Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
Structure of the Transaction
The transaction is structured as a reverse triangular merger, which includes the following:
(a) Pursuant to the Merger Agreement, on the Closing Date, Merger Sub will be
merged with and into the Company (the "Merger" and, together with the other transactions related thereto, the "Transactions"), with the Company surviving as a wholly owned direct subsidiary of Parent (the "Surviving Corporation");
(b) Contemporaneously with the execution of the Merger Agreement, certain
investors entered into subscription agreements (the "Subscription Agreements"), pursuant to which such investors subscribed for an aggregate value of$482,500,000.00 , representing 48,250,000 shares of Parent Common Stock at a purchase price of$10.00 per share in a private placement (the "PIPE Financing") to be consummated immediately prior to the consummation of the Transactions. A description of the Subscription Agreements is set forth under the heading "Subscription Agreements" under this Item 1.01 of this Current Report on Form 8-K;
(c) Contemporaneously with the execution of the Merger Agreement, Parent, the
Company and the Key Company Holders entered into the Company Stockholder Support Agreement (the "Company Support Agreement"), pursuant to which such Key Company Holders agreed, among other things, to vote their shares of Company Capital Stock in favor of adopting the Merger Agreement and approving the Transactions. A description of the Company Support Agreement is set forth under the heading "Company Support Agreement" under this Item 1.01 of this Current Report on Form 8-K;
(d) Contemporaneously with the execution of the Merger Agreement, Parent, Tuscan
HoldingsAcquisition LLC , aDelaware limited liability company (the "Sponsor"), certain stockholders of Parent (together with the Sponsor, the "Sponsor Group ") and the Company entered into the Sponsor Support Agreement (the "Sponsor Support Agreement"), pursuant to which (i) each member of theSponsor Group agreed, among other things, to vote all Equity Interests of Parent held by such member of theSponsor Group in favor of the Transactions and abstain from exercising any redemption rights in connection with the Redemption, and (ii) the Sponsor agreed that certain shares of Parent Common Stock held by it will be subject to forfeiture and vesting as set forth therein and that the Sponsor shall pay (or forfeit certain shares of Parent Common Stock with a value equal to) certain expenses of Parent, to the extent such expenses exceed$46,000,000 (unless such expenses shall have been approved by the Company) in accordance with the terms set forth therein. A description of the Parent Support Agreement is set forth under the heading "Parent Support Agreement" under this Item 1.01 of this Current Report on Form 8-K;
(e) Contemporaneously with the execution of the Merger Agreement, Parent, MVST
SPV Inc. , a newly formedDelaware corporation and wholly owned subsidiary of Parent ("MVST SPV"), the Company,Microvast Power System (Huzhou) Co., Ltd. , the Company's majority owned subsidiary ("MPS"), certain MPS convertible loan investors (the "CL Investors ") and certain minority equity investors in MPS (the "Minority Investors " and, together with theCL Investors , the "MPS Investors ") and certain other parties entered into a framework agreement (the "Framework Agreement"), pursuant to which, among other things, (1) theCL Investors will waive certain rights with respect to the convertible loans (the "Convertible Loans") held by suchCL Investors that were issued under that certain Convertible Loan Agreement, datedNovember 2, 2018 , among the Company, MPS, suchCL Investors and theMPS Investors (the "Convertible Loan Agreement") and, in connection therewith, certain affiliates of theCL Investors ("CL Affiliates") will subscribe for the number of shares that would otherwise have been issued to theCL Investors in the Transactions had theCL Investors been direct stockholders of the Company, and (2) theMinority Investors will waive any voting or economic rights they may have in any MPS equity held by them and, in connection therewith, Parent will issue to MVST SPV (or any successor thereto), to be held on behalf of suchMinority Investors , the number of shares that would otherwise have been issued to theMinority Investors in the Transactions had theMinority Investors been direct stockholders of the Company.. A description of the Framework Agreement is set forth under the heading "Framework Agreement" under this Item 1.01 of this Current Report on Form 8-K; and
(f) In connection with the Closing, Parent, the stockholders of the Company and
certain stockholders of Parent will also enter into a Registration Rights and Lock-Up Agreement (the "Registration Rights and Lock-Up Agreement"). A description of the Registration Rights and Lock-Up Agreement is set forth under the heading "Registration Rights and Lock-Up Agreement" under this Item 1.01 of this Current Report on Form 8-K.
The total number of shares of Parent Common Stock to be issued to the
shareholders of the Company and the
Conversion of Securities; Aggregate Transaction Consideration
At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or any Company Holder:
(a) Cancellation of Certain Company Capital Stock: Each share of Company Common
Stock and Company Preferred Stock owned by Parent, Merger Sub or the Company
or any of their respective direct or indirect wholly owned Subsidiaries as of
immediately prior to the Effective Time will automatically be cancelled and
shall cease to exist, without any conversion thereof and no consideration
will be delivered in exchange therefor; . . .
Item 3.02 Unregistered Sales of
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
is incorporated by reference herein. In connection with the Closing, Parent will
issue 48,250,000 shares of Parent Common Stock to Subscribers, 210,000,000
shares of Parent Common Stock to shareholders of the Company and the
Item 7.01 Regulation FD Disclosure.
Attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference is the form of updated presentation to be used by Parent in presentations for certain of Parent's stockholders and other persons regarding the Transactions.
The foregoing exhibit and the information set forth therein shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.
Additional Information and Where to Find It
In connection with the Transactions involving Parent and the Company, Parent
intends to file relevant materials with the
No Offer or Solicitation
This Current Report on Form 8-K is for informational purposes only and is not intended to and shall not constitute a proxy statement or the solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Transactions and is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy or subscribe for any securities or a solicitation of any vote of approval, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Participants in Solicitation
This Current Report on Form 8-K is not a solicitation of a proxy from any
investor or securityholder. However, Parent, the Company, and certain of their
directors and executive officers may be deemed to be participants in the
solicitation of proxies in connection with the Transactions under the rules of
the
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "believe," "intend," "plan," "projection," "outlook" or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding the Company's industry and market sizes, future opportunities for Parent, the Company and the combined company, Parent's and the Company's estimated future results and the Transactions, including the implied enterprise value, the expected transaction and ownership structure and the likelihood and ability of the parties to successfully consummate the Transactions. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.
In addition to factors previously disclosed in Parent's reports filed with the
Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about Parent and the Company or the date of such information in the case of information from persons other than Parent or the Company, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding The Company's industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. 2.1* Merger Agreement, dated as ofFebruary 1, 2021 , by and among Parent, Merger Sub and the Company. 10.1 Framework Agreement, dated as ofFebruary 1, 2021 , by and among Parent, the Company, MPS, theMPS Investors and the other parties thereto. 10.2 Company Stockholder Support Agreement, dated as ofFebruary 1, 2021 , by and among Parent, the Company and certain stockholders of the Company. 10.3 Sponsor Support Agreement, dated as ofFebruary 1, 2021 , by and among Parent, the Sponsor, the Company, and certain stockholders of Parent. 10.4 Form of Subscription Agreement. 10.5 Subscription Agreement, dated as ofFebruary 1, 2021 , by and betweenParent and Riheng HK Limited . 10.6 Subscription Agreement, dated as ofFebruary 1, 2021 , by and betweenParent and Aurora Sheen Limited . 10.7 Form of Registration Rights and Lock-Up Agreement (as Exhibit E to the Merger Agreement). 10.8 Form of Stockholders Agreement (as Exhibit F to the Merger Agreement). 99.1 Investor Presentation. 104 Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document).
*Certain exhibits and schedules to this Exhibit have been omitted in accordance
with Regulation S-K Item 601(b)(2). Parent agrees to furnish supplementally a
copy of all omitted exhibits and schedules to the
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