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Dune Acquisition Corporation *

Dune Acquisition Corporation *

Oct 16, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Global Gas Corporation

ENTERPRISE VALUE: $112 million
ANTICIPATED SYMBOL: HGAS

Dune Acquisition Corporation proposes to combine with Global Gas Corporation.

Global Hydrogen seeks to be a leader in the sustainable energy transition as a next-generation industrial gas supplier. Global Hydrogen is a 100% minority-owned business that targets both private and publicly-funded hydrogen development and carbon recovery projects, including projects supported by local, county, state, and national-level governments. Global Hydrogen primarily targets renewable waste as feedstock to generate the industrial gases it sells, and seeks arrangements with owners of wastewater treatment plants, food waste processing facilities, agricultural farms, and landfills as well as producers and distributors of renewable natural gas.

SUBSEQUENT EVENT – 12/4/23 – LINK

  • Forward Purchase Agreement:
    • Dune entered a Forward Purchase Agreement (FPA) on December 1, 2023 with Meteora for an OTC Equity Prepaid Forward Transaction.
    • The sellers plan to buy up to 950,000 shares of Dune Class A Common Stock.
    • They may also purchase additional shares from third parties.
    • The sellers must not exceed 9.9% ownership of Dune Class A Common Stock unless they decide to waive this limit.
    • The initial Reset Price is $10.00.

SUBSEQUENT EVENT – 11/27/23 – LINK

  • On November 24, 2023, Dune, Holdings, Global Hydrogen, and the Sellers amended the Unit Purchase Agreement through the Second Amendment, which reduced the total share consideration to the Sellers from $48.0 million to $43.0 million and increased the reserved shares of common stock under the Global Gas Corporation 2023 Long Term Incentive Plan from 900,000 to 1,400,000, with up to 500,000 shares available for joint ventures, consulting, or strategic partnerships.

SUBSEQUENT EVENT – 8/23/23 – LINK

  • On August 22, 2023, Dune, Holdings, Global Hydrogen, and the Sellers amended the Unit Purchase Agreement through the First Amendment, reducing the total share consideration to the Sellers from $57.5 million to $48.0 million.

TRANSACTION

  • Dune will complete a business combination with Global Hydrogen at a pro forma combined enterprise value of approximately $112 million.
  • The Board of Directors of Dune has received an independent fairness opinion.
  • The Board of Directors of Dune and the managers and unitholders of Global Hydrogen have each unanimously approved the proposed business combination, which is expected to close in the second half of 2023 and remains subject to approval by Dune’s stockholders and customary closing conditions.

SPAC FUNDING

  • See Subsequent Event from 12/4/23.

LOCK-UP

  • Company and Sponsor
    • 12 months after the Closing Date
  • With respect to New Global Hydrogen’s private placement warrants, thirty days after the Closing.

NOTABLE CONDITIONS TO CLOSING

  • No minimum cash closing condition was disclosed at this time.

NOTABLE CONDITIONS TO TERMINATION

  • By either Dune or Global Hydrogen if the Closing has not occurred by December 31, 2024
  • In the event the Purchase Agreement is terminated as a result Global Hydrogen shall pay to Dune, within five business days of the termination date, a termination fee of $7,500,000 (the “Termination Fee”), which shall be
    • (i) payable in cash or
    • (ii) by transfer of 50% of the fully diluted equity of Global Hydrogen, free and clear of all Liens

ADVISORS

  • Company
    • Alston & Bird LLP is serving as legal advisor to Global Hydrogen
  • SPAC
    • Winston & Strawn LLP and Sidley Austin LLP are serving as legal advisors to Dune.

The below-announced combination was terminated on 12/30/22.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: TradeZero Holding Corp. [Terminated]

ENTERPRISE VALUE: $556 million
ANTICIPATED SYMBOL: TRAD

Dune Acquisition Corporation proposes to combine with TradeZero Holding Corp., a trading platform targeting the global active trader community.

  • TradeZero Holding Corp. owns TradeZero, Inc., a Nassau, Bahamas-based broker-dealer serving international clients since 2015, and TradeZero America, Inc., a U.S. broker-dealer serving U.S. clients since 2019.
  • TradeZero America, Inc. is a member of The New York Stock Exchange, NYSE Arca, Inc., NYSE American LLC, and Cboe EDGX Exchange, Inc.
  • Through its subsidiaries, TradeZero offers retail investors commission-free stock trading and direct market center access to U.S equities and equity options trading.
  • TradeZero provides its clients with an advanced suite of desktop, web-based and mobile software platforms, all of which include its proprietary Short Locator (U.S. patent pending).
  • TradeZero’s innovative features and capabilities for stock shorting accommodate all types of retail investors, especially the active trader.

Investment highlights:

  • Significant and Growing Addressable Market Opportunity: Driven by powerful secular tailwinds, self-directed retail traders continue to grow in size and sophistication, demanding increasingly advanced trading functionality.
  • International Market Opportunities: TradeZero is currently in the process of expanding its services to the Canadian market and has developed plans for further international expansion.
  • Full-Featured Trading Platform: Designed to address the full spectrum of active traders, TradeZero combines professional-grade market access, next-gen trading tools, and 24×7 customer support to optimally serve active traders.
  • Differentiated Short Locates Offering: Patent-pending service features a proprietary short locate marketplace and regularly delivers enhanced access to hard to locate securities.
  • Engaged, Loyal Community of Active Trader Clients: Platform capabilities and superior live customer service drives strong user growth, utilization and retention.
  • Compelling Unit Economics: Strong first-year revenue yield of approximately $4,000 per account plus a historical customer acquisition cost of $225 leads to a first-year revenue/CAC ratio of approximately 17.5x.
  • Robust Near-Term Revenue Per Account Expansion Potential: Organic, horizontal expansion opportunities include launch of a Crypto-currency offering, Institutional Short Sales Locates Access, Complex Options, and Self-Clearing functionality.
  • Unique Combination of Growth and Profitability: Superior expected revenue growth for 2021-2023 of 35% with expected adjusted net income margins above 40% compares favorably to its publicly traded peer group.
  • Experienced Founder-Led Management Team: Leadership team comprised of active traders and technologists has prior exits in the brokerage space; founded and scaled TradeZero with no outside capital to date.

TERMINATION 12-30-22 – LINK

  • On December 28, 2022, Dune Acquisition Corporation, Dune Merger Sub, Inc., Dune Merger Sub II, LLC, Dune Acquisition Holdings LLC (“Sponsor” and, together with Dune, Merger Sub and Merger Sub II, “Plaintiffs”) entered into a Settlement Agreement and Release (the “Settlement Agreement”) with TradeZero Holding Corp., Daniel Pipitone, Giovanni Ferrari, John Muscatella, Joshua Choi, Andrew Koslow, John Caruso, and Kosta Corriveau (together with TradeZero, “Defendants”) (each Plaintiff and Defendant individually, a “Party” and collectively, the “Parties”), pursuant to which:
    • (i) Dune and TradeZero mutually agreed to terminate the Agreement and Plan of Merger, by and among Dune, Merger Sub, Merger Sub II and TradeZero, dated as of October 12, 2021, as amended by that certain First Amendment to the Agreement and Plan of Merger, dated as of January 26, 2022 and
    • (ii) the Parties agreed to a mutual release of all claims related to the Merger Agreement, the transactions contemplated thereby, and the lawsuit filed by the Plaintiffs against Defendants in the Delaware Court of Chancery, in each case effective upon receipt in full of the Settlement Consideration (as defined below) by the Plaintiffs.
  • By virtue of the termination of the Merger Agreement, the Transaction Agreements will terminate in accordance with their terms.
  • Following the termination of the Merger Agreement, Dune intends to seek an alternative business combination and per its extended liquidation date approved by Dune’s stockholders on June 14, 2022, Dune has until December 22, 2023, to consummate its initial business combination.
  • Pursuant to the Settlement Agreement, the Defendants will pay and/or cause to be paid by their insurers $5,000,000.00 to the Plaintiffs within 15 business days of the date of the Settlement Agreement.
  • The Settlement Agreement contains mutual releases by all Parties, for all claims known and unknown, relating and arising out of, among other things, the Merger Agreement and the transactions contemplated thereby.
  • The Settlement Agreement acknowledges that the Parties admit no liability or wrongdoing whatsoever.
  • The Settlement Agreement also contains a covenant not to sue and other customary terms.

SUBSEQUENT EVENT – 7/15/22 – LINK

  • On July 15, 2022, Dune sent a letter to TradeZero in response to the Purported Termination Notice stating that TradeZero is not permitted to terminate the Merger Agreement because:
    • (i) TradeZero’s breaches of, and failure to perform under, the Merger Agreement primarily resulted in the failure of the mergers to be consummated by the Termination Date and
    • (ii) Dune disputes TradeZero’s claims that Dune has breached the Merger Agreement, and even if Dune had breached the Merger Agreement, TradeZero has materially breached multiple provisions of the Merger Agreement.
  • As a result, the Purported Termination Notice is invalid and unenforceable, and TradeZero continues to be bound to its obligations under the Merger Agreement in all respects. 

SUBSEQUENT EVENT – 6/17/22 – LINK

  • Dune and Cantor agreed to waive in full the $6,037,500 deferred underwriting commissions previously payable to the Underwriters in connection with the consummation of Dune’s initial business combination.
    • Dune agreed to grant Cantor a right of first refusal to act as Dune’s capital markets advisor with an advisory fee of $3,800,000.
  • After the extension vote, Dune consented to requests to reverse the redemptions of an aggregate of 341,087 shares of Dune’s Class A common stock.
    • 1,182,054 Class A shares remain outstanding as compared to the previous amount of 840,967

EXTENSION – 6/14/22 – LINK

  • At the Special Meeting, Dune’s stockholders approved the Charter Amendment extending the date by which Dune must consummate an initial business combination from June 22, 2022 to December 22, 2023
    • 16,409,033 (95.125%) shares of Dune’s Class A common stock exercised their right to redeem
    • There will be no contribution to trust

SUBSEQUENT EVENT (1/26/22) – LINK

  • On January 26, 2022, Dune, Merger Sub, Merger Sub II, and TradeZero entered into the First Amendment to the Merger Agreement.
    • (i) Upon the occurrence of a Company Sale during the three-years following the closing of the transactions contemplated by the Merger Agreement, the dilutive effect of any Earn-Out Shares to be issued in connection with such Company Sale must be taken into account when calculating the Share Price to determine if any triggering events for Earn-Out Shares have been achieved
    • (ii) provide that if any Earn-Out Shares are forfeited pursuant to the terms of any applicable SPAC RSU Earnout Awards, such Earn-Out Shares shall not be redistributed to the holders of TradeZero’s common stock prior to the Closing
    • (iii) clarify that the proposals to approve and adopt an amendment to the certificate of incorporation of Dune to
      • (x) Increase the number of authorized shares of the common stock of Dune from 380,000,000 shares to 550,000,000 shares and the total number of authorized shares of Dune from 401,000,000 shares to 551,000,000 shares
      • (y) The number of authorized shares of any class of common stock or preferred stock of Dune may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of Dune entitled to vote

TRANSACTION

Dune will merge with TradeZero at a pro forma combined enterprise value of approximately $556 million and equity value of $716 million (assuming no redemptions), representing a price-to-earnings multiple of 14.9x projected net income for 2022.

  • Cash proceeds of the business combination will fund up to $160 million of cash to TradeZero’s balance sheet.
  • The cash components of the transaction will be funded by Dune’s cash in trust of $172.5 million (assuming no redemptions).
  • The balance of the consideration to TradeZero’s equity holders will consist of equity in the combined company.
  • Existing TradeZero equity holders, including the management team, will roll 100% of their equity into the combined company and will remain the largest stockholders with approximately 70% of ownership immediately following the business combination (assuming no redemptions by Dune’s stockholders).
  • Existing TradeZero equity holders have the potential to receive an earnout for additional shares of common stock if certain price targets are met as set forth in the definitive merger agreement.

The business combination is expected to close in the 1st quarter of 2022 and remains subject to approval by Dune’s stockholders and customary closing conditions

Dune Acquisition Corp Transaction Overview

PIPE

  • There is no PIPE in this transaction.

LOCK-UP

  • The restrictions on transfer contained in the Lock-up Agreement apply to both the Sponsor and TradeZero’s existing stockholders and end:
    • (i) with respect to New TradeZero’s Class A common stock, on the earlier of 180 days after Closing and the date on which New TradeZero completes a liquidation, merger, capital stock exchange, reorganization, bankruptcy or other similar transaction that results in all of the Class A common stock of New TradeZero being converted into cash, securities or other property.
    • (ii) with respect to New TradeZero’s private placement warrants, on the later of thirty (30) days after the Closing and December 22, 2021.

EARNOUT

  • The holders of Class A common stock of TradeZero immediately prior to the Closing and the holders of the RSU Earnout Awards will have the right to receive a pro-rata share of up to 9,000,000 additional shares of New TradeZero Class A common stock upon the occurrence of certain earn-out triggering events, as follows:
    • (i) 3,000,000 shares (the “$12.00 Earn-Out Shares”) upon the date on which the VWAP of New TradeZero’s Class A common stock is equal to or greater than $12.00 per share for a period of twenty (20) trading days out of thirty (30) consecutive trading days at any time during the period beginning at the Closing and ending on the three-year anniversary of the Closing date (the “Earn-Out Period”).
    • (ii) 3,000,000 shares (the “$15.00 Earn-Out Shares”) upon the date on which the VWAP is equal to or greater than $15.00 per share during the Earn-Out Period.
    • (iii) 3,000,000 shares (the “$18.00 Earn-Out Shares”) upon the date on which the VWAP is equal to or greater than $18.00 per share during the Earn-Out Period.

NOTABLE CONDITIONS TO CLOSING

  • The aggregate cash proceeds from Dune’s trust account or other available cash equaling or exceeding $80,000,000 after giving effect to the redemption of any shares of Dune’s Class A common stock, par value $0.0001 per share, in connection with the stockholder vote to approve the Business Combination.

NOTABLE CONDITIONS TO TERMINATION

  • By either Dune or TradeZero if the Closing has not occurred on or before July 12, 2022.

ADVISORS

  • PJT Partners is serving as financial advisor and Winston & Strawn LLP and White & Case LLP are serving as legal advisors to Dune.
  • Appleby Capital is serving as financial advisor and Vinson & Elkins LLP is serving as legal advisors to TradeZero.
  • PJT Partners, Cantor Fitzgerald, and Needham & Co. are serving as capital markets advisors to Dune.

MANAGEMENT & BOARD

Executive Officers

Carter Glatt, 27
Chief Executive Officer & Director

Mr. Glatt most recently from 2018 to 2020 served as the Head of Corporate Development and Senior Vice President of GTY Technology Holdings Inc., or GTY (Nasdaq: GTYH), a SaaS company that offers a cloud-based suite of solutions for the public sector which was formerly a SPAC founded by the former chairmen of EMC Corporation, VMware, Inc. and Accenture PLC. In such role, Mr. Glatt oversaw or was directly involved in all M&A, joint venture, capital raising, investor relations and strategic alternatives efforts for GTY. Since 2020, Mr. Glatt has served as Chief Investment Officer and Managing Partner of delta2 Capital, a SPAC-focused investment fund. Mr. Glatt’s SPAC expertise and operational leadership is complemented by his background in investment banking. He began his career at Barclays (NYSE: BCS) covering the financial technology, consumer retail and healthcare industries before becoming a private equity investor. Mr. Glatt holds a BA with Honors from Dartmouth College. Mr. Glatt’s qualifications to serve on the board include his expertise in SPACs, deal sourcing, M&A structuring, and capital raising.

Michael Castaldy, 42
Chief Financial Officer and Director

Mr. Castaldy has over twenty-five years of experience as a portfolio manager and currently serves as the Chief Executive Officer and Managing Partner of delta2 Capital, where he has held such roles since 2020. Prior to managing delta2 Capital, Mr. Castaldy co-founded Diverse Partners, LP in 2014, a multi-strategy hedge fund that engages in a broad array of investment activities, including SPAC investing, private transactions and quantitative volatility trading. Through Diverse Partners, LP, Mr. Castaldy structured numerous SPAC IPOs and business combinations as well as led venture rounds for SaaS and health technology companies until 2019. Prior to co-founding Diverse Partners, LP, Mr. Castaldy was a proprietary trader at ECHOtrade, LLC for six years, trading U.S. equities and options.  Prior to his time at ECHOtrade, LLC, Mr. Castaldy was the Senior Market Strategist at CAM Asset Management, LLC for five years. From 2019 to 2020, Mr. Castaldy also served as the Chief Financial Officer of Curant, a software startup that has built a mobile platform to enhance service, payment, and promotions across various sectors. Mr. Castaldy attended the United States Military Academy at West Point, Hofstra University, and Quantic School of Business and Technology. He has post-graduate certificates in data science and machine learning.

 

Board of Directors

William Nance, 43
Director

Since 2019, Mr. Nance has served as the Senior Vice President of Business Development at U.S. Real Estate Market Holdings, Inc., a capital markets technology firm.  From 2012 to 2019, Mr. Nance was a vice president at First Data Corporation (acquired by Fiserv, Inc. (Nasdaq: FISV)), where he was a senior member within the business development organization and, from 2016, led the group responsible for the firm’s venture capital investments.  Before that, Mr. Nance held senior-level finance, business development, analytics, and general management roles at Patch Media Corporation (acquired by AOL, Inc).  Earlier in his career, Mr. Nance was an associate in the investment banking division at Lehman Brothers and prior to that, he helped establish the New York office of Mainspring, Inc. (acquired by International Business Machines Corporation (NYSE: IBM)).  He began his career as a business analyst at Deloitte Consulting, the management consulting division of Deloitte Touche Tohmatsu Limited.  Mr. Nance holds an A.B. degree in History from Princeton University and an M.B.A. from the Harvard Business School.

Igor Fuks, 39 [Resigned 1/27/23]
Director

Mr. Fuks has served as Portfolio Manager and Managing Director at Tarsadia Capital since 2019.  Prior to joining Tarsadia Capital in 2019, Mr. Fuks was a Managing Principal at Bardin Hill Investment Partners and held various roles at the predecessor firm, Halcyon Capital Management, from 2011 to 2019.  Prior to joining the predecessor to Bardin Hill Investment Partners, Mr. Fuks served as an analyst in the Credit Opportunities group of D. E. Shaw & Co., L.P from 2008 to 2011.  Before this, Mr. Fuks was an attorney in the restructuring and finance group at Wachtell, Lipton, Rosen & Katz.  Mr. Fuks holds a Bachelor of Arts degree in Government from Dartmouth College and a Juris Doctor from Columbia Law School.

Jeron Smith, 34
Director

Jeron founded Unanimous Media with business partner Stephen Curry of the Golden State Warriors. Unanimous develops and produces television, film and digital content. Unanimous launched in April 2018 in partnership with Sony Pictures Entertainment across its film, television, and worldwide partnerships operations. In conjunction with Sony Pictures Entertainment, Mr. Smith is also a founder of The Incubation Lab, a culture-forward media incubator. Mr. Smith is a seasoned leader in brand management, helping spearhead the launch of Stephen Curry 30 Inc., as Chief Marketing Officer, and overseeing Mr. Curry’s holistic brand strategy and partnership portfolio. In his role at Stephen Curry 30 Inc., Mr. Smith developed an industry-leading benchmark formula for player marketing and engineered various prominent partnership deals. Prior to teaming up with Mr. Curry, Mr. Smith worked at the White House Office of Digital Strategy under President Barack Obama, where he developed and implemented a comprehensive digital strategy for the Executive Office of the President including digital content, media partners, whitehouse.gov, as well as @whitehouse and @POTUS social media channels for specific policy initiatives. Before joining the White House, Mr. Smith served as a Brand Marketing Strategic Lead across several categories and territories at Nike Inc. While there, Mr. Smith leveraged the integrated marketing mix to launch and lead disruptive marketing campaigns. In 2015, Mr. Smith was recognized on Forbes’ 30 under 30 list for Marketing and Advertising and the Ad Age 40 Under 40 list, and his expertise in digital marketing is highlighted through his published research in the International Journal of Mobile Marketing. Mr. Smith holds a B.A. in Business Administration from Howard University, and Master’s degrees from Georgetown University and Columbia University.

ByRoman Developer