UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on March 3, 2023, Kernel Group Holdings, Inc., a Cayman Islands exempted company (the “Company”) entered into a Business Combination Agreement (the “Business Combination Agreement”) with AIRO Group, Inc., a Delaware corporation (“ParentCo”), Kernel Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of ParentCo, AIRO Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of ParentCo, VKSS Capital, LLC, a Delaware limited liability company, in the capacity as the representative for the shareholders of the Company and ParentCo, and also in the capacity as the Company’s sponsor (the “Sponsor”), Dr. Chirinjeev Kathuria, in the capacity as the representative for the AIRO Group Holdings stockholders, and AIRO Group Holdings, Inc., a Delaware corporation.
On July 31, 2023, the Company entered into Loan and Transfer Agreements between the Company, the Sponsor, and other parties (the “Lenders”), pursuant to which the Lenders loaned an aggregate of $900,000 (the “Funded Amount”) to the Sponsor (the “Loan”) and the Sponsor loaned $900,000 to the Company (the “SPAC Loan”). The Loan shall accrue interest at 8% per annum and the SPAC Loan does not accrue interest. The Company is not responsible for the payment of any interest on the Loan and is only required to repay the principal amount of the SPAC Loan upon the completion of the Company’s initial business combination (the “Business Combination”). The Funded Amount, together with all accrued and unpaid interest thereon, shall be repaid by the Sponsor at the option of the Lender, in either (a) cash; or (b) Class A ordinary shares of the Company held by the Sponsor, either upon automatic conversion of Class B ordinary shares held by the Sponsor upon the closing of the Business Combination or other Class A ordinary shares acquired by the Sponsor, at the rate of one (1) Class A ordinary share for each $10.00 of converted principal and interest. As additional consideration for the Lenders making the Loan available to the Sponsor, the Sponsor agreed to transfer four (4) Class A ordinary shares of the Company to Lender for each $10.00 multiple of the Funded Amount, which included the registration rights previously provided by the Company to the Sponsor.
Pursuant to the Business Combination Agreement, the SPAC Loan requires the issuance of an additional 900,000 shares of ParentCo Common Stock (as defined in the Business Combination Agreement).
The foregoing description is qualified in its entirety by reference to the terms and conditions of the Loan and Transfer Agreement, the form of which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.
On September 5, 2023, the Company deposited an aggregate of $150,000 (the “Extension Payment”) into the trust account of the Company for its public shareholders, representing $0.02 per public share remaining outstanding, which enables the Company to further extend the period of time it has to consummate its Initial Business Combination by one month from September 5, 2023 to October 5, 2023 (the “Extension”). The Extension is the second of up to six monthly extensions permitted under the Company’s governing documents.
Item 7.01. Regulation FD Disclosure.
On September 7, 2023, the Company issued a press release announcing the Extension. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure.
The furnishing of the press release is not an admission as to the materiality of any information therein. The information contained in the press release is summary information that is intended to be considered in the context of more complete information included in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”) and other public announcements that the Company has made and may make from time to time by press release or otherwise. The Company undertakes no duty or obligation to update or revise the information contained in this report, although it may do so from time to time as its management believes is appropriate. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosures.
The information in this Item 7.01 of this Current Report on Form 8-K and the press release shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 7.01 and in the press release shall not be incorporated by reference into any filing with the SEC made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01. Exhibits.
Exhibit Number |
Description of Exhibit | |
| 10.1 | Form of Loan and Transfer Agreement | |
| 99.1 | Press Release, dated September 7, 2023 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KERNEL GROUP HOLDINGS, INC. | ||
| Date: September 7, 2023 | By: | /s/ Suren Ajjarapu |
| Suren Ajjarapu | ||
| Chief Executive Officer | ||