CONX Corp. 8-K

What Happened

• On May 29, 2026 CONX Corp.’s wholly owned subsidiary, HC2 Merger Sub, LLC, and HC2 Broadcasting Holdings Inc. (HC2) entered into an Agreement and Plan of Merger. At closing, Merger Sub will merge into HC2, with HC2 surviving as a subsidiary of CONX.
• Under the agreement, HC2 shareholders would receive 25% of the Surviving Entity’s outstanding common stock immediately after closing and Merger Sub’s membership interests will convert into 75%, reflecting (i) extinguishment of the Loans and (ii) CONX’s funding of $75 million in equity commitments to the Surviving Entity (subject to contract adjustments).
• Closing is conditioned on customary items including required regulatory approvals (including FCC approvals and expiration/termination of the Hart‑Scott‑Rodino waiting period). The agreement includes termination rights and deadlines (initial outside date Nov. 29, 2026, with two potential extensions to Mar. 1, 2027 and May 29, 2027 if regulatory approvals remain the only outstanding condition).

Key Details

• Bridge loan: On May 29, 2026 Merger Sub funded a $105 million Bridge Loan Facility to HC2 in a single draw to (a) repay HC2’s existing 8.50% and 11.45% notes and (b) repurchase certain equity interests. Loans bear interest at 8.00% per year, capitalized and payable quarterly in kind, mature one year from the loan closing date, and may not be voluntarily prepaid.
• Repayment protection: If repaid early, accelerated, or if loans mature without the Merger closing, HC2 must pay a minimum cash return equal to 1.50:1.00 on the original principal plus accrued/capitalized interest. Loans are guaranteed by HC2’s subsidiaries and secured by first liens (subject to customary exclusions).
• Option arrangements: (1) Innovate Corp. (Innovate Parent) / Seller have an 18‑month option post‑closing to buy up to 15% of the Surviving Entity from CONX at a specified valuation. (2) EchoStar has a two‑year option from May 29, 2026 to purchase up to 80.1% of HC2 equity at fair market value; if EchoStar exercises pre‑closing, CONX may assign Merger Agreement rights to EchoStar or an affiliate.
• Other: The Merger Agreement contains customary representations, covenants (including conduct-before-closing), indemnities and conditions; it also ties certain Loan Agreement obligations to closing conditions.

Why It Matters

• Ownership and control: If completed as structured, CONX would own ~75% of the combined entity (subject to adjustments), which materially changes CONX’s business mix and makes HC2 a consolidated subsidiary. However, EchoStar’s option could materially change post‑transaction ownership (potentially leaving CONX as a minority owner).
• Financing and timing risk: The $105M bridge loan refinances HC2’s prior debt and funds equity repurchases, but it matures in one year and contains strict terms (no voluntary prepay, in‑kind interest), creating urgency to obtain regulatory approvals and close the Merger or refinance the loans.
• Dilution and future funding: CONX’s $75M equity commitments and the Innovate/EchoStar option arrangements may affect future dilution and CONX’s economic interest in the Surviving Entity.
• Regulatory and execution risk: Closing requires FCC and HSR approvals and other conditions; the filing lists multiple transaction risks (including the possibility the Merger may not close), so investors should watch future SEC/FCC filings for updates and material developments.