Item 1.01 Entry into a Material Definitive Agreement
Share Purchase Agreement
As previously announced, 8i Acquisition 2 Corp., a British Virgin Islands
business company ("LAX"), entered into a Share Purchase Agreement (the "SPA")
dated April 11, 2022, with Euda Health Limited, a British Virgin Islands
business company ("EUDA Health"), Watermark Developments Limited, a British
Virgin Islands business company (the "Seller") and Kwong Yeow Liew, acting as
Representative of the Indemnified Parties (the "Indemnified Party
Representative"). Pursuant to the terms of the SPA, a business combination
between LAX and EUDA Health will be effected through the purchase by LAX of all
of the issued and outstanding shares of EUDA Health from the Seller (the "Share
Purchase"). On May 30, 2022, the parties amended the SPA (the "First Amendment")
to extend the time for LAX to complete its financial, operational and legal due
diligence review of EUDA Health from May 31, 2022 to June 15, 2022.
On June 10, 2022, the parties to the SPA, as amended, entered into a second
amendment of the SPA (the "Second Amendment").
The foregoing is a summary only and does not purport to be a complete
description of all terms and provisions of the Second Amendment, and is subject
to and qualified in its entirety by reference to the full text of the Second
Amendment, which is filed herewith as Exhibit 2.1 to this Current Report on Form
8-K, and is incorporated into this Item 1.01 by reference.
Consideration
Initial Consideration
Pursuant to the Second Amendment, the initial consideration to be paid at
closing (the "Closing") of the Share Purchase (the "Initial Consideration") by
LAX to Seller for the Share Purchase will be adjusted to an amount equal to
$140,000,000. The Initial Consideration will be payable in ordinary shares of
LAX, no par value, (the "Purchaser Shares") valued at $10.00 per share. To
secure Seller's obligations under the indemnification provisions of the SPA,
1,400,000 Purchaser Shares (the "Indemnification Escrow Shares") shall be
withheld from the Purchaser Shares payable at Closing, and be delivered to
American Stock Transfer & Trust Company, as Escrow Agent, and held by the Escrow
Agent pursuant to an escrow agreement, by and among LAX, Seller, and the
Indemnified Party Representative.
Earnout Payments
Pursuant to the Second Amendment, in addition to the Initial Consideration, the
Seller may also receive up to 4,000,000 additional Purchaser Shares as an
earnout payment (the "Earnout Shares") if, during the period beginning on the
date of Closing and ending on December 31, 2024, the volume-weighted average
price of Purchaser Shares (the "Purchaser Share Price") equals or exceeds any of
four thresholds over any 20 trading days within a 30-day trading period under
the terms and conditions set forth in the SPA and related transaction documents:
? The Seller will be issued 1,000,000 additional Purchaser Shares if during the
period beginning on the Closing Date and ending on the first anniversary of the
Closing Date, the Purchaser Share Price is equal to or greater than Fifteen
Dollars ($15.00) after the Closing Date;
? The Seller will be issued 1,000,000 additional Purchaser Shares if during the
period beginning on the first anniversary of the Closing Date and ending on the
second anniversary of the Closing Date, the Purchaser Share Price is equal to or
greater than Twenty Dollars ($20.00);
? The Seller will be issued 1,000,000 additional Purchaser Shares if the
consolidated audited financial statements of EUDA Health for the fiscal year
commencing January 1, 2023 and ending December 31, 2023, reflect that EUDA
Health has achieved both of the following financial metrics for such fiscal
year: (x) revenues of at least $20,100,000 and (y) net income attributable to
EUDA Health of at least $3,600,000.
? The Seller will be issued 1,000,000 additional Purchaser Shares if the
consolidated audited financial statements of EUDA Health for the fiscal year
commencing January 1, 2024 and ending December 31, 2024, reflect that EUDA
Health has achieved both of the following financial metrics for such fiscal
year: (x) revenues of at least $40,100,000 and (y) net income attributable to
EUDA Health of at least $10,100,000.
Indemnification
The Second Amendment expands the indemnification obligations of the Seller to
indemnify each of LAX, EUDA Health and its subsidiaries and affiliates, from
certain losses, liabilities, damages, costs, payments and related fees. The
expanded indemnification obligation includes any failure by PT Bumi Lestori
Melimpah, an Indonesian company, to pay Universal Gateway International Pt.
Ltd., a subsidiary of EUDA Health, Singapore Dollars $5,150,000 due under a
mutual termination agreement dated March 1, 2021 and an addendum to such
agreement dated May 11, 2022. The expanded indemnification obligation of the
Seller also indemnifies any failure by Kent Ridge Healthcare Singapore Limited
to keep insured for full insurable value in the joint names of Kent Ridge
Healthcare Singapore and United Overseas Bank Limited certain real and personal
property against loss or damage by fire, lightening, burglary, riots and other
risks determined by United Overseas Bank Limited. The expanded indemnification
obligations also includes any failure by EUDA Health and its subsidiaries to
comply with Singapore employment law. Finally, the expanded indemnification
obligation of the Seller also includes any breach by either Kent Ridge
Healthcare Singapore Private Limited or Melana International Private Limited of
their obligations under a Settlement Agreement dated May 23, 2022 with Jamie Fan
Wei Zhi. The basket for certain indemnifications has also been reduced from
$2,500,000 to $636,636.
Item 7.01 Regulation FD Disclosure.
On June 10, 2022, LAX and EUDA Health issued a joint press release announcing
the execution of the Second Amendment. A copy of the press release is furnished
hereto as Exhibit 99.1.
Furnished as Exhibit 99.2 is the investor presentation, and Exhibit 99.3 is the
executive summary of the investor presentation that will be used by LAX and EUDA
Health in connection with the Share Purchase, the SPA, the First Amendment, the
Second Amendment and related matters.
The information in this Item 7.01 and Exhibits 99.1, 99.2 and 99.3 attached
hereto shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (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 of 1933, as amended (the
"Securities Act"), or the Exchange Act, except as expressly set forth by
specific reference in such filing.
Important Information for Investors and Shareholders
This document relates to a proposed transaction between LAX and EUDA Health.
This document does not constitute an offer to sell or exchange, or the
solicitation of an offer to buy or exchange, any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer, sale or exchange
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. LAX intends to file a proxy statement with the
SEC. A proxy statement will be sent to all LAX shareholders. LAX also will file
other documents regarding the proposed transaction with the SEC. Before making
any voting decision, investors and security holders of LAX are urged to read the
proxy statement and all other relevant documents filed or that will be filed
with the SEC in connection with the proposed transaction as they become
available because they will contain important information about the proposed
transaction.
Investors and security holders will be able to obtain free copies of the proxy
statement and all other relevant documents filed or that will be filed with the
SEC by LAX through the website maintained by the SEC at www.sec.gov.
Forward Looking Statements
Certain statements included in this Current Report on Form 8-K are not
historical facts but are forward-looking statements. Forward-looking statements
generally are accompanied by words such as "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "should," "would," "plan,"
"future," "outlook," and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters, but the
absence of these words does not mean that a statement is not forward-looking.
These forward-looking statements include, but are not limited to, statements
regarding estimates and forecasts of other performance metrics and projections
of market opportunity. These statements are based on various assumptions,
whether or not identified in this Current Report on Form 8-K and on the current
expectations of LAX's and EUDA Health's respective management and are not
predictions of actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as, and must not be
relied on by any investor 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 actual
events and circumstances are beyond the control of LAX and EUDA Health. Some
important factors that could cause actual results to differ materially from
those in any forward-looking statements could include changes in domestic and
foreign business, market, financial, political and legal conditions.
These forward-looking statements are subject to a number of risks and
uncertainties. These risks and uncertainties include, but are not limited to,
those factors described in the section entitled "Risk Factors" in the prospectus
filed by LAX in connection with its initial public offering on November 22,
2021. Important factors, among others, that may affect actual results or
outcomes include: the inability of the parties to successfully or timely
consummate the Share Purchase, including the risk that any required regulatory
approvals are not obtained, are delayed or are subject to unanticipated
conditions that could adversely affect EUDA Health or the expected benefits of
the Share Purchase, if not obtained; the failure to realize the anticipated
benefits of the business combination; matters discovered by the parties as they
complete their respective due diligence investigation of the other parties; the
ability of LAX prior to the Share Purchase, and EUDA Health following the Share
Purchase, to maintain the listing of LAX's shares on Nasdaq; costs related to
the business combination; the failure to satisfy the conditions to the
consummation of the Share Purchase, including the approval of the SPA by the
shareholders of LAX, the satisfaction of the minimum cash requirements of the
SPA following any redemptions by LAX's shareholders; the risk that the Share
Purchase may not be completed by the stated deadline and the potential failure
to obtain an extension of the stated deadline; and the outcome of any legal
proceedings that may be instituted against LAX or EUDA Health related to the
business combination. Important factors that could cause the combined company's
actual results or outcomes to differ materially from those discussed in the
forward-looking statements include: EUDA Health's limited operating history and
history of net losses; EUDA Health's ability to manage growth; EUDA Health's
ability to execute its business plan; EUDA Health's estimates of the size of the
markets for its products; the rate and degree of market acceptance of EUDA
Health's products; EUDA Health's ability to identify and integrate acquisitions;
potential litigation involving the Company or EUDA Health or the validity or
enforceability of EUDA Health's intellectual property; and general economic and
market conditions impacting demand for EUDA Health's products and services.
If any of these risks materialize or our assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements. There may be additional risks that neither LAX nor
EUDA Health presently know, or that LAX and EUDA Health currently believe are
immaterial that could also cause actual results to differ from those contained
in the forward-looking statements. In addition, forward-looking statements
reflect LAX and EUDA Health's current expectations, plans and forecasts of
future events and views as of the date hereof. Nothing in this Current Report on
Form 8-K and the attachments hereto should be regarded as a representation by
any person that the forward-looking statements set forth herein will be achieved
or that any of the contemplated results of such forward-looking statements will
be achieved. You should not place undue reliance on forward-looking statements
in this Current Report on Form 8-K and the attachments hereto, which speak only
as of the date they are made and are qualified in their entirety by reference to
the cautionary statements herein and the risk factors of LAX and EUDA Health
described above. LAX and EUDA Health anticipate that subsequent events and
developments will cause their assessments to change. However, while LAX and EUDA
Health may elect to update these forward-looking statements at some point in the
future, they each specifically disclaim any obligation to do so, except as
required by law. These forward-looking statements should not be relied upon as
representing LAX or EUDA Health's assessments as of any date subsequent to the
date of this Current Report. Accordingly, undue reliance should not be placed
upon the forward-looking statements.
Participants in the Solicitation
LAX and its directors and executive officers and other persons may be deemed to
be participants in the solicitation of proxies from LAX's shareholders with
respect to the proposed transaction. Information regarding LAX's directors and
executive officers is available in its prospectus filed in connection with its
initial public offering on November 22, 2021. Additional information regarding
the participants in the proxy solicitation relating to the proposed transaction
and a description of their direct and indirect interests will be contained in
the proxy statement when it becomes available.
EUDA Health and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the shareholders of LAX in
connection with the proposed transaction. A list of the names of such directors
and executive officers and information regarding their interests in the proposed
transaction will be included in the proxy statement for the proposed transaction
when available. You may obtain free copies of these documents as described in
the second paragraph under the above section entitled "Important Information for
Investors and Shareholders."
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval, nor
shall there be any sale of any securities in any state or jurisdiction in which
such offer, solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such other 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.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Description
2.1 Amendment No. 2 to Share Purchase Agreement, dated as of June 10,
2022, by and among Euda Health Limited, Watermark Developments Limited,
8i Acquisition 2 Corp., and Kwong Yeow Liew.
99.1 Press Release issued by LAX and EUDA Health, dated June 10, 2022
99.2 Investor Presentation dated June 10, 2022
99.3 Executive Summary of Investor Presentation dated June 10, 2022
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the Inline XBRL document.
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