DEF 14A: Vaso Corporation Stockholders to Vote on Merger with Achari Ventures Holdings

Vaso Corporation is holding a special meeting for stockholders to vote on a proposed business combination with Achari Ventures Holdings Corp. I, which would result in Vaso becoming a wholly-owned subsidiary of Achari.

Summary

• Vaso Corporation is seeking stockholder approval for a business combination with Achari Ventures Holdings Corp. I.
• The merger involves Achari Merger Sub merging into Vaso, with Vaso becoming a wholly-owned subsidiary of Achari.
• Vaso stockholders will receive up to 17,600,000 shares of Achari Class A Common Stock in exchange for all outstanding Vaso capital stock, assuming a reverse stock split does not occur.
• The need for a reverse stock split depends on whether the trading price of Achari's common stock meets Nasdaq's minimum bid price requirement of $4.00 per share upon closing.
• The trading price of Vaso's common stock has been volatile, ranging from $0.04 to $0.37 in recent years.
• The proxy statement also seeks approval for director elections, ratification of UHY LLP as independent auditors, and adjournment of the special meeting if necessary.
• The Vaso Board of Directors unanimously recommends that stockholders vote in favor of all proposals.

Sentiment

Score: 6

Explanation: The document is primarily factual, presenting the details of a proposed merger. While the board recommends approval, there are also numerous risk factors outlined, leading to a neutral to slightly positive sentiment.

Positives

• The Vaso Board of Directors believes the merger is in the best interests of stockholders.
• The merger provides an opportunity for Vaso to uplist to a national securities exchange.
• The merger may provide access to additional capital for New Vaso.

Negatives

• The need for a reverse stock split indicates potential concerns about meeting Nasdaq's listing requirements.
• The trading price of Vaso's common stock has been historically volatile.
• The market price of Achari's common stock may decline if the Business Combination does not meet investor expectations.

Risks

• The percentage ownership of New Vaso after the Business Combination by the current Vaso stockholders will not be known until the Redemptions are complete.
• New Vasos ability to be successful following the Business Combination will depend upon the efforts of the members of the New Vaso Board and Vasos key personnel and the loss of such persons could negatively impact the operations and profitability of New Vasos business following the Business Combination.
• New Vaso will be a holding company, and its only material asset after completion of the Business Combination will be its interest in Vaso.
• Vasos officers and directors may be argued to have conflicts of interest that may influence or have influenced them to support or approve the Business Combination without regard to your interests or in determining whether the Business Combination is appropriate for Vaso.
• Achari is, and New Vaso will be, an emerging growth company, and New Vaso cannot be certain that the reduced disclosure requirements applicable to emerging growth companies will not make its common stock less attractive to investors.
• As a smaller reporting company New Vaso would be permitted to provide less disclosure than larger public companies which may make its common stock less attractive to investors.
• Vaso depends upon its executive officers and directors and their departure could adversely affect Vasos ability to operate and to consummate the initial business combination.
• The Sponsor and some of Acharis officers and directors may be argued to have conflicts of interest that may influence or have influenced them to support or approve the Business Combination without regard to your interests or in determining whether Vaso is appropriate for Acharis initial business combination.
• Trading in Acharis securities is currently suspended on the Nasdaq exchange as a result of a delisting determination Achari received in connection with the Acharis failure to regain compliance with certain continued listing standards by April 2, 2024, which was the deadline Nasdaq had set for Achari to consummate the Business Combination or otherwise regain compliance with such standards.
• The unaudited pro forma financial information included in the section entitled Unaudited Pro Forma Condensed Combined Financial Information may not be representative of New Vasos results if the Business Combination is completed.
• If the conditions to the Closing under Business Combination Agreement are not met, the Business Combination may not be consummated.
• If Vaso fails to approve the Business Combination Proposal at the Vaso Stockholders Meeting, it will owe Achari a termination fee of $5.28 million.
• Each of Achari and Vaso may waive one or more of the conditions to the Business Combination.
• There are risks to Achari stockholders who are not affiliates of the Sponsor becoming stockholders of Vaso through the Business Combination rather than acquiring securities of Vaso directly in an underwritten public offering, including no independent due diligence review by an underwriter and conflicts of interest of the Sponsor.
• The exercise of each of Vasos and Acharis directors and executive officers discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in the best interest of the stockholders of the respective companies.
• The consummation of the Business Combination is subject to a number of conditions, and if those conditions are not satisfied or waived, the Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed.
• If the Business Combination benefits do not meet the expectation of investors or securities analysts, the market price of Acharis securities or, following the consummation of the Business Combination, New Vasos securities may decline.
• The dual class structure of our Common Stock after the Business Combination will have the effect of concentrating voting control with the holders of our Class B Common Stock; this will limit or preclude your ability to influence corporate matters.
• Delaware law, the Amended and Restated Certificate of Incorporation and the Bylaws will contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
• New Vasos business and operations could be negatively affected if it becomes subject to any securities litigation or stockholder activism, which could cause New Vaso to incur significant expense, hinder execution of business and growth strategy and impact its stock price.
• If the Business Combination does not qualify as a tax-free reorganization under Section 368(a) of the Code, former holders of Vaso common stock receiving Achari common stock in connection with the Business Combination may incur greater U.S. federal income tax liability as a result of the Business Combination.
• The proposed Reverse Stock Split may not increase Acharis stock price over the long-term.
• Since the Sponsor will lose its entire investment in Achari if an initial business combination is not completed, it may have a conflict of interest in the approval of the proposals at the special meeting.
• Delays in the government budget process or a government shutdown may materially adversely affect Acharis ability to complete a Business Combination or the operations of the New Vaso following a Business Combination.
• Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect Acharis investments or business, including Acharis ability to negotiate and complete a Business Combination.
• If Achari is deemed to be an investment company for purposes of the Investment Company Act, it would be required to institute burdensome compliance requirements and its activities would be severely restricted and, as a result, it may abandon its efforts to consummate the Business Combination.
• If third parties bring claims against Achari, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.15 per share (the amount originally deposited in the Trust Account upon the consummation of our IPO).
• Achari has not obtained a fairness opinion, and consequently, Acharis stockholders may have no assurance from an independent source that the price we are paying for the Vaso business is fair to Achari from a financial point of view.
• We currently derive a significant amount of our revenue and operating income from our agreement with GEHC.
• Maintaining profitable operations depends on several factors
• We compete with companies that have longer operating histories, more established products and greater resources than we do in the face of limited hospital capital budgets and alternative products.
• We compete with companies that with products that may develop products which outperform our own, rendering our products obsolete or non-competitive.
• We depend on management and other key personnel.
• We may not continue to receive necessary clearances or approvals from the US FDA or foreign authorities for our medical devices, which could hinder our ability to market and sell certain products in the relevant markets.
• After clearance or approval of our products, we are subject to continuing regulation by the FDA, and if we fail to comply with FDA regulations, our business could suffer.
• If we or our suppliers fail to comply with the FDAs Quality System Regulation, some of our operations could be halted, and our business would suffer.
• If we are unable to comply with applicable governmental regulations, we may not be able to continue certain of our operations.
• We have foreign operations and are subject to the associated risks of doing business in foreign countries.
• Federal regulatory reforms may adversely affect our ability to sell our products profitably.
• We depend on several suppliers for the supply of certain products.
• The impact of pandemic, geopolitical and climate risk on our markets and financial condition is difficult to predict and manage.
• We may not have adequate intellectual property protection.
• The loss or violation of certain of our patents and trademarks could have a material adverse effect upon our business.
• The on-going COVID-19 pandemic and other global events (such as Russias invasion of Ukraine and the war in the Middle East) and the corresponding impact on businesses and debt and equity markets could have a material adverse effect on our search for a Business Combination and any target business with which we ultimately consummate a Business Combination.
• Our growth could suffer if the markets into which we sell products decline, do not grow as anticipated or experience cyclicality.
• Technological change is difficult to predict and to manage.
• We are subject to product liability claims and associated legal expenses and product recalls that may not be covered by insurance.
• The proposed Business Combination may not, if consummated, have the intended benefits.

Future Outlook

New Vaso intends to apply to list its common stock and warrants on Nasdaq under the ticker symbols VASO and VASOW, respectively.

Management Comments

• Vasos Board of Directors unanimously recommends that Vaso stockholders vote FOR approval of each of the Proposals.
• Acharis Board has approved the Business Combination and recommended that its stockholders approve the Business Combination at the Achari Stockholders Meeting.

Industry Context

The announcement relates to a business combination in the healthcare equipment and information technology industries, reflecting a trend of consolidation and strategic partnerships in these sectors.

Comparison to Industry Standards

• The document includes a comparison to comparable companies in the medical technology and managed services industries, such as Abbott Laboratories, Baxter International, and Medtronic.
• The analysis considers metrics like Enterprise Value, EV/Revenue, and EV/EBITDA to assess the valuation of Vaso in relation to these industry peers.
• The document also compares the Sponsor Ownership after the business combination and assuming 100% redemptions to those of selected Healthcare SPAC Transactions.

Stakeholder Impact

• Shareholders of Vaso will receive shares of Achari Class A Common Stock.
• Shareholders of Achari will have their shares converted to shares of New Vaso.
• Employees of Vaso will have their employment continue with New Vaso.
• Customers of Vaso will continue to be served by the combined company.

Next Steps

• Vaso stockholders will vote on the proposed business combination.
• Achari stockholders will vote on the proposals related to the business combination.
• The parties will work to satisfy the closing conditions outlined in the Business Combination Agreement.
• If approved, the merger will be completed, and Vaso will become a wholly-owned subsidiary of Achari.

Key Dates

Keywords

Business Combination, Merger, Stockholders, Achari, Vaso, Listing, Nasdaq, Redemption, Proxy, Shares