Mesa Air Group, Inc., working with United Airlines, has reached an agreement in principle with air mobility company, Archer Aviation, as part of the airline’s effort to invest in emerging technologies that decarbonize air travel.
In connection with the agreement, which remains subject to final documentation, Mesa will receive 20% of United’s warrant to purchase 14,645,614 shares of Archer’s common stock (the “United Warrant”) with a $0.01 per share exercise price such that Mesa will receive a warrant exercisable for 2,929,123 shares (the “Mesa Warrant”). The Mesa Warrant will be subject to vesting upon the achievement of certain milestones and conditions. Vesting occurs as follows, subject to vesting acceleration under certain circumstances:
- 40% of the shares are vested immediately upon receipt of the Mesa Warrant;
- 20% of the shares vest upon the closing of Mesa’s investment in the proposed PIPE transaction or a similar financing transaction;
- 10% of the shares vest upon the approval of the Aircraft’s final type certificate by the FAA but only so long as the United-Archer Purchase Agreement or Collaboration Agreement is in effect on the date that such type certificate is issued; and
- 30% of the shares shall vest on a pro rata basis (based on the number of Aircraft (excluding the option) deliverable under the Purchase Agreement) upon the purchase of each Aircraft as set forth in the Purchase Agreement.
- Concurrently with the execution of the Business Combination Agreement, Atlas entered into subscription agreements for a PIPE (Private Placement) Financing transaction. As part of the agreement with United and Archer, Mesa agreed to acquire 500,000 shares of Atlas’ Class A Common Stock in the Private Placement for a purchase price of $10.00 per share, or $5 million.
