UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 Section 240.14a-12 |
| HARMONY MERGER 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: | |
| (2) | Aggregate number of securities to which transaction applies: | |
| (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): | |
| (4) | Proposed maximum aggregate value of transaction: | |
| (5) | Total fee paid: | |
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | 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: | |
This filing consists of a Current Report on Form 8-K and related exhibits filed by Harmony Merger Corp. on March 14, 2017.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 14, 2017
HARMONY MERGER CORP.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-36842 | 46-5723951 | ||
| (State or Other Jurisdiction | (Commission | (IRS Employer | ||
| of Incorporation) | File Number) | Identification No.) |
777 Third Avenue, 37th Floor, New York, New York 10017
(Address of Principal Executive Offices) (Zip Code)
(212) 319-7676
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c)) |
Item 7.01 — Regulation FD Disclosure
On March 14, 2017, Harmony Merger Corp. (the “Company”) held a conference call to discuss its previously announced proposed business combination with NextDecade, LLC. A transcript of that conference call is being furnished with this Current Report on Form 8-K and is attached to this report as Exhibit 99.1.
This information furnished hereunder, including the related exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any disclosure document of the Company, except as shall be expressly set forth by specific reference in such document.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit | Description | |
| 99.1 | Call transcript |
Forward-Looking Statements
Certain statements made herein are “forward-looking statements”. Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”, and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on the Company’s and NextDecade’s managements’ current expectations or beliefs as well as assumptions concerning the events and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation of the Company’s and NextDecade’s business. These risks, uncertainties and contingencies include: business conditions; weather and natural disasters; changing interpretations of GAAP; outcomes of government reviews; inquiries and investigations and related litigation; continued compliance with government regulations; legislation or regulatory environments; requirements or changes adversely affecting the business in which NextDecade is engaged; fluctuations in customer demand; management of rapid growth; intensity of competition from other providers of LNG and related services; general economic conditions; geopolitical events and regulatory changes; the possibility that the proposed business combination does not close, including due to the failure to receive required security holder approvals or the failure of other closing conditions; and other factors set forth in the Company’s filings with the Securities and Exchange Commission and available at www.sec.gov. The information set forth herein should be read in light of such risks. Forward-looking statements speak only as of the date of this Current Report on Form 8-K. Neither the Company nor NextDecade undertakes, and expressly disclaims any obligation to, update or alter its forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 8-K, whether as a result of new information, future events, changes in assumptions or otherwise, except as required by law.
Additional information concerning these and other factors that may impact expectations and projections can be found in the Company’s periodic filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2016, the definitive proxy statement filed by the Company with the SEC on March 13, 2017 wherein the Company is seeking stockholder approval to extend the date by which the Company has to consummate a business combination from March 27, 2017 to July 27, 2017, and in the proxy statement to be filed by the Company regarding the proposed transaction with NextDecade with the SEC when available.
Disclaimer
This communication shall neither constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
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Additional Information about the Transaction and Where to Find It
In connection with the proposed transaction, the Company will file a preliminary proxy statement with the SEC and will mail a definitive proxy statement and other relevant documents to its stockholders. Investors and security holders of the Company are advised to read, when available, the preliminary proxy statement, and amendments thereto, and the definitive proxy statement in connection with the Company’s solicitation of proxies for its stockholders’ meeting to be held to approve the proposed transaction because the proxy statement will contain important information about the proposed transaction and the parties thereto. The definitive proxy statement will be mailed to stockholders of the Company as of a record date to be established for voting on the proposed transaction. Stockholders will also be able to obtain copies of the proxy statement, without charge, once available, at the SEC’s website at www.sec.gov or by directing a request to: Harmony Merger Corp., 777 Third Avenue, 37th Floor, New York, New York 10017.
Participants in Solicitation
The Company and its directors, executive officers and other members of its management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies of the Company’s stockholders in connection with the proposed transaction. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests in the Company of the Company’s directors and officers in the Company’s filings with the SEC. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to the Company’s stockholders in connection with the proposed transaction will be set forth in the proxy statement for the proposed transaction when available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the proposed transaction when it becomes available.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: March 14, 2017
| HARMONY MERGER CORP. | ||
| By: | /s/ Eric S. Rosenfeld | |
| Name: | Eric S. Rosenfeld | |
| Title: | Chief Executive Officer | |
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Exhibit 99.1
Conference Call
Tuesday, March 14, 2017
10:00 a.m. ET
Harmony Merger Corp. (NASDAQ: HRMN) Proposed Merger with NextDecade, LLC
Call Operator
Good morning, and welcome to today’s conference call hosted by Harmony Merger Corp. (NASDAQ: HRMN, HRMNU, HRMNW). The purpose of the call is to discuss Harmony’s proposed Merger with NextDecade, LLC, a liquefied natural gas (or “LNG”) development company focused on LNG export projects and associated pipelines in the State of Texas.
Before we begin, we note that today’s call may be recorded. All participants have been placed on listen only mode. Our call today contains forward-looking statements concerning the proposed transaction between Harmony Merger Corp. and NextDecade. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from the expected results. Most of these factors are outside the parties’ control and difficult to predict. These forward-looking statements include, without limitation, Harmony’s and NextDecade’s expectations with respect to future performance, anticipated financial impacts of the transaction, approval of the transaction by security holders, the satisfaction of the closing conditions to the transaction and the timing of the completion of the transaction. The forward-looking statements made on this call are only made as of this date, March 14, 2017.
You are advised to read, when available, Harmony’s filings with the Securities and Exchange Commission, including its proxy statement to be used in connection with the solicitation of proxies for the special meeting of stockholders to approve the transaction, because these documents will contain important information about the transaction and the participants’ interest in such transaction. These documents can be obtained, without charge, at the SEC’s internet website (http://www.sec.gov).
Back to today’s call, joining are Eric Rosenfeld, chief executive officer of Harmony, David Sgro, chief operating officer of Harmony, Kathleen Eisbrenner, chief executive officer of NextDecade, Rene van Vliet, chief operating officer of NextDecade, and Next Decade board members Matthew Bonanno (York Capital Management), Brian Belke (Valinor Management), and Avi Kripalani (Halcyon Capital Management).
It is my pleasure to turn the call over to your host, Eric Rosenfeld, Chairman and Chief Executive Officer of Harmony Merger Corp. Please go ahead, sir.
Eric Rosenfeld, Harmony Merger Corp.
Hello, this is Eric Rosenfeld, the Chairman and Chief Executive Officer of Harmony Merger Corp., and also the CEO of Crescendo Partners. Harmony is the fifth Special Purpose Acquisition Company (“SPAC”) that our management team has led. Harmony completed its initial public offering (“IPO”) in March 2015 and has $117.5 million in Trust, which may be used in order to complete a merger or other type of business combination.
Yesterday, we filed our definitive proxy statement for our annual shareholder meeting which will be held on March 27, 2017 at the offices of Graubard Miller in New York, New York. Shareholders of record as of March 7, 2017 will be asked to vote on the extension of our corporate existence from March 27, 2017 to July 27, 2017, among other matters. Harmony’s board of directors believes that it is in the best interest of our stockholders to grant Harmony an extension of its corporate existence in order to give the company enough time to complete a successful business combination.
| Transcript | 1 |
Conference Call
Tuesday, March 14, 2017
10:00 a.m. ET
Yesterday, Harmony also announced that it had signed a non-binding Letter of Intent (“LOI”) with NextDecade, a premier developer of LNG liquefaction projects, at an initial equity valuation of $1.0 billion. The LOI provides for 30 days of mutual exclusivity in order to allow both sides to conduct confirmatory due diligence and draft definitive merger documentation. We are very excited about this possible transaction with NextDecade and believe that it has the potential to create significant value for our stockholders.
The transaction will be structured as an all-stock deal, with none of the current NextDecade investors taking any cash out of the combined business. The cash remaining in the Trust Fund will be used to operate the company through the regulatory approval and construction process. In addition to the upfront stock consideration, the current owners of NextDecade will have the opportunity to receive up to an additional $200 million of Harmony common stock if specified contingent targets are met. We believe that the all-stock nature of this transaction shows the faith that York Capital Management, Valinor Management, and Halcyon Capital Management (each a significant owner of NextDecade), and the management team, have in the prospects for this business and its future value.
Since its founding in 2010 by Kathleen Eisbrenner, NextDecade’s current CEO, NextDecade has executed on its plan to create a portfolio of cost advantaged LNG projects. In particular, NextDecade’s Rio Grande LNG project, with nameplate capacity of 27 mtpa, is well on its way to becoming one of the premier second wave LNG liquefaction projects in the United States. Given the engineering work done to date and Rio Grande LNG’s proximity to abundant supplies of low-cost natural gas, we believe the project is positioned to be among the lowest cost suppliers of LNG once production commences in 2022.
As we have stated before, Harmony has been looking for companies that have the potential for significant growth and the ability to generate returns on invested capital well in excess of their respective costs of capital. We believe that the business model that Kathleen and her management team have pursued provide NextDecade with the potential for both high growth and high returns on invested capital. In particular, NextDecade’s plan to finance the construction of its pipelines and LNG liquefaction facilities at the project level with residual cash flows to the equity holders of NextDecade requires limited additional capital at the corporate level to fund growth beyond Rio Grande LNG’s initial three trains. As such, NextDecade can scale its business very quickly once all regulatory approvals are met and will be able to do so without investing significant additional capital into the business.
In order to derive the purchase price, we valued NextDecade on both an absolute and relative basis, and we believe that the $1.0 billion purchase price reflects a significant discount to NextDecade’s intrinsic value. Our valuation work was done on the basis of three of the six planned trains in service.
In short, we believe that we have found a company with a tremendous business plan, top notch partners, and a visionary management team all at a significant discount from our view of its intrinsic value. I would now like to turn the call over to Kathleen Eisbrenner, who will give you more background on NextDecade and its business prospects.
Kathleen Eisbrenner, NextDecade
Thank you, Eric. We are pleased to be working with you and your colleagues at Harmony to advance this exciting transaction. As Eric pointed out in his remarks, NextDecade is a liquefied natural gas development company focused on LNG export projects and associated pipelines in the State of Texas. We are well-positioned among the second wave of U.S. LNG project sponsors, and believe we have key competitive advantages in several important areas, including engineering, commercial, regulatory, and gas supply.
| Transcript | 2 |
Conference Call
Tuesday, March 14, 2017
10:00 a.m. ET
NextDecade’s first proposed LNG export facility, in development since 2014, is the Rio Grande LNG project located on a 984-acre site in Brownsville, Texas. It is being developed to deliver natural gas from some of the lowest cost resource basins in the world – the Permian and Eagle Ford basins, right here in Texas – to our facility on the United States Gulf Coast, and then onward to markets around the globe.
NextDecade is currently progressing design, regulatory, engineering, and commercial activities for Rio Grande LNG, an export project with 27 million tons per annum of nameplate liquefaction capacity. We expect Rio Grande to offer one of the most competitive opportunities for our customers to buy LNG – as compared to other projects around the world, and including competitive projects in the U.S. We are using proven technology – Air Products C3MR liquefaction systems – and we are closely collaborating with our highly experienced engineering, procurement, and construction or (“EPC”) contractor, Chicago Bridge & Iron. CB&I is one of the most reputable and experienced EPC contractors in the LNG industry. The consistent feedback we receive from our potential customers is that proven liquefaction technology at a site with access to reliable, low-cost feedgas is their preferred choice for satisfying future LNG needs.
NextDecade commenced the regulatory process for Rio Grande LNG in the first quarter of 2015, and we filed our formal application with the Federal Energy Regulatory Commission in May 2016. We continue to attract significant interest from customers and commercial partners around the world, and have signed non-binding commitments for 30 mtpa of long-term off-take so far. We believe our draft environmental impact statement will be released as soon as the middle of this year, and we expect to take a positive final investment decision or (“FID”) on the first phase of our project in 2018.
This transaction with Harmony is a natural next step in NextDecade’s strategy of continuing to de-risk its projects, to attract world-class customers and access capital on competitive terms. It is a testament to the achievements of our management team, our principal shareholders York Capital Management, Valinor Management, and Halcyon Capital Management, and the tremendous track record the team have collectively achieved with some of the most prestigious projects across the LNG value chain.
Our proposed merger comes at a pivotal moment in the LNG cycle, and we believe it will enhance NextDecade’s ability to provide flexible solutions to customers and producers as the market begins to tighten in the coming years. We think our agreement with Harmony creates significant value for our current and future stakeholders and partners, particularly as LNG market dynamics shift and global demand grows over the coming years.
I’d now like to turn the call over to Matthew Bonanno, a Board member of NextDecade and a partner with York Capital Management. Matthew has been involved in NextDecade as a major shareholder since 2014. He will offer some brief remarks on behalf of our principal shareholders and fellow Board members. Matt?
Matthew Bonanno, York Capital Management
Thank you, Kathleen. York Capital Management was introduced to NextDecade in the late summer of 2014 through a senior LNG industry contact who spoke highly of its experienced management team and its export project located on the U.S. Gulf Coast in Brownsville, Texas. York Capital Management had analyzed a number of early-stage LNG ventures prior to NextDecade and ultimately passed on all of those, primarily due to project costs and inexperienced management teams.
| Transcript | 3 |
Conference Call
Tuesday, March 14, 2017
10:00 a.m. ET
After extensive due diligence, York Capital Management invested in a Series A round in order to help transition NextDecade from the use of floating liquefaction technology, a technology in which it had significant intellectual property and capital invested into from a previous project offshore Israel which was halted due to legislative changes, despite having secured commercial off-take, to a lower risk land-based LNG project suited to the U.S. market. The capital was used to finalize feasibility studies, secure the Rio Grande LNG site, a site that we at York believe to be one of the most compelling LNG export locations in North America, and to provide working capital to launch a larger funding.
As highlighted by Kathleen, York Capital Management worked closely with management to develop a value proposition centered on the deployment of proven technology known globally to the industry in close proximity to world class natural gas reserves in the Permian Basin and the Eagle Ford Shale, and existing pipeline infrastructure. That strategy attracted additional investors in a Series B round in the spring of 2015 and has been deployed to advance commercial contracts via non-binding heads of agreement (HOAs), file an application with the Federal Energy Regulatory Commission, secure a second potential project site in Texas, and conduct feasibility studies on gas supply pipelines.
We believe that the commercial and regulatory accomplishments of the Rio Grande LNG project to date have created significant shareholder value and we look forward to additional value creation in the future. We, and the other founding shareholders, Valinor Management and Halcyon Capital Management, remain committed to the company and the project and are very excited about this natural next step in the company’s evolution. I would now like to turn the call back over to Eric Rosenfeld, Harmony’s chief executive officer, for closing remarks. Eric?
Eric Rosenfeld, Harmony Merger Corp.
Thank you, Matt. And thank you as well to the NextDecade team. We firmly believe we have a bright future together, and are pleased to be working toward bringing our stockholders this unique opportunity to participate in the U.S. LNG export market. This concludes today’s conference call. Thank you all very much.
Call Operator
Thank you for joining today’s conference call. Additional information about the proposed transaction is available on the SEC’s website. You may now disconnect.
Note: Please be advised that this transcription was done from an audio recording. As such, the quality of the transcript is impacted by the quality of the audio recording and may not be a perfect representation of the terminology and comments offered during the conference call. You are advised to read, when available, Harmony’s filings with the Securities and Exchange Commission, including its proxy statement to be used in connection with the solicitation of proxies for the special meeting of stockholders to approve the transaction, because these documents will contain important information about the transaction and the participants’ interest in such transaction. These documents can be obtained, without charge, at the SEC’s internet website (http://www.sec.gov).
Transcript | 4