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High-Speed Mobility Specialist HyperloopTT to Merge with SPAC
Friday 25 November 2022

US-based transportation and technology licensing company Hyperloop Transportation Technologies and US-based special purpose acquisition company Forest Road Acquisition Corp. II (NYSE: FRXB) have entered into a definitive merger agreement that is expected to result in HyperloopTT becoming a publicly listed company, the companies said.

Upon the closing of the transaction, the newly combined company will be named "Hyperloop Transportation Technologies'' and will continue to be led by chief executive officer Andrés de León and the HyperloopTT management team.

Led by an experienced team of hyperloop business and technology professionals, HyperloopTT relies on a global network of technologists, scientists, engineers, and expert contributors, resulting in an asset-light technology development business model.

Through this partner network, the company is driving a suite of next generation technologies to power transportation in the future.

Since its inception in 2013, HyperloopTT has made significant progress towards the adoption of hyperloop systems.

The company developed a full scale hyperloop test track in Toulouse, France, a hyperloop insurance framework model, and model safety and certification guidelines.

With the deployment of the company's test track, HyperloopTT has built a robust technology portfolio relating to patents across levitation and propulsion, low pressure tube transportation, and passenger experience.

These patents are the basis of a technology that combines sustainability with the ability to reach destinations faster, which can redefine the urban landscape, create new economic opportunities, and disrupt the USD 2+tn transportation industry.

Hyperloop is a vacuum tube-based system that moves people and goods in levitating capsules at airplane speeds on the ground.

These speeds are achieved by using passive magnetic levitation technology and a linear electric motor in a tube with minimal pressure, reducing resistance.

As a mobility solution with transformative power, hyperloop is potentially cleaner, safer, healthier, and more efficient than existing forms of transportation.

Through its combination of experience, capabilities, and partners, HyperloopTT has an opportunity to transform the multi-trillion-dollar transportation market.

Technology with world-changing impact in a USD 2+tn transportation market, of which HyperloopTT is well positioned to capture early market share for hyperloop technology.

Nearly a decade of proprietary critical IP development, including 66 global patents for hyperloop technologies, with 40 granted and 26 in process, across the spectrum of technologies including levitation and propulsion, low pressure tube system, and passenger experience.

Asset-light technology licensing business model with three potential major revenue streams: one-time license fee during system construction, annual license fees throughout the life of a system, and annual take-rate of sales.

Working relationships with regulators in the US and Europe has resulted in legislative advancements with opportunities for transportation industry grant access.

Innovative expert contributors model, with more than 800 technology contributors worldwide since inception in 2013.

Several hyperloop projects in various stages globally, including potential projects in Italy and the US.

Experienced leadership team, with decades of executive experience across leading global corporations.

Contemplated transaction structure provides attractive value opportunity for shareholders
Management Commentary.

HyperloopTT is actively engaged in providing the European Commission and the US Department of Transportation (OT) with a critical technical understanding of hyperloop systems.

The transaction ascribes to HyperloopTT a pre-money equity value of approximately USD 600m, including outstanding options and warrants.

Existing HyperloopTT shareholders and convertible note holders will roll 100% of their interests in the transaction and the combined company will assume the outstanding HyperloopTT options and warrants, which will remain outstanding to the extent not otherwise exercised prior to closing.

Approximately USD 289m of common stock will be issued at closing to the HyperloopTT shareholders and convertible note holders.

Assuming no redemptions, the transaction is expected to deliver up to USD 330m in net proceeds to the combined company at close. For more information, please see the investor deck here.

The boards of directors of HyperloopTT and Forest Road have each unanimously approved this transaction. The transaction is subject to customary closing conditions, including the approval of the stockholders of Forest Road. The transaction is expected to close in the first half of 2023.
Details
Date Published: 25/11/2022

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