Morning Roundup: November 30, 2023


Morning Roundup: November 30, 2023

At the SPAC of Dawn

Pono Capital Three (NASDAQ:PTHR) is the latest SPAC to try and bring an eVTOL target in for landing, and, as a part of its final flight checks, it dropped its first full investor presentation for its target Horizon yesterday.

This included a few updates and new information on how Horizon is differentiated from the de-SPACs that came before it in the space. The main pitch that the parties have worked to push is that Horizon expects its Cavorite X7 design to have a significantly larger payload, seat capacity, top speed and range over its competing models produced by Joby (NYSE:JOBY), Lilium (NASDAQ:LILM) and Archer (NYSE:ACHR).

All this for a significantly lower entry valuation. Pono Three’s deal grants Horizon an enterprise value of just $96 million while these others were valued at announcement several times higher – 46x higher in the case of Joby.

But, this valuation difference also reflects different stages of development. While each of these other eVTOL developers have been testing their capabilities with full scale models and are working towards the final stages of regulatory approval, Horizon lags a bit behind in the formation.

The presentation updates that Cavorite X7 has successfully hovered with a 50%-scale model and is expected to demonstrate its ability to transition from hover to forward flight mode in wind-tunnel testing by the end of the next quarter, but full-scale testing in different conditions is still a few years off.

On the plus side, it expects it will only need $20 million to finish its full-scale prototype and get it through testing and pre-sales over the next two years. In the meantime, this wind tunnel test could provide a bump if the company is listed by then. Pono Three has filed a preliminary proxy, but has not yet set a date for the completion vote.

Deal Amendments

  • 10X Capital II (NASDAQ:VCXA) added a variety of tweaks to its combination with African Agriculture. The target is no longer required to execute an offtake agreement and combined company investors will now receive a pro rata portion of up to 3,000,000 shares. The parties also terminated an earlier OTC prepaid forward purchase agreement with Vellar, replacing it with one under which Vellar will receive 11,500,000 shares and provide $11.5 million in cash in tranches according to terms outlined on 10X Capital II’s profile page.

News and Rumors

  • PR: pet products online marketplace Rover (NASDAQ:ROVR), which combined with Nebula Caravel in 2021, has agreed to be acquired by Blackstone (NYSE:BX) affiliates for $11 per share in a $2.3 billion all-cash transaction. The price represents a 61% premium to the company’s 90-day VWAP for the 90 days ending November 28.
  • Bloomberg: Sam Altman, who serves as CEO of AltC (NYSE:ALCC) and chairs the SPAC’s target Oklo, got back another of his jobs as he was re-instated as CEO of OpenAI. This move follows a his brief firing from the generative AI firm and netted Microsoft (NASDAQ:MSFT) a spot of OpenAI’s Board as he took on a job there in the interim.

Non-Redemption and Forward Purchase Agreements

  • PROOF I (NYSE:PACI) entered into a forward purchase agreement with Vellar Opportunities Fund under which the investor may buy up to 2,000,000 shares and be prepaid an amount equal to the redemption price for these shares at close. It will then transfer proceeds back to the combined company for any share sales it makes before the agreement is fully settled two years fater close. At that time, Vellar may be further compensated for any shares it still holds. Absent this agreement, all but 19,798 of PROOF I shares were to be redeemed in connection with its completion vote yesterday.

Scheduling Notes

  • 10X Capital II (NASDAQ:VCXA) has postponed its vote to complete its combination with African Agriculture to 8 am ET December 5 from 10 am ET November 30. This will also push the deadline for redemption decisions to 5 pm ET December 1.
  • Brilliant Acquisition Corp. (NASDAQ:BRLI) has adjourned its vote to complete its combination with Nukkleus to December 13 at 10:00 a.m. ET.