as in effect as of
the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing
interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder of our Class A
common stock. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can
be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences
of the purchase, ownership and disposition of our Class A common stock.
This
discussion is limited to Non-U.S. Holders that hold our Class A common stock as a “capital asset” within
the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all
U.S. federal income tax consequences relevant to a Non-U.S. Holder’s particular circumstances, including the impact of
the Medicare contribution tax on net investment income or any considerations with respect to any withholding required pursuant to the Foreign Account Tax Compliance
Act of 2010 (including the Treasury Regulations promulgated thereunder and any intergovernmental agreements entered in connection
therewith and any laws, regulations or practices adopted in connection with any such agreement). In addition, it does not address consequences relevant to Non-U.S.
Holders subject to special rules, including, without limitation:
|
●
|
U.S.
expatriates and former citizens or long-term residents of the United States;
|
|
●
|
persons
subject to the alternative minimum tax;
|
|
●
|
persons
holding our Class A common stock as part of a hedge, straddle or other risk reduction
strategy or as part of a conversion transaction or other integrated investment;
|
|
●
|
banks,
insurance companies, and other financial institutions;
|
|
●
|
brokers,
dealers or traders in securities or currencies;
|
|
●
|
“controlled
foreign corporations,” “passive foreign investment companies,” and
corporations that accumulate earnings to avoid U.S. federal income tax;
|
|
|
|
|
●
|
real estate investment trusts;
|
|
|
|
|
●
|
regulated investment companies;
|
|
●
|
partnerships,
or other entities or arrangements treated as partnerships for U.S. federal income tax
purposes or other flow-through entities (and investors therein);
|
|
●
|
tax-exempt
organizations or governmental organizations;
|
|
●
|
persons
who hold our Class A common stock as part of a hedge, straddle, constructive sale, conversion transaction or other integrated or risk reduction
transaction;
|
|
●
|
persons
who hold or receive our Class A common stock pursuant to the exercise of any employee
stock option or otherwise as compensation;
|
|
|
|
|
●
|
persons required to report income no later than when such income is reported on an “applicable financial statement”;
|
|
|
|
|
●
|
persons that hold directly, indirectly or constructively 5% of any class of our stock;
|
|
●
|
“qualified
foreign pension funds” as defined in Section 897(l)(2) of the Code and entities
all of the interests of which are held by qualified foreign pension funds; and
|
|
●
|
retirement
plans, individual retirement accounts or other tax-deferred accounts.
|
If
an entity treated as a partnership for U.S. federal income tax purposes holds our Class A common stock, the tax treatment
of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations
made at the partner level. Accordingly, partnerships holding our Class A common stock and partners in such partnerships should
consult their tax advisors regarding the U.S. federal income tax consequences to them.
THIS
DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT
TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF OUR CLASS A COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE
LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
Definition
of a Non-U.S. Holder
For
purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our Class A common stock that
is neither a “U.S. person” nor an entity or arrangement treated as a partnership for U.S. federal income tax
purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the
following:
|
●
|
an
individual who is a citizen or resident of the United States;
|
|
●
|
a
corporation created or organized under the laws of the United States, any state thereof,
or the District of Columbia;
|
|
●
|
an
estate, the income of which is subject to U.S. federal income tax regardless of its source;
or
|
|
●
|
a trust (1) if a court within the United States is able to exercise primary supervision over the trust’s administration
and one or more “United States persons” (within the
meaning of Section 7701(a)(30) of the Code) have the authority to control all substantial decisions of the trust, or (2) that
has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.
|
Distributions
Any distributions of cash or property on
our Class A common stock will constitute dividends for U.S. federal income tax purposes to the extent paid from our current
or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends
for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder’s
adjusted tax basis in its Class A common stock, but not below zero. Any excess will be treated as capital gain and will be
treated as described below under “—Sale or Other Taxable Disposition.”
Subject
to the discussion below with respect to effectively connected income, dividends paid to a Non-U.S. Holder of our Class A common stock
will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified
by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid IRS Form W-8BEN or W-8BEN-E (or other
applicable documentation) certifying qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish
the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by
timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their
entitlement to benefits under any applicable income tax treaty.
If
dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a trade or business
within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment
in the United States to which such dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding
tax described above, provided that the non-U.S. holder complies with applicable certification and other requirements.
Any
such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular graduated
rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate
specified by an applicable income tax treaty) on its effectively connected earnings and profits (as adjusted for certain items),
which will include such effectively connected dividends. Non-U.S. Holders should consult their tax advisors regarding any applicable
tax treaties that may provide for different rules.
Sale
or Other Taxable Disposition
A
Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition
of our Class A common stock unless:
|
●
|
the
gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or
business within the United States (and, if required by an applicable income tax treaty,
the Non-U.S. Holder maintains a permanent establishment in the United States to which
such gain is attributable);
|
|
●
|
the
Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days
or more during the taxable year of the disposition and certain other requirements are
met; or
|
|
●
|
our
Class A common stock constitutes a United States real property interest (“USRPI”)
by reason of our status as a United States real property holding corporation (“USRPHC”)
for U.S. federal income tax purposes. Generally, a domestic corporation is a USRPHC if
the fair market value of its USRPIs equals or exceeds 50% of the sum of the fair market
value of its worldwide real property interests plus its other assets used or held for
use in its trade or business.
|
Gain
described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular
graduated rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such
lower rate specified by an applicable income tax treaty) on its effectively connected earnings and profits (adjusted for certain
items), which will include such effectively connected gain.
A
Non-U.S. Holder described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such
lower rate specified by an applicable income tax treaty) on any gain derived from the disposition, which may be offset by U.S.
source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided
the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.
With
respect to the third bullet point above, we believe that we currently are, and expect to remain for the foreseeable future, a
USRPHC for U.S. federal income tax purposes. However, a Non-U.S. Holder of our Class A common stock generally will not be
subject to U.S. net federal income tax as a result of our being a USRPHC if our Class A common stock is “regularly
traded,” as defined by applicable Treasury Regulations, on an established securities market, and such Non-U.S. Holder owned,
actually or constructively, 5% or less of our Class A common stock throughout the shorter of the five-year period ending
on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period. If our Class A common
stock is not considered to be so traded, a Non-U.S. Holder generally would be subject to net U.S. federal income tax on the gain
realized on a disposition of our Class A common stock as a result of our being a USRPHC and generally would be required to
file a U.S. federal income tax return. Additionally, a 15% withholding tax would apply to the gross proceeds from such disposition.
Non-U.S.
Holders should also consult their tax advisors regarding potentially applicable income tax treaties that may provide for different
rules.
Information
Reporting and Backup Withholding
Payments
of dividends on our Class A common stock will not be subject to backup withholding, provided the applicable withholding agent
does not have actual knowledge or reason to know the Non-U.S. Holder is a United States person and the Non-U.S. Holder either
certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishes
an exemption. However, information returns are required to be filed with the IRS in connection with any dividends on our Class A
common stock paid to the Non-U.S. Holder, regardless of whether any tax was actually withheld. In addition, proceeds of the sale
or other taxable disposition of our Class A common stock within the United States or conducted through certain U.S.-related
brokers generally will not be subject to backup withholding or information reporting if the applicable withholding agent receives
the certification described above and does not have actual knowledge or reason to know that such Non-U.S. Holder is a United States
person, or the Non-U.S. Holder otherwise establishes an exemption. Proceeds of a disposition of our Class A common stock
conducted through a non-U.S. office of a non-U.S. broker generally will not be subject to backup withholding or information reporting.
Copies
of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or
agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is established.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a
credit against a Non-U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished
to the IRS.
LEGAL
MATTERS
Wachtell,
Lipton, Rosen & Katz will pass upon the validity of the securities covered by this prospectus. Any underwriters or agents
will be advised about other issues relating to the offering by counsel to be named in the applicable prospectus supplement.
EXPERTS
The
financial statements of Osprey Energy Acquisition Corp. as of December 31, 2017 and 2016 and for year ended December 31, 2017
and for the period from June 13, 2016 (inception) to December 31, 2016, have been incorporated by reference herein in reliance
upon the report of Marcum LLP, independent registered public accounting firm, incorporated in this prospectus by reference to
our Proxy Statement filed with the SEC on August 3, 2018 and upon the authority of such firm as experts in accounting and auditing.
The
consolidated financial statements of Royal Resources L.P. as of December 31, 2017 and 2016 and for the three years ended December
31, 2017, 2016 and 2015 incorporated in this prospectus by reference from the Company’s Current Report on Form 8-K dated
August 29, 2018 have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated
in their report, which is incorporated herein by reference. Such consolidated financial statements have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The
information incorporated by reference in this prospectus regarding estimated quantities of proved reserves of our assets, the
future net revenues from those reserves and their present value as of December 31, 2017 is based on the proved reserve report
prepared by Ryder Scott Company, L.P., Royal’s independent petroleum engineers. These estimates are incorporated by reference
in this prospectus in reliance upon the authority of such firm as an expert in these matters.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the securities offered
by this prospectus. This prospectus, which forms a part of such registration statement, does not contain all of the information
included in the registration statement. For further information pertaining to us and our common stock, including the securities,
you should refer to the registration statement and to its exhibits. Whenever we make reference in this prospectus to any of our
contracts, agreements or other documents, the references are not necessarily complete. If a contract or document has been filed
as an exhibit to the registration statement or a report we file under the Exchange Act, you should refer to the copy of the contract
or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit to a
registration statement or report is qualified in all respects by the filed exhibit.
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available
to the public over the Internet at the SEC’s website at www.sec.gov and on our website at www.falconminerals.com. Information
on our website does not constitute part of this prospectus. You may inspect without charge any documents filed by us at the SEC’s
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain copies of all or any part of these materials
from the SEC upon the payment of certain fees prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for further information
on the Public Reference Room.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We
“incorporate by reference” into this prospectus documents we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The information incorporated by reference is an important part of this
prospectus. Some information contained in this prospectus updates the information incorporated by reference, and information that
we file subsequently with the SEC will automatically update this prospectus. In other words, in the case of a conflict or inconsistency
between information set forth in this prospectus and information that we file later and incorporate by reference into this prospectus,
you should rely on the information contained in the document that was filed later.
In
particular, we incorporate by reference into this prospectus the documents listed below and any filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the initial filing and prior to effectiveness of the registration
statement that contains this prospectus and prior to the time that all the securities offered by this prospectus have been sold
by the selling security holders as described in this prospectus (other than, in each case, documents or information deemed to
have been “furnished” and not “filed” in accordance with SEC rules) or such registration statement has
been withdrawn:
|
●
|
our
Annual Report on Form 10-K for the fiscal year ended December 31, 2017;
|
|
●
|
our
Quarterly Report on Form 10-Q for the quarters ended March 31, 2018 and June 30,
2018;
|
|
●
|
our
Definitive Proxy Statement on Schedule 14A filed with the SEC on August 3, 2018;
|
|
●
|
our
Current Reports on Form 8-K filed on June 4, 2018, July 20, 2018, August 10, 2018,
August 23, 2018 and August 29, 2018; and
|
|
●
|
the
description of our Class A common stock set forth in our registration statement
on Form 8-A filed on July 19, 2017 pursuant to Section 12 of the Exchange Act,
and any amendment or report filed for the purpose of updating that description.
|
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to
be modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which also
is or is deemed to be incorporated by reference in this prospectus modifies or supersedes that statement. Any statement so modified
or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You
may request a copy of the registration statement, the above filings and any future filings that are incorporated by reference
into this prospectus, other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that
filing, at no cost, by writing or calling us at the following address:
Falcon
Minerals Corporation
1845
Walnut Street, 10th Floor
Philadelphia,
PA 19103
(215)
832-4161
Falcon
Minerals Corporation
Class
A Common Stock
Preferred
Stock
New
Warrants
21,250,000
Shares of Class A common stock Issuable Upon Existing Warrants
7,500,000
Private Placement Warrants
78,355,000
Shares of Class A common stock
Prospectus
, 2018
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following table sets forth the fees and expenses, other than underwriting discounts and commissions, payable by us in connection
with the sale or resale of the securities being registered hereby.
SEC registration fee
|
|
$
|
191,727
|
|
Accounting fees and expenses
|
|
|
*
|
|
Legal fees and expenses
|
|
|
*
|
|
Printing and engraving expenses
|
|
|
*
|
|
Miscellaneous
|
|
|
*
|
|
Total
|
|
$
|
*
|
|
*
Estimates not presently known.
We
will bear all costs, expenses and fees in connection with the registration of the securities, including with regard to compliance
with state securities or “Blue Sky” laws. The selling security holders, however, will bear all commissions and discounts,
if any, attributable to their sale of the securities.
Item
15. Indemnification of Directors and Officers.
Section 145
of the DGCL, as amended, authorizes us to indemnify any director or officer under certain prescribed circumstances and subject
to certain limitations against certain costs and expenses, including attorney’s fees actually and reasonably incurred in
connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative, to which a person is
a party by reason of being one of our directors or officers if it is determined that such person acted in accordance with the
applicable standard of conduct set forth in such statutory provisions.
Our
A&R Charter provides that our officers and directors are indemnified by us to the fullest extent authorized by Delaware law,
as it now exists or may in the future be amended. In addition, our A&R Charter provides that our directors will not be personally
liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated
their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful
payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions
as directors.
Our
bylaws permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her
actions, regardless of whether Delaware law would permit such indemnification. We have purchased a policy of directors’
and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment
of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors. In addition,
we have entered into indemnification agreements with each of our officers and directors, a form of which is attached to this Registration
Statement as Exhibit 10.3. These agreements require us to indemnify these individuals to the fullest extent permitted under
Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result
of any proceeding against them as to which they could be indemnified.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling
us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Item
16. Exhibits.
Exhibit Number
|
|
Description
|
|
|
|
2.1
|
|
Contribution Agreement, dated June 3, 2018, by and among Royal Resources L.P., Royal Resources GP L.L.C., Nobel Royalties Acquisition Co. LP, Hooks Ranch Holdings LP, DGK ORRI Holdings, LP, DGK ORRI GP LLC, Hooks Holding Company GP, LLC and Osprey Energy Acquisition Corp. (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on June 4, 2018).
|
3.1
|
|
Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on August 29, 2018).
|
3.2
|
|
Amended and Restated Bylaws of Falcon Minerals Corporation (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on August 29, 2018).
|
4.1
|
|
Shareholders’ Agreement, dated August 23, 2018, by and among Falcon Minerals Corporation, Osprey Sponsor, LLC, Edward Cohen, Jonathan Z. Cohen, Daniel C. Herz, Jeffrey F. Brotman, Royal Resources L.P., Royal Resources GP L.L.C., Noble Royalties Acquisition Co. L.P., Hooks Ranch Holdings LP, DGK ORRI Holdings, LP and Blackstone Management Partners, L.L.C. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on August 29, 2018).
|
4.2
|
|
Registration Rights Agreement, dated August 23, 2018, by and among Falcon Minerals Corporation, Royal Resources L.P., Noble Royalties Acquisition Co., L.P., Hooks Ranch Holdings LP, DGK ORRI Holdings, LP, DGK ORRI GP LLC and Hooks Holdings Company GP, LLC. (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on August 29, 2018).
|
4.3
|
|
Registration Rights Agreement, dated July 20, 2017, by and among Falcon Minerals Corporation and Osprey Sponsor, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on July 26, 2017).
|
4.4
|
|
Warrant Agreement, dated July 20, 2017, between Falcon Minerals Corporation and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on July 26, 2017).
|
5.1*
|
|
Opinion of Wachtell, Lipton, Rosen & Katz.
|
10.1†
|
|
Falcon Minerals Corporation 2018 Long-Term Incentive Plan. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (file No. 001-38158) filed with the SEC on August 29, 2018).
|
10.2
|
|
Credit Agreement, dated as of August 23, 2018, by and among Osprey Minerals Operating Partnership, LP, as the Borrower, the lenders from time to time party thereto, Citibank, N.A., as administrative agent and collateral agent for the lenders from time to time party thereto and each other issuing bank from time to time party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on August 29, 2018).
|
10.3
|
|
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on August 29, 2018).
|
10.4
|
|
Second Amended and Restated Agreement of Limited Partnership of Osprey Minerals Operating Partnership, LP, dated August 23, 2018 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (File No. 001-38158) filed with the SEC on August 29, 2018).
|
10.5
|
|
Form of Subscription Agreement, dated June 3, 2018, by and between Osprey Energy Acquisition Corp. and the subscriber named therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (file No. 001-38158) filed June 4, 2018).
|
23.1*
|
|
Consent of Marcum LLP.
|
23.2*
|
|
Consent of Deloitte & Touche LLP.
|
23.3*
|
|
Consent of Ryder Scott Company, L.P.
|
23.4*
|
|
Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.1).
|
24.1*
|
|
Power of Attorney (included on signature pages of this Registration Statement).
|
99.1
|
|
Reserve Report, dated May 18, 2018 (incorporated by reference to Annex I of the Company’s definitive proxy statement filed with the SEC on August 3, 2018).
|
†
|
Compensatory
plan or arrangement.
|
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration
statement:
(i)
to include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii)
to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement; and
(iii)
to include any material information with respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration statement;
provided
,
however
, that paragraphs (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement, or is contained in
a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser,
(i)
each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii)
each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement
in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the
purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such
date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective
date.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial
distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i)
any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
(ii)
any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or
referred to by the undersigned registrant;
(iii)
the portion of any other free writing prospectus relating to the offering containing material information about the
undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6)
That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit
plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the
offering of the securities at that time shall be deemed to be the initial bona fide offering thereof.
(7)
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised
that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Philadelphia, Pennsylvania on September 7, 2018.
|
Falcon
Minerals Corporation
|
|
|
|
By:
|
/s/
Jeffrey F. Brotman
|
|
Name:
|
Jeffrey
F. Brotman
|
|
Title:
|
Chief
Financial Officer, Chief Legal Officer and Secretary
|
POWER
OF ATTORNEY
KNOW
BY ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Daniel C. Herz and Jeffrey
F. Brotman, and each of them, his or her true and lawful attorney-in-fact and agents with full and several power of substitution,
for him or her and his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and
authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact
and agents or any of them, or their substitutes, may lawfully do or cause to be done.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons
on behalf of the registrant and in the capacities and on the date indicated.
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Daniel
C. Herz
|
|
Chief
Executive Officer and President
|
|
September 7,
2018
|
Daniel
C. Herz
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
/s/ Jeffrey
F. Brotman
|
|
Chief
Financial Officer, Chief Legal Officer
|
|
September 7,
2018
|
Jeffrey
F. Brotman
|
|
and
Secretary (Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Jonathan
Z. Cohen
|
|
Director
|
|
September 7,
2018
|
Jonathan
Z. Cohen
|
|
|
|
|
|
|
|
|
|
/s/ Edward
E. Cohen
|
|
Director
|
|
September 7,
2018
|
Edward
E. Cohen
|
|
|
|
|
|
|
|
|
|
/s/
David
I. Foley
|
|
Director
|
|
September 7,
2018
|
David
I. Foley
|
|
|
|
|
|
|
|
|
|
/s/ Angelo
G. Acconcia
|
|
Director
|
|
September 7,
2018
|
Angelo
G. Acconcia
|
|
|
|
|
|
|
|
|
|
/s/ Adam
M. Jenkins
|
|
Director
|
|
September 7,
2018
|
Adam
M. Jenkins
|
|
|
|
|
|
|
|
|
|
/s/
Jonathan R. Hamilton
|
|
Director
|
|
September 7,
2018
|
Jonathan
R. Hamilton
|
|
|
|
|
|
|
|
|
|
/s/ William
D. Anderson
|
|
Director
|
|
September 7,
2018
|
William
D. Anderson
|
|
|
|
|
|
|
|
|
|
/s/ Brian
L. Frank
|
|
Director
|
|
September 7,
2018
|
Brian
L. Frank
|
|
|
|
|
|
|
|
|
|
/s/ Steven
R. Jones
|
|
Director
|
|
September 7,
2018
|
Steven
R. Jones
|
|
|
|
|
Osprey Energy Acquisition Corp. - Unit (delisted) (NASDAQ:OSPRU)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Osprey Energy Acquisition Corp. - Unit (delisted) (NASDAQ:OSPRU)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024