Ok... after a lot of reading (and posting on this board) I have finally figured out the situation. Here it is...
Agiliti tried to make it to the NASDAQ before the merger was completed. They were unsuccessful because of the "level of redemptions" (whatever that means).
From 10k - March 08, 2019
Agiliti’s Common Stock and Agiliti’s Warrants are not listed on a national securities exchange.
Due to the level of redemptions by FSAC public stockholders in the Business Combination, the Company was unable to comply with the NASDAQ listing requirements relating to the number of round lot holders at the closing of the Business Combination. Therefore Agiliti’s Common Stock as well as its warrants are not listed on a national securities exchange. Because of the lack of listing, the Company and its stockholders and warrant holders could face significant material adverse consequences including:
> a limited availability of market quotations for the Company’s securities; > reduced liquidity for the Company’s securities; > a determination that the Common Stock is a “penny stock,” which will require brokers trading in the Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the Company’s securities; > a limited amount of news and analyst coverage; and > a decreased ability to issue additional securities or obtain additional financing in the future.
In addition, because we did not list our Common Stock or warrants on a national securities exchange at the closing of the Business Combination, we do not have securities registered under Section 12 of the Exchange Act and are not subject to the reporting requirements of the Exchange Act or the SEC’s proxy rules, and large holders of our capital stock are not subject to beneficial ownership reporting requirements under Sections 13 or 16 of the Exchange Act and their related rules. Following the filing of this Annual Report on Form 10-K, we do not anticipate filing any reports with the SEC. As a result, our stockholders and warrant holders will not have available to them as much or as robust information as they may have with respect to other companies.
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Agiliti is not subject to compliance with rules requiring the adoption of certain corporate governance measures and as a result Agiliti’s stockholders have limited protections against interested director transactions, conflicts of interest and similar matters.
The listing rules of the national stock exchanges require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities which are listed on those exchanges. Because the Company is not listed on a national stock exchange, the Company is not presently required to comply with many of the corporate governance provisions and has not adopted some of these measures. The absence of such standards of corporate governance may leave the Company’s stockholders and holders of warrants without protections against interested director transactions, conflicts of interest and similar matters.
THL Stockholder controls the Company and may have conflicts of interest with our stockholders.
THL Stockholder, an affiliate of Thomas H. Lee Partners, L.P., beneficially owns approximately 99.3% of our common stock. In addition, at the closing of the Business Combination, the Company entered into a Director Nomination Agreement with THL Stockholder pursuant to which for so long as THL Stockholder beneficially owns at least 5% of our Common Stock, THL Stockholder will have a right to appoint or nominate for election to the Company’s board of directors, as applicable, a number of individuals that, if elected, when compared to the authorized number of directors on the Company’s board of directors, is closest to but not less than proportional to the total number of shares of Common Stock over which THL Stockholder has direct or indirect voting control relative to the total number of shares of Agiliti Common Stock then outstanding. The current number of directors on our board is eight. Pursuant to the Director Nomination Agreement, THL Stockholder currently has a right to appoint or nominate substantially all members of the board of directors.
As a result of its beneficial ownership and the nomination rights under the Director Nomination Agreement, THL Stockholder will have control, subject to applicable law, over the Company’s and its subsidiaries’ decisions regarding their respective operations, plans, strategies, finances, and structure, including whether to enter into any corporate transaction, and will have the ability to prevent any transaction that requires the approval of stockholders. THL Stockholder will have the ability to implement its decisions regardless of whether or not other stockholders believe that any such decision is in their own best interests.
THL Stockholder and its affiliates are in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us. THL Stockholder and its affiliates may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, our certificate of incorporation provides that we renounce any interest or expectancy in the business opportunities of THL Stockholder and its officers, directors, agents, stockholders, members, partners, affiliates and subsidiaries and each such party shall not have any obligation to offer us those opportunities unless presented to one of our directors or officers in his or her capacity as a director or officer.
There is no guarantee that Agiliti’s warrants will ever be in the money, and they may expire worthless, and the terms of Agiliti’s warrants may be amended.
The exercise price for Agiliti’s warrants is $11.50 per share of Agiliti Common Stock. There is no guarantee that the warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.
In addition, Agiliti’s warrants were issued in registered form under a warrant agreement with Continental Stock Transfer & Trust Company, as warrant agent. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding warrants held by parties other than THL Stockholder to make any change that adversely affects the interests of the holders. Accordingly, Agiliti may amend the terms of the warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding warrants (other than those held by THL Stockholder) approve of such amendment. Although Agiliti’s ability to amend the terms of the warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments
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could be amendments to, among other things, provide for an immediate mandatory cash redemption, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of common stock purchasable upon exercise of a warrant.
The Company may not pay dividends on its Common Stock for the foreseeable future or ever.
Agiliti has no direct operations and no significant assets other than the ownership of 100% of Agiliti Health. Agiliti depends on Agiliti Health for distributions and other payments to generate the funds necessary to meet Agiliti’s financial obligations, including its expenses as a publicly traded company, and to pay any dividends with respect to its Common Stock. The earnings from, or other available assets of, Agiliti Health may not be sufficient to pay dividends or make distributions or loans to enable Agiliti to pay any dividends on its common stock or satisfy its other financial obligations.
Additionally, even if the Company is able, it may choose not to pay dividends on its Common Stock for the foreseeable future or ever. Any decision to declare and pay dividends in the future will be made at the discretion of the board of directors and will depend on, among other things, the Company’s results of operations, financial condition, cash requirements and other factors that the board of directors may deem relevant. In addition, the Company’s ability to pay dividends may be limited to the extent that covenants of any existing and future outstanding indebtedness that the Company or its subsidiaries incur, including its credit facilities prevent the payment of dividends by the Company, and applicable law. The Company may not pay dividends on its Common Stock in the foreseeable future or ever.
So now we know why Agiliti is trading on the OTCM as AGLY verses on the NASDAQ as ALGI. That brings forth many new questions.
1. Does the company still aspire to make the NASDAQ? 2. What is the "level of redemptions" problem and can it be fixed? 3. Has the "level of redemptions" problem already been addressed with the buyback of warrants and/or the purchase of FASC stock and/or the consummation of the merger itself? 4. Is AGLY a shell company? 5. What is the current value of 1 share of AGLY if this is not a shell company? 6. What is a fair projection of the future value of 1 share of AGLY when considering post merger acquisitions and contracts considering they have every piece of equipment leased out because of the COVID crisis? 7. If the company has decided to stay on the OTCM will they become Pinksheet Current and aspire to the top tier — the OTCQX?
