Item 1.01. Entry into a Material Definitive Agreement.
Forward Purchase Agreements
As previously disclosed, CIIG Capital Partners II, Inc. ("CIIG II"), a Delaware
corporation, Zapp Electric Vehicles Group Limited, an exempted company
incorporated with limited liability under the laws of the Cayman Islands
("Pubco"), Zapp Electric Vehicles Limited, a private company limited by shares
registered in England and Wales ("Zapp"), and Zapp Electric Vehicles, Inc., a
Delaware corporation ("Merger Sub") entered into a Merger Agreement dated
November 22, 2022 (the "Merger Agreement") in connection with its proposed
business combination (the "Business Combination") pursuant to which CIIG II
will, along with Zapp, become wholly owned subsidiaries of Pubco.
On April 26, 2023, CIIG II and Pubco entered into separate agreements (each a
"Forward Purchase Agreement", and together, the "Forward Purchase Agreements")
with each of ACM ARRT I LLC and CFPA Holdings LLC-Zapp RS (each of ACM ARRT I
LLC and CFPA Holdings LLC -Zapp RS, individually, a "Seller", and together, the
"Sellers") for OTC Equity Prepaid Forward Transactions. The primary purpose of
entering into the Forward Purchase Agreements is to help ensure the Business
Combination will be consummated. For purposes of the Forward Purchase
Agreements, CIIG II and Pubco are referred to as the "Counterparty" prior to and
after the Business Combination, respectively. Capitalized terms used herein but
not otherwise defined shall have the meanings ascribed in the Forward Purchase
Agreements.
Pursuant to the terms of the Forward Purchase Agreements, the Sellers may, but
are not obligated to, purchase up to 10,000,000 shares of Class A common stock,
par value $0.0001 per share, of CIIG II ("CIIG II Common Stock") in the
aggregate before the closing of the Business Combination (the "Closing"). The
aggregate total number of shares subject to the Forward Purchase Agreements will
be in no event more than 10,000,000 Shares (as defined in the Forward Purchase
Agreements). The Number of Shares is subject to reduction following termination
of the Forward Purchase Agreements with respect to such shares as described
under "Optional Early Termination" in the Forward Purchase Agreements.
The Forward Purchase Agreements provide that the Sellers will be paid directly
an aggregate cash amount (the "Prepayment Amount") equal to (x) the product of
(i) the Number of Shares as set forth in each Pricing Date Notice (as defined in
the Forward Purchase Agreements) and (ii) the redemption price per share as
defined in Section 9.2(a) of CIIG II's Amended and Restated Certificate of
Incorporation (the "Initial Price") less (y) $2,000,000.
Counterparty will pay the Prepayment Amount directly from the Counterparty's
Trust Account maintained by Continental Stock Transfer and Trust Company holding
the net proceeds of the sale of the units in Counterparty's initial public
offering and the sale of private placement warrants (the "Trust Account") no
later than the earlier of (a) one business day after the Closing Date and
(b) the date any assets from the Trust Account are disbursed in connection with
the Business Combination. For the avoidance of doubt, any Additional Shares
purchased by the Sellers will not be included in the Number of Shares for
purposes of determining the Prepayment Amount.
After the Closing Date, Counterparty may request in writing that the Sellers
provide it with additional funding in an amount of $2,000,000 in the aggregate,
in which case, Sellers shall provide such funds to an account designated by
Counterparty on the third Business Day after such request; provided, that
2
--------------------------------------------------------------------------------
(a) each Seller shall not be obligated to provide its portion of such funds
until it has sold Shares (excluding any Terminated Shares) for aggregate
proceeds of at least $1,000,000, (b) if a Seller has provided a Registration
Request, Counterparty cannot make a Funding Election until and unless the
Registration Statement has been declared and remains effective, and (c) Sellers
shall not be required to provide funds under more than one Funding Election.
Following the Closing, the reset price (the "Reset Price") will be the Initial
Price; provided, however, that the Reset Price may be reduced to any lower price
at which the Counterparty sells, issues or grants any shares or securities
convertible or exchangeable into shares (other than, among other things, grants
or issuances under the Counterparty's equity compensation plans or any
securities issued in connection with the Business Combination), subject to
certain exceptions.
The valuation date will be the earliest to occur of (a) the third anniversary of
the Closing Date, (b) the date specified by a Seller in a written notice to be
delivered to Counterparty at a Seller's discretion (which Valuation Date shall
not be earlier than the day such notice is effective) after the occurrence of
any of (w) a VWAP Trigger Event (x) a Delisting Event, (y) a Registration
Failure or (z) unless otherwise specified therein, upon any Additional
Termination Event and (c) the date specified by a Seller in a written notice to
be delivered to Counterparty at a Seller's sole discretion (which Valuation Date
shall not be earlier than the day such notice is effective)(the "Valuation
Date").
On the Cash Settlement Payment Date, in the event the Valuation Date is
determined by clause (c) of the above paragraph, a Seller shall pay Counterparty
a cash amount equal to (1) the Number of Shares as of the Valuation Date
multiplied (2) by closing price of the Shares on the immediately preceding
trading day.
In all other cases, a Seller shall pay Counterparty a cash amount equal to
(1) the Number of Shares as of the Valuation Date, which are registered for
resale under an effective Registration Statement or may be transferred without
any restrictions, including the requirement for the Counterparty to be in
compliance with the current public information required under Rule 144(c)(1) (or
Rule 144(i)(2), if applicable) or the volume and manner of sale limitations
under Rule 144(e), (f) and (g) under the Securities Act, multiplied by the
average of the daily VWAP Price over the Valuation Period less (2) the
Settlement Amount Adjustment.
Each Seller has agreed to waive any redemption rights with respect to any
Recycled Shares in connection with the Business Combination, as well as any
redemption rights under CIIG II's Amended and Restated Certificate of
Incorporation that would require redemption by CIIG II of the Shares. Such
waiver may reduce the number of shares of CIIG II Common Stock redeemed in
connection with the Business Combination, and such reduction could alter the
perception of the potential strength of the Business Combination. Each Forward
Purchase Agreement has been structured, and all activity in connection with such
agreement has been undertaken, to comply with the requirements of all tender
offer regulations applicable to the Business Combination, including Rule 14e-5
under the Securities Exchange Act of 1934.
The foregoing summary of the Forward Purchase Agreements is qualified in its
entirety by reference to the text of the Form of Forward Purchase Agreement,
which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
As of April 26, 2023, the per share redemption price for each share of CIIG II
Class A common stock was approximately $10.47.
3
--------------------------------------------------------------------------------
In addition, Pubco was informed by the Nasdaq Stock Market on April 24, 2023
that its application to list its ordinary shares and warrants on Nasdaq has been
approved.
The information in this Item 7.01 is furnished and shall not be deemed "filed"
for purposes of Section 18 of the Exchange Act, or otherwise subject to
liabilities under that section, and shall not be deemed to be incorporated by
reference into the filings of CIIG II under the Securities Act or the Exchange
Act, regardless of any general incorporation language in such filings. This
Current Report will not be deemed an admission as to the materiality of any
information of the information in this Item 7.01.
No Offer or Solicitation
This Form 8-K is for informational purposes only and does not constitute an
offer to sell, a solicitation of an offer to buy, or a recommendation to
purchase any security of Pubco, Zapp, CIIG II or any of their respective
affiliates. No such 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. The contents of this Form 8-K have not been reviewed by any
regulatory authority in any jurisdiction.
Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of U.S. federal securities laws with respect to the proposed
Business Combination between Zapp, CIIG II and Pubco, including statements
regarding the benefits of the transaction, the anticipated timing of the
transaction, the anticipated growth in the industry in which Zapp operates and
anticipated growth in demand for Zapp's products, projections of Zapp's future
financial results and possible growth opportunities for Zapp. These
forward-looking statements generally are identified by the words "believe,"
"project," "expect," "anticipate," "estimate," "intend," "strategy," "future,"
"budget," "opportunity," "plan," "may," "should," "will," "would," "will be,"
"will continue," "will likely result," and similar expressions. These statements
involve risks, uncertainties and other factors that may cause actual results,
levels of activity, performance or achievements to be materially different from
the information expressed or implied by these forward-looking statements.
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. Many factors could cause
actual future events to differ materially from the forward-looking statements in
this Current Report on Form 8-K, including but not limited to: (i) the risk that
the transaction may not be completed in a timely manner or at all, which may
adversely affect the price of CIIG II's securities, (ii) the risk that the
transaction may not be completed by CIIG II's business combination deadline,
(iii) the failure to satisfy the conditions to the consummation of the
transaction, (iv) the risk that CIIG II may not have sufficient funds to
consummate the Business Combination, (v) the lack of a third party valuation in
determining whether or not to pursue the proposed Business Combination, (vi) the
occurrence of any event, change or other circumstance that could give rise to
the termination of the Merger Agreement, (vii) the effect of the announcement or
pendency of the transaction on Zapp's business relationships, performance, and
business generally, (viii) risks that the proposed Business Combination disrupts
current plans of Zapp or diverts management's attention from Zapp's ongoing
business operations and potential
4
--------------------------------------------------------------------------------
difficulties in Zapp's employee retention as a result of the proposed Business
Combination, (ix) the outcome of any legal proceedings that may be instituted
against Zapp, Pubco, CIIG II or their respective directors or officers related
to the proposed Business Combination, (x) the ability of Pubco, CIIG II or a
successor thereto to maintain the listing of its securities on Nasdaq,
(xi) volatility in the price of the securities of Pubco, CIIG II or a successor
thereto due to a variety of factors, including changes in the competitive and
highly regulated industries in which Zapp plans to operate, variations in
performance across competitors, changes in laws and regulations affecting Zapp's
business and changes in the combined capital structure, (xii) the ability to
implement business plans, forecasts, and other expectations after the completion
of the proposed Business Combination, and identify and realize additional
opportunities, (xiii) the risk of downturns in the highly competitive electric
vehicle industry, (xiv) the ability of Zapp to build the Zapp brand and
consumers' recognition, acceptance and adoption of the Zapp brand, (xv) the risk
that Zapp may be unable to develop and manufacture electric vehicles of
sufficient quality and on schedule and scale, that would appeal to a large
customer base, (xvi) the risk that Zapp has a limited operating history, has not
yet released a commercially available electric vehicle and does not have
experience manufacturing or selling a commercial product at scale and (xvii) the
risk that Zapp may not be able to effectively manage its growth, including its
design, research, development and maintenance capabilities.
The foregoing list of factors is not exhaustive. Forward-looking statements are
not guarantees of future performance. You should carefully consider the
foregoing factors and the other risks and uncertainties described in the "Risk
Factors" section of Pubco's registration statement on Form F-4, CIIG II's Annual
Report on Form 10-K and Quarterly Report on Form 10-Q and other documents filed
by Pubco, CIIG II or a successor thereto 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. The forward-looking statements in this Current
Report on Form 8-K represent the views of Zapp, Pubco and CIIG II as of the date
of this Current Report on Form 8-K. Subsequent events and developments may cause
that view to change. Readers are cautioned not to put undue reliance on
forward-looking statements, and all forward-looking statements in this Current
Report on Form 8-K are qualified by these cautionary statements. Zapp, Pubco and
CIIG II assume no obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information, future
events, or otherwise. None of Zapp, Pubco nor CIIG II gives any assurance that
Zapp, Pubco or CIIG II will achieve its expectations. The inclusion of any
statement in this Current Report on Form 8-K does not constitute an admission by
Zapp, Pubco or CIIG II or any other person that the events or circumstances
described in such statement are material.
5
--------------------------------------------------------------------------------
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1 Form of Forward Purchase Agreement.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
6
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses
CIIG CAPI 