Item 1.01 Entry into a Material Definitive Agreement
Merger Agreement
On April 5, 2022, Pacifico Acquisition Corp., a Delaware corporation ("SPAC"),
entered into an Agreement and Plan of Merger (as it may be amended, supplemented
or otherwise modified from time to time, the "Merger Agreement") by and among
(i) Caravelle International Group, a Cayman Islands exempted company and a
direct wholly owned subsidiary of the Company ("PubCo"), (ii) Pacifico
International Group, a Cayman Islands exempted company and a direct wholly owned
subsidiary of PubCo ("Merger Sub 1"), (iii) Pacifico Merger Sub 2 Inc., a
Delaware corporation and a direct wholly owned subsidiary of PubCo ("Merger Sub
2" and, together with PubCo and Merger Sub 1, each, individually, an
"Acquisition Entity" and, collectively, the "Acquisition Entities"), and (iv)
Caravelle Group Co., Ltd., a Cayman Islands exempted company (the "Company").
Capitalized terms used in this Current Report on Form 8-K but not otherwise
defined herein have the meanings given to them in the Merger Agreement.
Pursuant to the Merger Agreement, subject to the terms and conditions set forth
therein, (i) Merger Sub 1 will merge with and into the Company (the "Initial
Merger") whereby the separate existence of Merger Sub 1 will cease and the
Company will be the surviving corporation of the Initial Merger and become a
wholly owned subsidiary of PubCo, and (ii) following confirmation of the
effective filing of the Initial Merger, Merger Sub 2 will merge with and into
SPAC (the "SPAC Merger" and together with the Initial Merger, the "Mergers"),
the separate existence of Merger Sub 2 will cease and SPAC will be the surviving
corporation of the SPAC Merger and a direct wholly owned subsidiary of PubCo.
As a result of the Mergers, among other things, (i) all outstanding Company
Ordinary Shares will be cancelled in exchange for 50,000,000 PubCo ordinary
shares, (ii) each outstanding SPAC Unit will be automatically detached, (iii)
each unredeemed outstanding share of SPAC Common Stock will be cancelled in
exchange for the right to receive one (1) PubCo Ordinary Share, (iv) every ten
(10) outstanding SPAC Rights will be cancelled and cease to exist in exchange
for one (1) PubCo Ordinary Share, and (v) each SPAC UPO will automatically be
cancelled and cease to exist in exchange for one (1) PubCo UPO.
Earnout
Following the Closing, and as additional contingent consideration for the
Mergers and the other Transactions, within ten (10) Business Days after the
occurrence of an Earnout Event, PubCo shall issue or cause to be issued to
certain shareholders of the Company (the "Earnout Participants") the following
additional PubCo Ordinary Shares (which shall be equitably adjusted for share
subdivisions, share consolidations, share dividends, reorganizations,
recapitalizations, reclassifications, combination, exchange of shares or other
like change or transaction): (i) upon the occurrence of Earnout Event I, a
one-time issuance of 15,000,000 Earnout Shares; and (ii) upon the occurrence of
Earnout Event II, a one-time issuance of 20,000,000 Earnout Shares.
For purposes hereof:
? "Earnout Event I" means PubCo reporting consolidated revenue of no less than
$200,000,000 for the six months ending June 30, 2023, provided that such
financial statements have been reviewed by PubCo's independent auditors.
? "Earnout Event II" means PubCo reporting audited consolidated revenue of no
less than $450,000,000 for the year ending December 31, 2023.
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Representations, Warranties and Covenants
The Merger Agreement contains customary representations and warranties of the
parties, which will not survive the Closing. Many of the representations and
warranties are qualified by materiality or Company Material Adverse Effect (with
respect to the Company) or SPAC Material Adverse Effect (with respect to SPAC).
"Material Adverse Effect" as used in the Merger Agreement means with respect to
the Company or SPAC, as applicable, any event, state of facts, development,
change, circumstance, occurrence or effect that has had, or would reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
(i) the business, assets and liabilities, results of operations or financial
condition of the applicable party and its subsidiaries, taken as a whole or (ii)
the ability of such party or any of its subsidiaries to consummate the
Transactions, in each case subject to certain customary exceptions. Certain of
the representations are subject to specified exceptions and qualifications
contained in the Merger Agreement or in information provided pursuant to certain
disclosure schedules to the Merger Agreement.
The Merger Agreement also contains pre-closing covenants of the parties,
including obligations of the parties to operate their respective businesses in
the ordinary course consistent with past practice, and to refrain from taking
certain specified actions without the prior written consent of the other
applicable parties, in each case, subject to certain exceptions and
qualifications. Additionally, the parties have agreed not to solicit, negotiate
or enter into competing transactions, as further provided in the Merger
Agreement. The covenants do not survive the Closing (other than those that are
to be performed after the Closing).
SPAC and the Company agreed, as promptly as practicable after the execution of
the Merger Agreement, to prepare, and SPAC and PubCo have agreed to file with
the SEC, a registration statement on Form F-4 (as amended, the "F-4 Registration
Statement") in connection with the registration under the Securities Act of
1933, as amended (the "Securities Act") of the PubCo Ordinary Shares pursuant to
the Merger Agreement, and containing a proxy statement/prospectus for the
purpose of SPAC soliciting proxies from the stockholders of SPAC to approve the
Merger Agreement, the Transactions and related matters (the "SPAC Stockholder
Approval") at a special meeting of SPAC stockholders (the "Stockholder Meeting")
and providing such stockholders an opportunity, in accordance with SPAC's
organizational documents and initial public offering prospectus, to have their
shares of SPAC Common Stock redeemed (the "Redemptions").
PubCo agreed to take all action within its power so that effective at the
Closing, the entire board of directors of PubCo will consist of no less than
seven (7) individuals, of whom (i) one (1) will be designated by SPAC, and (ii)
six (6) will be designated by the Company, of which four (4) must qualify as an
"independent director" under stock exchange regulations applicable to PubCo, and
which shall comply with all diversity requirements under applicable Law, each
such director to hold office in accordance with the PubCo Governing Documents.
In addition, PubCo agreed to amend and restate its Memorandum of Association and
Articles of Association (the "PubCo Governing Documents") at or before the
Closing by the passing of a shareholder special resolution. The PubCo Governing
Documents will include customary provisions for a memorandum of association and
articles of association of a Cayman Islands publicly traded company that is
traded on Nasdaq or NYSE.
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Conditions to the Parties' Obligations to Consummate the Mergers
Under the Merger Agreement, the obligations of the parties to consummate (or
cause to be consummated) the Transactions are subject to a number of customary
conditions for special purpose acquisition companies, including, among others,
the following: (i) the approval of the Mergers and the other stockholder
proposals required to approve the Transactions by SPAC's stockholders and the
Company's shareholders, (ii) all specified approvals or consents (including
governmental and regulatory approvals) and all waiting or other periods have
been obtained or have expired or been terminated, as applicable, (iii) the
effectiveness of the F-4 Registration Statement, (iv) PubCo's initial listing
application with Nasdaq or NYSE shall have been conditionally approved and,
immediately following the Closing, PubCo shall satisfy any applicable initial
and continuing listing requirements of Nasdaq or NYSE and PubCo shall not have
received any notice of non-compliance therewith, (v) the PubCo Ordinary Shares
having been approved for listing on Nasdaq or NYSE, subject to round lot holder
requirements, and (vi) SPAC having a minimum of $5,000,001 of net tangible
assets on its pro forma consolidated balance sheet after giving effect to the
Closing (after giving effect to any Redemptions and any PIPE Investment).
The obligations of SPAC to consummate (or cause to be consummated) the
Transactions are also subject to, among other things (i) the representations and
warranties of the Company and of each Acquisition Entity being true and correct,
subject to the materiality standards contained in the Merger Agreement, (ii)
material compliance by the Company and each Acquisition Entity with its
pre-closing covenants, and (iii) no Company Material Adverse Effect, (iv)
obtaining all approvals, waivers or consents from any third parties set forth
and described on Section 9.2(d) of the Company Disclosure Letter, (v) receiving
PIPE Subscription Agreements within two months after the date of the Merger
Agreement, pursuant to which PIPE Investors have committed to provide equity
financing to PubCo with the total PIPE Investment Amount of $60,000,000 solely
for purposes of consummating the Transactions, (vi) Company obtaining executed
counterparts to the Shareholder Support Agreement from all the Key Company
. . .
Item 7.01. Regulation FD Disclosure
On April 6, 2022, SPAC and the Company issued a joint press release announcing
the execution of the Merger Agreement described in Item 1.01 above. The press
release is attached hereto as Exhibit 99.1 and incorporated into this Item 7.01
by reference. Notwithstanding the foregoing, information contained on the
websites of SPAC, the Company or any of their affiliates referenced in Exhibit
99.1 or linked therein or otherwise connected thereto does not constitute part
of nor is it incorporated by reference into this Current Report on Form 8-K.
The information in this Item 7.01, including Exhibit 99.1, is furnished and
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
liabilities under that section, and shall not be deemed to be incorporated by
reference into the filings of SPAC under the Securities Act or the Exchange Act,
regardless of any general incorporation language in such filings. This Current
Report on Form 8-K will not be deemed an admission as to the materiality of any
of the information in this Item 7.01, including Exhibit 99.1.
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Important Information and Where to Find It
This Current Report on Form 8-K relates to a proposed transaction between SPAC,
PubCo and the Company. This Current Report on Form 8-K 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. In connection
with the transaction described herein, SPAC and PubCo intend to file relevant
materials with the SEC, including a registration statement on Form F-4, which
will include a proxy statement/prospectus. The proxy statement/prospectus will
be sent to all SPAC stockholders. SPAC and PubCo also will file other documents
regarding the proposed transaction with the SEC. Before making any voting or
investment decision, investors and security holders of SPAC are urged to read
the F-4 Registration Statement, the proxy statement/prospectus 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/prospectus and all other relevant documents filed or that will be
filed with the SEC by SPAC through the website maintained by the SEC at
www.sec.gov or by directing a request to SPAC to c/o Pacifico Capital LLC, 521
Fifth Avenue 17th Floor, New York, NY 10175 or via email at
edwardwang@pacificocorp.com.
Participants in the Solicitation
SPAC, PubCo and the Company, and their respective directors and executive
officers, may be deemed to be participants in the solicitation of proxies from
SPAC's stockholders in connection with the proposed transaction. Information
about SPAC's directors and executive officers and their ownership of SPAC's
securities is set forth in SPAC's filings with the SEC. Additional information
regarding the interests of those persons and other persons who may be deemed
participants in the proposed transaction may be obtained by reading the proxy
statement/prospectus regarding the proposed transaction when it becomes
available. You may obtain free copies of these documents as described in the
preceding paragraph.
Non-Solicitation
This Current Report on Form 8-K is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or in respect of
the potential transaction and shall not constitute an offer to sell or a
solicitation of an offer to buy the securities of SPAC, PubCo or the Company,
nor shall there be any sale of any such 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 state or
jurisdiction. No offer of securities shall be made except by means of a
prospectus meeting the requirements of the Securities Act.
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Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, including statements
regarding the proposed transaction between SPAC, PubCo and the Company. Such
forward-looking statements include, but are not limited to, statements regarding
the closing of the transaction and SPAC's, the Company's or their respective
management teams' expectations, hopes, beliefs, intentions or strategies
regarding the future. The words "anticipate", "believe", "continue", "could",
"estimate", "expect", "intends", "may", "might", "plan", "possible",
"potential", "predict", "project", "should", "would" and similar expressions may
identify forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. These forward-looking statements
are based on SPAC's and the Company's current expectations and beliefs
concerning future developments and their potential effects on SPAC, the Company,
PubCo or any successor entity of the transaction and include statements
concerning (i) the Company's ability to scale its constellation, (ii) the
Company's ability to meet image quality expectations and continue to offer
superior unit economics, (iii) the Company's ability to become or remain an
industry leader, (iv) the Company's ability to address all commercial
applications for satellite imagery or address a certain total addressable
market, (v) expectations regarding cash on the balance sheet following closing
and whether such cash will be sufficient to meet the Company's business
objectives and (vi) the expected timing of closing the transaction.
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 statements are based
on various assumptions, whether or not identified in this Current Report on Form
8-K. These forward-looking statements are provided for illustrative purposes
only and are not intended to serve as and must not be relied on by an 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 SPAC, PubCo and the Company. 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 SPAC's securities, (ii) the failure to satisfy the
conditions to the consummation of the transaction, including the adoption of the
Merger Agreement by SPAC's stockholders, the satisfaction of the minimum trust
account amount following any redemptions by SPAC's public stockholders and the
receipt of certain governmental and regulatory approvals, (iii) the occurrence
of any event, change or other circumstance that could give rise to the
termination of the Merger Agreement, (iv) the inability to complete the PIPE
Investment, (v) the effect of the announcement or pendency of the transaction on
the Company's business relationships, operating results and business generally,
(vi) risks that the transaction disrupts current plans and operations of the
Company, (vii) changes in the competitive and highly regulated industries in
which the Company operates, variations in operating performance across
competitors and changes in laws and regulations affecting the Company's
business, (viii) the ability to implement business plans, forecasts and other
expectations after the completion of the transaction, and identify and realize
additional opportunities, (ix) the risk of downturns in the commercial launch
services, satellite and spacecraft industry, (x) the outcome of any legal
proceedings that may be instituted against the Company, PubCo or SPAC related to
the Merger Agreement or the transaction, (xi) volatility in the price of SPAC's
or any successor entity's securities due to a variety of factors, including
changes in the competitive and highly regulated industries in which the Company
operates or plans to operate, variations in performance across competitors,
changes in laws and regulations affecting the Company's business and changes in
the combined capital structure, (xii) costs related to the transaction and the
failure to realize anticipated benefits of the transaction or to realize
estimated pro forma results and underlying assumptions, including with respect
to estimated stockholder redemptions, (xiii) the risk that the Company and its
current and future collaborators are unable to successfully develop and
commercialize the Company's products or services, or experience significant
delays in doing so, (xiv) the risk that the Company may never achieve or sustain
profitability, (xv) the risk that the Company may need to raise additional
capital to execute its business plan, which many not be available on acceptable
terms or at all, (xvi) the risk that the post-combination company experiences
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Description
2.1* Agreement and Plan of Merger, dated as of April 5, 2022, by and among
SPAC, PubCo, Merger Sub 1, Merger Sub 2 and the Company.
10.1 Form of Shareholder Support Agreement.
10.2 Form of Sponsor Support Agreement.
10.3 Form of Lock-up Agreement.
10.4 Form of Amended and Restated Registration Rights Agreement.
99.1 Joint Press Release, dated April 6, 2022.
104 Cover Page Interactive Data File (formatted as inline XBRL).
* Certain exhibits and schedules to this Exhibit have been omitted in accordance
with Regulation S-K Item 601(b)(2). SPAC agrees to furnish supplementally a
copy of all omitted exhibits and schedules to the Securities and Exchange
Commission upon its request.
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