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
April 24, 2024
Date of Report (Date of earliest event reported)
CETUS CAPITAL ACQUISITION CORP.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-41609 | 88-2718139 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
Floor 3, No. 6, Lane 99 Zhengda Second Street, Wenshan District Taipei, Taiwan, R.O.C. |
11602 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: +886 920518827
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:
| ☒ | 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 Symbols | Name of each exchange on which registered | ||
| Warrants included as part of the Units | CETUW | The Nasdaq Stock Market LLC | ||
| Rights included as part of the Units | CETUR | 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 ☒
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.
Amendment of Business Combination Agreement
As previously disclosed in a Current Report on Form 8-K that Cetus Capital Acquisition Corp. (the “Company” or “Cetus”) filed with the Securities and Exchange Commission (the “SEC”) on June 26, 2023, on June 20, 2023, the Company entered into a Business Combination Agreement (as amended, restated, supplemented or modified from time to time, the “Business Combination Agreement”, and the transactions contemplated thereby, the “Business Combination”) with MKD Technology Inc., a Taiwan corporation (the “MKD Taiwan”), MKDWELL Limited, a British Virgin Islands company (“MKD BVI”), Ming-Chia Huang, in his capacity as the representative of the shareholders of MKD Taiwan (the “Shareholders’ Representative”), and the other parties thereto.
On April 30, 2024, the parties to the Business Combination Agreement executed and delivered a Fifth Addendum to the Business Combination Agreement (the “Fifth Addendum”) to extend the “Outside Date”, as set forth in the Business Combination Agreement, from April 30, 2024 to June 30, 2024.
The Fifth Addendum is filed as Exhibit 2.1 to this Current Report on Form 8-K and the foregoing description is qualified in its entirety by reference to the full text of the Fifth Addendum.
Satisfaction and Discharge Agreement
On April 24, 2024, the Company, EF Hutton LLC (f/k/a EF Hutton, division of Benchmark Investments, LLC) (“EFH”), MKD Taiwan, MKD BVI and MKDWELL Tech Inc., a British Virgin Islands company (“PubCo”, and together with MKD Taiwan and MKD BVI, the “MKD Parties”) entered into a Satisfaction and Discharge of Indebtedness Pursuant to Underwriting Agreement Dated January 31, 2023 (the “Satisfaction and Discharge Agreement”), pursuant to which, among other things, EFH waived $862,500 of the $1,725,000 cash deferred underwriting commission (the “Deferred Underwriting Commission”) that would otherwise be immediately due and payable to it pursuant to the Underwriting Agreement dated January 31, 2023 by and between the Company and EFH upon the closing of the Business Combination, accepting in lieu thereof (i) a one-time cash payment of $862,500 on or before the closing of the Business Combination and (ii) the issuance of 115,000 ordinary shares of PubCo at $10.00 per share on or before the closing of the Business Combination (the “Ordinary Shares”).
The Satisfaction and Discharge Agreement also provides that, within sixty (60) days of the closing of the Business Combination, the Company, the MKD Parties or their successors-in-interest shall cause the Ordinary Shares issued to EFH pursuant to the Satisfaction and Discharge Agreement to be registered under the Securities Act of 1933, as amended (the “Securities Act”).
If the aggregate volume weighted average price (“VWAP”) of the 115,000 Ordinary Shares that EFH holds as a result of the Satisfaction and Discharge Agreement, as of the effectiveness date of the registration statement for such Ordinary Shares, is lower than $1,150,000 (the “Original Aggregate Share Value”) (the difference between the VWAP value on such date and the Original Aggregate Share Value, the “Difference in Amount”), then the Company, the MKD Parties or their successors-in-interest shall compensate EFH either in cash or issuing additional Ordinary Shares at a new value of Ordinary Shares (the “New Share Price”) in an amount equal to the Difference in Amount on the effectiveness date of the registration statement. If the Company, the MKD Parties and/or their successors in interest decide to compensate EFH the Difference in Amount in issuing additional Ordinary Shares, then the New Share Price shall equal an amount that is the lowest of the VWAP for a period of five (5) trading days immediately prior to the effectiveness date of the registration statement, subject to certain limitations as set forth in the Satisfaction and Discharge Agreement.
If the date that is five (5) trading days prior to the day the Ordinary Shares issued to EFH pursuant to the Satisfaction & Discharge Agreement are eligible for release pursuant to Rule 144 promulgated under the Securities Act, the aggregate VWAP value of such Ordinary Shares is lower than the Original Aggregate Share Value, then the Company, the MKD Parties or their successor in interest shall compensate EFH either in cash or issuing additional Ordinary Shares at the New Share Price in an amount equal to the Difference in Amount on such date. If the Company, the MKD Parties, or their successor in interest decide to compensate EFH for the Difference in Amount in issuing additional Ordinary Shares, then the New Share Price of such additional Ordinary Shares shall equal an amount that is the lowest of the VWAP for a period of five (5) trading days immediately prior to the end of the twelve-month month period immediately following the closing of the Business Combination, subject to certain limitations as set forth in the Satisfaction and Discharge Agreement.
The Satisfaction ad Discharge Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and the foregoing description is qualified in its entirety by reference to the full text of the Satisfaction and Discharge Agreement.
Item 8.01. Other Events.
As previously disclosed in a Current Report on Form 8-K that was filed with the SEC on February 1, 2024, on January 31, 2024, the Company held a special meeting of stockholders (the “Meeting”), at which the Company’s stockholders approved an amendment (the “Extension Amendment”) to the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate its initial business combination from February 3, 2024 up to six (6) one-month extensions to August 3, 2024, provided that an additional amount equal to the lesser of $0.03 per outstanding public share and $50,000 for each month extended is deposited into the Trust Account (as defined below), or such earlier date as determined by the Company’s board of directors (the “Extension”).
As previously disclosed in a Current Report on Form 8-K that was filed with the SEC on February 7, 2024, on February 2, 2024 the Company implemented the Extension by filing the Extension Amendment with the Secretary of State of the State of Delaware and entering into an Amendment No. 1 (the “IMTA Amendment”) of that certain Investment Management Trust Agreement dated as of January 31, 2023 by and between the Company and Continental Stock Transfer & Trust Company (the “Trust Agreement”).
As a result of the Extension and the IMTA Amendment, an additional $50,000.00 must be deposited into the trust account maintained by the Trustee under the Trust Agreement (such account, the “Trust Account”) for each month extended. As of the date of this Current Report on Form 8-K, additional deposits in the aggregate amount of $200,000 have been made into the Trust Account to extend the business combination period until June 3, 2024.
Additional Information and Where to Find It
In connection with the business combination contemplated by the Business Combination Agreement (the “Business Combination”), Cetus and MKDWELL Tech Inc., a British Virgin Islands business company (“Pubco”), have filed relevant materials with the SEC, including a joint prospectus / proxy statement as part of a registration statement on Form F-4 (No. 333-277785) (the “Registration Statement”). The definitive proxy statement / final prospectus contained in the Registration Statement (and related proxy card and other relevant documents) will be mailed to the stockholders as of a record date to be established for voting at the stockholders’ meeting relating to the Business Combination. Stockholders will also be able to obtain copies of the Registration Statement and of the proxy statement / prospectus, without charge, once available, at the SEC’s website at www.sec.gov or by directing a request to: Cetus Capital Acquisition Corp., Attention: Chung-Yi Sun, Chief Executive Officer, Floor 3, No. 6, Lane 99, Zhengda Second Street, Wenshan District, Taipei, Taiwan, R.O.C. 11602. This communication is not a substitute for the Registration Statement, the definitive proxy statement / final prospectus or any other document that Cetus will send to its stockholders in connection with the Business Combination.
Investors and security holders of Cetus are urged to read these materials (including any amendments or supplements thereto) and any other relevant documents in connection with the Business Combination that Cetus may file with the SEC when they become available because they will contain important information about the Business Combination and the parties to the Business Combination Agreement.
Participants in the Solicitation
Cetus, Pubco, MKD Taiwan, MKD BVI and each of the other parties to the Business Combination Agreement, and each of their respective directors, executive officers, other members of management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies of the stockholders of Cetus in connection with the Business Combination. Investors and security holders may obtain more detailed information regarding the names and interests in the Business Combination of the directors and officers of Cetus in Cetus’ filings with the SEC, including the Registration Statement, which will include the proxy statement of Cetus for the Business Combination, and such information and names of the directors and executive officers of Pubco following the Business Combination, as well as other pertinent information relating to MKD Taiwan will also be in the Registration Statement, which will include the proxy statement of Cetus for the Business Combination.
Forward Looking Statements
Certain statements made herein that are not historical facts are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the expectations of Cetus and the other parties to the Business Combination Agreement with respect to the proposed business combination involving Cetus and the other parties to the Business Combination Agreement, including statements regarding the benefits of the transaction, the anticipated timing of the transaction, the implied valuation of MKD Taiwan, the products and services offered by MKD Taiwan and the markets in which it operates, and the projected future results of the combined company. Words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions are intended to identify such 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 significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the control of Cetus and MKD Taiwan and are difficult to predict. Factors that may cause actual future events to differ materially from the expected results, include, but are not limited to: (i) the risk that the Business Combination may not be completed in a timely manner or at all, which may adversely affect the price of the securities of Cetus, (ii) the risk that the transaction may not be completed by Cetus’ business combination deadline, even if such deadline is extended by its sponsor, (iii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the Business Combination Agreement by the stockholders of Cetus, (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the Business Combination Agreement, (v) the receipt of an unsolicited offer from another party for an alternative transaction that could interfere with the proposed Business Combination, (vi) the effect of the announcement or pendency of the transaction on MKD Taiwan’s business relationships, performance and business generally, (vii) the inability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition and the ability of the post-combination company to grow and manage growth profitability and retain its key employees, (viii) costs related to the proposed Business Combination, (ix) the outcome of any legal proceedings that may be instituted against any party to the Business Combination Agreement following the announcement of the proposed Business Combination, (x) the ability to maintain the listing of the securities of Cetus on Nasdaq, (xi) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed Business Combination, and identify and realize additional opportunities, (xii) the risk of downturns and the possibility of rapid change in the highly competitive industry in which MKD Taiwan operates, (xiii) the risk that MKD Taiwan and its current and future collaborators are unable to successfully develop and commercialize the products or services of MKD Taiwan, or experience significant delays in doing so, including failure to achieve approval of its products or services by applicable regulatory authorities, (xiv) the risk that MKD Taiwan may never achieve or sustain profitability, (xv) the risk that the combined 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 third-party suppliers and manufacturers are not able to fully and timely meet their obligations, (xvii) the risk of product liability or regulatory lawsuits or proceedings relating to the products and services of MKD Taiwan, (xviii) the risk that MKD Taiwan is unable to secure or protect its intellectual property, (xix) the risk that the securities of the post-combination company will not be approved for listing on Nasdaq or if approved, maintain the listing, and (xx) other risks and uncertainties indicated in the filings that are made from time to time with the SEC by Cetus (including those under the “Risk Factors” sections therein). The foregoing list of factors is not exhaustive. 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 neither Cetus nor any other party to the Business Combination Agreement assumes any obligation, and nor does Cetus or any other party to the Business Combination Agreement intend, to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Disclaimer
This communication is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote in any jurisdiction pursuant to the Business Combination or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. |
Description | |
| 2.1 | Fifth Addendum to the Business Combination Agreement, dated as of April 30, 2024. | |
| 10.1 | Satisfaction and Discharge of Indebtedness Pursuant to Underwriting Agreement Dated January 31, 2023, dated April 24, 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: April 30, 2024 | CETUS CAPITAL ACQUISITION CORP. | |
| By: | /s/ Chung-Yi Sun | |
| Name: | Chung-Yi Sun | |
| Title: | President & CEO | |
Exhibit 2.1
FIFTH ADDENDUM TO THE
BUSINESS COMBINATION AGREEMENT
This Fifth Addendum to the Business Combination Agreement dated as of April 30, 2024 (this “Fifth Addendum”), is entered into by and among Cetus Capital Acquisition Corp., a Delaware corporation (“SPAC”), MKD Technology Inc., a Taiwan corporation with registration number 28408583 (the “Company”), MKDWELL Limited, a company incorporated in the British Virgin Islands with BVI Company Number: 2121160 (“MKD BVI”), MKDWELL Tech Inc., a company incorporated in the British Virgin Islands with BVI Company Number: 2128871, MKDMerger1 Inc., a company incorporated in the British Virgin Islands with BVI Company Number: 2129350, MKDMerger2 Inc., a company incorporated in the British Virgin Islands with BVI Company Number: 2129349, and Ming-Chia Huang, in his capacity as the Company Shareholders’ Representative (the “Shareholders’ Representative”).
WHEREAS, SPAC, the Company, MKD BVI and the Shareholders’ Representative have entered into a Business Combination Agreement dated June 20, 2023 (as amended by that certain First Addendum to the Business Combination Agreement dated as of July 31, 2023, that certain Second Addendum to the Business Combination Agreement dated as of August 10, 2023, that certain Third Addendum to the Business Combination Agreement dated as of November 19, 2023, and that certain Fourth Addendum to the Business Combination Agreement dated as of February 1, 2024, the “Business Combination Agreement”); and
WHEREAS, the parties to the Business Combination Agreement desire to enter into this Fifth Addendum to amend the Business Combination Agreement to change the Outside Date from April 30, 2024 to June 30, 2024.
NOW THEREFORE, the parties, intending to be legally bound, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, agree as follows. Capitalized terms not defined herein shall have the same meanings as assigned in the Business Combination Agreement.
Section 1. Amendment to Section 10.01(b). Section 10.01(b) of the Business Combination Agreement is hereby deleted in its entirety and replaced in its entirety with the following:
“(b) by SPAC or the Company, if the Closing has not occurred on or before June 30, 2024 (the “Outside Date”), unless the absence of such occurrence shall be due to the failure of SPAC, on the one hand, or any Company Party, on the other hand, to materially perform its obligations under this Agreement required to be performed by it on or prior to the Outside Date; or”
Section 2. Miscellaneous.
(a) This Fifth Addendum may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Fifth Addendum delivered by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Fifth Addendum.
(b) In the event of any conflict between the terms of this Fifth Addendum and the terms of the Business Combination Agreement, the terms of this Fifth Addendum shall prevail. To the extent not inconsistent with this Fifth Addendum, the terms of the Business Combination Agreement shall remain in full force and effect.
(c) Section 12.06 of the Business Combination Agreement relating to the governing law, jurisdiction, and waiver of jury trial shall apply to this Fifth Addendum.
(d) Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Business Combination Agreement.
[Remainder of page intentionally left blank; Signature page follows.]
| 1 |
IN WITNESS WHEREOF, the undersigned have executed this Fifth Addendum to the Business Combination Agreement as of the date first written above.
| MKDWELL TECH INC. | ||
| By: | /s/ Ming-Chia Huang | |
| Name: | Ming-Chia Huang | |
| Title: | Sole Director | |
| CETUS CAPITAL ACQUISITION CORP. | ||
| By: | /s/ Chung-Yi Sun | |
| Name: | Chung-Yi Sun | |
| Title: | CEO & President | |
| MKD TECHNOLOGY INC. | ||
| By: | /s/ Ming-Chia Huang | |
| Name: | Ming-Chia Huang | |
| Title: | Chief Executive Officer | |
| MKDWELL LIMITED | ||
| By: | /s/ Ming-Chia Huang | |
| Name: | Ming-Chia Huang | |
| Title: | Director | |
| MKDMERGER1 INC. | ||
| By: | /s/ Ming-Chia Huang | |
| Name: | Ming-Chia Huang | |
| Title: | Sole Director | |
| MKDMERGER2 INC. | ||
| By: | /s/ Ming-Chia Huang | |
| Name: | Ming-Chia Huang | |
| Title: | Sole Director | |
| /s/ Ming-Chia Huang | |
Ming-Chia Huang (in his capacity as the Shareholders’ Representative) |
[Signature page to the Fifth Addendum to the Business Combination Agreement]
Exhibit 10.1
SATISFACTION AND DISCHARGE OF indebtedness pursuant to underwriting agreement dated January 31, 2023
April 24, 2024
This Satisfaction and Discharge of Indebtedness (the “Satisfaction and Discharge”) is made and entered into to be effective as of April 24, 2024, by and between Cetus Capital Acquisition Corp., a Delaware corporation (the “Company”), MKD Technology Inc., a Taiwan corporation (“MKDT”), MKDWELL Limited, a British Virgin Islands company (“MKDW”), and MKDWELL Tech Inc., a British Virgin Islands company (“PubCo”) (collectively, MKDT, MKDW and PubCo, the “MKD Parties”), on the one hand, and EF Hutton LLC (f/k/a EF Hutton, division of Benchmark Investments, LLC) (“EF Hutton”), on the other hand. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Underwriting Agreement (as defined below).
RECITALS
WHEREAS, the Company and EF Hutton are parties to an Underwriting Agreement dated January 31, 2023 (the “Underwriting Agreement”);
WHEREAS, pursuant to Sections 1.3, 3.16 and 3.36.6 of Underwriting Agreement, $1,725,000 (the “Deferred Underwriting Commission”) shall be payable to EF Hutton upon the consummation of the Company’s initial business combination, and the Company agreed that it will cause the Trustee to pay the Deferred Underwriting Commission directly from the Trust Account to EF Hutton.
WHEREAS, on June 20, 2023, the Company and the MKD Parties signed a business combination agreement (the “Business Combination”).
WHEREAS, the Business Combination is scheduled to close on or before August 3, 2024, at which time, the Deferred Underwriting Commission to EF Hutton would be immediately due and payable.
WHEREAS, the Company and the MKD Parties have requested of EF Hutton that in lieu of the Company tendering the full amount of the Deferred Underwriting Commission ($1,725,000) in cash, EF Hutton accept cash and ordinary shares of PubCo as satisfaction of the Deferred Underwriting Commission.
WHEREAS, in lieu of collecting the full amount of the Deferred Underwriting Commission in cash at the time of the closing of the Business Combination, EF Hutton hereby agrees to accept as full satisfaction of the Deferred Underwriting Commission, the specific allocated payments of (1) $862,500 in cash at the time of the closing of the Business Combination (“Closing”) and (2) 115,000 ordinary shares of PubCo (the “Ordinary Shares”), which when multiplied by the $10.00 per share price agreed to between the MKD Parties and EF Hutton (the “Agreed Share Price”) equals $1,150,000 (the “Original Aggregate Share Value”), shall be issued and delivered to EF Hutton at the closing of the Business Combination.
| 1 |
For clarity, this Agreement is not intended to, and shall not serve to, affect, modify or amend the Underwriting Agreement and the Deferred Underwriting Commission unless or until the amounts specified in Sections 1.1A and 1.1B below are paid in full.
ARTICLE I
CONDITIONS TO SATISFACTION AND DISCHARGE
| 1.1 | EF Hutton shall only acknowledge the satisfaction and discharge of the Deferred Underwriting Commission and will only acknowledge that the Company and the MKD Parties’ obligations to pay in cash the Deferred Underwriting Commission under the Underwriting Agreement have been satisfied and discharged, if the below conditions occur: |
| A. | On or before the closing date of the Business Combination, the Company and/or the MKD Parties wire $862,500 to the bank account of EF Hutton; |
| B. | On or before the closing date of the Business Combination, the Company and/or the MKD Parties shall cause to be transferred or issued to EF Hutton (or its designees) 115,000 Ordinary Shares. |
| 1.2 | After the conditions above are satisfied, EF Hutton shall acknowledge the satisfaction and discharge of the Deferred Underwriting Commission, except with respect to Article II below. |
ARTICLE II
POST-SATISFACTION COMPANY COVENANTS AND RIGHTS
| 2.1 | After EF Hutton has acknowledged the satisfaction and discharge of the Deferred Underwriting Compensation, the Company irrevocably covenants to perform the following after execution of this Agreement: |
| A. | Within sixty (60) days from the Business Combination, the Company, the MKD Parties or their successors-in-interest shall cause to be registered under the Securities Act all of the Ordinary Shares that EF Hutton has requested to be registered. |
| i. | Furthermore, if the aggregate VWAP value of the 115,000 Ordinary Shares that EF Hutton holds as a result of this Satisfaction and Discharge, as of the effectiveness date of the registration statement for the Ordinary Shares, is lower than the Original Aggregate Share Value (the difference between the VWAP value on such date and the Original Aggregate Share Value, the “Difference in Amount”), then the Company, the MKD Parties or their successors-in-interest shall compensate EF Hutton either in cash or issuing additional Ordinary Shares at a new value of Ordinary Shares, the (“New Share Price”) in an amount equal to the Difference in Amount on the effectiveness date of the registration statement. If the Company, the MKD Parties and/or their successors in interest decide to compensate EF Hutton for the Difference in Amount in issuing additional Ordinary Shares, then the New Share Price shall equal an amount that is the lowest of the VWAP for a period of five (5) trading days immediately prior to the registration statement effectiveness date, but the parties hereto agree that the Company and the MKD Parties shall also be treated as having discharged all liability relating to the Difference in Amount by issuing an additional 200,000 Ordinary Shares to EF Hutton (for a total of 315,000 Ordinary Shares issued to EF Hutton). The Company will nevertheless proceed to register all or any of the Ordinary Shares EF Hutton has requested to be registered. |
| 2 |
| ii. | Reservation of Shares. The Company, the MKD Parties or their successor in interest, warrant, covenant and agree that the registration statement to be filed to cover the resale of Ordinary Shares, will include the 115,000 Ordinary Shares and an additional 200,000 authorized Ordinary Shares (the “Reserved Amount”) for issuance, in whole or part, in the event 2.1.A.i applies and the Company, the MKD Parties and/or their successors in interest decide to compensate EF Hutton for the Difference in Amount (as defined above) owed to EF Hutton with additional Ordinary Shares. The Company, the MKD Parties or their successors in interest will instruct the Transfer Agent to reserve the Reserved Amount in the name of EF Hutton should the Difference in Amount become payable to EF Hutton using additional Ordinary Shares. The Company, the MKD Parties and/or their successor in interest, represent and warrant and covenant and agree that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. |
| B. | Alternatively, if after twelve months from the Business Combination (the “Twelve-Month Period Date”), the Company, the MKD Parties or their successor-in-interest fail to register any of EF Hutton’s Ordinary Shares on an effective registration statement, then the Company, the MKD Parties or their successor-in-interest will confirm in writing that such unregistered Ordinary Shares are freely sellable under Rule 144. No later than the Twelve-Month Period Date, the Company, the MKD Parties, or their successor in interest shall provide EF Hutton with a valid legal opinion that its Ordinary Shares are eligible for resale pursuant to Rule 144. |
| i. | Furthermore, if the date that is five (5) trading days prior to the day such Ordinary Shares are eligible for release pursuant to Rule 144, the aggregate VWAP value of such Ordinary Shares that EF Hutton holds as a result of this Satisfaction and Discharge, is lower than the Original Aggregate Share Value, then the Company, the MKD Parties or their successor in interest shall compensate EF Hutton either in cash or issuing additional Ordinary Shares at the New Share Price in an amount equal to the Difference in Amount on such date. If the Company, the MKD Parties, or their successor in interest decide to compensate EF Hutton for the Difference in Amount in issuing additional Ordinary Shares, then the New Share Price of such additional Ordinary Shares shall equal an amount that is the lowest of the VWAP for a period of five (5) trading days immediately prior to the end of the Twelve-Month Period Date, but the parties hereto agree that the Company and the MKD Parties shall also be treated as having discharged all liability relating to the Difference in Amount by issuing an additional 200,000 Ordinary Shares to EF Hutton. |
| 3 |
| ii. | Reservation of Shares. In the event that the Company, the MKD Parties, or their successor in interest select to issue additional Ordinary Shares to compensate EF Hutton as set forth in Section 2.1.B.i above, then the Company, the MKD Parties or their successor in interest, warrant, covenant and agree that it will instruct the Transfer Agent to reserve the Reserved Amount in the name of EF Hutton for issuance to cover the Difference in Amount in the event a Difference in Amount owed to EF Hutton. The Company, the MKD Parties and/or their successor in interest, represent and warrant and covenant and agree that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. |
ARTICLE II
MISCELLANEOUS PROVISIONS
3.1 This Satisfaction and Discharge shall be governed by and construed in accordance with the laws of the State of New York.
3.2 This Satisfaction and Discharge may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of which shall together constitute but one and the same instrument.
| 3.3 | The Company, the MKD Parties or their successor-in-interest hereby acknowledge and agree that EF Hutton shall be entitled to all of their rights, protections, indemnities, and immunities in connection with their execution of this Satisfaction and Discharge and the performance of any obligations hereunder or in connection herewith. |
| 3.4 | Other than expressly set forth herein, the Underwriting Agreement, including, but not limited to, Section 3.35 “Right of First Refusal” and Section 5 “Indemnification and Contribution”, shall remain in full force and effect. |
| 3.5 | For purposes of this Agreement, the following terms shall have the following meanings: |
“Principal Market” means The Nasdaq Stock Market.
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization, or other similar transaction during such period.
[Signature page follows.]
| 4 |
IN WITNESS WHEREOF, EF Hutton, on one hand, and the Company and the MKD Parties have caused their names to be hereunto affixed, and this instrument to be signed by their respective authorized officers, all as of the day and year first above written.
| EF HUTTON LLC | ||
| By: | /s/ Phil Wiederlight | |
| Name: | Phil Wiederlight | |
| Title: | COO and Supervisory Principal | |
| CETUS CAPITAL ACQUISITION CORP. | ||
| By: | /s/ Chung-Yi Sun | |
| Name: | Chung-Yi Sun | |
| Title: | Chief Executive Officer | |
| MKD Technology Inc., a Taiwan corporation | ||
| By: | /s/ Ming-Chia Huang | |
| Name: | Ming-Chia Huang | |
| Title: | Chief Executive Officer | |
| MKDWELL Limited, a British Virgin Islands company | ||
| By: | /s/ Ming-Chia Huang | |
| Name: | Ming-Chia Huang | |
| Title: | Director | |
| MKDWELL Tech Inc., a British Virgin Islands company | ||
| By: | /s/ Ming-Chia Huang | |
| Name: | Ming-Chia Huang | |
| Title: | Director | |
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