Forest Road Acquisition Corp. II and HyperloopTT Announce Termination of Merger Agreement

Rhea-AI Summary

Hyperloop Transportation Technologies and Forest Road Acquisition Corp. II have mutually agreed to terminate their business combination agreement. The decision comes after assessing the significant time required to finalize the merger and challenging market conditions. HyperloopTT's CEO expressed ongoing commitment to its transformational transportation technology while evaluating financing alternatives. Forest Road's Co-CEOs acknowledged the potential of HyperloopTT's technology but cited persistent market challenges as a factor in the decision. Both companies aim to prioritize the best interests of their shareholders and employees.

Positive

• HyperloopTT's commitment to evaluating financing alternatives, including public and private capital raises.

Negative

• Termination of the merger agreement might hinder HyperloopTT's progress toward market introduction.
• Challenging market conditions negatively impacted the execution of the proposed business combination.

LOS ANGELES & NEW YORK--(BUSINESS WIRE)-- Hyperloop Transportation Technologies (“HyperloopTT” or “the Company”), a leading transportation and technology licensing company focused on realizing the hyperloop, and Forest Road Acquisition Corp. II (NYSE: FRXB, FRXB.WS, and FRXB.U) (“Forest Road”), a publicly-traded special purpose acquisition company, have mutually agreed to terminate their previously announced business combination agreement.

Considering the significant time to close the business combination, coupled with prevailing market conditions, both parties decided that terminating the agreement is in the best interest of their respective shareholders and employees.

“While we believe the proposed combination would have accelerated time to market for HyperloopTT’s leading hyperloop technology, we remain committed to the prospects for our company, its transformational transportation technology, and the underlying business opportunity at hand,” said Andres de Leon, Chief Executive Officer of HyperloopTT. “I wish to thank HyperloopTT employees and contributors for their unwavering dedication and commitment throughout this process. Moving forward, we will continue to evaluate financing alternatives, including both public and private capital raises.”

Tom Staggs and Kevin Mayer, Co-CEOs and Co-Chairpersons of the Board of Directors of Forest Road, commented, “While we maintain our belief that HyperloopTT’s technology has the potential to address some of today’s most profound transportation challenges, persistent negative market conditions, coupled with our upcoming expiration date, made the execution of our proposed business combination challenging. We wish Andres and his team all the best in their continued efforts to modernize transportation and positively impact our world.”

About HyperloopTT

Hyperloop Transportation Technologies (www.hyperlooptt.com, “HyperloopTT”) is an innovative transportation and technology company focused on realizing the hyperloop, a system that moves people and goods safely, efficiently, and sustainably by bringing airplane speeds to the ground. Through the use of unique, patented technology and a collaborative business model, HyperloopTT is creating a potential new form of transportation.

HyperloopTT’s European Research and Development Center in Toulouse, France, the aerospace capital of Europe, is home to a full-scale test system. In 2019, HyperloopTT released the first comprehensive feasibility study analyzing a hyperloop system, which found that the system is economically and technically feasible and will generate a profit without requiring government subsidies.

Founded in 2013, HyperloopTT is a global network of more than 800 engineers, creatives, and technologists, with 50 corporate and university partners. Headquartered in Los Angeles, CA, and Toulouse, France, HyperloopTT has offices in North and South America, the Middle East, and Europe.

HyperloopTT is a proud signatory of the United Nations Global Compact, reflecting the company’s commitment to the UN Sustainable Development Goals.

About Forest Road Acquisition Corp. II

Forest Road Acquisition Corp. II, a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, raised $350 million in March 2021 and its securities are listed on the NYSE under the tickers “FRXB” and “FRXB WS.”

Forward-Looking Statements

This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, many of which are beyond the control of the Company or Forest Road, including those set forth in the Risk Factors section of Forest Road’s registration statement and final prospectus for the initial public offering filed with the SEC, and each of which could cause actual results to differ from the forward-looking statements. Copies are available on the SEC’s website, www.sec.gov. The Company and Forest Road expressly disclaim any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s or Forest Road's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

No Offer or Solicitation

This communication shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination. This communication shall also not 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 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. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or an exemption therefrom.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230203005314/en/

Investor Relations:

HyperloopTT@spacroadtwo.com

Media:

Media@spacroadtwo.com

Source: Hyperloop Transportation Technologies

FAQ

Why did HyperloopTT and Forest Road Acquisition Corp. II terminate their merger agreement?

The merger agreement was terminated due to significant time needed to close the deal and challenging market conditions.

What impact does the merger termination have on HyperloopTT?

The termination may slow HyperloopTT's market introduction and development of its technology.

What are the future plans for HyperloopTT after the merger termination?

HyperloopTT plans to continue evaluating financing alternatives, including public and private capital raises.

What challenges did Forest Road identify in pursuing the merger with HyperloopTT?

Forest Road cited persistent negative market conditions and an upcoming expiration date as challenges in executing the merger.