PREM14A 1 rot-prem14a_20210514.htm PREM14A rot-prem14a_20210514.DOCX.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

 

Information Required in Proxy Statement

Schedule 14A Information

 

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

 

 

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box: 

 

Preliminary Proxy Statement

 

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

 

Definitive Proxy Statement

 

 

Definitive Additional Materials

 

 

Soliciting Material Pursuant to §240.14a-12

 

ROTOR ACQUISITION CORP.

 

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

No fee required.

 

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 

 

(1)

Title of each class of securities to which transaction applies:

 

 

Not applicable

 

(2)

Aggregate number of securities to which transaction applies:

 

 

Not applicable 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

Not applicable

 

(4)

Proposed maximum aggregate value of transaction:

 

 

$1,200,000,000.00

 

(5)

Total fee paid:

 

 

$130,920.00(1)

 

 

Fee paid previously with preliminary materials.

 

 

 

(1)

Our estimate of the transaction value is based on the following estimated values: [●] shares of the registrant’s Class A Common Stock valued at a fixed price of $10.00 per share.

 

 

 

(2)

The amount is the product of $[●] multiplied by the SEC’s filing fee of $109.10 per $1,000,000.

 

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

 

 

(1)

Amount Previously Paid:

 

(2)

Form, Schedule or Registration Statement No.:

 

(3)

Filing Party:

 

(4)

Date Filed:

 

(1)  The amount is the product of $1,200,000,000.00 multiplied by the SEC’s filing fee of $109.10 per $1,000,000.

 

 

 

 


 

ROTOR ACQUISITION CORP.

The Chrysler Building

405 Lexington Avenue

New York, New York 10174

Dear Rotor Acquisition Corp. Stockholder:

We cordially invite you to attend a special meeting of the stockholders of Rotor Acquisition Corp., a Delaware corporation (“we,” “us,” “our” or the “Company”), which will be held on [●] at [●] Eastern Time (the “Special Meeting”). The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at [●].

On April 5, 2021, the Company, Rotor Merger Sub Corp., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub”), and Sarcos Corp., a Utah corporation (“Sarcos”), entered into an Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), which provides for, among other things, the merger of Merger Sub with and into Sarcos, with Sarcos continuing as the surviving corporation (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). As a result of the Merger, the Company will own 100% of the outstanding common stock of Sarcos. Our publicly-traded Class A Common Stock, public warrants and public units (which are comprised of one share of Class A Common Stock and one-half of one public warrant) are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols “ROT,” “ROT.WS” and “ROT.U,” respectively. We intend to apply to continue the listing of our publicly-traded Common Stock and public warrants on the Nasdaq Capital Market (“Nasdaq”) under the symbols “STRC,” and “STRCW,” respectively, upon the closing of the Business Combination.  Units will automatically separate into their underlying Class A Common Stock and public warrants in connection with the closing of the Business Combination.

At the Special Meeting, Company stockholders will be asked to consider and vote upon the following proposals:

 

 

1.

a proposal to adopt the Merger Agreement (the “Business Combination Proposal” or “Proposal No. 1”), a copy of which is attached to the accompanying proxy statement as Annex A, and approve the transactions contemplated thereby, including the Business Combination. Subject to the terms of the Merger Agreement, the consideration to be paid to the existing equity holders of Sarcos at the time of the Business Combination (including shares of common stock, preferred stock, restricted stock awards, options, restricted stock units and warrants) (the “Sarcos Equity Holders”) will be stock consideration, consisting of 120,000,000 newly-issued shares of our Common Stock, par value $0.0001 per share (the “Common Stock”), plus up to an additional 5,000,000 shares of Common Stock if Sarcos consummates an equity financing prior to the closing of the Business Combination (the “Financing Shares”) with one share issued for every $10.00 raised in such financing. At the closing of the Business Combination, each option to purchase shares of Sarcos’ Common Stock will be converted into an option exercisable into a number of shares of Common Stock and each award of Sarcos’ restricted stock units will be converted into a right to receive restricted stock units based on shares of Common Stock. Following the closing of the Business Combination, the Sarcos Stockholders will be entitled to receive an additional (1) 14,062,500 shares of Common Stock if the closing share price of a share of Common Stock is equal to or exceeds $15.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the closing and ending on the fourth anniversary of the closing, and (2) 14,062,500 shares of Common Stock if the closing share price of a share of Common Stock is equal to or exceeds $20.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the closing and ending on the fifth anniversary of the closing (collectively, the “Earn-Out Shares”). The aggregate purchase price and number of shares issued to the Sarcos Equity Holders as a result of the Business Combination will not be subject to any adjustment but will be subject to customary closing conditions,

 

 

2.

a proposal to approve, for purposes of complying with applicable NYSE Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock pursuant to (i) the issuance of up to 153,125,000 shares of Common Stock in the Business Combination and (ii) the issuance and sale of 22,000,000 shares of Common Stock in a private offering of securities to certain investors in connection with the Business Combination (the “NYSE Proposal” or “Proposal No. 2”),

 

 

3.

a proposal to adopt the Second Amended and Restated Certificate of Incorporation of the Company in the form attached hereto as Annex B (the “Charter Approval Proposal” or “Proposal No. 3”),

 

 

4.

a separate proposal with respect to certain governance provisions in the Second Amended and Restated Certificate of Incorporation, which are being separately presented in accordance with SEC requirements and which will each be voted upon on a non-binding advisory basis (each a “Governance Proposal,” and collectively, the “Governance Proposals” or “Proposal No. 4”),

 

i


 

 

5.

a proposal to elect eight directors to our board of directors (our “Board”), with Benjamin G. Wolff and Admiral Eric T. Olson (Ret.) to serve as our Class I directors for a term expiring at the annual meeting of stockholders to be held in 2022,

Dennis Weibling, Matthew Shigenobu Muta and Laura J. Peterson to serve as our Class II directors for a term expiring at the annual meeting of stockholders to be held in 2023, and Brian D. Finn, Peter Klein and Priya Balasubramaniam to serve as our Class III directors for a term expiring at the annual meeting of stockholders to be held in 2024, or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. (the “Director Election Proposal” or “Proposal No. 5”),

 

 

6.

a proposal to approve the Sarcos Technology and Robotics Corporation 2021 Equity Incentive Plan (the “Incentive Plan”), including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” or “Proposal No. 6”), and

 

 

7.

a proposal to approve the Sarcos Technology and Robotics Corporation 2021 Employee Stock Purchase Plan (the “ESPP”), including the authorization of the initial share reserve under the ESPP (the “Employee Stock Purchase Plan Proposal” or “Proposal No. 7”), and

 

 

8.

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal (the “Adjournment Proposal” or “Proposal No. 8”).

 

Each of the proposals is more fully described in this proxy statement, which each stockholder is encouraged to read carefully.

We are providing the accompanying proxy statement and proxy cards to our stockholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements thereof. Information about the Special Meeting and the proposals to be considered by the Company’s stockholders is included in this proxy statement. Whether or not you plan to attend the Special Meeting, we urge all stockholders to read this proxy statement, including the Annexes and the accompanying financial statements of the Company and Sarcos, carefully and in its entirety. In particular, we urge you to read carefully the section entitled “Risk Factors” beginning on page [●] of this proxy statement.

After careful consideration, our Special Committee recommended that the Board approve, and the Board has unanimously approved, the Merger Agreement and the transactions contemplated thereby. The Board unanimously recommends that our stockholders vote “FOR” adoption of the Merger Agreement and approval of the transactions contemplated thereby, including the Business Combination, and that our stockholders vote “FOR” all other proposals presented to our stockholders in the accompanying proxy statement. When you consider the Board’s recommendation of these proposals, you should keep in mind that our directors and officers may have interests in the Business Combination that are different from, or in addition to, the interests of our stockholders. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Interests of Certain Persons in the Business Combination” for additional information.

Your vote is very important. Whether or not you plan to attend the Special Meeting, please vote as soon as possible by following the instructions in this proxy statement to make sure that your shares are represented at the Special Meeting. If you hold your shares or units in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Special Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Special Meeting virtually, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. If you are a stockholder of record and you attend the Special Meeting and wish to vote virtually, you may withdraw your proxy and vote virtually at the Special Meeting.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT THE COMPANY REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE COMPANY’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT SUCH MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. 

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On behalf of our Board, I would like to thank you for your support of Rotor Acquisition Corp. and look forward to a successful completion of the Business Combination.

 

 

Sincerely,

[●], 2021

 

 

 

 

Stefan M. Selig

 

Chairman of the Board of Directors

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

This proxy statement is dated [●], 2021 and is expected to be first mailed to Company stockholders on or about [●], 2021. 


iii


 

ROTOR ACQUISITION CORP.

The Chrysler Building

405 Lexington Avenue

New York, New York 10174

Notice of SPECIAL Meeting of STOCKHOLDERS OF ROTOR ACQUISITION CORP.

TO BE HELD [●], 2021

To the Stockholders of Rotor Acquisition Corp.:

NOTICE IS HEREBY GIVEN that a special meeting of the stockholders of Rotor Acquisition Corp., a Delaware corporation (the “Company”), will be held on [●] at [●] Eastern Time (the “Special Meeting”). The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at [●].

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Special Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Special Meeting, the chair or secretary of the Special Meeting will convene the meeting at [●] on the date specified above and at [●] solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement at [●].

You are cordially invited to attend the Special Meeting to conduct the following items of business:

 

1.

a proposal to adopt the Merger Agreement (the “Business Combination Proposal” or “Proposal No. 1”), a copy of which is attached to the accompanying proxy statement as Annex A, and approve the transactions contemplated thereby, including the Business Combination. Subject to the terms of the Merger Agreement, the consideration to be paid to the existing equity holders of Sarcos at the time of the Business Combination (including shares of common stock, preferred stock, restricted stock awards, options, restricted stock units and warrants) (the “Sarcos Equity Holders”) will be stock consideration, consisting of 120,000,000 newly-issued shares of our Common Stock, par value $0.0001 per share (the “Common Stock”), plus up to an additional 5,000,000 shares of Common Stock if Sarcos consummates an equity financing prior to the closing of the Business Combination (the “Financing Shares”) with one share issued for every $10.00 raised in such financing. At the closing of the Business Combination, each option to purchase shares of Sarcos’ Common Stock will be converted into an option exercisable into a number of shares of Common Stock and each award of Sarcos’ restricted stock units will be converted into a right to receive restricted stock units based on shares of Common Stock. Following the closing of the Business Combination, the holders of Sarcos capital stock (including any capital stock subject to restricted stock awards) (the “Sarcos Stockholders”) will be entitled to receive an additional (1) 14,062,500 shares of Common Stock if the closing share price of a share of Common Stock is equal to or exceeds $15.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the closing and ending on the fourth anniversary of the closing, and (2) 14,062,500 shares of Common Stock if the closing share price of a share of Common Stock is equal to or exceeds $20.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the closing and ending on the fifth anniversary of the closing (collectively, the “Earn-Out Shares”). The aggregate purchase price and number of shares issued to the Sarcos Equity Holders as a result of the Business Combination will not be subject to any adjustment but will be subject to customary closing conditions,

 

2.

a proposal to approve, for purposes of complying with applicable NYSE Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock pursuant to (i) the issuance of up to 153,125,000 shares of Common Stock in the Business Combination and (ii) the issuance and sale of 22,000,000 shares of Common Stock (the “PIPE Financing”) in a private offering of securities to certain investors in connection with the Business Combination (the “NYSE Proposal” or “Proposal No. 2”),

 

3.

a proposal to adopt the Second Amended and Restated Certificate of Incorporation of the Company in the form attached hereto as Annex B (the “Charter Approval Proposal” or “Proposal No. 3”),

 

4.

a separate proposal with respect to certain governance provisions in the Second Amended and Restated Certificate of Incorporation, which are being separately presented in accordance with SEC requirements and which will each be voted upon on a non-binding advisory basis (each a “Governance Proposal,” and collectively, the “Governance Proposals” or “Proposal No. 4”),

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5.

a proposal to elect eight directors to our board of directors (our “Board”), with Benjamin G. Wolff and Admiral Eric T. Olson (Ret.) to serve as our Class I directors for a term expiring at the annual meeting of stockholders to be held in 2022, Dennis Weibling, Matthew Shigenobu Muta and Laura J. Peterson to serve as our Class II directors for a term expiring at the annual meeting of stockholders to be held in 2023, and Brian D. Finn, Peter Klein and Priya Balasubramaniam  to serve as our Class III directors for a term expiring at the annual meeting of stockholders to be held in 2024, or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. (the “Director Election Proposal” or “Proposal No. 5”),

 

6.

a proposal to approve the Sarcos Technology and Robotics Corporation 2021 Equity Incentive Plan (the “Incentive Plan”), including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” or “Proposal No. 6”),

 

7.

a proposal to approve the Sarcos Technology and Robotics Corporation 2021 Employee Stock Purchase Plan (the “ESPP”), including the authorization of the initial share reserve under the ESPP (the “Employee Stock Purchase Plan Proposal” or “Proposal No. 7”), and

 

8.

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposals, the Incentive Plan Proposal or the Employee Stock Purchase Plan Proposal (the “Adjournment Proposal” or “Proposal No. 8”).

The above matters are more fully described in this proxy statement, which also includes, as Annex A, a copy of the Merger Agreement. We urge you to read carefully this proxy statement in its entirety, including the Annexes and accompanying financial statements of the Company and Sarcos. 

The record date for the Special Meeting is [●], 2021. Only stockholders of record at the close of business on that date may vote at the Special Meeting or any adjournment thereof. A complete list of our stockholders of record entitled to vote at the Special Meeting will be available for ten days before the Special Meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting.

To be admitted to the virtual Special Meeting, go to the webcast URL and [enter your unique 12-digit control number]. Stockholders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. You may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. For technical assistance during the meeting, you can contact Continental Stock Transfer & Trust Company for assistance at [(917) 262-2373], or via email at [proxy@continentalstock.com].

Pursuant to our current certificate of incorporation, we will provide our public stockholders with the opportunity to redeem, upon the closing of the Business Combination, shares of the Company’s Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”) then held by them for cash at a price equal to the quotient obtained by dividing (i) the amount then held in our Trust Account that holds the proceeds (including interest not previously released to the Company to fund regulatory compliance requirements and other costs related thereto and/or to pay its franchise and income taxes) of our IPO (the “Trust Account”) net of taxes payable, calculated as of two business days prior to the consummation of the Business Combination by (ii) the total number of shares of Class A Common Stock issued in the IPO then outstanding. The per-share amount we will distribute to our stockholders who properly redeem their shares will not be reduced by the deferred underwriting commission totaling $9,660,000 that we will pay to the underwriters of our IPO, as well as other transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based on the fair value of investment securities held in our Trust Account of $[●] as of [●], 2021, the estimated per share redemption price would have been approximately $[●]. Public stockholders may elect to redeem their shares even if they vote “FOR” the Business Combination. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Common Stock included in the units sold in our IPO. Unlike some other blank check companies, we have no specified maximum redemption threshold under our current certificate of incorporation, other than the aforementioned 15%. Each redemption of shares of Class A Common Stock by our public stockholders will reduce the amount in our Trust Account, which held investment securities with a fair value of $[●] as of [●], 2021. The Merger Agreement provides that Sarcos’ obligation to consummate the Business Combination is conditioned on the amount in the Trust Account, together with the proceeds from the PIPE Financing, equaling or exceeding $200,000,000 after taking into account the aggregate amount of Class A Common Stock redemptions. The gross proceeds from the PIPE Financing of $220 million are sufficient to satisfy this closing condition.  This condition to closing in the Merger Agreement is for the sole benefit of Sarcos and may be waived by Sarcos. If, as a result of redemptions of Class A Common Stock by our public stockholders, these conditions are not met (or waived), then Sarcos may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Common Stock in an amount that would result in the Company’s failure to have net tangible assets of at least $5,000,001. Holders of our outstanding public warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their shares of Class A Common Stock.

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Our Rotor Restricted Stockholders have agreed to waive their conversion rights and anti-dilution rights with respect to any Founder Shares they may hold in connection with the consummation of the Business Combination.

Unless waived by the parties to the Merger Agreement, the closing of the Business Combination is conditioned on the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal at the Special Meeting. The approval of the Business Combination Proposal, NYSE Proposal and Charter Approval Proposal are each cross-conditioned on the approval of the others at the Special Meeting (the “Cross-Conditioned Proposals”).  The approval of the Director Election Proposal, Incentive Plan Proposal and Employee Stock Purchase Plan Proposal are each conditioned on the approval of the Cross-Conditioned Proposals at the Special Meeting.  The Governance Proposals and Adjournment Proposal are not conditioned on the approval of any proposal set forth in this proxy statement. It is important for you to note that in the event that any of the Cross-Conditioned Proposals is not approved at the Special Meeting, then the Company will not consummate the Business Combination.

The presence, virtually or by proxy, at the Special Meeting of the holders of shares of outstanding Common Stock of the Company representing a majority of the voting power of all outstanding shares of Common Stock entitled to vote at the Special Meeting shall constitute a quorum in order to conduct business at the Special Meeting. Approval of each of the Business Combination Proposal, the NYSE Proposal, the Governance Proposals, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal requires the affirmative vote of the holders of a majority of our outstanding shares of Common Stock present, represented virtually or by proxy and entitled to vote at the Special Meeting. Approval of the Charter Approval Proposal requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Directors in the Director Election Proposal are elected by a plurality of the votes cast by the holders of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting; this means that the eight individuals nominated for election to the Board who receive the most “FOR” votes will be elected. The Board unanimously recommends that you vote “FOR” each of these proposals.

 

 

By Order of the Board of Directors 

 

 

 

Stefan M. Selig

 

Chairman of the Board of Directors

 

New York, New York

[●], 2021

 

 

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Table of Contents

 

[TO BE UPDATED]

  

 

Page

SUMMARY TERM SHEET

1

FREQUENTLY USED TERMS

1

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS

5

SUMMARY OF THE PROXY STATEMENT

21

SELECTED HISTORICAL FINANCIAL INFORMATION OF THE COMPANY

33

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

35

unaudited pro forma condensed combined financial information

37

Notes to the unaudited pro forma condensed combined financial information

40

Cautionary note regarding forward-looking statements

50

Risk factors

52

Comparative share information

93

Special meeting of company stockholders

95

Proposal no. 1 – approval of the business combination

102

Proposal No. 2 – approval of the issuance of more than 20% of the company’s issued and outstanding common stock in connection with the business combination

140

Proposal no. 3 – APPROVAL OF THE Second Amended and Restated Certificate of Incorporation

142

Proposal no. 4 – APPROVAL OF CERTAIN GOVERNANCE PROVISIONS IN THE Second Amended and Restated Certificate of Incorporation

145

Proposal no. 5 – election of directors to the board of directors

147

Proposal no. 6 – APPROVAL OF THE INCENTIVE PLAN, INCLUDING THE AUTHORIZATION OF THE INITIAL SHARE RESERVE UNDER THE INCENTIVE PLAN

148

PROPOSAL NO. 7 – APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN, INCLUDING AUTHORIZATION OF THE INITIAL SHARE RESERVE UNDER the EMPLOYEE STOCK PURCHASE PLAN

154

Proposal No. 8 – the adjournment proposal

158

Information about the company

159

The company’s management’s discussion and analysis of financial condition and results of operations

170

Information about SARCOS

172

  SARCOS’ management’s discussion and analysis of financial condition and results of operations

185

Executive and Director compensation

196

Management after the business combination

203

Description of securities

214

Beneficial ownership of securities

232

Certain relationships and related transactions

236

Price range of securities and dividends

241

Independent registered PUBLIC accounting firm

242

Appraisal rights

242

Householding information

243

Transfer agent and registrar

243

Submission of stockholder proposals

243

Future stockholder proposals

243

Where you can find more information

244

INCORPORATION BY REFERENCE

244

Index to consolidated financial information

F-1

Annex A – Merger Agreement

A-1

Annex B – Form of Second Amended and Restated Certificate of Incorporation

B-1

Annex C – Form of Amended and Restated Bylaws

C-1

Annex D – Form OF Subscription Agreement

D-1

ANNEX E – INCENTIVE PLAN

E-1

ANNEX F – EMPLOYEE STOCK PURCHASE PLAN

F-1

ANNEX G-1 – FORM OF SARCOS Lock-up Agreement

G-1-1

ANNEX G-2 – FORM OF OTHER Lock-up Agreement

G-2-1

ANNEX H – FORM OF REGISTRATION RIGHTS Agreement

H-1

ANNEX I – FORM OF Waiver Agreement

I-1

ANNEX J – Exchange Agent Agreement

J-1

ANNEX K – OPINION OF HOULIHAN LOKEY CAPITAL, INC.

K-1

  

 

 

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SUMMARY TERM SHEET

This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals for Stockholders” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached Annexes, for a more complete understanding of the matters to be considered at the Special Meeting. In addition, for definitions used commonly throughout this proxy statement, including this summary term sheet, please see the section entitled “Frequently Used Terms.” 

 

Rotor Acquisition Corp., a Delaware corporation, which we refer to as “we,” “us,” “our,” or the “Company,” is a special purpose acquisition company formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses.

 

There are currently 34,500,000 shares of Common Stock, par value $0.0001 per share, of the Company, issued and outstanding, consisting of (i) 27,600,000 shares of Class A Common Stock originally sold as part of the IPO, and (ii) 6,900,000 shares of Class B Common Stock that were initially issued to our Sponsor prior to our IPO and to the BlackRock and Millennium Holders in a private placement.  There are currently no shares of Company preferred stock issued and outstanding.  In addition, we issued 13,800,000 public warrants to purchase Class A Common Stock (originally sold as part of the units issued in our IPO) as part of our IPO along with 7,270,000 Private Placement Warrants issued to our Sponsor and the BlackRock and Millennium Holders in a private placement on the IPO closing date.  Each warrant entitles its holder to purchase one share of our Class A Common Stock at an exercise price of $11.50 per share, to be exercised only for a whole number of shares of our Class A Common Stock.  The warrants will become exercisable the later of (a) 30 days after the completion of our initial business combination and (b) one year from the closing of the IPO, and they expire five years after the completion of our initial business combination or earlier upon redemption or liquidation.  Once the warrants become exercisable, the Company may redeem the outstanding warrants at a price of $0.01 per warrant, if the last sale price of the Company’s Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders.  The Private Placement Warrants, however, are non-redeemable so long as they are held by our Sponsor or its permitted transferees.  For more information regarding the warrants, please see the section entitled “Description of the Securities.”

 

Sarcos is a global technology leader for industrial highly dexterous mobile robotic systems for use in dynamic environments. For more information about Sarcos, please see the sections entitled “Information About Sarcos,” “Sarcos’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management After the Business Combination.”  

 

In connection with the Business Combination, the Sarcos Equity Holders will receive stock consideration, consisting of 120,000,000 newly-issued shares of our Common Stock, par value $0.0001 per share (the “Common Stock”), plus up to an additional 5,000,000 shares of Common Stock if Sarcos consummates an equity financing prior to the closing of the Business Combination (the “Financing Shares”) with one share issued for every $10.00 raised in such financing. At the closing of the Business Combination, each option to purchase shares of Sarcos’ Common Stock will be converted into an option exercisable into a number of shares of Common Stock and each award of Sarcos’ restricted stock units will be converted into a right to receive restricted stock units based on shares of Common Stock. Following the closing of the Business Combination, the Sarcos Stockholders will be entitled to receive an additional (1) 14,062,500 shares of Common Stock if the closing share price of a share of Common Stock is equal to or exceeds $15.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the closing and ending on the fourth anniversary of the closing, and (2) 14,062,500 shares of Common Stock if the closing share price of a share of Common Stock is equal to or exceeds $20.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the closing and ending on the fifth anniversary of the closing (collectively, the “Earn-Out Shares”). For more information about the Merger Agreement, please see the section entitled “Proposal No. 1 — Approval of the Business Combination — The Merger Agreement.”

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It is anticipated that, upon completion of the Business Combination: (i) public stockholders will retain an ownership interest of approximately [●]% in the post-combination company, (ii) converted Founder shares held by the Rotor Restricted Stockholders will represent approximately [●]% of the post-combination company, (iii) PIPE Investors will own approximately [●]% of the post-combination company, and (iv) the Sarcos Equity Holders will own approximately [●]% of the post-combination company.  The ownership percentages with respect to the post-combination company (a) presents post-combination company ownership as if all issued and outstanding restricted stock awards of Sarcos have vested and all of the issued and outstanding Sarcos options have been exercised, in each case concurrently with the consummation of the Business Combination, (b) do not take into account the number of shares of Common Stock to be issued upon exercise of public warrants or Private Placement Warrants, (c) do not take into account the potential issuance of Financing Shares and Earn-Out Shares, (d) assumes that there are no redemptions by holders of Class A Common Stock, and (e) takes into account the forfeiture of 494,040 Founder Shares by the Rotor Restricted Stockholders pursuant to the Waiver Agreement.  If the actual facts are different from these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders in the post-combination company will be different. For more information, please see the sections entitled “Summary of the Proxy Statement—Ownership Following the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information.”

 

Our management, the Special Committee and the Board considered various factors in determining whether to approve the Merger Agreement and the transactions contemplated thereby, which the Special Committee and Board believe positions Sarcos for future growth and profitability.  For more information about our decision-making process, see the section entitled “Proposal No. 1—Approval of the Business Combination—Recommendation of the Special Committee and the Board and Reasons for the Approval of the Business Combination.”

 

Pursuant to our current certificate of incorporation, upon the closing of the Business Combination, holders of our public shares may elect to have their Class A Common Stock redeemed for cash at the applicable redemption price per share calculated in accordance with our current certificate of incorporation.  As of [●], 2021, the redemption price would have been approximately $[●] per share.  If a holder exercises its redemption rights, then such holder will be exchanging its shares of our Class A Common Stock for cash and will no longer own shares of the post-combination company and will not participate in the future growth of the post-combination company, if any.  Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent at least two business days prior to the Special Meeting.  Please see the section entitled “Special Meeting of the Company’s Stockholders — Redemption Rights.”

 

In addition to voting on the proposal to adopt the Merger Agreement and approve the transactions contemplated thereunder, including the Business Combination, at the Special Meeting, the stockholders of the Company will be asked to vote on:

 

o

a proposal to approve, for purposes of complying with applicable NYSE Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock in connection with the Business Combination and the PIPE Financing (the “NYSE Proposal” or “Proposal No. 2”);

 

o

a proposal to adopt the Second Amended and Restated Certificate of Incorporation in the form attached hereto as Annex B (the “Charter Approval Proposal” or “Proposal No. 3”),

 

o

a separate proposal with respect to certain governance provisions in the Second Amended and Restated Certificate of Incorporation, which are being separately presented in accordance with SEC requirements and which will each be voted upon on a non-binding advisory basis (each a “Governance Proposal,” and collectively, the “Governance Proposals” or “Proposal No. 4”),

 

o

a proposal to elect eight directors to serve staggered terms on our Board until the 2022, 2023 and 2024 annual meeting of stockholders, as applicable, and until their respective successors are duly elected and qualified (the “Director Election Proposal” or “Proposal No. 5”);

 

o

a proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” or “Proposal No. 6”); and

 

o

a proposal to approve the ESPP, including the authorization of the initial share reserve under the ESPP (the “Employee Stock Purchase Plan Proposal” or “Proposal No. 7”)

 

o

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposal, the Director Election Proposal, the Incentive Plan Proposal or the Employee Stock Purchase Plan Proposal (the “Adjournment Proposal” or “Proposal No. 8”).  

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Please see the sections entitled “Proposal No. 1 — Approval of the Business Combination,” “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Issued and Outstanding Common Stock in Connection with the Business Combination and the PIPE Financing,” “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation,” “Proposal No. 4—Approval of Certain Governance Provisions in the Second Amended and Restated Certificate of Incorporation,” “Proposal No. 5—Election of Directors to the Board of Directors,” “Proposal No. 6—Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve under the Incentive Plan,” “Proposal No. 7–Approval of the Employee Stock Purchase Plan, Including the Authorization of the Initial Share Reserve under the Employee Stock Purchase Plan,” and “Proposal No. 8—The Adjournment Proposal.”

Unless waived by the parties to the Merger Agreement, the closing of the Business Combination is conditioned on the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal at the Special Meeting.  The approval of the Business Combination Proposal, NYSE Proposal and Charter Approval Proposal are each cross-conditioned on the approval of the others at the Special Meeting (the “Cross-Conditioned Proposals”).  The approval of the Director Election Proposal, Incentive Plan Proposal and Employee Stock Purchase Plan Proposal are each conditioned on the approval of the Cross-Conditioned Proposals at the Special Meeting.  The Governance Proposals and Adjournment Proposal are not conditioned on the approval of any proposal set forth in this proxy statement.  It is important for you to note that in the event that any of the Cross-Conditioned Proposals is not approved at the Special Meeting, then the Company will not consummate the Business Combination.

 

Upon consummation of the Business Combination, our Board anticipates increasing its size from five directors to eight, with each Class I director having a term that expires at the post-combination company’s annual meeting of stockholders in 2022, each Class II director having a term that expires at the post-combination company’s annual meeting of stockholders in 2023 and each Class III director having a term that expires at the post-combination company’s annual meeting of stockholders in 2024, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. Please see the sections entitled “Proposal No. 5—Election of Directors to the Board of Directors” and “Management After the Business Combination” for additional information.

 

Unless waived by the parties to the Merger Agreement, and subject to applicable law, the closing of the Business Combination is subject to a number of conditions set forth in the Merger Agreement, including, among others, expiration of the waiting period under the HSR Act, receipt of certain stockholder approvals contemplated by this proxy statement and the availability of minimum cash amounts at closing. For more information about the closing conditions to the Business Combination, please see the section entitled “Proposal No. 1 — Approval of the Business Combination — The Merger Agreement — Conditions to Closing of the Business Combination.”

 

The Merger Agreement may be terminated at any time prior to the consummation of the Business Combination upon agreement of the parties thereto, or by the Company or Sarcos in specified circumstances.  For more information about the termination rights under the Merger Agreement, please see the section entitled “Proposal No. 1 — Approval of the Business Combination — The Merger Agreement — Termination.”

 

The proposed Business Combination involves numerous risks.  For more information about these risks, please see the section entitled “Risk Factors.”

 

In considering the recommendation of our Board to vote for the proposals presented at the Special Meeting, including the Business Combination Proposal, you should be aware that aside from their interests as stockholders, our Sponsor and the directors and officers of the Company may have interests in the Business Combination that are different from, or in addition to, the interests of our stockholders generally.  Our Board and the Special Committee were aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the Special Meeting, including the Business Combination Proposal.  Stockholders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal.  For more information and specific considerations, see the sections entitled  “Proposal No. 1—Approval of the Business Combination—Interests of Certain Persons in the Business Combination” and “Certain Relationships and Related Transactions—The Company’s Related Party Transactions” and the risk factors entitled “Two of our directors have interests in and relationships with Sarcos and, as a result, may have interests in the Business Combination that are different from or are in addition to those of other stockholders of the Company,” “Our Sponsor, the directors and officers of the Company, and two of our stockholders may have interests in the Business Combination that are different from or are in addition to those of other stockholders,” and “Our Rotor Restricted Stockholders hold a significant number of shares of our Common Stock and Private Placement Warrants, and they will lose their entire investment in us if a business combination is not completed.”  

 

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FREQUENTLY USED TERMS

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company” and “Rotor” refer to Rotor Acquisition Corp., and the term “post-combination company” refers to the Company following the consummation of the Business Combination.

In this proxy statement:

2015 Plan” means the Sarcos 2015 Equity Incentive Plan, as amended.

Amended and Restated Bylaws” means the proposed Amended and Restated Bylaws of the Company, a form of which is attached hereto as Annex C, which will become the post-combination company’s bylaws upon the consummation of the Business Combination.

BlackRock and Millennium Holders” means, collectively, the BlackRock Holders and the Millennium Holder.

BlackRock Holders” means, collectively, those certain funds managed by BlackRock that subscribed for Founder Shares and Private Placement Warrants in a private placement concurrent with the Company’s initial public offering.

Board” means the board of directors of the Company.

Business Combination” means the transactions contemplated by the Merger Agreement, including the merger of Merger Sub with and into Sarcos, with Sarcos continuing as the surviving corporation.

Class A Common Stock” means the shares of Class A Common Stock, par value $0.0001 per share, of the Company.

Class B Common Stock” means the shares of Class B Common Stock, par value $0.0001 per share, of the Company.

Code” means the Internal Revenue Code of 1986, as amended.

Common Stock” means, prior to the consummation of the Business Combination, the Class A Common Stock and Class B Common Stock of the Company, and after the consummation of the Business Combination, the shares of common stock, par value $0.0001 per share, of the of the post-combination company.

Company” means Rotor Acquisition Corp., a Delaware corporation. After the Business Combination, the Company will refer to the post-combination company.

Cross-Conditioned Proposals” means the Business Combination Proposal, NYSE Proposal and Charter Approval Proposal.

current certificate of incorporation” or “current certificate” means our Amended and Restated Certificate of Incorporation, dated January 14, 2021.

DGCL” means the General Corporation Law of the State of Delaware.

E&Y” means Ernst & Young LLP, Sarcos’ independent registered public accounting firm.

Employment Agreements” means the employment agreements to be entered into by certain executives of Sarcos with Sarcos or the Company.

ESPP” means the Sarcos Technology and Robotics Corporation 2021 Employee Stock Purchase Plan, in the form attached as Annex F to this proxy statement, effective at the closing of the Business Combination.

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Existing Registration Agreement” means the registration agreement entered into by and among the Company and the Rotor Restricted Stockholders, dated January 14, 2021.

Founder Shares” means the 6,900,000 shares of Class B Common Stock, of which 6,109,616 shares are held by our Sponsor, 395,192 shares are held by the BlackRock Holders, and 395,192 shares are held by the Millennium Holder.

“Gibson Dunn” means Gibson, Dunn & Crutcher LLP, counsel to the Company. 

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Investment Company Act” means the Investment Company Act of 1940, as amended.

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Incentive Plan” means the Sarcos Technology and Robotics Corporation 2021 Equity Incentive Plan, in the form attached as Annex E to this proxy statement, effective at the closing of the Business Combination.

IPO” means the Company’s initial public offering, consummated on January 14, 2021, through the sale of 27,600,000 public units (including 3,600,000 units sold pursuant to the underwriters’ exercise of their over-allotment option) at $10.00 per unit.

IRS means the U.S. Internal Revenue Service.

“Lock-up Agreements” means collectively the Sarcos Lock-up Agreements, the Other Lock-up Agreements, the Founders Letter Agreement, the Millennium Letter Agreement, and the BlackRock Letter Agreement.

Merger Agreement” means that certain Agreement and Plan of Merger, dated as of April 5, 2021 (as it may be amended from time to time), by and among the Company, Merger Sub and Sarcos.

Merger Sub” means Rotor Merger Sub Corp., a Delaware corporation and a direct, wholly-owned subsidiary of the Company.

Millennium Holder” means Riverview Group LLC and its affiliates.

Nasdaq” means the Nasdaq Capital Market.

NYSE” means the New York Stock Exchange.

Other Lock-up Agreements” mean, collectively, those agreements, dated April 5, 2021, by and among the Specified Sarcos Equity Holders on the one hand, and the Company and Sarcos on the other hand, whereby each such Specified Sarcos Equity Holder has agreed to certain transfer restrictions with respect to their Common Stock for up to one year, subject to certain exceptions provided for therein.

PIPE Financing” means the private placement pursuant to which the PIPE Investors have collectively subscribed for 22,000,000 shares of common stock at $10.00 per share, for an aggregate purchase price of $220,000,000.

PIPE Investors” means certain institutional investors that will invest in the PIPE Financing.

“post-combination company” means the Company upon consummation of the Business Combination, which will be renamed Sarcos Technology and Robotics Corporation.

Private Placement” means the private offering and sale of Founder Shares and Private Placement Warrants.

Private Placement Warrants” means those warrants issued to our Sponsor and the BlackRock and Millennium Holders in a private placement on the IPO closing date.

Promissory Note” means that certain Promissory Note, dated September 14, 2020, by and between Sponsor and the Company.

public shares” means shares of Class A Common Stock included in the units issued in the Company’s IPO.

public stockholders” means holders of public shares, including our Rotor Restricted Stockholders to the extent our Rotor Restricted Stockholders hold public shares, provided, that our Rotor Restricted Stockholders will be considered a “public stockholder” only with respect to any public shares held by them.

public units” or “units” means one share of Class A Common Stock and one-half of one public warrant of the Company, whereby each public warrant entitles the holder thereof to purchase one share of Class A Common Stock at an exercise price of $11.50 per share of Class A Common Stock, sold in the IPO. 

public warrants” means the warrants included in the units issued in the Company’s IPO, each of which is exercisable for one share of Class A Common Stock, in accordance with its terms.

record date” means [●], 2021.

Registration Rights Agreement” means the Registration Rights Agreement between the Company, the Sponsor and certain Sarcos Stockholders.

Rotor Restricted Stockholders” means those persons holding the 6,900,000 Founder Shares, of which 6,109,616 shares are held by our Sponsor, 395,192 shares are held by the BlackRock Holders, and 395,192 shares are held by the Millennium Holder.

Rotor-Sarcos, LLC”  means an investment entity controlled by Mr. Finn and another member of the Sponsor who is neither an officer nor director of the Company that acquired a minority equity investment in Sarcos in early 2020.  Neither the Company, the Sponsor, nor any directors or officers of the Company other than Messrs. Finn and Howard, have an investment or other interest in Rotor-Sarcos, LLC.

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Sarcos” means Sarcos Corp., a Utah corporation, and additionally, when such term is used in reference to rights, obligations or covenants under the Merger Agreement, Sarcos Corp.’s subsidiaries.

Sarcos Class A Common Stock” means Class A Common Stock of Sarcos, $0.001 par value per share,

Sarcos Class B Common Stock” means Class B Common Stock of Sarcos, $0.001 par value per share.

Sarcos Common Stock” means Sarcos Class A Common Stock and the Sarcos Class B Common Stock.

Sarcos Equity Holders” means the holders of Sarcos equity (including shares of Sarcos common stock, preferred stock, restricted stock awards, options, restricted stock units and warrants).

Sarcos Lock-up Agreements” mean, collectively, those agreements, by and among certain Sarcos Stockholders, on the one hand, Sarcos and the Company on the other hand, whereby the Sarcos Stockholders have agreed to certain transfer restrictions with respect to their Common Stock, subject to certain exceptions provided for therein.

Sarcos Options” means those certain issued and outstanding options to acquire Sarcos Common Stock, and following the consummation of the Business Combination, will be exercisable for shares of Common Stock of the post-combination company, in each case pursuant to the terms thereof and the Merger Agreement.

Sarcos Preferred Conversion” means the conversion of all of the preferred stock of Sarcos into Sarcos Common Stock in accordance with Section 4(b) of Article V of Sarcos’ Amended and Restated Articles of Incorporation, with the effective time of such conversion to be conditioned upon the consummation of the Closing and to occur as of immediately prior to the effective time of the Merger.

Sarcos Stockholders” means the holders of shares of Sarcos Common Stock (including any shares of Sarcos Common Stock subject to restricted stock awards).

Sarcos Warrants” means those issued and outstanding warrants to purchase Sarcos Class A Common Stock.

SEC” means the United States Securities and Exchange Commission.

Second Amended and Restated Certificate of Incorporation” means the proposed Second Amended and Restated Certificate of Incorporation of the Company, a form of which is attached hereto as Annex B, which will become the post-combination company’s certificate of incorporation if the Charter Approval Proposal is approved, assuming the consummation of the Business Combination.

Securities Act” means the Securities Act of 1933, as amended.

Special Committee” means a committee comprised solely of disinterested and independent directors of Rotor.

Special Meeting” means the special meeting of the stockholders of the Company that is the subject of this proxy statement.

Specified Sarcos Equity Holders” means, collectively, a group comprised of the Company’s Chief Executive Officer, one of its other directors and certain members of the Sponsor who are not directors or officers of the Company that (directly or through affiliates) acquired a minority equity investment in Sarcos in early 2020, in each case, that hold their interest in preferred stock of Sarcos via Rotor-Sarcos, LLC.  Certain Specified Sarcos Equity Holders individually hold Sarcos Warrants that were distributed by Rotor-Sarcos, LLC.

Sponsor” means Rotor Sponsor LLC, a Delaware limited liability company.

Stock Consideration” means the Common Stock to be issued to the Sarcos Equity Holders pursuant to the transactions contemplated by the Merger Agreement.

Subscription Agreement” means the subscription agreements dated April 5, 2021, each entered into by the Company and certain institutional investors, pursuant to which the Company agreed to issue and sell, in private placements to close immediately prior to the closing of the Business Combination, an aggregate of 22,000,000 shares of Common Stock at $10.00 per share, for an aggregate purchase price of $220,000,000.00.

Transfer Agent” means Continental Stock Transfer & Trust Company.

Trust Account” means the trust account of the Company that holds the proceeds from the Company’s IPO.

Trustee” means Continental Stock Transfer & Trust Company.

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Waiver Agreement” means the waiver agreement, dated April 5, 2021, delivered by Rotor Restricted Stockholders, whereby, in connection with the consummation of the transactions contemplated by the Merger Agreement and the Related Documents, Rotor Restricted Stockholders have agreed to waive certain of their anti-dilution and conversion rights in connection with the PIPE Financing and the Merger and to forfeit a certain number of Founder Shares and the Private Placement Warrants in connection with the Merger.

warrants” means the public warrants and Private Placement Warrants.

Warrant Agent” means Continental Stock Transfer & Trust Company.

Warrant Exercise Notice” means the warrant exercise notices delivered by holders of warrants of Sarcos, pursuant to which all such warrants shall, immediately prior to the effective time of the Business Combination, be exercised into shares of Sarcos Class A Common Stock.

Whole Board” means the total number of authorized directors of the post-combination company whether or not there exist any vacancies in previously authorized directorships.

Wilson Sonsini ” means Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel to Sarcos.

Working Capital Loans” means loans from our Sponsor or an affiliate of the Sponsor, or certain of our officers or directors, to finance transaction costs in connection with an initial business combination, including the working capital loans issued pursuant to the Promissory Note.

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the Special Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to our stockholders. We urge stockholders to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the Special Meeting, which will be held on [●] at [●] Eastern Time. The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at [●].

Q:

Why am I receiving this proxy statement?

A:

Our stockholders are being asked to consider and vote upon a proposal to adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination, among other proposals. We have entered into the Merger Agreement providing for, among other things, the merger of Merger Sub with and into Sarcos, with Sarcos continuing as the surviving corporation (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). As a result of the Merger, the Company will own 100% of the outstanding common stock of Sarcos. You are being asked to vote on the Business Combination between us and Sarcos. Subject to the terms of the Merger Agreement, the aggregate consideration payable in the Business Combination is 120,000,000 shares of Common Stock of the Company, plus up to 5,000,000 Financing Shares (if any), plus up to 28,125,000 Earn-Out Shares (if any). A copy of the Merger Agreement is attached to this proxy statement as Annex A.

This proxy statement and its Annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting. You should read this proxy statement and its Annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.

Q:

When and where is the Special Meeting?

A:

The Special Meeting will be held on [●] at [●] Eastern Time. The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at [●].

To be admitted to the virtual Special Meeting, go to the webcast URL and [enter your unique 12-digit control number]. Stockholders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. You may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. For technical assistance during the meeting, you can contact Continental Stock Transfer & Trust Company for assistance at [(917) 262-2373], or via email at [proxy@continentalstock.com].

You can pre-register to attend the virtual meeting starting [●], 2021 at [●] Eastern Time. To pre-register, enter the webcast URL address into your browser and enter your control number, name and email address. Once you pre-register, you may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. Stockholders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. For technical assistance during the meeting, you can contact Continental Stock Transfer & Trust Company for assistance at [(917) 262-2373], or via email at [proxy@continentalstock.com].

If you do not have internet capabilities, you can listen only to the meeting by dialing +1 [(888) 965-8995] (toll-free), outside the U.S., and Canada +1 [(415) 655-0243] (standard rates apply). When prompted enter the pin number [●]#. The telephone line will be listen-only, and you will not be able to vote or enter questions during the meeting via telephone.

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Special Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the DGCL, or that otherwise makes it advisable to adjourn the Special Meeting, the chair or secretary of the Special Meeting will convene the meeting at [●] on the date specified above and at [●] solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement at [●].

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Q:

What are the specific proposals on which I am being asked to vote at the Special Meeting?

A:

The Company’s stockholders are being asked to approve the following proposals:

 

1.

Business Combination Proposal—To adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination (Proposal No. 1);

 

2.

NYSE Proposal—To approve, for purposes of complying with applicable NYSE Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock in connection with the Business Combination and the PIPE Financing (Proposal No. 2);

 

3.

Charter Approval Proposal—To consider and act upon a proposal to adopt the Second Amended and Restated Certificate of Incorporation in the form attached hereto as Annex B (Proposal No. 3);

 

4.

Governance Proposals—To consider and act upon a separate proposal with respect to certain governance provisions in the Second Amended and Restated Certificate of Incorporation, which are being separately presented in accordance with SEC requirements and which will each be voted upon on a non-binding advisory basis (Proposal No. 4);

 

5.

Director Election Proposal—To consider and vote upon a proposal to elect eight directors to our Board, with Benjamin G. Wolff and Admiral Eric T. Olson (Ret.)  to serve as our Class I directors for a term expiring at the annual meeting of stockholders to be held in 2022, Dennis Weibling, Matthew Shigenobu Muta and Laura J. Peterson  to serve as our Class II directors for a term expiring at the annual meeting of stockholders to be held in 2023, and Brian D. Finn, Peter Klein and Priya Balasubramaniam  to serve as our Class III directors for a term expiring at the annual meeting of stockholders to be held in 2024, or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. (Proposal No. 5);

 

6.

Incentive Plan Proposal—To consider and vote upon a proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan (Proposal No. 6);

 

7.

Employee Stock Purchase Plan Proposal—To consider and vote upon a proposal to approve the ESPP, including the authorization of the initial share reserve under the ESPP (Proposal No. 7); and

 

8.

Adjournment Proposal—To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal. This proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal the Governance Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal (Proposal No. 8).

Q:

Are the proposals conditioned on one another?

A:

Yes. Unless waived by the parties to the Merger Agreement, the closing of the Business Combination is conditioned on the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal. The approval of the Business Combination Proposal, NYSE Proposal and Charter Approval Proposal are each cross-conditioned on the approval of the others at the Special Meeting (the “Cross-Conditioned Proposals”).  The approval of the Director Election Proposal, Incentive Plan Proposal and Employee Stock Purchase Plan Proposal are each conditioned on the approval of the Cross-Conditioned Proposals at the Special Meeting.  The Governance Proposals and Adjournment Proposals are not conditioned on the approval of any proposal set forth in this proxy statement. It is important for you to note that in the event that any of the Cross-Conditioned Proposals is not approved at the Special Meeting, then the Company will not consummate the Business Combination.  If we do not consummate the Business Combination and fail to complete an initial business combination by July 20, 2022, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to the public stockholders.

Q:

Why is the Company providing stockholders with the opportunity to vote on the Business Combination?

A:

Under our current certificate of incorporation, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the Business Combination Proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the closing of our Business Combination. The approval of the Business Combination is required under our current certificate of incorporation. In addition, such approval is also a condition to the closing of the Business Combination under the Merger Agreement.

6


 

Q:

What revenues and profits/losses has Sarcos generated in the last three years?

A:

For the fiscal years ended December 31, 2020 and 2019, Sarcos had total revenue of $8.8 million and $10.2 million, respectively, and net loss of $20.9 million and $18.0 million, respectively. For additional information, please see the sections entitled “Selected Consolidated Historical Financial and Other Information of Sarcos Corp.” and “Sarcos Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Q:

What will happen in the Business Combination?

A:

Pursuant to the Merger Agreement, and upon the terms and subject to the conditions set forth therein, the Company will acquire Sarcos in a transaction we refer to as the “Business Combination.” At the closing of the Business Combination contemplated by the Merger Agreement, the parties will undertake a transaction by which Merger Sub will merge with and into Sarcos, with Sarcos being the surviving entity of the Merger. As a result of the Merger, the Company will own 100% of the outstanding capital stock of Sarcos.

Q:

Following the Business Combination, will the Company’s securities continue to trade on a stock exchange?

A:

Yes. We intend to apply to continue the listing of the post-combination company’s Common Stock and public warrants on Nasdaq under the symbols “STRC” and “STRCW,” respectively, upon the closing of the Business Combination.  Public units will automatically separate into the underlying Class A Common Stock and public warrants in connection with the closing of the Business Combination.  

Q:

How has the announcement of the Business Combination affected the trading price of the Company’s Class A Common Stock?

A:

On April 5, 2021, the trading date before the public announcement of the Business Combination, the Company’s Class A Common Stock, public warrants and public units closed at $9.77, $0.64 and $10.18, respectively. On [●], 2021, the trading date immediately prior to the date of this proxy statement, the Company’s Class A Common Stock, public units and public warrants closed at $[●], $[●] and $[●], respectively.

Q:

How will the Business Combination impact the shares of the Company outstanding after the Business Combination?

A:

As a result of the Business Combination and the consummation of the transactions contemplated thereby, the amount of Common Stock outstanding, immediately upon consummation of the Business Combination will increase from 34,500,000 to approximately [●] shares of Common Stock (assuming that no shares of Class A Common Stock are redeemed, no Financing Shares are issued, and no outstanding warrants to purchase shares of Common Stock are exercised, and subject to further issuance of awards under the Incentive Plan described in the following sentence).

Q:

Is the Business Combination the first step in a “going private” transaction?

A:

No. The Company does not intend for the Business Combination to be the first step in a “going private” transaction. One of the primary purposes of the Business Combination is to provide a platform for Sarcos to access the U.S. public markets.

Q:

Will the management of Sarcos change in the Business Combination?

A:

We anticipate that all of the named executive officers of Sarcos will remain with the post-combination company. We expect that Benjamin Wolff, Peter Klein and Dennis Weibling, current directors at Sarcos, will each be appointed to serve as directors of the post-combination company upon completion of the Business Combination. Please see the sections entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation” and “Management After the Business Combination” for additional information.

7


 

Q:

What equity stake will current stockholders of the Company and the Sarcos Equity Holders hold in the post-combination company after the closing?

A:

It is anticipated that, upon completion of the Business Combination: (i) public stockholders will retain an ownership interest of approximately [●]% in the post-combination company, (ii) converted Founder shares held by the Rotor Restricted Stockholders will represent approximately [●]% of the post-combination company, (iii) PIPE Investors will own approximately [●]% of the post-combination company, and (iv) the Sarcos Equity Holders will own approximately [●]% of the post-combination company.  The ownership percentages with respect to the post-combination company (a) presents post-combination company ownership as if all issued and outstanding restricted stock awards of Sarcos have vested and all of the issued and outstanding Sarcos options have been exercised, in each case concurrently with the consummation of the Business Combination, (b) do not take into account the number of shares of Common Stock to be issued upon exercise of public warrants or Private Placement Warrants, (c) do not take into account the potential issuance of Financing Shares and Earn-Out Shares, (d) assumes that there are no redemptions by holders of Class A Common Stock, and (e) takes into account the forfeiture of 494,040 Founder Shares by the Rotor Restricted Stockholders pursuant to the Waiver Agreement. For more information, please see the sections entitled “Summary of the Proxy Statement—Ownership Following the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information.”

Q:

Will the Company obtain new financing in connection with the Business Combination?

A:

Yes. The PIPE Investors have agreed to purchase 22,000,000 shares of Common Stock in the aggregate, for $220,000,000.00 of gross proceeds, pursuant to Subscription Agreements. The Subscription Agreements are contingent upon, among other things, stockholder approval of the Business Combination Proposal and the Closing.

Pursuant to the Merger Agreement, Sarcos may enter into one or more series of transactions for debt or equity financing with aggregate gross proceeds not to exceed $50,000,000.  In consideration thereof, the Company will issue additional shares of Class A Common Stock to Sarcos Equity Holders equal to such financing amount divided by $10.00.  

Pursuant to the Merger Agreement, the Company may incur up to $1,500,000 in Working Capital Loans, provided that such loans are non-interest bearing and do not have any prepayment or repayment premiums, penalties, breakage or similar costs if it were to be prepaid or repaid in full.  

The Company will use the funds in the Trust Account to pay certain transaction expenses upon the closing of the Business Combination and to fund working capital needs of the Company following the closing of the Business Combination, and the sole consideration for the Business Combination will be stock consideration.

Q:

What conditions must be satisfied to complete the Business Combination?

A:

There are a number of closing conditions in the Merger Agreement, including the expiration of any applicable waiting period under the HSR Act, if required by the HSR Act, and the approval by the stockholders of the Company of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

Q:

Are there any arrangements to help ensure that the Company will have sufficient funds to fund the aggregate purchase price?

A:

The Merger Agreement provides that Sarcos’ obligation to consummate the Business Combination is conditioned on the amount in the Trust Account, together with the proceeds from the PIPE Financing, equaling or exceeding $200,000,000 after taking into account the redemptions of Class A Common Stock by public stockholders. The gross proceeds from the Private Placement of $220 million are sufficient to satisfy this closing condition. This condition to closing in the Merger Agreement is for the sole benefit of Sarcos and may be waived by Sarcos. If, as a result of redemptions of Class A Common Stock by our public stockholders, these conditions are not met (or waived), then Sarcos may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Common Stock in an amount that would result in the Company’s failure to have net tangible assets of at least $5,000,001. Holders of our outstanding public warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their shares of Class A Common Stock.

Q:

Why is the Company proposing the NYSE Proposal?

A:

We are proposing the NYSE Proposal in order to comply with NYSE Listing Rules, which, among other things, require stockholder approval of (i) adoption of equity compensation plans, (ii) certain transactions that result in the issuance of 20% or

8


 

more of the outstanding voting power or shares of Common Stock outstanding before the issuance of stock or securities, and (iii) transactions that may result in the change of control of the issuer.

In connection with the Business Combination, (i) we are asking stockholders of the Company to approve the Incentive Plan and ESPP, (ii) we expect to issue (x) up to 153,125,000 shares of Common Stock to the Sarcos Equity Holders pursuant to the terms of the Merger Agreement and (y) 22,000,000 shares of Common Stock in connection with the PIPE Financing, which will result in an issuance of more than 20% of our outstanding Common Stock, and (iii) such issuance may result in the change in control of the post-combination company.  As a result of the proposals set forth herein and the terms of the Merger Agreement, we are required to obtain stockholder approval pursuant to NYSE Listing Rules.

Approval of the NYSE Proposal is conditioned on the approval of the Cross-Conditioned Proposals at the Special Meeting.

For more information, please see the section entitled “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Issued and Outstanding Common Stock in Connection with the Business Combination and PIPE Financing.”

Q:

Why is the Company proposing the Charter Approval Proposal?

A:

The Second Amended and Restated Certificate of Incorporation that we are asking our stockholders to adopt in connection with the Business Combination (the “Charter Approval Proposal” or “Proposal No. 3”) provides for certain amendments to our existing certificate of incorporation. Pursuant to Delaware law and the Merger Agreement, we are required to submit the Charter Approval Proposal to the Company’s stockholders for adoption.

Approval of the Charter Approval Proposal is conditioned on the approval of the Cross-Conditioned Proposals at the Special Meeting.

For additional information please see the section entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation.”

Q:

Why is the Company proposing the Governance Proposals?

A:

As required by applicable SEC guidance, the Company is requesting that its stockholders vote upon, on a non-binding advisory basis, a proposal to approve certain governance provisions contained in the Second Amended and Restated Certificate of Incorporation that materially affect stockholder rights. This separate vote is not otherwise required by Delaware law separate and apart from Proposal No. 3, but pursuant to SEC guidance, the Company is required to submit these provisions to its stockholders separately for approval. However, the stockholder vote regarding this proposal is an advisory vote, and is not binding on the Company or our Board (separate and apart from the approval of Proposal No. 3). Furthermore, the Business Combination is not conditioned on the separate approval of the Governance Proposals (separate and apart from approval of Proposal No. 3). For additional information, please see the section entitled “Proposal No. 4—Approval of Certain Governance Provisions in the Second Amended and Restated Certificate of Incorporation.”

Q:

Why is the Company proposing the Director Election Proposal?

A:

In connection with the Business Combination, the Company is setting forth a proposal to elect two directors to our Board to serve as our Class I directors for a term expiring at the annual meeting of stockholders to be held in 2022, three directors to our Board to serve as our Class II directors for a term expiring at the annual meeting of stockholders to be held in 2023, and three directors to our Board to serve as our Class III directors for a term expiring at the annual meeting of stockholders to be held in 2024, or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal.

Approval of the Director Election Proposal is conditioned on the approval of the Cross-Conditioned Proposals at the Special Meeting.

Please see the sections entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation” and “Management After the Business Combination” for additional information.

Q:

Why is the Company proposing the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal?

A:

The Incentive Plan and the ESPP will promote ownership in the post-combination company by the employees, officers, non-employee directors and other service providers of the post-combination company and its subsidiaries and align the interests between these service providers and stockholders by providing compensation based on the value of, shares of the post-combination company’s Common Stock.

9


 

Approval of each of the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Cross-Conditioned Proposals at the Special Meeting.

Please see the sections entitled “Proposal No. 6— Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve under the Incentive Plan” and Proposal No. 7 – Approval of the Employee Stock Purchase Plan Proposal, Including the Authorization of the Initial Share Reserve Under the ESPP” for additional information.

Q:

Why is the Company proposing the Adjournment Proposal?

A:

We are proposing the Adjournment Proposal to allow our Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, Governance Proposals, the Director Election Proposal, the Incentive Plan Proposal or the Employee Stock Purchase Plan Proposal but no other proposal if the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposals, the Incentive Plan Proposal or the Employee Stock Purchase Plan Proposal are approved. In no event will our Board adjourn the Special Meeting or consummate the Business Combination beyond July 20, 2022. Please see the section entitled “Proposal No. 8—The Adjournment Proposal” for additional information.

Q:

What happens if I sell my shares of Class A Common Stock before the Special Meeting?

A:

The record date for the Special Meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of our Class A Common Stock after the record date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares of our Class A Common Stock because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your shares of our Class A Common Stock prior to the record date, you will have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in our Trust Account.

Q:

What constitutes a quorum at the Special Meeting?

A:

The presence, virtually or by proxy, at the Special Meeting of the holders of shares of outstanding Common Stock of the Company representing a majority of the Common Stock issued and outstanding and entitled to vote at the Special Meeting, shall constitute a quorum in order to conduct business at the Special Meeting. Abstentions will be counted as present for the purpose of determining a quorum; broker non-votes will not be counted as present for the purpose of determining a quorum as they are not considered to be entitled to vote on the non-routine matters to be presented at the Special Meeting. Our Rotor Restricted Stockholders own all of our Founder Shares, which represents 20% of our issued and outstanding shares of Common Stock, and will count towards this quorum. In the absence of a quorum, (a) the presiding officer or (b) an affirmative vote of the holders of a majority of our outstanding shares of Common Stock present, represented virtually or by proxy and entitled to vote thereat shall be required to adjourn the Special Meeting. As of the record date for the Special Meeting, [17,250,001] shares of our Common Stock would be required to achieve a quorum.

Q:

What vote is required to approve the proposals presented at the Special Meeting?

A:

The approval of the Business Combination Proposal, the NYSE Proposal, the Governance Proposals (which are non-binding advisory votes), the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal requires the affirmative vote of the holders of a majority of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. Accordingly, assuming a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, will have no effect on the Business Combination Proposal, the NYSE Proposal, the Governance Proposals (which are non-binding advisory votes), the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal.

 

At the Special Meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present; broker non-votes will not be counted as present for the purpose of determining a quorum, as they are not considered to be entitled to vote on the non-routine matters to be presented at the Special Meeting.  

 

Broker non-votes will have no effect on the approval of the Business Combination Proposal, the NYSE Proposal, the Governance Proposals (which are non-binding advisory votes), the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal.  A properly executed proxy marked “ABSTAIN” will have the same effect as a vote “AGAINST” the Business Combination Proposal, the NYSE Proposal, the Governance Proposals (which are non-binding advisory votes), the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal, as each require a vote of the holders of a majority of the stock represented and entitled to vote thereat.  

10


 

The approval of the Charter Approval Proposal requires the affirmative vote of holders of a majority of the voting power of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as a properly executed proxy marked “ABSTAIN and a broker non-vote will have the same effect as a vote “AGAINST” such Charter Approval Proposal.

Directors are elected by a plurality of the votes cast by the holders of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. This means that the eight director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting and abstentions and broker non-votes will have no effect on the election of directors pursuant to the Director Election Proposal.

Q:

What happens if the Business Combination Proposal is not approved?

A:

If the Business Combination Proposal is not approved and we do not consummate a business combination by July 20, 2022, we will be required to dissolve and liquidate our Trust Account.

Q:

What are the recommendations of the Special Committee and the Board?

A:

The Special Committee recommended that the Board approve the Merger Agreement and the transactions contemplated thereby.  Upon recommendation by the Special Committee and its own review and consideration, the Board believes that the Business Combination Proposal and the other proposals to be presented at the Special Meeting are in the best interest of our stockholders and recommends that stockholders vote “FOR” the Business Combination Proposal, “FOR” the NYSE Proposal, “FOR” the Charter Approval Proposal, “FOR” each of the Governance Proposals, “FOR” each of the director nominees set forth in the Director Election Proposal, “FOR” the Incentive Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal and “FOR” the Adjournment Proposal, if presented to the Special Meeting.

In considering the recommendation of our Board to vote in favor of the Business Combination, stockholders should be aware that aside from their interests as stockholders, our Sponsor and directors and officers may have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. Our Board and the Special Committee were aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Interests of Certain Persons in the Business Combination” for additional information.

Q:

May the Company, its Sponsor or the Company’s directors or officers or their affiliates purchase shares in connection with the Business Combination?

A:

In connection with the stockholder vote to approve the proposed Business Combination, our Sponsor, directors or officers or their respective affiliates may privately negotiate transactions to purchase shares from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per-share pro rata portion of the Trust Account. None of our directors or officers or their respective affiliates will make any such purchases when they are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such selling stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such selling stockholder to vote such shares in a manner directed by the purchaser. In the event that our Sponsor, directors or officers or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are below or in excess of the per-share pro rata portion of the Trust Account.

Q:

How many votes do I have at the Special Meeting?

A:

Our stockholders are entitled to one vote on each proposal presented at the Special Meeting for each share of Common Stock held of record as of [●], the record date for the Special Meeting. As of the close of business on the record date, there were [34,500,000] outstanding shares of our Common Stock.

11


 

Q:

How do I vote?

A:

If you were a holder of record of our Common Stock (including a holder of public units) on [●], the record date for the Special Meeting, you may vote with respect to the proposals virtually at the Special Meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

Voting by Mail.  By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the Special Meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the Special Meeting so that your shares will be voted if you are unable to attend the Special Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by 5:00 p.m. Eastern Time the business day prior to the Special Meeting.

Voting at the Virtual Meeting.  The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at [●]. To be admitted to the virtual Special Meeting, go to the webcast URL and [enter your unique 12-digit control number]. Stockholders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. You may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. For technical assistance during the meeting, you can contact Continental Stock Transfer & Trust Company for assistance at [(917) 262-2373], or via email at [proxy@continentalstock.com]. For additional information, please see the section entitled “Special Meeting of Company Stockholders.”

You can pre-register to attend the virtual meeting starting [●], 2021 at [●] Eastern Time. To pre-register, enter the webcast URL address into your browser and enter your control number, name and email address. Once you pre-register, you may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. Stockholders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. For technical assistance during the meeting, you can contact Continental Stock Transfer & Trust Company for assistance at [(917) 262-2373], or via email at [proxy@continentalstock.com].

If you do not have internet capabilities, you can listen only to the meeting by dialing +1 [(888) 965-8995] (toll-free), outside the U.S., and Canada +1 [(415) 655-0243] (standard rates apply). When prompted enter the pin number [●]#. The telephone line will be listen-only, and you will not be able to vote or enter questions during the meeting via telephone

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Special Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the DGCL, or that otherwise makes it advisable to adjourn the Special Meeting, the chair or secretary of the Special Meeting will convene the meeting at [●] on the date specified above and at [●] solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement at [●].

Q:

What will happen if I abstain from voting or fail to vote at the Special Meeting?

A:

At the Special Meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, a properly executed proxy marked “ABSTAIN” will have will have the same effect as a vote “AGAINST” the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposals, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal, but will have no effect on the approval of the Director Election Proposal.  A failure to vote will have no effect on any of the proposals other than the “Charter Approval Proposal,” where such failure to vote will have the same effect as a vote “AGAINST” the Charter Approval Proposal.

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

A:

Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the Special Meeting.

Q:

If I am not going to attend the virtual Special Meeting, should I return my proxy card instead?

A:

Yes. Whether you plan to attend the Special Meeting or not, please read the enclosed proxy statement carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

12


 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

A:

No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe the proposals presented to the stockholders at this Special Meeting will be considered non-routine and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the Special Meeting. If you do not provide instructions with your proxy, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares; this indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the Special Meeting. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

Q:

How will a broker non-vote impact the results of each proposal?

A:

Broker non-votes will count as a vote “AGAINST” the Charter Approval Proposal but will not have any effect on the outcome of any other proposals.

Q:

May I change my vote after I have mailed my signed proxy card?

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to our Secretary at the address listed herein so that it is received by our Secretary prior to the Special Meeting or attend the Special Meeting virtually and vote. You also may revoke your proxy by sending a notice of revocation to our Secretary, which must be received by our Secretary prior to the Special Meeting.

Q:

What should I do if I receive more than one set of voting materials?

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

Q:

How will the Company’s Sponsor, directors and officers vote?

A:

None of our Sponsor, directors or officers has purchased any shares of our Common Stock during or after our IPO and, as of the date of this proxy statement, neither we nor our Sponsor, directors or officers have entered into agreements, and are not currently in negotiations, to purchase shares prior to the consummation of the Business Combination.

Q:

What interests do the Sponsor and the Company’s current officers and directors have in the Business Combination?

A:

In considering the recommendation of our Special Committee and Board to vote for the proposals presented at the Special Meeting, including the Business Combination Proposal, you should be aware that aside from their interests as stockholders, our Sponsor and the directors and officers of the Company may have interests in the Business Combination that are different from, or in addition to, the interests of our stockholders generally.  Our Board and the Special Committee were aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the Special Meeting, including the Business Combination Proposal.  Stockholders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal.  For more information and specific considerations, see the sections entitled “Proposal No. 1—Approval of the Business Combination—Interests of Certain Persons in the Business Combination” and “Certain Relationships and Related Transactions—The Company’s Related Party Transactions” and the risk factors entitled “Two of our directors have interests in and relationships with Sarcos and, as a result, may have interests in the Business Combination that are different from or are in addition to those of other stockholders of the Company,” “Our Sponsor, the directors and officers of the Company, and two of our stockholders may have interests in the Business Combination that are different from or are in addition to those of other stockholders,” and “Our Rotor Restricted Stockholders hold a significant number of shares of our Common Stock and Private Placement Warrants, and they will lose their entire investment in us if a business combination is not completed.”

 

Q:

Did the Special Committee obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

A:

Yes. The Special Committee obtained a third-party fairness opinion in connection with the proposed Business Combination from Houlihan Lokey Capital, Inc. (“Houlihan Lokey”), an independent financial advisor engaged by the Special Committee.  

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For more information regarding the fairness opinion, see the section entitled “Proposal No. 1—Approval of the Business Combination—Opinion of the Financial Advisor to the Special Committee.

Q:

Why was a Special Committee of the Board of Directors of the Company Formed?

A:

Because of the minority equity interest in Sarcos held by Messrs. Finn and Howard (each directors of the Company) and certain other owners of Sponsor who are not directors or officers of the Company, the board of directors of the Company adopted formal resolutions on January 30, 2021 to form a special committee (“Special Committee”) comprised of disinterested independent directors of the Company, Messrs. Fennebresque and Berkman, with the authority to:

 

1.

make such investigation of the proposed Business Combination as the Special Transaction Committee deems appropriate;

 

2.

evaluate the terms of the proposed Business Combination;

 

3.

negotiate with Sarcos and its representatives the proposed Business Combination;

 

4.

negotiate the terms of any definitive agreement with respect to the proposed Business Combination (the execution of which definitive agreement shall be subject to the approval of the Board);

 

5.

obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that the proposed Business Combination is fair to the Corporation (and any other person or persons that the Special Transaction Committee may deem appropriate) from a financial point of view;

 

6.

report to the Board and any other appropriate committee thereof its recommendations and conclusions with respect to the Potential Transaction, including a determination and recommendation as to whether the proposed Business Combination is fair to and in the best interests of the Corporation (and any other person or persons that the Special Transaction Committee may deem appropriate) and should be approved by the Board; and

 

7.

determine to elect not to pursue the proposed Business Combination

Q:

Who are the Specified Sarcos Equity Holders and what are their interests in the Business Combination?

A:

They are Brian Finn, who is the Company’s CEO and a director of the Company and the managing member of the Sponsor, John Howard, who is a director of the Company and a member of the Sponsor, and other members of the Sponsor who are not directors or officers of the Company.  They may have interests (directly or through a related entity) in the proposed Business Combination with Sarcos that are different from, or are in addition to, the interests of the Company’s other stockholders . These interests include, among other things:

 

Interests in Rotor-Sarcos, LLC, an investment entity that owns an approximate 7.3% fully-diluted equity interest in Sarcos, purchased for approximately $20 million in early 2020. Rotor-Sarcos, LLC is controlled by Mr. Finn and another member of the Sponsor who is neither an officer nor director of the Company.

 

Mr. Finn and Mr. Howard, as well as other members of our Sponsor who are not directors or officers of the Company, also received Sarcos Warrants, via a distribution of such from Rotor-Sarcos, LLC, to acquire, in the aggregate, an additional 1.0% equity interest in Sarcos at the time of the investment in Sarcos.  Under agreements signed at the time of the signing of the Merger Agreement, these warrants will be net exercised and will convert into Sarcos equity immediately prior to the closing of the Business Combination.  

 

An investment entity controlled by Mr. Finn, Mr. Howard and two members of the Sponsor who are not directors or officers of the Company (each of whom are also the investors in such entity), reached an agreement in late January 2021 to purchase a 4.8% fully-diluted equity interest in Sarcos from a Sarcos shareholder for $10 million plus additional contingent consideration. In mid-February 2021, at the request of the investment entity and by agreement with the Sarcos shareholder, this transaction was rescinded and the agreement was voluntarily canceled and terminated.

 

Mr. Finn served on the board of directors of Sarcos until his voluntary resignation on January 26, 2021.  

 

A member of our Sponsor who is not a director or officer of the Company and who participated in the 2020 investment in Sarcos has been and remains a non-voting board observer at Sarcos.

Concurrent with the execution of the Merger Agreement, at the request of the Special Committee, the Specified Sarcos Equity Holders, including the holders of all outstanding Sarcos Warrants, entered into the Other Lock-up Agreements with Sarcos and

14


 

the Company.  Pursuant to the Other Lock-up Agreements, the Specified Sarcos Equity Holders agreed to certain transfer restrictions with respect to Common Stock received in connection with the Business Combination (including, as applicable, Common Stock distributed by Rotor-Sarcos, LLC or Sponsor or Common Stock issued upon exercise of Private Placement Warrants held or distributed by Sponsor) until the earlier of (i) one year following the closing of the Business Combination or (ii) the post-combination company’s completion of a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the post-combination company’s stockholders having the right to exchange their equity holdings in the post-combination company for cash, securities or other property.  The lock-up restrictions are also subject to certain customary transfer exceptions.  The Specified Sarcos Equity Holders further agreed (i) to irrevocably waive certain preemptive rights with respect to any issuance and sale by Sarcos of new securities pursuant to certain contractual rights entered into with Sarcos, and (ii) that such holders will not purchase any new securities issued and sold by Sarcos at any time prior to the closing of the Business Combination.  

 

For more information and specific considerations, see the sections entitled “Proposal No. 1—Approval of the Business Combination—Interests of Certain Persons in the Business Combination” and “Certain Relationships and Related Transactions—The Company’s Related Party Transactions” and the risk factors entitled “Two of our directors have interests in and relationships with Sarcos and, as a result, may have interests in the Business Combination that are different from or are in addition to those of other stockholders of the Company,” “Our Sponsor, the directors and officers of the Company, and two of our stockholders may have interests in the Business Combination that are different from or are in addition to those of other stockholders,” and “Our Rotor Restricted Stockholders hold a significant number of shares of our Common Stock and Private Placement Warrants, and they will lose their entire investment in us if a business combination is not completed.”

 

Q:

Does the Sponsor or any director or officer of the Company other than Messrs. Finn and Howard have a current or prior investment or other interest in or relationship with Sarcos?

 

A:

No.  As described in this proxy statement, such investments, interests and relationships with Sarcos are with Messrs. Finn and Howard and other members of the Sponsor who are not directors or officers of the Company.

 

Q:

What happens if I vote against the Business Combination Proposal?

A:

If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the affirmative vote of a majority of the outstanding shares of our Common Stock entitled to vote thereon at the Special Meeting, then the Business Combination Proposal will be approved and, assuming the approval of the NYSE Proposal and the Charter Approval Proposal, and the satisfaction or waiver of the other conditions to closing, the Business Combination will be consummated in accordance with the terms of the Merger Agreement.

If you vote against the Business Combination Proposal and the Business Combination Proposal is not approved at the Special Meeting, then the Business Combination Proposal will fail and we will not consummate the Business Combination. If we do not consummate the Business Combination, we may seek to terminate the Merger Agreement in accordance with its terms and continue to try to complete a business combination with a different target business until July 20, 2022. If we fail to complete an initial business combination by July 20, 2022, then we will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to our public stockholders.

Q:

Do I have redemption rights?

A:

If you are a holder of public shares, you may submit your public shares for redemption for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to the Company to pay its franchise and income taxes, by (ii) the total number of then-outstanding public shares; provided that the Company will not redeem any shares of Class A Common Stock issued in the IPO to the extent that such redemption would result in the Company’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of at least $5,000,001. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Class A Common Stock included in the units sold in our IPO. Holders of our outstanding public warrants do not have redemption rights in connection with the Business Combination. Our Rotor Restricted Stockholders have also agreed to waive their right to anti-dilution adjustment with respect to any shares of our Founder Shares they may hold in connection with the consummation of the Business Combination. For illustrative purposes, based on the fair value of investment securities held in the Trust Account of $[●] as of [●], 2021, the estimated per share redemption price would have been approximately $[●]. Additionally, shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest not previously released to the

15


 

Company to pay its franchise and income taxes) in connection with the liquidation of the Trust Account, unless we complete an alternative business combination prior to July 20, 2022.

Q:

If I am a unit holder, can I exercise redemption rights with respect to my units?

A:

No. Holders of outstanding units must separate the underlying Class A Common Stock and public warrants prior to exercising redemption rights with respect to the Class A Common Stock. If you hold units registered in your own name, you must deliver the certificate for such units to Continental Stock Transfer & Trust Company, our transfer agent, with written instructions to separate such units into Class A Common Stock and public warrants. This must be completed far enough in advance to permit the mailing of the Class A Common Stock certificates back to you so that you may then exercise your redemption rights upon the separation of the Class A Common Stock from the units. See “How do I exercise my redemption rights?” below. The address of Continental Stock Transfer & Trust Company is listed under the question “Who can help answer my questions?” below. If a broker, dealer, commercial bank, trust company or other nominee holds your units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company, our transfer agent. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using DTC’s deposit withdrawal at custodian (DWAC) system, a withdrawal of the relevant units and a deposit of an equal number of Class A Common Stock and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation.

Q:

Can the Company’s Rotor Restricted Stockholders redeem their Founder Shares in connection with consummation of the Business Combination?

A:

No. Pursuant to our current certificate of incorporation Founder Shares may not be redeemed in connection with the consummation of the Business Combination. Our Rotor Restricted Stockholders have agreed to waive their right to an anti-dilution conversion adjustment with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination.

Q:

Is there a limit on the number of shares I may redeem?

A:

Yes. A public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), is restricted from exercising redemption rights with respect to more than an aggregate of 15% of the shares sold in our IPO. Accordingly, all shares in excess of 15% owned by a holder or “group” of holders will not be redeemed for cash. On the other hand, a public stockholder who holds less than 15% of the shares of Class A Common Stock and is not a member of a “group” may redeem all of the public shares held by such stockholder for cash.

In no event is your ability to vote all of your shares (including those shares held by you or by a “group” in excess of 15% of the shares sold in our IPO) for or against our Business Combination restricted.

We have no specified maximum redemption threshold under our current certificate of incorporation, other than the aforementioned 15% threshold. Each redemption of shares of Class A Common Stock by our public stockholders will reduce the amount in our Trust Account, which held cash and investment securities with a fair value of approximately $[●] as of [●], 2021. The Merger Agreement provides that Sarcos’ obligation to consummate the Business Combination is conditioned on the amount in the Trust Account, together with the proceeds from the PIPE Financing, equaling or exceeding $200,000,000 after taking into account the redemptions of Class A Common Stock by public stockholders. This condition to closing in the Merger Agreement is for the sole benefit of Sarcos and may be waived by Sarcos. If, as a result of redemptions of Class A Common Stock by our public stockholders, these conditions are not met (or waived), then Sarcos may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Common Stock in an amount that would result in the Company’s failure to have net tangible assets of at least $5,000,001.

Q:

Is there a limit on the total number of shares that may be redeemed?

A:

Yes. Our current certificate of incorporation provides that we may not redeem our public shares in an amount that would result in the Company’s failure to have net tangible assets of at least $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the Merger Agreement. Other than this limitation, our current certificate of incorporation does not provide a specified maximum redemption threshold. However, the Merger Agreement provides that Sarcos’ obligations to consummate the Business Combination is conditioned on the amount in the Trust Account, together with the proceeds from the PIPE Financing, equaling or exceeding $200,000,000. The gross proceeds from the Private Placement of $220 million are sufficient to satisfy this closing condition. In the event the aggregate cash consideration that we would be required to pay for all shares of Class A Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Merger Agreement

16


 

exceeds the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any shares, all shares of Class A Common Stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

Based on the amount of $[●] in our Trust Account as of [●], 2021, assuming a per share redemption price of $[●], approximately [●] shares of Class A Common Stock may be redeemed and still enable us to have sufficient cash to satisfy the cash closing conditions in the Merger Agreement. We refer to this as the maximum redemption scenario.

Q:

How will the absence of a maximum redemption threshold affect the Business Combination?

A:

The Merger Agreement provides that our and Sarcos’ obligations to consummate the Business Combination are conditioned on the amount in the Trust Account, together with the proceeds from the PIPE Financing, equaling or exceeding $200,000,000. The gross proceeds from the Private Placement of $220 million are sufficient to satisfy this closing condition. As a result, we may be able to complete our Business Combination even though a substantial portion of our public stockholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to our Sponsor, directors or officers or their affiliates. As of the date of this proxy statement, no agreements with respect to the private purchase of public shares by the Company or the persons described above have been entered into with any such investor or holder. We will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals (as described in this proxy statement) at the Special Meeting.

Q:

Will how I vote affect my ability to exercise redemption rights?

A:

No. You may exercise your redemption rights whether you vote your shares of Common Stock for or against, or whether you abstain from voting on the Business Combination Proposal or any other proposal described by this proxy statement. As a result, the Merger Agreement can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of Nasdaq.

Q:

How do I exercise my redemption rights?

A:

In order to exercise your redemption rights, you must (i) check the box on the enclosed proxy card to elect redemption, (ii) if you hold public units, separate the underlying public shares and public warrants, and (iii) prior to 5:00 p.m. Eastern Time on [●], 2021 (two business days before the Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your public shares for cash to Continental Stock Transfer & Trust Company, our Transfer Agent, at the following address:

Continental Stock Transfer & Trust Company

1 State Street 30th Floor

New York, New York 10004

Attention: [Mark Zimkind]

Email: [mzimkind@continentalstock.com]

Please check the box on the enclosed proxy card marked “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of Common Stock. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from exercising redemption rights with respect to more than an aggregate of 15% of the shares of Class A Common Stock included in the units sold in our IPO. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public stockholder or group will not be redeemed for cash.

Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, we do not have any control over this process and it may take longer than two weeks. Electronic delivery of your public shares generally will be faster than delivery of physical certificates. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name” are required to either tender their certificates to our Transfer Agent prior to the date set forth in these proxy materials, or up to two business days prior to the vote on the proposal to approve the Business Combination at the Special Meeting, or to deliver

17


 

their shares to the Transfer Agent electronically using Depository Trust Company’s (“DTC”) Deposit/Withdrawal At Custodian (“DWAC”) system, at such stockholder’s option. A physical certificate will not be needed if your shares are delivered to our Transfer Agent electronically. The requirement for physical or electronic delivery prior to the Special Meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the Business Combination is approved.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming stockholder. However, this fee would be incurred regardless of whether or not we require stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

A:

The U.S. federal income tax consequences of exercising your redemption rights depend on the particular facts and circumstances. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Material United States Federal Income Tax Considerations for Stockholders Exercising Redemption Rights.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

Q:

If I am a Company warrant holder, can I exercise redemption rights with respect to my public warrants?

A:

No. The holders of our public warrants have no redemption rights with respect to our public warrants.

Q:

Do I have appraisal rights if I object to the proposed Business Combination?

A:

No. Appraisal rights are not available to holders of our Common Stock in connection with the Business Combination.

Q:

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

A:

The funds held in the Trust Account will be used to: (i) pay Company stockholders who properly exercise their redemption rights; (ii) pay $9,660,000 in deferred underwriting commissions to the underwriters of our IPO, in connection with the Business Combination; and (iii) pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by the Company and other parties to the Merger Agreement in connection with the transactions contemplated by the Merger Agreement, including the Business Combination and the PIPE Financing, and pursuant to the terms of the Merger Agreement.  The remaining proceeds from the Business Combination (including funds from the Trust Account) will be used by the post-combination company to fund its ongoing growth plans.

 

Q:

What happens if the Business Combination is not consummated?

A:

There are certain circumstances under which the Merger Agreement may be terminated. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement” for information regarding the parties’ specific termination rights.

If we do not consummate the Business Combination, we may seek to terminate the Merger Agreement in accordance with its terms and continue to try to complete a business combination with a different target business until July 20, 2022. Unless we amend our current certificate of incorporation (which requires the affirmative vote of 65% of all then outstanding shares of Class A Common Stock) and amend certain other agreements into which we have entered to extend the life of the Company, if we fail to complete an initial business combination by July 20, 2022, then we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem our public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish our public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the IPO. Please see the section entitled “Risk Factors—Risks Related to the Business Combination.”

Holders of our Founder Shares have waived any right to any liquidation distribution with respect to such shares. In addition, if we fail to complete a business combination by July 20, 2022, there will be no redemption rights or liquidating distributions

18


 

with respect to our outstanding warrants, which will expire and be worthless. We expect to consummate the Business Combination and do not intend to take any action to extend the life of the Company beyond July 20, 2022.

Q:

When is the Business Combination expected to be completed?

A:

The closing of the Business Combination is expected to take place on or prior to the third business day following the satisfaction or waiver of the conditions described below in the subsection entitled “Proposal No. 1—Approval of the Business Combination—Conditions to Closing of the Business Combination.” The closing is expected to occur in the third quarter of 2021. The Merger Agreement may be terminated by the Company or Sarcos if the closing of the Business Combination has not occurred by October 5, 2021 (the “Termination Date”), provided that the Termination Date shall automatically be extended on a day-for-day basis (up to 30 days) for each day of any delay to the applicable waiting or review periods, or any extension thereof of any governmental entity that would, or would reasonably be expected to, have the effect of delaying, impeding, hindering or preventing the review of the transactions contemplated hereby.

For a description of the conditions to the completion of the Business Combination, see the section entitled “Proposal No. 1—Approval of the Business Combination—Conditions to Closing of the Business Combination.”

Q:

What do I need to do now?

A:

You are urged to read carefully and consider the information contained in this proxy statement, including the Annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

Q:

Who will solicit and pay the cost of soliciting proxies for the Special Meeting?

A:

The Company is soliciting proxies on behalf of its Board. The Company will pay the cost of soliciting proxies for the Special Meeting. The Company has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the Special Meeting. The Company has agreed to pay Morrow Sodali LLC a fee of up to $35,000, plus disbursements, and will reimburse Morrow Sodali LLC for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. The Company will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of the Company’s Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the Company’s Common Stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or virtually. They will not be paid any additional amounts for soliciting proxies.

Q:

Who can help answer my questions?

A:

If you have questions about the proposals or if you need additional copies of this proxy statement or the enclosed proxy card you should contact:

Rotor Acquisition Corp.
The Chrysler Building, 405 Lexington Avenue
New York, New York 10174
(212) 818-8800
Attention: [Brian D. Finn]
Email: [●]

You may also contact our proxy solicitor at:

Morrow Sodali LLC
470 West Avenue
Stamford, CT 06902
Individuals, please call toll-free: (800) 662-5200
Banks and brokerage, please call collect: (203) 658-9400
Email: ROT.info@investor.morrowsodali.com

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the Special Meeting.

You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

19


 

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our Transfer Agent prior to the Special Meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact our Transfer Agent:

Continental Stock Transfer & Trust Company
1 State Street 30th Floor
New York, New York 10004
Attention: [Mark Zimkind]
Email: [mzimkind@continentalstock.com]

 

 

20


 

SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information contained in this proxy statement and does not contain all of the information that may be important to you. You should read carefully this entire proxy statement, including the Annexes and accompanying financial statements of the Company and Sarcos, to fully understand the proposed Business Combination (as described below) before voting on the proposals to be considered at the Special Meeting (as described below). Please see the section entitled “Where You Can Find More Information” beginning on page [●] of this proxy statement.

Sarcos’ Business

Sarcos is a global technology leader for industrial highly dexterous mobile robotic systems for use in dynamic environments.  For more information about Sarcos, please see the sections entitled “Information About Sarcos,” “Sarcos’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management After the Business Combination.”

Parties to the Business Combination

The Company

The Company is a blank check company incorporated in the state of Delaware on August 27, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses.

The Company’s securities are currently listed on the New York Stock Exchange under the symbols “ROT,” “ROT.WS” and “ROT.U,” respectively. The Company intends to apply to continue the listing of its publicly-traded Class A Common Stock and public warrants on Nasdaq under the symbols “STRC” and “STRCW,” respectively, upon the closing of the Business Combination. Units will automatically separate into their underlying Class A Common Stock and public warrants in connection with the closing of the Business Combination.  In connection with the consummation of the Business Combination, the Company will change its name to Sarcos Technology and Robotics Corporation.  The mailing address of the Company’s principal executive office is c/o Graubard Miller, The Chrysler Building, 405 Lexington Avenue, New York, New York 10174.

Merger Sub

Merger Sub, a Delaware corporation, is a wholly-owned subsidiary of the Company, formed by the Company on March 12, 2021. In the Business Combination, Merger Sub will merge with and into Sarcos, with Sarcos continuing as the surviving entity.  The mailing address of Merger Sub’s principal executive office is c/o Graubard Miller, The Chrysler Building, 405 Lexington Avenue, New York, New York 10174.

Sarcos

Sarcos was incorporated in Utah in February 2015 and is a global technology leader for industrial highly dexterous mobile robotic systems for use in dynamic environments. In the Business Combination, Merger Sub will merge with and into Sarcos, with Sarcos continuing as the surviving entity. Sarcos’ principal executive offices are located at 360 Wakara Way, Salt Lake City Utah, 84108, and its telephone number is 888-927-7296.

Proposals to be Submitted and the Special Meeting

Rotor stockholders are being asked to vote on the following proposals:

 

1.

a proposal to adopt the Merger Agreement (the “Business Combination Proposal” or “Proposal No. 1”), a copy of which is attached to the accompanying proxy statement as Annex A, and approve the transactions contemplated thereby, including the Business Combination. Subject to the terms of the Merger Agreement, the consideration to be paid to the existing equity holders of Sarcos at the time of the Business Combination (including shares of common stock, preferred stock, restricted stock awards, options, restricted stock units and warrants) (the “Sarcos Equity Holders”) will be stock consideration, consisting of 120,000,000 newly-issued shares of our  Common Stock, par value $0.0001 per share (the “Common Stock”), plus up to an additional 5,000,000 shares of Common Stock if Sarcos consummates an equity financing prior to the closing of the Business Combination (the “Financing Shares”) with one share issued for every $10.00 raised in such financing. At the closing of the Business Combination, each option to purchase shares of Sarcos’ Common Stock will be converted into an option exercisable into a number of shares of Common Stock and each award of Sarcos’ restricted stock units will be converted into a right to receive restricted stock units based on shares of Common Stock. Following the closing of the Business Combination, the Sarcos Stockholders will be entitled to receive an additional (1) 14,062,500 shares of Common Stock if the closing share price of a share of Common Stock is equal to or exceeds $15.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the closing and ending on the fourth anniversary of the closing, and (2) 14,062,500 shares of Common Stock if the closing share price of a share of Common Stock is equal to or exceeds $20.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the closing and ending on the fifth anniversary of the closing (collectively, the “Earn-Out Shares”). The aggregate purchase price and number of shares issued to the Sarcos Equity Holders as a result of the Business Combination will not be subject to any adjustment but will be subject to customary closing conditions,

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2.

a proposal to approve, for purposes of complying with applicable NYSE Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock pursuant to (i) the issuance of up to 153,125,000 shares of Common Stock in the Business Combination and (ii) the issuance and sale of 22,000,000 shares of Common Stock (the “PIPE Financing”) in a private offering of securities to certain investors in connection with the Business Combination (the “NYSE Proposal” or “Proposal No. 2”),

 

3.

a proposal to adopt the Second Amended and Restated Certificate of Incorporation of the Company in the form attached hereto as Annex B (the “Charter Approval Proposal” or “Proposal No. 3”),

 

4.

a separate proposal with respect to certain governance provisions in the Second Amended and Restated Certificate of Incorporation, which are being separately presented in accordance with SEC requirements and which will each be voted upon on a non-binding advisory basis (each a “Governance Proposal,” and collectively, the “Governance Proposals” or “Proposal No. 4”),

 

5.

a proposal to elect eight directors to our board of directors (our “Board”), with Benjamin G. Wolff and Admiral Eric T. Olson (Ret.)  to serve as our Class I directors for a term expiring at the annual meeting of stockholders to be held in 2022, Dennis Weibling, Matthew Shigenobu Muta and Laura J. Peterson to serve as our Class II directors for a term expiring at the annual meeting of stockholders to be held in 2023, and Brian D. Finn, Peter Klein and Priya Balasubramaniam  to serve as our Class III directors for a term expiring at the annual meeting of stockholders to be held in 2024, or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. (the “Director Election Proposal” or “Proposal No. 5”),

 

6.

a proposal to approve the Sarcos Technology and Robotics Corporation 2021 Equity Incentive Plan (the “Incentive Plan”), including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” or “Proposal No. 6”),

 

7.

a proposal to approve the Sarcos Technology and Robotics Corporation 2021 Employee Stock Purchase Plan (the “ESPP”), including the authorization of the initial share reserve under the ESPP (the “Employee Stock Purchase Plan Proposal” or “Proposal No. 7”), and

 

8.

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposals, the Incentive Plan Proposal or the Employee Stock Purchase Plan Proposal (the “Adjournment Proposal” or “Proposal No. 8”).

 

Unless waived by the parties to the Merger Agreement, the closing of the Business Combination is conditioned on the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal at the Special Meeting. The approval of the Business Combination Proposal, NYSE Proposal and Charter Approval Proposal are each cross-conditioned on the approval of the others at the Special Meeting (the “Cross-Conditioned Proposals”).  The approval of the Director Election Proposal, Incentive Plan Proposal and Employee Stock Purchase Plan Proposal are each conditioned on the approval of the Cross-Conditioned Proposals at the Special Meeting.  The Governance Proposals and Adjournment Proposal are not conditioned on the approval of any proposal set forth in this proxy statement. It is important for you to note that in the event that any of the Cross-Conditioned Proposals is not approved at the Special Meeting, then the Company will not consummate the Business Combination.  

Other Agreements

Concurrent with the execution of the Merger Agreement, the Company entered into certain Subscription Agreements, Lock-Up Agreements, and Waiver Agreement by and among various parties to the transaction, including the Rotor Restricted Stockholders, Specified Sarcos Equity Holders and Sarcos Stockholders.  Additionally, pursuant to the Merger Agreement, the Company intends on entering into a Registration Rights Agreement with Sponsor and certain Sarcos Stockholders, the Exchange Agent Agreement, and Employment Agreements with certain members of Sarcos’ management team.  For more information about the ancillary agreements entered into concurrently with and contemplated by the Merger Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Other Agreements.

Recommendation of the Special Committee and the Board and Reasons for the Approval of the Business Combination

This explanation of the Company’s reasons for the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.”

As described in greater detail under the section entitled “Proposal No. 1—Approval of the Business CombinationBackground of the Business Combination,” the Special Committee and Board, in evaluating the Business Combination, consulted with its management and legal and financial advisors, and, in reaching its decision to recommend approval of the Business Combination,

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considered a variety of factors. In light of the complexity of those factors, the Special Committee and the Board did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific factors it took into account in reaching its decision.

On January 30, 2021, the Board formed the Special Committee comprised solely of members of the Board that were determined to be independent and disinterested with respect to the potential Business Combination transaction with Sarcos and was empowered to evaluate the terms of such potential transaction, negotiate with Sarcos and its representatives any element of such potential transaction, negotiate the terms of any definitive agreement with respect to such potential transaction, obtain a fairness opinion from an independent investment banking firm, report to the Board its recommendations and conclusions with respect to such potential transaction, and determine to elect not to pursue such potential transaction with Sarcos.  As part of the authorizing resolutions forming the Special Committee, the Board agreed that it would not proceed with the transaction absent the recommendation of the Special Committee.

Recommendation of the Special Committee

The Special Committee, with the advice and assistance of the Company’s and the Special Committee’s financial and legal advisors, and in consultation with the Company’s senior management team, negotiated and evaluated the terms of the Merger Agreement, the Business Combination and the other transactions contemplated by the Merger Agreement. The Special Committee was advised by independent financial and legal advisors, and each member of the special committee was actively engaged in the process on a continuous and regular basis.

After careful consideration, on April 3, 2021, the Special Committee unanimously (i) determined that it is fair and in the best interests of the Company, and declared it advisable, to enter into the Merger Agreement, (ii) approved the execution, delivery and performance of the Merger Agreement by the Company and the consummation of the transactions contemplated thereby, including the Business Combination, and (iii) resolved to recommend the approval of the Merger Agreement, the Business Combination and the other transactions contemplated thereby by the Board.  

Recommendation of the Board

The Board, in evaluating the Business Combination, consulted with the Company’s management and its legal counsel, financial advisors and other advisors, taking into account the recommendation of the Special Committee. Upon such consultation, Mr. Selig and the two members of the Special Committee, Messrs. Berkman and Fennebresque, determined  (i) that the terms and conditions of the Merger Agreement and the Business Combination are advisable, fair to and in the best interests of the Company and its stockholders and (ii) to recommend that the stockholders adopt the Merger Agreement and approve the Business Combination and other proposals.  Upon such vote and resolution by such directors, the full Board, including Messrs. Finn and Howard, unanimously ratified the foregoing resolutions.  In making such determinations, each director considered and evaluated a number of factors, including, but not limited to, the factors discussed below. In light of the number and wide variety of factors considered in connection with its evaluation of the Business Combination, the Special Committee and the Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. Each of the Special Committee and the Board viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors.

Reasons for the Approval of the Business Combination

Each of the Special Committee and the Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Merger Agreement and the transactions contemplated thereby, including, but not limited to, the following material factors:

 

Growth Prospects. The Board believes Sarcos is a market leader in industrial highly dexterous mobile robotic systems with decades of innovation and development experience, an extensive patent portfolio and strong growth prospects within the global workplace across the private and public sectors. In addition, the Board believes Sarcos has multiple areas of potential growth, including but not limited to, completing the commercialization and launch of its Guardian XO and Guardian XT products, ramping up production to drive scale and growth, increasing its capabilities through potential bolt-on acquisitions and developing Sarcos’ AI platform to enhance the value proposition of its core products;

 

Economics.  Some of the factors the Board considered include Sarcos’ (i) potential market share in the traditional labor markets across a wide range of industries, representing a total addressable market in the U.S. industrial sectors alone of approximately $147 billion, (ii) plan to deploy its robot fleet primarily through a Robotics as-a Service solution, which is expected to accelerate the adoption of its products and deliver recurring revenues, (iii) extensive portfolio of patents covering a wide array of product categories, (iv) history of product innovation and plans to increase its investments in product research and development, (iv)

23


 

 

strong engagement and support from key strategic partners and potential customers and (v) experienced and proven management team with extensive public company experience;

 

Due Diligence.  Due diligence examinations of Sarcos and discussions with Sarcos’ management and the Company’s financial and legal advisors concerning the Company’s due diligence examination of Sarcos;

 

Financial Condition.  The Board also considered factors such as Sarcos’ historical financial results, outlook, financial plan and debt structure, as well as the financial profiles of private and publicly traded peer companies in the robotic systems market, and adjacent markets and relevant information with respect to companies that had been acquisition targets or received equity financings in transactions similar to the Business Combination.  In considering these factors, the Board reviewed Sarcos’ capital efficient business model, the current prospects for growth if Sarcos achieved its business plans and various historical and current balance sheet items for Sarcos. In reviewing these factors, the Board noted that Sarcos was well-positioned in its industry for strong future growth;

 

Experienced and Proven Management Team.  Sarcos has a strong management team and the senior management of Sarcos intends to remain with Sarcos, which will provide helpful continuity in advancing Sarcos’ strategic and growth goals;

 

Lock Up.  Certain Sarcos Stockholders agreed to certain restrictions on transfer for up to two years with respect to the shares of Common Stock issued to them immediately following the Closing;

 

Other Alternatives.  The Board believes, after a thorough review of other business combination opportunities reasonably available to the Company, that the proposed Business Combination represents the best potential business combination for the Company;

 

Negotiated Transaction.  The financial and other terms of the Merger Agreement and the fact that such terms and conditions are reasonable and were the product of review and arm’s length negotiations between the Special Committee and the Company, on the one hand, and Sarcos on the other hand; and

 

Opinion of Houlihan Lokey.  The financial analysis reviewed by Houlihan Lokey with the Special Committee as well as the oral opinion of Houlihan Lokey rendered to the Special Committee on April 3, 2021 (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the Special Committee dated April 3, 2021), as to the fairness, from a financial point of view, to the Company of the base merger consideration of 120 million shares of Common Stock to be paid by the Company in the Merger pursuant to the Merger Agreement. See “Proposal No. 1—Approval of the Business Combination—Opinion of the Financial Advisor to the Special Committee.”

Each of the Special Committee and the Board also considered a variety of uncertainties, risks and other potentially negative factors concerning the Business Combination including, but not limited to, the following:

 

Macroeconomic Risks.  Macroeconomic uncertainty and the effects it could have on the combined company’s revenues;

 

Benefits Not Achieved.  The risk that the potential benefits of the Business Combination may not be fully achieved, or may not be achieved within the expected timeframe;

 

Liquidation of the Company.  The risks and costs to the Company if the Business Combination is not completed, including the risk of diverting management focus and resources from other businesses combination opportunities, which could result in the Company being unable to effect a business combination by July 20, 2022 and force the Company to liquidate and the warrants to expire worthless.

 

Redemption Risk.  The potential that a significant number of the Company’s stockholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to the Company’s existing certificate of incorporation, which would potentially make the Business Combination more difficult or impossible to complete;

 

Shareholder Vote.  The risk that the Company’s stockholders may fail to provide the respective votes necessary to effect the Business Combination;

 

Closing Conditions.  The fact that the completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within the Company’s control;

 

Litigation.  The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination; and

24


 

 

Fees and Expenses.  The fees and expenses associated with completing the Business Combination.  

 

Early Stage Company.  Sarcos is an early stage company with a history of losses, and it expects to incur significant expenses for the foreseeable future, and therefore may fail to achieve the projections presented to the Board and management.

 

Product Development.  Sarcos’ core products are still under development, Sarcos has limited current customers and there are no pending orders for the commercial version of its core products, and therefore there is a possibility that ongoing and expected customer trials and discussions may not result in binding orders or sales.

 

Commercializing Products.  Sarcos’ core products represent a new product category in the commercial market, which is unproven, and important assumptions about the potential market demand, pricing, and sales cycle, for its current and future products may be inaccurate.

In addition to considering the factors described above, the Board also considered other factors including, without limitation:

 

Interests of Certain Persons.  The Sponsor, and the officers and directors of the Company may have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. For more information, see the sections entitled “Interests of Certain Persons in the Business Combination” and “Certain Relationships and Related Transactions—The Company’s Related Party Transactions” and the risk factors entitled “Two of our directors have interests in and relationships with Sarcos and, as a result, may have interests in the Business Combination that are different from or are in addition to those of other stockholders of the Company,” “Our Sponsor, the directors and officers of the Company, and two of our stockholders may have interests in the Business Combination that are different from or are in addition to those of other stockholders,” and “Our Rotor Restricted Stockholders hold a significant number of shares of our Common Stock and Private Placement Warrants, and they will lose their entire investment in us if a business combination is not completed.” The Board was aware of and considered these interests, among other matters, in evaluating the Business Combination and the Merger Agreement and in recommending to our stockholders that they vote in favor of the proposals presented at the Special Meeting, including the Business Combination Proposal; and

 

Other Risk Factors.  Various other risk factors associated with the business of Sarcos, as described in the section entitled “Risk Factors.

Each of the Special Committee and the Board concluded that the potential benefits that it expected the Company and its stockholders to achieve as a result of the Business Combination outweighed the potentially negative and other factors associated with the Business Combination. Accordingly, the Board, upon the unanimous recommendation of the Special Committee, unanimously determined that the Business Combination and the transactions contemplated by the Merger Agreement, were advisable and in the best interests of the Company and its stockholders.  

Opinion of the Financial Advisor to the Special Committee

On April 3, 2021, Houlihan Lokey verbally rendered its opinion to the Special Committee (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the Special Committee dated April 3, 2021) to the effect that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth therein, the base merger consideration of 120 million shares of Common Stock to be paid by the Company in the Merger pursuant to the Merger Agreement was fair to the Company from a financial point of view.

Houlihan Lokey’s opinion was directed to the Special Committee (in its capacity as such) and only addressed the fairness, from a financial point of view, to the Company, of the base merger consideration of 120 million shares of Common Stock to be paid by the Company in the Merger pursuant to the Merger Agreement and did not address any other aspect or implication of the Merger or any other agreement, arrangement or understanding.  The summary of Houlihan Lokey’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex K to this proxy statement and describes the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion.  However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute, a recommendation to the Special Committee, the Board, any security holder or any other party as to how to act or vote with respect to any matter relating to the Merger, the Related Transactions (as defined in the section entitled “Proposal No. 1—Approval of the Business Combination—Opinion of the Financial Advisor to the Special Committee”) or otherwise (including, without limitation, any election to redeem shares of Class A Common Stock or to subscribe for shares of Common Stock in the PIPE Financing or for debt or equity securities of Sarcos prior to the closing of the Merger.

For more information with respect to the opinion of Houlihan Lokey, please see the section entitled “Proposal No. 1Approval of the Business Combination—Opinion of the Financial Advisor to the Special Committee.”

25


 

Interests of Certain Persons in the Business Combination

In considering the recommendation of our Board to vote in favor of the Business Combination, stockholders should be aware that aside from their interests as stockholders, our Sponsor and directors and officers may have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. Our Board and the Special Committee were aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination.  For more information, see the sections entitled “Proposal No. 1—Approval of the Business Combination—Interests of Certain Persons in the Business Combination” and “Certain Relationships and Related Transactions—The Company’s Related Party Transactions” and the risk factors entitled “Two of our directors have interests in and relationships with Sarcos and, as a result, may have interests in the Business Combination that are different from or are in addition to those of other stockholders of the Company,” “Our Sponsor, the directors and officers of the Company, and two of our stockholders may have interests in the Business Combination that are different from or are in addition to those of other stockholders,” and “Our Rotor Restricted Stockholders hold a significant number of shares of our Common Stock and Private Placement Warrants, and they will lose their entire investment in us if a business combination is not completed.”

Ownership Following the Business Combination

As of the date of this proxy statement, there are 27,600,000 shares of Class A Common Stock and 6,900,000 Founder Shares issued and outstanding, which will be converted into Common Stock on a one-for-one basis upon the consummation of the Business Combination.  As of the date of this proxy statement, there are an aggregate of 13,800,000 public warrants and 7,270,000 Private Placement Warrants outstanding. Each whole warrant entitles the holder thereof to purchase one (1) share of Class A Common Stock.

The following table illustrates varying beneficial ownership levels in the post-combination company immediately following the consummation of the Business Combination assuming (i) a No Redemption Scenario and (ii) Maximum Redemption Scenario:

 

No Redemption Scenario:  The expected beneficial ownership of shares of our Common Stock post-Business Combination assuming none of the public shares are redeemed has been determined based upon the following: (i) that no public stockholders exercise their redemption rights, (ii) that none of the investors set forth in the table below has purchased or purchases shares of Common Stock (pre- or post-Business Combination), (iii) that 22,000,000 shares of Common Stock are issued to the PIPE Investors, (iv) that [] shares of Common Stock are issued to the Sarcos Equity Holders (including shares issuable upon the including shares of Common Stock issuable upon the exercise of outstanding Sarcos Options within sixty (60) days from [], 2021 and assuming no Financing Shares or Earn-Out Shares are issued), (v) the Rotor Restricted Stockholders forfeit 494,040 Founder Shares immediately prior to the consummation of the Business Combination, and (vi) there will be an aggregate of [●] shares of the post-combination company’s Common Stock issued and outstanding at Closing.

 

 

Maximum Redemption Scenario:  The expected beneficial ownership of shares of Common Stock post-Business Combination assuming the maximum number of public shares have been redeemed has been determined based on the following: (i) that holders of 27,600,000 public shares exercise their redemption rights (maximum redemption scenario), (ii) that none of the investors set forth in the table below has purchased or purchases shares of Common Stock (pre- or post-Business Combination), (iii) that 22,000,000 shares of Common Stock are issued to the PIPE Investors, (iv) that [●] shares of Common Stock are issued to the Sarcos Equity Holders (including shares issuable upon the including shares of Common Stock issuable upon the exercise of outstanding Sarcos Options within sixty (60) days from [●], 2021 and assuming no Financing Shares or Earn-Out Shares are issued), (v) the Rotor Restricted Stockholders forfeit 494,040 Founder Shares immediately prior to the consummation of the Business Combination, and (vi) there will be an aggregate of [●] shares of the post-combination company’s Common Stock issued and outstanding at Closing.

 

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Share Ownership in

the Post-Combination Company(1)

 

 

 

No

Redemptions

 

Maximum Possible

Redemption

 

 

 

Number

of Shares

 

 

Percentage of

Outstanding

Shares

 

Number

of Shares

 

 

Percentage of

Outstanding

Shares

 

 

 

(in millions)

 

 

 

 

(in millions)

 

 

 

 

 

Holders of Class A Common Stock

 

 

27,600,000

 

 

[●]%

 

0

 

 

 

0

%

Holders of Founder Shares(2)

 

 

6,405,960

 

 

[●]%

 

 

6,405,960

 

 

[●]%

 

PIPE Investors

 

 

22,000,000

 

 

[●]%

 

 

22,000,000

 

 

[●]%

 

Sarcos Equity Holders

 

[●]

 

 

[●]%

 

[●]

 

 

[●]%

 

 

 

(1)

Percentages may not sum to 100% due to rounding. Figures and percentages do not give effect to the shares reserved for issuance under the Incentive Plan or Employee Stock Purchase Plan. See “Proposal No. 6—The Incentive Plan Proposal” and “Proposal No. 8—The Employee Stock Purchase Plan Proposal” for additional information.  Figures and percentages do not give effect to the exercise of public warrants or Private Placement Warrants.

 

(2)

Figure only reflects the converted Founder Shares held by the Rotor Restricted Stockholders, giving effect to forfeiture of 494,040 Founder Shares pursuant to the Waiver Agreement. Does not reflect public shares otherwise held by the Rotor Restricted Stockholders.

Organizational Structure

The following diagram depicts the current ownership structure of the Company:

 

 

The following diagram depicts the current ownership structure of Sarcos:

 

 

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The following diagram illustrates the ownership structure of the post-combination company immediately following the Business Combination:

 

 

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The Special Meeting

 

Date, Time and Place of Special Meeting

The Special Meeting will be held on [●], 2021 at [●] Eastern Time, or at such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

Voting Power; Record Date

Only Company stockholders of record at the close of business on [●], 2021, the record date for the Special Meeting, will be entitled to vote at the Special Meeting. You are entitled to one vote for each share of Class A Common Stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were [34,500,000] shares of Common Stock outstanding and entitled to vote, of which [27,600,000] are shares of Class A Common Stock and [6,900,000] are Founder Shares held by our Rotor Restricted Stockholders.

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of Company stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if the holders of shares of outstanding Common Stock of the Company representing a majority of the Common Stock issued and outstanding and entitled to vote at the Special Meeting, are present in person, virtually or represented by proxy at the Special Meeting. At the Special Meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present; broker non-votes will not be counted as present for the purpose of determining a quorum as they are not considered to be entitled to vote on the non-routine matters to be presented at the Special Meeting. The Rotor Restricted Stockholders own all of our Founder Shares, which represents 20% of the issued and outstanding shares of Common Stock and will count towards this quorum.  As of the record date for the Special Meeting, [17,250,001] shares of our Common Stock would be required to achieve a quorum.

The approval of the Business Combination Proposal, the NYSE Proposal, the Governance Proposals (which are non-binding advisory votes), the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal requires the affirmative vote of the holders of a majority of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. Accordingly, assuming a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting will have no effect on the outcome of the Business Combination Proposal, the NYSE Proposal, the Governance Proposals (which are non-binding advisory votes), the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal or the Adjournment Proposal.  Broker non-votes will have no effect on the approval of the Business Combination Proposal, the NYSE Proposal, the Governance Proposals (which are non-binding advisory votes), the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal.  A properly executed proxy marked “ABSTAIN” will have the same effect as a vote “AGAINST” the Business Combination Proposal, the NYSE Proposal, the Governance Proposals (which are non-binding advisory votes), the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal as each require a vote of the holders of a majority of the stock represented and entitled to vote thereat.  

The approval of the Charter Approval Proposal requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as a properly executed proxy marked “ABSTAIN” or broker non-vote, will have the same effect as a vote “AGAINST” such Charter Approval Proposal.

Directors are elected by a plurality of the votes cast by the holders of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. This means that the eight director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Accordingly, assuming a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting or broker non-vote, will have no effect on the outcome of the Director Election Proposal.

Unless waived by the parties to the Merger Agreement, the closing of the Business Combination is conditioned on the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal. The approval of the Business Combination Proposal, NYSE Proposal and Charter Approval Proposal are each cross-conditioned on the approval of the others at the Special Meeting (the “Cross-Conditioned Proposals”).  The approval of the Director Election Proposal, Incentive Plan Proposal and Employee Stock Purchase Plan Proposal are each conditioned on the approval of the Cross-Conditioned Proposals at the Special Meeting.  The Governance Proposals and Adjournment Proposal are not conditioned on the approval of any proposal set forth in this proxy statement. It is important for you to note that in the event that any of the Cross-Conditioned Proposals is not approved at the Special Meeting, then the Company will not consummate the Business Combination.  If we do not consummate the Business Combination and fail to complete an initial business combination by July 20, 2022, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to our public stockholders.

29


 

Recommendation to Company Stockholders

The Special Committee recommended that the Board approve the Merger Agreement and the transactions contemplated thereby.  Upon recommendation by the Special Committee and its own review and consideration, our Board believes that each of the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal to be presented at the Special Meeting is in the best interests of the Company and our stockholders and unanimously recommends that its stockholders vote “FOR” each of the proposals.

When you consider the recommendation of our Board in favor of approval of the Business Combination Proposal, you should keep in mind that our Sponsor and directors and officers may have interests in the Business Combination that are different from or in addition to your interests as a stockholder. Stockholders should take these interests into account in deciding whether to approve the Business Combination. For more information, see the sections entitled “Proposal No. 1—Approval of the Business Combination—Interests of Certain Persons in the Business Combination” and “Certain Relationships and Related Transactions—The Company’s Related Party Transactions” and the risk factors entitled “Two of our directors have interests in and relationships with Sarcos and, as a result, may have interests in the Business Combination that are different from or are in addition to those of other stockholders of the Company,” “Our Sponsor, the directors and officers of the Company, and two of our stockholders may have interests in the Business Combination that are different from or are in addition to those of other stockholders,” and “Our Rotor Restricted Stockholders hold a significant number of shares of our Common Stock and Private Placement Warrants, and they will lose their entire investment in us if a business combination is not completed.”  

Redemption Rights

Pursuant to our current certificate of incorporation, holders of public shares may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the amount then held in the Trust Account net of taxes payable, calculated as of two business days prior to the consummation of the Business Combination, by (ii) the total number of shares of Class A Common Stock issued in the IPO then outstanding; provided that the Company will not redeem any shares of Class A Common Stock issued in the IPO to the extent that such redemption would result in the Company’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of at least $5,000,001. As of [●], 2021, the redemption price would have been approximately $[●] per share. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Common Stock included in the units sold in our IPO. We have no specified maximum redemption threshold under our current certificate of incorporation, other than the aforementioned 15%.

If a holder exercises its redemption rights, then such holder will be exchanging its shares of our Class A Common Stock for cash and will no longer own shares of the post-combination company. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our Transfer Agent in accordance with the procedures described herein. Please see the section entitled “Special Meeting of Company Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash. 

Accounting Treatment

The Business Combination will be accounted for as a reverse recapitalization, in accordance with U.S. generally accepted accounting principles (“GAAP”). Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of Sarcos issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the business combination will be those of Sarcos.

Sarcos has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under both the minimum and maximum redemption scenarios:

 

Sarcos Stockholders will have the largest voting interest in the post-combination company;

 

The board of directors of the post-combination company will have eight members, and the Sarcos Stockholders will have the ability to designate at least a majority of the members of the board of directors;

 

Sarcos management will hold executive management roles for the post-combination company and be responsible for the day-to-day operations;

 

Sarcos is significantly larger than the Company by assets, revenue, and employees; and

 

The purpose and intent of the Business Combination is to create an operating public company through the Company, with management continuing to use Sarcos’ platform to grow the business and the combined entity will be renamed Sarcos Technology and Robotics Corporation.

30


 

Appraisal Rights

Appraisal rights are not available to our stockholders in connection with the Business Combination.

Proxy Solicitation

The Company is soliciting proxies on behalf of its Board. Proxies may be solicited by mail. The Company has engaged Morrow Sodali LLC to assist in the solicitation of proxies.

If a stockholder grants a proxy, it may still vote its shares virtually if it revokes its proxy before the Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “Special Meeting of Company Stockholders – Revoking Your Proxy.”

Regulatory Matters

Under the HSR Act and the rules that have been promulgated thereunder by the U.S. Federal Trade Commission (“FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (“Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Business Combination is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. If the FTC or the Antitrust Division makes a request for additional information or documentary material related to the Business Combination (a “Second Request”), the waiting period with respect to the Business Combination will be extended for an additional period of 30 calendar days, which will begin on the date on which we have complied. Complying with a Second Request can take a significant period of time. On April 19, 2021, the Company and Sarcos filed the required forms under the HSR Act with the Antitrust Division and the FTC. The 30-day waiting period with respect to the Business Combination, which cannot expire on a Saturday, Sunday or a U.S. federal holiday, is expected to expire at 11:59 p.m. Eastern Time on May 19, 2021, unless the FTC and the Antitrust Division earlier terminates the waiting period or make a Second Request.

At any time before or after consummation of the Business Combination, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. We cannot assure you that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result.

Neither the Company nor Sarcos is aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

Risk Factors

In evaluating the Business Combination and the proposals to be considered and voted on at the Special Meeting, you should carefully review and consider the risk factors set forth under the section entitled “Risk Factors” beginning on page [●] of this proxy statement. The occurrence of one or more of the events or circumstances described in that section, alone or in combination with other events or circumstances, may have a material adverse effect on (i) the ability of the Company and Sarcos to complete the Business Combination, and (ii) the business, cash flows, financial condition and results of operations of Sarcos prior to the consummation of the Business Combination and the post-combination company following consummation of the Business Combination.

Trademarks and Service Marks

Sarcos uses Sarcos, Guardian, Guardian S, Guardian XT, Guardian XO, CYTAR and other marks as trademarks in the United States and other countries. This proxy statement contains references to Sarcos’ trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate in any way that Sarcos or, after the consummation of the Business Combination, the Company, will not assert, to the fullest extent under applicable law, its rights or the rights of the applicable licensor to these trademarks and trade names. Neither the Company nor Sarcos intends the use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of the Company or Sarcos by, any other entity.

Emerging Growth Company

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive

31


 

compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.

 

32


 

SELECTED HISTORICAL FINANCIAL INFORMATION OF THE COMPANY

The following table contains summary historical financial data for the Company as of and for the period from August 27, 2020 (inception) through December 31, 2020. Such data as of December 31, 2020 and for the period from August 27, 2020 (inception) through December 31, 2020 have been derived from the audited financial statements of the Company, which are included elsewhere in this proxy statement. The information below is only a summary and should be read in conjunction with the financial statements and notes thereto, and the sections entitled “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Information About the Company” and in our financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement.

STATEMENT OF OPERATIONS DATA

FOR THE PERIOD FROM AUGUST 27, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020

 

Formation and operating costs

 

$

1,450

 

Net Loss

 

$

(1,450

)

Weighted average shares outstanding, basic and diluted (1)

 

 

6,000,000

 

Basic and diluted net loss per common share

 

$

(0.00

)

 

(1)

Excluded up to 900,000 shares of Class B common stock that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised (see Note 5 to the Company’s Financial Statements). On January 14, 2021, the Company effected a stock dividend of 0.2 shares of Class B common stock for each outstanding share of Class B common stock, resulting in an aggregate of 6,900,000 shares outstanding (see Note 5 to the Company’s Financial Statements). All share and per-share amounts have been retroactively restated to reflect the stock dividend.

 

CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 2020

 

ASSETS

 

 

 

 

Deferred offering costs

 

$

137,336

 

TOTAL ASSETS

 

$

137,336

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDER’S EQUITY

 

 

 

 

Current liabilities

 

 

 

 

Accrued expenses

 

$

1,450

 

Accrued offering costs

 

 

7,000

 

Promissory note — related party

 

 

105,336

 

Total Current Liabilities

 

 

113,786

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

Stockholder’s Equity

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and

   outstanding

 

 

 

Class A common stock, $0.0001 par value; 70,000,000 shares authorized; no shares

   issued and outstanding

 

 

 

Class B common stock, $0.0001 par value; 12,500,000 shares authorized; 6,900,000 shares

   issued and outstanding (1)

 

 

690

 

Additional paid-in capital

 

 

24,310

 

Accumulated deficit

 

 

(1,450

)

Total Stockholder’s Equity

 

 

23,550

 

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY

 

$

137,336

 

 

(1)

Included up to 900,000 shares of Class B common stock that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised (see Note 5 to the Company’s Financial Statements). On January 14, 2021, the Company effected a stock dividend of 0.2 shares of Class B common stock for each outstanding share of Class B common stock, resulting in an aggregate of 6,900,000 shares outstanding (see Note 5 to the Company’s Financial Statements). All share and per-share amounts have been retroactively restated to reflect the stock dividend.

33


 

SELECTED HISTORICAL FINANCIAL INFORMATION OF SARCOS

The following table contains summary historical financial data for Sarcos as of and for the years ended December 31, 2019 and 2020. Such data as of and for the years ended December 31, 2019 and 2020 have been derived from the audited financial statements of Sarcos, which are included elsewhere in this proxy statement. The information below is only a summary and should be read in conjunction with the sections entitled “Sarcos’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Information About Sarcos” and in Sarcos’ financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement. The selected historical financial information in this section is not intended to replace Sarcos’ consolidated financial statements and the related notes. Sarcos’ historical results are not necessarily indicative of the results that may be expected in the future.

The financial information contained in this section relates to Sarcos, prior to and without giving pro forma effect to the impact of the Business Combination. The results reflected in this section may not be indicative of the results of the post-combination company going forward. See “Unaudited Pro Forma Condensed Combined Financial Information”.

Sarcos is providing the following selected historical financial information to assist you in your analysis of the financial aspects of the Business Combination.

 

 

 

Year Ended December 31,

 

 

 

2020

 

 

2019

 

Statement of Operations Data:

 

 

 

 

 

 

 

Revenue, net

 

$

8,813

 

 

$

10,150

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

 

5,602

 

 

 

5,746

 

Research and development

 

 

14,117

 

 

 

12,904

 

General and administrative

 

 

7,297

 

 

 

7,510

 

Sales and marketing

 

 

2,796

 

 

 

2,338

 

Total operating expenses

 

 

29,812

 

 

 

28,498

 

Loss from operations

 

 

(20,999

)

 

 

(18,348

)

Interest income, net

 

 

40

 

 

 

305

 

Other income, net

 

 

34

 

 

 

4

 

Loss before income taxes

 

 

(20,925

)

 

 

(18,039

)

Provision for income taxes

 

 

1

 

 

 

1

 

Net loss and comprehensive loss

 

$

(20,926

)

 

$

(18,040

)

Net loss attributable to non-controlling interests

 

 

 

 

 

 

Net loss attributable to common stockholders

 

$

(20,926

)

 

$

(18,040

)

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(2.65

)

 

$

(2.62

)

Weighted-average shares used in computing net loss per share attributable to

   common stockholders

 

 

 

 

 

 

 

 

Basic and diluted

 

 

7,887,760

 

 

 

6,896,258

 

 

 

 

December 31,

2020

 

 

December 31,

2019

 

Balance Sheet Data:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

33,664

 

 

$

9,195

 

Total assets

 

$

38,051

 

 

$

13,716

 

Total liabilities

 

 

5,147

 

 

 

2,243

 

Additional paid-in capital

 

 

96,870

 

 

 

54,518

 

Accumulated deficit

 

 

(63,983

)

 

 

(43,057

)

Total Sarcos stockholders’ equity

 

 

32,907

 

 

 

11,476

 

Non-controlling interests

 

 

(3

)

 

 

(3

)

Total stockholders’ equity

 

 

32,904

 

 

 

11,473

 

 

 

SUMMARY UNAUDITED PRO FORMA

34


 

CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial information has been derived from the unaudited pro forma condensed combined balance sheet as of December 31, 2020 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020, included in “Unaudited Pro Forma Condensed Combined Financial Information.”

The summary unaudited pro forma condensed combined financial information should be read in conjunction with the unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statement of operations, and the accompanying notes. In addition, the unaudited condensed combined pro forma financial information was based on and should be read in conjunction with the historical financial statements of Rotor and Sarcos, including the accompanying notes, which are included elsewhere in this proxy statement/prospectus.

The Business Combination will be accounted for as a reverse capitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, Rotor is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Sarcos with the Business Combination being treated as the equivalent of Sarcos issuing stock for the net assets of Rotor, accompanied by a recapitalization. The net assets of Rotor are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Sarcos.

The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemption into cash of Rotor’s Class A Common Stock Shares:

 

Assuming No Redemptions: This presentation assumes that no Rotor public stockholders exercise right to have their public shares converted into pro rata share of the Trust Account.

 

Assuming Maximum Redemptions: This presentation assumes that public stockholders holding 27,600,000 public shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share) of the funds in the Trust Account of $276,000 as adjusted as of December 31, 2020. The maximum redemption provides that the consummation of the Business Combination is conditioned to the Company having funds at the closing of the Business Combination of at least $200,000.

 

 

  

Pro Forma
Combined
(Assuming No
Redemptions)

 

 

Pro Forma
Combined
(Assuming
Maximum
Redemptions)

 

(in thousands, except share and per share data)

  

 

 

 

 

 

Summary Unaudited Pro Forma Condensed Combined

  

 

 

 

 

 

 

 

Statement of Operations Data

  

 

 

 

 

 

 

 

Year Ended December 31, 2020

  

 

 

 

 

 

 

 

Revenue

  

$

8,813

 

 

$

8,813

 

Net loss per share, Class A – basic and diluted

  

$

(0.15

 

$

(0.21

Weighted-average shares outstanding, Class A – basic and diluted

  

 

162,334,985

 

 

 

134,734,985

 

Summary Unaudited Pro Forma Condensed Combined

  

 

 

 

 

 

 

 

Balance Sheet Data as of December 31, 2020

  

 

 

 

 

 

 

 

Total assets

  

$

503,403

 

 

$

227,403

 

Total liabilities

  

$

32,494

 

 

$

32,494

 

Total stockholders’ equity, including non-controlling interests

  

$

470,909

 

 

$

194,912

 

 

 

35


 

COMPARATIVE PER SHARE DATA

(in thousands, except share and per share data)

The following table sets forth:

 

 

 

historical per share information of Rotor for the period from August 27, 2020 (inception) through December 31, 2020, adjusted to reflect net proceeds of Rotor’s IPO, as if it took place on December 31, 2020;

 

 

 

historical per share information of Sarcos for the year ended December 31, 2020; and

 

 

 

unaudited pro forma per share information of the combined company for the year ended December 31, 2020 after giving effect to the Business Combination and related transactions, assuming two redemption scenarios as follows:

 

 

 

Assuming No Redemptions: This presentation assumes that no Rotor public stockholders exercise right to have their public shares converted into pro rata share of the Trust Account.

 

 

 

Assuming Maximum Redemptions: This presentation assumes that public stockholders holding 27,600,000 public shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share) of the funds in the Trust Account of $276,000 as adjusted as of December 31, 2020. The maximum redemption provides that the consummation of the Business Combination is conditioned to the Company having funds at the closing of the Business Combination of at least $200,000.

The pro forma book value shares outstanding, and net earnings per share information reflects the Business Combination, assuming the Post-Combination Company shares were outstanding since January 1, 2020. The weighted average shares outstanding and net loss per share information give pro forma effect to the Business Combination and the other transactions contemplated by the Merger Agreement as if they had occurred on January 1, 2020.

The historical information should be read in conjunction with “—Selected Historical Financial Information of Sarcos,” “—Selected Historical Financial Information of the Company,” “Sarcos’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “The Company’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement/prospectus and the audited consolidated financial statements and the related notes of Sarcos and Rotor contained elsewhere in this proxy statement/prospectus.

The unaudited pro forma per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information and related notes included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined net loss per share information below does not purport to represent what the actual results of operations of the combined company would have been had the Business Combination been completed or to project the combined company results of operations that may be achieved after the Business Combination. The unaudited pro forma book value per share information below

36


 

does not purport to represent what the book value of the combined company would have been had the Business Combination been completed nor the book value per share for any future date or period.

 

 

Historical (1)

Pro Forma Combined

 

 

Unaudited Sarcos equivalent

pro forma per share data(4)

 

As of and for

the year ended

December 31, 2020

Rotor

Sarcos

Assuming No

Redemptions

 

Assuming

Maximum
Redemptions

 

 

Assuming No
Redemptions

 

 

Assuming

Maximum
Redemptions

 

Book value per share (2)(3)

$

0.14

 

$

4.17

 

$

2.90

 

$

1.45

 

$

15.06

 

$

7.51

 

Weighted average shares outstanding of Rotor Class A Common Stock – basic and diluted

 

27,600,000

 

 

 

 

 

162,334,985

 

 

134,734,985

 

 

106,329,025

 

 

106,329,025

 

Weighted average shares outstanding of Rotor Class B Common Stock – basic and diluted

 

6,900,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding of Sarcos Common Stock – basic and diluted

 

 

 

 

7,887,760

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share of Rotor Class A Common Stock– basic and diluted

 

 

 

 

 

 

(0.15

)

$

(0.21

)

$

(0.77

)

$

(1.08

)

Net loss per share of Rotor Class B Common Stock– basic and diluted

 

(0.60

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share of Sarcos Common Stock—basic and diluted

 

 

 

$

(2.65

)

$

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Historical values for Rotor are adjusted to reflect net proceeds of Rotor’s IPO, as if it took place on December 31, 2020.

(2)

Historical book value per share is equal to the total stockholders’ equity divided by weighted average common stock shares outstanding

(3)

Pro Forma book value per share is equal to pro forma total stockholders’ equity divided by pro forma common stock shares outstanding

(4)

The equivalent pro forma per share data is calculated by multiplying the pro forma combined per share date by the Exchange Ratio as stipulated by the terms of the Merger Agreement.

 

 


37


 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined balance sheet of Sarcos as of December 31, 2020 and the unaudited pro forma condensed combined statements of operations of Sarcos for the year ended December 31, 2020 has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” and presents the combination of the financial information of Rotor and Sarcos after giving effect to the Business Combination and related transactions, as described in the accompanying notes.

The following unaudited pro forma condensed combined balance sheet of the combined company as of December 31, 2020 and the unaudited pro forma condensed combined statement of operations of the combined company for the year ended December 31, 2020 present the combination of the historical financial information of Rotor and the historical financial information of Sarcos on a pro forma basis after giving effect to the Business Combination and related transactions, summarized below:

 

the Business Combination;

 

PIPE Financing;

 

the holders of Sarcos preferred stock will exchange their preferred shares of Sarcos for common shares of Sarcos utilizing the conversion ratio stipulated in Sarcos’s Certificate of Incorporation;

 

all the Sarcos common shareholders and restricted stock award holders (after above conversions have been effected) will receive the right to convert their common shares into shares of the combined entity and also receive the contingent right to receive their proportionate share of the Earn-out Shares;

 

the Sarcos vested and unvested stock option awards and Restricted Stock Units (“RSUs”) will automatically convert into Company stock options and Company RSUs, respectively;

 

all outstanding warrants to purchase common shares of Sarcos will be exercised; and

 

the forgiveness of the Sarcos Paycheck Protection Program (“PPP”) Loan, which will be arranged for on or prior to the closing date of the Business Combination as stipulated by the Merger Agreement.

The unaudited pro forma condensed combined balance sheet as of December 31, 2020 gives pro forma effect to the Business Combination and related transactions as if they were completed on December 31, 2020. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 gives pro forma effect to the Business Combination and related transactions as if they had occurred on January 1, 2020.

The unaudited pro forma condensed combined financial information is based on and should be read in conjunction with the audited historical financial statements of each of Rotor and Sarcos and the notes thereto, as well as the disclosures contained in the sections titled “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Sarcos’ Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and are not necessarily indicative of the financial condition or results of operations that would have been had the Business Combination and related transactions occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.

The unaudited pro forma condensed combined financial information contained herein assumes that Rotor’s shareholders approve the Business Combination. Rotor’s public shareholders may elect to redeem their public shares for cash even if they approve the Business Combination. The Company cannot predict how many of its public shareholders will exercise their right to have their public shares redeemed for cash. As a result, the Company has elected to provide the unaudited pro forma condensed combined financial information under two different redemption scenarios, which produce different allocations of total Rotor equity between Rotor stockholders. As described in greater detail in Note 2, Basis of Presentation, of the unaudited pro forma condensed combined financial information, the first scenario, or “no redemption scenario,” assumes that none of Rotor’s public shareholders will exercise their right to have their Rotor public shares redeemed for cash, and the second scenario, or “maximum redemption scenario,” assumes that holders of the maximum number of public shares that could be redeemed for cash, while still leaving sufficient cash available to consummate the Business Combination, will exercise their right to have their public shares redeemed for cash. The actual results are expected to be within the parameters described by the two scenarios. However, there can be no assurance regarding which scenario will be closest to the actual results. Under both scenarios, Sarcos is considered the accounting acquirer, as further discussed in Note 2, Basis of Presentation, of the unaudited pro forma condensed combined financial information.

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

DECEMBER 31, 2020

(In thousands)

 

 

 

Rotor

(Adjusted) (1)

 

 

Sarcos

(Historical)

 

 

Transaction

Accounting Adjustments

(Assuming

No

redemptions)

 

 

 

 

Pro Forma

Combined

(Assuming

No

Redemptions)

 

 

Additional

Transaction

Accounting

Adjustments

(Assuming

Maximum

Redemptions)

 

 

 

 

Pro Forma

Combined

(Assuming

Maximum

Redemptions)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,749

 

 

$

33,664

 

 

$

463,590

 

 

5(a)

 

$

499,003

 

 

$

(276,000

)

 

5(m)

 

$

223,003

 

Accounts receivable

 

 

 

 

 

1,051

 

 

 

 

 

 

 

 

1,051

 

 

 

 

 

 

 

 

1,051

 

Unbilled receivable

 

 

 

 

 

219

 

 

 

 

 

 

 

 

219

 

 

 

 

 

 

 

 

219

 

Contract assets

 

 

 

 

 

93

 

 

 

 

 

 

 

 

93

 

 

 

 

 

 

 

 

93

 

Inventories

 

 

 

 

 

707

 

 

 

 

 

 

 

 

707

 

 

 

 

 

 

 

 

707

 

Prepaid expenses

 

 

13

 

 

 

600

 

 

 

 

 

 

 

 

613

 

 

 

 

 

 

 

 

613

 

Property, plant and equipment, net

 

 

 

 

 

1,425

 

 

 

 

 

 

 

 

1,425