Item 1.01 Entry into a Material Definitive Agreement.
Business Combination Agreement
On November 18, 2020, CIIG Merger Corp. (the "Registrant" or "CIIG"), Arrival
S.à r.l., a limited liability company (société à responsabilité limitée)
governed by the laws of the Grand Duchy of Luxembourg (the "Company"), Arrival
Group, a newly-formed joint stock company (société anonyme) governed by the laws
of the Grand Duchy of Luxembourg ("Holdco") and ARSNL Merger Sub Inc., a
newly-formed Delaware corporation ("Merger Sub") entered into a Business
Combination Agreement (the "Business Combination Agreement"), pursuant to which
(i) the existing ordinary and preferred shareholders of the Company have each
concurrently entered into separate exchange agreements (the "Exchange
Agreements") to contribute their respective equity interests in the Company to
Holdco in exchange for ordinary shares of Holdco ("Holdco Ordinary Shares") (the
"Share Exchanges") and (ii) following the Share Exchanges, Registrant will merge
with and into Merger Sub and all shares of CIIG common stock will be exchanged
for Holdco Ordinary Shares. Upon consummation of the Transactions (defined
below) contemplated by the Business Combination Agreement, the Company and the
Registrant will become direct wholly-owned subsidiaries of Holdco. Capitalized
terms used but not defined herein shall have the respective meanings set forth
in the Business Combination Agreement.
Upon the terms and subject to the conditions set forth in the Business
Combination Agreement and the Exchange Agreements at the First Exchange
Effective Time, each Company Preferred Shareholder will contribute its
respective Company Preferred Shares to Holdco and at the Second Exchange
Effective Time, each Company Ordinary Shareholder will contribute its Company
Ordinary Shares to Holdco, in each case, in exchange (the "Exchange") for a
number of Holdco Ordinary Shares based on an exchange ratio of 0.5581634737 (the
"Aggregate Exchange Consideration"). The valuation of the Company Shares
contributed to Holdco by the Company Shareholders against new Holdco Ordinary
Shares pursuant to the Exchange shall be deemed to be, as of the Second Exchange
Effective Time, US $5,338,350,000. Immediately following the Second Exchange
Effective Time, the Company will be a direct wholly-owned subsidiary of Holdco.
Following the Second Exchange Effective Time and immediately prior to the Merger
Effective Time, each share of Registrant's Class B common stock, par value
$0.0001 per share (the "Class B Common Stock") issued and outstanding
immediately prior to the Merger Effective Time will automatically be converted
into and exchanged for a number of validly issued, fully paid and nonassessable
shares of Registrant's Class A common stock, par value $0.0001 per share (the
"Class A Common Stock") equal to the Class B conversion ratio (the "Class B
Conversion").
At the Merger Effective Time, immediately following the Class B Conversion,
Merger Sub will merge with and into Registrant, with Registrant surviving such
merger as a direct wholly owned subsidiary of Holdco (the "Merger", and the
surviving corporation of the Merger, the "Surviving Corporation") and, as a
result of the Merger, all of the Class A Common Stock will be exchanged for
Holdco Ordinary Shares as set forth in the Business Combination Agreement. The
CIIG Warrants will become warrants of Holdco exercisable for Holdco Ordinary
Shares on substantially the same terms as the CIIG Warrants ("Holdco Warrants")
and each share of common stock of Merger Sub will be converted into one share of
common stock of the Surviving Corporation (the "Surviving Corporation
Exchange"), such that, following the Surviving Corporation Exchange, each of the
Registrant and the Company will be direct wholly-owned subsidiaries of Holdco
(together with the Exchange, the Class B Conversion, the Merger and other
transactions discussed above, the "Transactions").
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Pursuant to the separate Exchange Agreements between the Company and each
Company Preferred Shareholder, each Company Preferred Shareholder has consented
to the Transactions and, consequently, agreed to (i) contribute its Company
Preferred Shares to Holdco in exchange for Holdco Ordinary Shares pursuant to
the First Exchange, (ii) not transfer any of its Company Preferred Shares before
the earlier to occur of the First Exchange and the termination of the Business
Combination Agreement pursuant to its terms and (iii) not transfer, subject to
certain limited exceptions, any of the Holdco Ordinary Shares it receives
pursuant to the First Exchange before the earlier to occur of the Second
Exchange and the termination of the Business Combination Agreement. Pursuant to
the separate Exchange Agreements between the Company and each Company Ordinary
Shareholder, each Company Ordinary Shareholder (together with the Company
Preferred Shareholders, the "Company Shareholders") has consented to the
Transactions and, consequently, agreed to contribute its Company Ordinary Shares
to Holdco in exchange for Holdco Ordinary Shares pursuant to the Second Exchange
and not transfer any of its Company Ordinary Shares before the earlier to occur
of the Second Exchange and the termination of the Business Combination
Agreement.
Concurrently with the execution of the Business Combination Agreement, the
Registrant, the Company, Holdco and certain Holders (as defined below) entered
into a Transaction Support Agreement pursuant to which, among other things, the
Holders agreed to vote their shares of Registrant in favor of the Transactions,
subject to customary exceptions; not transfer or pledge any of their subject
shares prior to the Closing Date, subject to certain conditions and exceptions;
and waive (i) the provisions of Section 4.3(b)(ii) of the Registrant's
Certificate of Incorporation relating to the anti-dilution adjustment applicable
in connection with the additional issuance of equity securities in connection
with the Transactions, (ii) their rights to redeem their Class B Common Stock in
connection with the Transactions and (iii) the right to convert working capital
loans into additional warrants.
The obligation of the parties to consummate the Transactions are subject to the
satisfaction or waiver of customary closing conditions at or prior to the Second
Exchange Effective Time and at or prior to the Closing, including Registrant
stockholder and Holdco approvals, issuance of statutory independent auditor
reports regarding the contributions relating to Holdco Ordinary Shares, the
expiration or termination of Hart Scott Rodino Act waiting periods applicable to
the Transactions, effectiveness of the registration statement on Form F-4
relating to the Holdco Ordinary Shares and Nasdaq listing approval of the Holdco
Ordinary Shares; and the execution and delivery of the Registration Rights and
Lock-Up Agreement and the Nomination Agreement by the parties.
The obligations of Registrant to consummate the Transactions are subject to
certain additional conditions at or prior to the Second Exchange Effective Time
and at or prior to the Closing, including the accuracy of certain
representations and warranties of the Company, Holdco, and Merger Sub except
. . .
Item 3.02 Unregistered Sales of Equity Securities.
PIPE Subscription Agreements
The Registrant has entered into separate subscription agreements (collectively,
the "Subscription Agreements"), dated November 18, 2020, with certain investors,
pursuant to which the Registrant has agreed to issue and sell, in private
placements to close immediately prior to the closing of the Merger, an aggregate
of 40,000,000 shares of Class A Common Stock, for a purchase price of $10.00 per
share and an aggregate purchase price of $400,000,000, which will automatically
be converted into Holdco Ordinary Shares at the Merger Effective Time.
The foregoing description of the Subscription Agreements is qualified in its
entirety by reference to the full text of the form of the Subscription
Agreement, a copy of which is included as Exhibit 10.3 to this Current Report,
and incorporated herein by reference.
The securities issued pursuant to the Subscription Agreements will not be
registered under the Securities Act in reliance on the exemption from
registration provided by Section 4(a)(2) of the Securities Act and/or Regulation
D promulgated thereunder.
Item 7.01 Regulation FD Disclosure.
On November 18, 2020, CIIG and the Company, issued a joint press release
announcing the execution of the Business Combination Agreement and announcing
that CIIG and the Company will hold a conference call on November 18, 2020 (the
"Conference Call"). A copy of the press release, which includes information
regarding access to the Conference Call, is attached hereto as Exhibit 99.1 and
incorporated herein by reference. The script that CIIG and the Company intend to
use for the Conference Call is attached hereto as Exhibit 99.3 and incorporated
herein by reference. Such exhibits 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.
Attached as Exhibit 99.2 to this Current Report on Form 8-K and incorporated
herein by reference is the form of presentation to be used by CIIG in
presentations for certain of CIIG's stockholders and other persons. Such
exhibits and the information set forth therein shall not be deemed to be filed
for purposes of Section 18 of 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, Arrival Group is expected to file a
registration statement on Form F-4 with the SEC that will include a proxy
statement of CIIG that will also constitute a prospectus of Arrival Group. CIIG
and Arrival Group urge investors, stockholders and other interested persons to
read, when available, the Form F-4, including the preliminary proxy
statement/prospectus and amendments thereto and the definitive proxy
statement/prospectus and documents incorporated by reference therein, as well as
other documents filed with the SEC in connection with the proposed transaction,
as these materials will contain important information about Arrival Group,
Arrival, CIIG and the proposed transaction. Such persons can also read CIIG's
Annual Report on Form 10-K for the fiscal year ended December 31, 2019, for a
description of the security holdings of CIIG's officers and directors and their
respective interests as security holders in the consummation of the proposed
transaction. When available, the definitive proxy statement/prospectus will be
mailed to CIIG's and Arrival's stockholders. Stockholders will also be able to
obtain copies of such documents, without charge, once available, at the SEC's
website at www.sec.gov, or by directing a request to: CIIG Merger Corp., 40 West
57th Street, 29th Floor, New York, NY 10019 or Arrival S.à r.l., 1, rue
Peternelchen, L-2370 Howald, Luxembourg.
Participants in Solicitation
CIIG, Arrival Group and Arrival and their respective directors, executive
officers and other members of their management and employees, under SEC rules,
may be deemed to be participants in the solicitation of proxies of CIIG's
stockholders in connection with the proposed transaction. Investors and security
holders may obtain more detailed information regarding the names, affiliations
and interests of CIIG's directors and executive officers in CIIG's Annual Report
on Form 10-K for the fiscal year ended December 31, 2019, which was filed with
the SEC on March 27, 2020. Information regarding the persons who may, under SEC
rules, be deemed participants in the solicitation of proxies of CIIG's
stockholders in connection with the proposed transaction will be set forth in
the proxy statement/prospectus for the proposed transaction when available.
Information concerning the interests of CIIG's participants in the solicitation,
which may, in some cases, be different than those of CIIG's equity holders
generally, will be set forth in the proxy statement/prospectus relating to the
proposed transaction when it becomes available.
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Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of the federal securities laws, including statements
regarding the benefits of the proposed transaction, the anticipated timing of
the proposed transaction, the products offered by Arrival and the markets in
which it operates, and Arrival Group's projected future results. These
forward-looking statements generally are identified by the words "believe,"
"project," "expect," "anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be," "will
continue," "will likely result," and similar expressions. Such statements are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and are based on management's belief or interpretation of
information currently available. 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 document, 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's
securities, (ii) the risk that the transaction may not be completed by CIIG's
business combination deadline and the potential failure to obtain an extension
of the business combination deadline if sought by CIIG, (iii) the failure to
satisfy the conditions to the consummation of the Transactions, including the
adoption of the Business Combination Agreement by the stockholders of CIIG and
Arrival, the satisfaction of the minimum trust account amount following
redemptions by CIIG's public stockholders and the receipt of certain
governmental and regulatory approvals, (iv) the lack of a third party valuation
in determining whether or not to pursue the proposed transaction, (v) the
occurrence of any event, change or other circumstance that could give rise to
the termination of the Business Combination Agreement, (vi) the impact of
COVID-19 on Arrival's business and/or the ability of the parties to complete the
Transactions; (vii) the effect of the announcement or pendency of the
Transactions on Arrival's business relationships, performance, and business
generally, (viii) risks that the Transactions disrupt current plans and
operations of Arrival and potential difficulties in Arrival employee retention
as a result of the Transactions, (ix) the outcome of any legal proceedings that
may be instituted against Arrival Group, Arrival or CIIG related to the Business
Combination Agreement or the Transactions, (x) the ability to maintain the
listing of CIIG's securities on the NASDAQ Stock Market, (xi) the price of
CIIG's and the post-combination company's securities may be volatile due to a
variety of factors, including changes in the competitive and highly regulated
industries in which Arrival operates, variations in performance across
competitors, changes in laws and regulations affecting Arrival business and
changes in the combined capital structure, (xii) the ability to implement
business plans, forecasts, and other expectations after the completion of the
Transactions, and identify and realize additional opportunities, (xiii) the risk
of downturns and the possibility of rapid change in the highly competitive
industry in which Arrival operates, (xiv) the risk that Arrival and its current
and future collaborators are unable to successfully develop and commercialize
Arrival's products or services, or experience significant delays in doing so,
(xv) the risk that the post-combination company may never achieve or sustain
profitability; (xvi) the risk that the post-combination company will need to
raise additional capital to execute its business plan, which may not be
available on acceptable terms or at all; (xvii) the risk that the
post-combination company experiences difficulties in managing its growth and
expanding operations, (xviii) the risk that third-parties suppliers and
manufacturers are not able to fully and timely meet their obligations; (xix) the
risk that the utilization of Microfactories will not provide the expected
benefits due to, among other things, the inability to locate appropriate
buildings to use as Microfactories, Microfactories needing a larger than
anticipated factory footprint, and the inability of Arrival to deploy
Microfactories in the anticipated time frame; (xx) the risk that the orders that
have been placed for vehicles, including the order from UPS, are cancelled or
modified; (xxi) the risk of product liability or regulatory lawsuits or
proceedings relating to Arrival's products and services; (xxii) the risk that
Arrival is unable to secure or protect its intellectual property; and (xxiii)
the risk that the post-combination company's securities will not be approved for
listing on the NASDAQ Stock Market or if approved, maintain the listing. The
foregoing list of factors is not exhaustive. You should carefully consider the
foregoing factors and the other risks and uncertainties described in the "Risk
Factors" section of CIIG's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, the registration statement on Form F-4 and proxy statement/prospectus
discussed above and other documents filed by CIIG 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. Forward-looking statements speak
only as of the date they are made. Readers are cautioned not to put undue
reliance on forward-looking statements, and Arrival Group, Arrival and CIIG
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.
Neither Arrival Group, Arrival nor CIIG gives any assurance that either Arrival
Group, Arrival or CIIG will achieve its expectations.
No Offer or Solicitation
This Current Report on Form 8-K is not a proxy statement or solicitation of a
. . .
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