Item.
7.01. Regulation FD Disclosure
As
previously announced, Kernel Group Holdings, Inc. (“Kernel”) announced a proposed business combination (the “Transaction”)
between Kernel and AIRO Group Holdings, Inc.
(“AIRO Group Holdings”). In
connection with the Transaction, AIRO
Group Holdings will hold meetings consisting of a presentation given by AIRO Group Holdings’ management team. A copy of this presentation
is attached hereto as Exhibit 99.1 and incorporated by reference herein.
The
information in this Item 7.01 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of
the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Forward-Looking
Statements
This
Current Report on Form 8-K contains certain statements that are not historical facts and are forward-looking statements within the meaning
of the federal securities laws with respect to the proposed Transaction between Kernel and AIRO Group Holdings, including without limitation
statements regarding the anticipated benefits of the proposed Transaction, the anticipated timing of the proposed Transaction, the implied
enterprise value, future financial condition and performance of AIRO Group Holdings and the combined company after the closing and expected
financial impacts of the proposed Transaction, the satisfaction of closing conditions to the proposed Transaction, the level of redemptions
of Kernel’s public stockholders and the products and markets and expected future performance and market opportunities of AIRO Group
Holdings. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,”
“anticipate,” “estimate,” “intend,” “think,” “strategy,” “future,”
“opportunity,” “potential,” “plan,” “seeks,” “may,” “should,”
“will,” “would,” “will be,” “will continue,” “will likely result,” and similar
expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions,
projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject
to risks and uncertainties.
These
forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on as,
a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult
or impossible to predict and will differ from assumptions. Many factors could cause actual future events to differ materially from the
forward-looking statements in this communication, including but not limited to: (i) the risk that the proposed Transaction may not be
completed in a timely manner or at all, which may adversely affect the price of Kernel’s securities; (ii) the risk that the proposed
Transaction may not be completed by Kernel’s business combination deadline; (iii) the failure to satisfy the conditions to the
consummation of the proposed Transaction, including the approval of the Business Combination Agreement by the stockholders of Kernel,
the satisfaction of the minimum net tangible assets and minimum cash at closing requirements and the receipt of certain governmental,
regulatory and third party approvals; (iv) the occurrence of any event, change or other circumstance that could give rise to the termination
of the Business Combination Agreement; (v) the failure to achieve the minimum amount of cash available following any redemptions by Kernel’s
stockholders; (vi) redemptions exceeding anticipated levels or the failure to meet The Nasdaq Global Market’s initial listing standards
in connection with the consummation of the proposed Transaction; (vii) the effect of the announcement or pendency of the proposed Transaction
on AIRO Group Holdings’ business relationships, operating results, and business generally; (viii) risks that the proposed Transaction
disrupts current plans and operations of AIRO Group Holdings; (ix) the outcome of any legal proceedings that may be instituted against
AIRO Group Holdings or against Kernel related to the Business Combination Agreement or the proposed Transaction ; (x) changes in the
markets in which AIRO Group Holdings’ competes, including with respect to its competitive landscape, technology evolution, or regulatory
changes; (xi) changes in domestic and global general economic conditions; (xii) risk that AIRO Group Holdings may not be able to execute
its growth strategies; (xiii) risks related to the ongoing COVID-19 pandemic and response, including supply chain disruptions; (xiv)
risk that AIRO Group Holdings may not be able to develop and maintain effective internal controls; (xv) costs related to the proposed
Transaction and the failure to realize anticipated benefits of the proposed Transaction or to realize estimated pro forma results and
underlying assumptions, including with respect to estimated stockholder redemptions; (xvi) the ability to recognize the anticipated benefits
of the proposed Transaction and to achieve its commercialization and development plans, and identify and realize additional opportunities,
which may be affected by, among other things, competition, the ability of AIRO Group Holdings to grow and manage growth economically
and hire and retain key employees; (xvii) the risk that AIRO Group Holdings may fail to keep pace with rapid technological developments
to provide new and innovative products and services or make substantial investments in unsuccessful new products and services; (xviii)
the ability to develop, license or acquire new therapeutics; (xix) the risk that AIRO Group Holdings will need to raise additional capital
to execute its business plan, which may not be available on acceptable terms or at all; (xx) the risk that AIRO Group Holdings, post-combination,
experiences difficulties in managing its growth and expanding operations; (xxi) the risk of product liability or regulatory lawsuits
or proceedings relating to AIRO Group Holdings’ business; (xxii) the risk of cyber security or foreign exchange losses; (xxiii)
the risk that AIRO Group Holdings is unable to secure or protect its intellectual property; and (xxiv) those factors discussed in Kernel’s
filings with the SEC and that that will be contained in the proxy statement relating to the proposed Transaction .
The
foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties
that will be described in the “Risk Factors” section of the preliminary proxy statement and the amendments thereto, the definitive
proxy statement, and other documents to be filed by Kernel from time to time with the SEC. These filings identify and address other important
risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking
statements, and while AIRO Group Holdings and Kernel may elect to update these forward-looking statements at some point in the future,
they assume no obligation to update or revise these forward-looking statements, whether as a result of new information, future events
or otherwise, except as required by applicable law. Neither of AIRO Group Holdings or Kernel gives any assurance that AIRO Group Holdings
or Kernel, or the combined company, will achieve its expectations. These forward-looking statements should not be relied upon as representing
Kernel’s or AIRO Group Holdings’ assessments as of any date subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking statements.
Additional
Information and Where to Find It
In
connection with the Business Combination Agreement and the proposed Transaction, Kernel intends to file relevant materials with the Securities
and Exchange Commission, including a registration statement on Form S-4 to be filed by AIRO Group, Inc., a Delaware corporation and a
wholly-owned subsidiary of Kernel with the SEC, which will include a proxy statement/prospectus of Kernel, and will file other documents
regarding the proposed transaction with the SEC. This communication is not intended to be, and is not, a substitute for the proxy statement
or any other document that Kernel has filed or may file with the SEC in connection with the proposed transaction. Kernel’s stockholders
and other interested persons are advised to read, when available, the preliminary proxy statement and the amendments thereto, the definitive
proxy statement and documents incorporated by reference therein filed in connection with the proposed transaction, as these materials
will contain important information about Kernel, AIRO Group Holdings, the Business Combination Agreement, and the proposed Transaction.
When available, the definitive proxy statement and other relevant materials for the proposed Transaction will be mailed to stockholders
of Kernel as of a record date to be established for voting on the proposed Transaction. Before making any voting or investment decision,
investors and stockholders of Kernel are urged to carefully read the entire proxy statement, when they become available, and any other
relevant documents filed with the SEC, as well as any amendments or supplements to these documents, because they will contain important
information about the proposed Transaction. Kernel investors and stockholders will also be able to obtain copies of the preliminary proxy
statement, the definitive proxy statement, and other documents filed with the SEC that will be incorporated by reference therein, without
charge, once available, at the SEC’s website at www.sec.gov, or by directing a request to: Kernel Group Holdings, Inc.,
515 Madison Avenue, Suite 8078, New York, NY 10022, Attention: Mr. Suren Ajjarapu.
Participants
in the Solicitation
Kernel,
AIRO Group Holdings and their respective directors, executive officers, other members of management and employees may be deemed participants
in the solicitation of proxies from Kernel’s stockholders with respect to the proposed Transaction. Investors and security holders
may obtain more detailed information regarding the names and interests in the proposed transaction of Kernel’s directors and officers
in Kernel’s filings with the SEC, including, when filed with the SEC, the preliminary proxy statement and the amendments thereto,
the definitive proxy statement, and other documents filed with the SEC. Such information with respect to AIRO Group Holdings’ directors
and executive officers will also be included in the proxy statement.
No
Offer or Solicitation
This
Current Report on Form 8-K is not a solicitation of a proxy, consent or authorization with respect to any securities or in respect of
the proposed Transaction and will not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there
be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction.