UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
July 29, 2022 (July 25, 2022)
Date of Report (Date of earliest event reported)
Mountain Crest Acquisition Corp. III
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-40418 | 85-2412613 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
|
311 West 43rd Street, 12th Floor New York, NY |
10036 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (646) 493-6558
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| x | Written communications pursuant to Rule 425 under the Securities Act |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock | MCAE | The Nasdaq Stock Market LLC | ||
| Rights | MCAER | The Nasdaq Stock Market LLC | ||
| Units | MCAEU | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on January 31, 2022, Mountain Crest Acquisition Corp. III, a Delaware corporation (“MCAE”), entered into that certain Agreement and Plan of Merger, as amended by that certain Amendment to the Merger Agreement, dated as of June 7, 2022 (the “Merger Agreement”), by and among MCAE, Etao International Group, a Cayman Islands corporation (the “Company”), and Wensheng Liu, in his capacity as the Company Shareholders’ Representative (the “Shareholders’ Representative”), pursuant to which, among other things, (1) MCAE will merge with and into a to be formed Cayman Islands company (“Purchaser”), with the Purchaser being the surviving corporation in the merger (the “Redomestication Merger”) and (2) the Company will merge with and into a to be formed Cayman Islands company and the wholly owned subsidiary of the Purchaser (“Merger Sub”), with the Company as the surviving corporation in the merger (the “Acquisition Merger”), and, after giving effect to the Acquisition Merger, the Company being a wholly owned subsidiary of Purchaser and the Purchaser will change its name to Etao International Co., Ltd. (collectively, the “Business Combination”). The Merger Agreement provides, that the outside date for the closing of the Business Combination was October 5, 2022 (the “Outside Date”). All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Merger Agreement.
On June 30, 2022, MCAE formed ETAO International Co., Ltd., as a wholly owned subsidiary and a Cayman Islands exempted company to be the Purchaser under the Merger Agreement. Also on June 30, 2022, MCAE formed ETAO Merger Sub, Inc., as a wholly owned subsidiary of ETAO International Co., Ltd. and a Cayman Islands exempted company to be the Merger Sub under the Merger Agreement. On July 26, 2022, MCAE, the Company, the Shareholders’ Representative, ETAO International Co., Ltd. and ETAO Merger Sub, Inc., entered into a Joinder Agreement to the Merger Agreement, that expressly amended and modified the Merger Agreement, by admitting ETAO International Co., Ltd. and ETAO Merger Sub, Inc. as parties to the Merger Agreement and fully binding them to all of the covenants, terms, representation, warranties, rights, obligations and conditions of the Merger Agreement applicable to such party as though an original party thereto.
The foregoing summary of the Joinder Agreement does not purport to be complete and is qualified in its entirety by reference to the actual Joinder Amendment which is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
As previously disclosed, in connection with the proposed Merger, MCAE and the Company obtained a commitment from SME Investment Group Co., Ltd. (the “Subscriber”) to purchase 250,000 ordinary shares of the Purchaser in connection with the Closing (the “PIPE Shares”), for an aggregate cash amount of $250,000,000 at a purchase price of $10.00 per share, in a private placement (the “PIPE”). Such commitment was made by way of a Subscription Agreement, dated January 26, 2022 (the “PIPE Subscription Agreement”), by and among MCAE and the Subscriber. On July 25, 2022, MCAE and the Subscriber terminated the PIPE Subscription Agreement by mutual consent by executing a Mutual Termination Agreement, dated as of July 25, 2022. Pursuant to the Mutual Termination Agreement, the PIPE Subscription Agreement is void and of no further force and effect, and all rights and obligations of the parties thereunder have terminated.
The foregoing summary of the Mutual Termination Agreement does not purport to be complete and is qualified in its entirety by reference to the actual Mutual Termination Agreement which is filed with this Current Report on Form 8-K as Exhibit 2.2 and is incorporated herein by reference.
IMPORTANT NOTICES
Important Notice Regarding Forward-Looking Statements
This Current Report on Form 8-K contains certain “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended. Statements that are not historical facts, including statements about the pending transactions described above, and the parties’ perspectives and expectations, are forward-looking statements. Such statements include, but are not limited to, statements regarding the proposed transaction, including the anticipated initial enterprise value and post-closing equity value, the benefits of the proposed transaction, integration plans, expected synergies and revenue opportunities, anticipated future financial and operating performance and results, including estimates for growth, the expected management and governance of the combined company, and the expected timing of the transactions. The words “expect,” “believe,” “estimate,” “intend,” “plan” and similar expressions indicate forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to various risks and uncertainties, assumptions (including assumptions about general economic, market, industry and operational factors), known or unknown, which could cause the actual results to vary materially from those indicated or anticipated.
The forward-looking statements are based on the current expectations of the management of MCAE and the Company, as applicable, and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements including: risks related to the Company’s businesses and strategies; the ability to complete the proposed business combination due to the failure to obtain approval from MCAE’s stockholders or satisfy other closing conditions in the definitive merger agreement; the amount of any redemptions by existing holders of MCAE’s common stock; the ability to recognize the anticipated benefits of the business combination; other risks and uncertainties included under the header “Risk Factors” in the Form 10-K for the year ended December 31, 2021 filed by MCAE on March 7, 2022, the Registration Statement to be filed by MCAE, the final prospectus of MCAE for its initial public offering, dated May 17, 2021; and in MCAE’s other filings with the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements relate only to the date they were made, and MCAE, the Company and their subsidiaries undertake no obligation to update forward-looking statements to reflect events or circumstances after the date they were made except as required by law or applicable regulation.
Additional Information and Where to Find It
In connection with the transaction described herein, MCAE and and/or its subsidiaries will file relevant materials with the Securities and Exchange Commission (the “SEC”), including the Registration Statement on Form F-4 and a proxy statement (the “Registration Statement”). The Registration Statement will include a proxy statement to be distributed to holders of MCAE’s common stock in connection with MCAE’s solicitation of proxies for the vote by MCAE shareholders with respect to the proposed transaction and other matters as described in the Registration Statement, as well as the prospectus relating to the offer of securities to be issued to the Company’s stockholders in connection with the proposed business combination. After the Registration Statement has been filed and declared effective, MCAE will mail a definitive proxy statement, when available, to its stockholders. Investors and security holders and other interested parties are urged to read the Registration Statement, any amendments thereto and any other documents filed with the SEC carefully and in their entirety when they become available because they will contain important information about MCAE, the Company and the proposed business combination. Additionally, MCAE will file other relevant materials with the SEC in connection with the business combination. Copies of these documents may be obtained free of charge at the SEC's web site at www.sec.gov. Securityholders of MCAE are urged to read the Registration Statement and the other relevant materials when they become available before making any voting decision with respect to the proposed business combination because they will contain important information. The Registration Statement and proxy statement, once available, may also be obtained without charge at the SEC’s website at www.sec.gov or by writing to MCAE at 311 West 43rd Street, 12th Floor, New York, NY 10036. INVESTORS AND SECURITY HOLDERS OF MCAE ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTIONS THAT MCAE WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MCAE, THE COMPANY AND THE TRANSACTIONS.
Participants in Solicitation
MCAE, the Company and their respective directors and executive officers may be deemed participants in the solicitation of proxies with respect to the proposed business combination under the rules of the SEC. Securityholders may obtain more detailed information regarding the names, affiliations, and interests of certain of MCAE’s executive officers and directors in the solicitation by reading MCAE’s Registration Statement and other relevant materials filed with the SEC in connection with the proposed business combination when they become available. Information about MCAE’s directors and executive officers and their ownership of MCAE common stock is set forth in MCAE’s Form 10-K for the year ended December 31, 2021, as modified or supplemented by any Form 3 or Form 4 filed with the SEC since the date of that filing. Other information regarding the interests of MCAE’s participants in the proxy solicitation, which in some cases, may be different than those of their stockholders generally, will be set forth in the Registration Statement relating to the proposed business combination when it becomes available. These documents can be obtained free of charge at the SEC's web site at www.sec.gov.
The Company and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the stockholders of MCAE in connection with the proposed business combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed business combination will be included in the Registration Statement for the proposed business combination.
No Offer or 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 transactions described above and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of MCAE 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 offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom.
Item 9.01. Financial Statements and Exhibits.
| Exhibit No. | Description | |
| 2.1* | Joinder Agreement, dated July 26, 2022 by and between Mountain Crest Acquisition Corp. III, ETAO International Group, Wensheng Liu, in his capacity as the Company Shareholders’ Representative, ETAO International Co., Ltd. and ETAO Merger Sub, Inc. | |
| 2.2* | Mutual Termination Agreement, dated July 25, 2022 between Mountain Crest Acquisition Corp. III and SME Investment Group Co., Ltd. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: July 29, 2022 | ||
| MOUNTAIN CREST ACQUISITION CORP. III | ||
| By: | /s/ Suying Liu | |
| Name: | Suying Liu | |
| Title: | Chief Executive Officer | |
Exhibit 2.1
EXECUTION VERSION
JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of July 26, 2022 (this “Joinder Agreement”), to the Agreement and Plan of Merger (as the same may be amended, restated, supplemented or modified from time to time in accordance with the terms hereof, this “Agreement”), dated as of January 27, 2022 is entered into by and among Mountain Crest Acquisition Corp. III, a Delaware corporation (“Parent”), Etao International Group., an exempted company incorporated with limited liability in the Cayman Islands (the “Company”), and Wensheng Liu, in his capacity as the Company Shareholders’ Representative (the “Shareholders’ Representative”), as amended by the Amendment to Agreement and Plan of Merger made and entered into as of June 7, 2022 by and between Parent and the Company (collectively, the “Merger Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Merger Agreement.
WHEREAS, ETAO International Co., Ltd., a Cayman Islands exempted company and wholly owned subsidiary of the Parent (“Purchaser”), was formed after the Merger Agreement Effective Date for the sole purpose of the merger of Parent with and into Purchaser, with Purchaser being the surviving entity and a wholly-owned subsidiary of Parent;
WHEREAS, ETAO Merger Sub, Inc., a Cayman Islands exempted company and wholly owned subsidiary of Purchaser (“Merger Sub”), was formed after the Merger Agreement Effective Date for the sole purpose of merging with and into the Company with the Company being the surviving entity and a wholly-owned subsidiary of Purchaser; and
WHEREAS, the parties hereto desire to execute this Joinder Agreement to evidence each of Purchaser’s and Merger Sub’s execution of the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Joinder Agreement hereby agree as follows:
1. Agreement to be Bound. Each of Purchaser and Merger Sub hereby agrees that upon execution of this Joinder Agreement, it shall become a party to the Merger Agreement and shall be fully bound by, and subject to, all of the covenants, terms, representations, warranties, rights, obligations and conditions of the Merger Agreement applicable to such party as though an original party thereto.
2. Successors and Assigns. This Joinder Agreement shall be binding upon, enforceable by and inure to the benefit of the parties and their respective successors and assigns.
3. Entire Agreement. This Joinder Agreement represents the entire agreement between the parties hereto with respect to the subject matter hereof and, except as expressly provided in this Joinder Agreement or the Merger Agreement, supersedes all prior negotiations, representations or agreements, either oral or written, with respect to such subject matter.
4. Counterparts. This Joinder Agreement may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement. This Joinder Agreement may be executed and delivered by facsimile or electronic transmission.
5. Governing Law. This Joinder Agreement and any claim, controversy or dispute arising under or related to this Joinder Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and to be performed wholly within such State (including in respect of the statute of limitations or other limitations period applicable hereto), and without regard to the conflicts of laws principles thereof. Any suit brought hereon, whether in contract, tort, equity or otherwise, shall be brought in the exclusive jurisdiction and venue within the State of Delaware (“Delaware Courts”), and any appellate court from any decision thereof, the parties hereto hereby waiving any claim or defense that such forum is not convenient or proper. Each party hereby agrees that any such court shall have in personam jurisdiction over it, consents to service of process in any manner prescribed in Section 12.06 of the Merger Agreement or in any other manner authorized by Delaware law, and agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner specified by applicable law.
6. Headings. The headings contained in this Joinder Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.
[signature pages follow]
EXECUTION VERSION
IN WITNESS WHEREOF, the parties hereto have caused this Joinder Agreement to be effective as of the date first written above.
| PARENT: | ||
| MOUNTAIN CREST ACQUISITION CORP. III, a Delaware corporation | ||
| By: | /s/ Suying Liu | |
| Name: Suying Liu | ||
| Title: Chief Executive Officer | ||
| SHAREHOLDERS’ REPRESENTATIVE | |
| /s/ Wensheng Liu | |
| Wensheng Liu (in his capacity as the Shareholders’ Representative) |
| PURCHASER: | ||
| ETAO INTERNATIONAL CO., LTD., a Cayman Islands exempted company | ||
| By: | /s/ Zihao Zhao | |
| Name: | Zihao Zhao | |
| Title: | Director |
| MERGER SUB: | ||
| ETAO MERGER SUB, INC., a Cayman Islands exempted company | ||
| By: /s/ Zihao Zhao | ||
| Name: | Zihao Zhao | |
| Title: | Director | |
| COMPANY: | ||
| ETAO INTERNATIONAL GROU | ||
| /s/ Wensheng Liu | ||
| Name: | Wensheng Liu | |
| Title: | Chairman and CEO | |
Signature Page to Joinder Agreement
Exhibit 2.2
MUTUAL TERMINATION AGREEMENT
This MUTUAL TERMINATION AGREEMENT(this “Agreement”) dated as of July 25, 2022 between Mountain Crest Acquisition Corp. III, a corporation with offices located at 311 West 43rd Street, 12th Floor, New York, NY 10036 (“MCAE”) and SME Investment Group Co., Ltd., a corporation having an office at 7th Floor, Unit 4, Kaitu Development Building, 33 Mongkok Road, Kowloon, China 999077 (“SME”). MCAE and SME are individually referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used herein but not otherwise defined shall have the meaning set forth in the Subscription Agreement (as defined below).
WHEREAS, MCAE and SME entered into a Subscription Agreement, dated January 26, 2022 (the “Subscription Agreement”) pursuant to which SME irrevocably subscribed for and agreed to purchase from MCAE the number of Shares set forth on the signature page of the Subscription Agreement on the terms and subject to the conditions provided for therein;
WHEREAS, the Parties desire to terminate the Subscription Agreement in accordance with its terms as set forth below; and
WHEREAS, Paragraph 8(b) of the Subscription Agreement provides for the termination of the Subscription Agreement upon mutual written agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the adequacy and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1. In accordance with the terms of the Subscription Agreement, the Parties agree that effective immediately as of the date hereof, the Subscription Agreement is hereby terminated in its entirety without any further action by any Party. The Parties further agree that upon termination the Subscription Agreement shall be void and of no further force and effect, and all rights and obligations of the Parties thereunder shall terminate without any further liability on the part of any Party in respect thereof.
2. SME acknowledges and agrees that in accordance with Paragraph 8 of the Subscription Agreement, all monies paid by the SME to MCAE, if any, in connection the Subscription Agreement have been returned to SME.
3. This Agreement shall be governed by and construed under the laws of the State of Delaware without regard to its conflict of laws principles.
4. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
| Mountain Crest Acquisition Corp. III | SME Investment Group Co., Ltd | |
| /s/ Suying Liu | /s/ Ting Jin Xiong | |
| Suying Liu | Ting Jin Xiong | |
| Chief Executive Officer | Chairman of the Board |