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
Date
of Report (Date of earliest event reported): April 21, 2022
East
Stone Acquisition Corporation
(Exact
name of registrant as specified in its charter)
British
Virgin Islands |
|
001-39233 |
|
N/A |
(State
or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
25
Mall Road, Suite 330
Burlington,
MA 01803
(Address
of principal executive offices, including zip code)
Registrant’s
telephone number, including area code: (781) 202 9128
Not
Applicable
(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 (17 CFR 230.425) |
| ☐ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which
registered |
Units,
each consisting of one Ordinary Share, one Right and one Warrant |
|
ESSCU |
|
The
Nasdaq Stock Market LLC |
Ordinary
Shares, no par value |
|
ESSC |
|
The
Nasdaq Stock Market LLC |
Rights,
exchangeable into one-tenth of one Ordinary Share |
|
ESSCR |
|
The
Nasdaq Stock Market LLC |
Warrants,
each exercisable for one-half of one Ordinary Share, each whole Ordinary Share exercisable for $11.50 per share |
|
ESSCW |
|
The
Nasdaq Stock Market LLC |
Item 1.01
Entry Into A Material Definitive Agreement.
BUSINESS
COMBINATION AGREEMENT
This
section describes the material provisions of the Business Combination Agreement (as defined below) but does not purport to describe all
of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of the Business Combination
Agreement, a copy of which is attached hereto as Exhibit 2.1. Unless otherwise defined herein, the capitalized terms used below are defined
in the Business Combination Agreement.
General
Description of the Business Combination Agreement
On
April 15, 2022, East Stone Acquisition Corporation, a British Virgin Islands business company (“East Stone”
or the “Purchaser”), entered into a Business Combination Agreement (the “Business Combination Agreement”)
with Navy Sail International Limited, a British Virgin Islands company, in the capacity as the representative of East Stone and the shareholders
of East Stone immediately prior to Closing from and after the Closing (the “Purchaser Representative”), NWTN
Inc., an exempted company incorporated with limited liability in the Cayman Islands (the “Pubco”), Muse Merger
Sub I Limited, an exempted company incorporated with limited liability in the Cayman Islands and a wholly-owned subsidiary of the Pubco
(the “First Merger Sub”), Muse Merger Sub II Limited, a British Virgin Islands business company and a wholly-owned
subsidiary of Pubco (the “Second Merger Sub”), and ICONIQ Holding Limited, an exempted company incorporated
with limited liability in the Cayman Islands (the “Company”).
Pursuant
to the Business Combination Agreement, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated
by the Business Combination Agreement (the “Closing”), (a) the First Merger Sub will merge with and into the
Company (the “First Merger”), with the Company surviving the First Merger as a wholly-owned subsidiary of Pubco
and the outstanding shares of the Company being converted into the right to receive shares of Pubco; and (b) the Second Merger Sub will
merge with and into East Stone (the “Second Merger”, and together with the First Merger, the “Mergers”),
with East Stone surviving the Second Merger as a wholly-owned subsidiary of the Pubco and the outstanding securities of East Stone being
converted into the right to receive substantially equivalent securities of the Pubco (the Mergers together with the other transactions
contemplated by the Business Combination Agreement and other ancillary documents, the “Transactions”).
Consideration
Under
the Business Combination Agreement, the Aggregate Merger Consideration Amount to be paid to the shareholders of the Company is $2,500,000,000
and will be paid entirely in shares, comprised of newly issued ordinary shares of the Pubco, with each share valued at the Per Share
Price.
As
a result of the Mergers, (a) each of the Class A ordinary shares of the Company that are issued and outstanding immediately prior to
the First Merger Effective Time will be cancelled and converted into (i) the right to receive 90% of such number of Class A ordinary
shares of the Pubco equal to the Exchange Ratio, and (ii) the contingent right to receive 10% of such number of Class A ordinary shares
of the Pubco equal to the Exchange Ratio in accordance with the Business Combination Agreement. Each Class B ordinary share of the Company
that is issued and outstanding immediately prior to the First Merger Effective Time will be cancelled and converted into the right to
receive the number of Class B ordinary shares of the Pubco equal to the Exchange Ratio; (b) each ordinary share of the Purchaser that
is issued and outstanding immediately prior to the Effective Time shall be cancelled and converted automatically into the right to receive
one Pubco Class B ordinary share. Each of outstanding Purchaser Public Warrant and Purchaser Private Warrant shall be converted into
one Pubco Public Warrant and one Pubco Private Warrant, respectively. Each issued and outstanding Purchaser Right shall be automatically
converted into one-tenth of one Pubco Class B ordinary share.
For
the purposes of the Business Combination Agreement, the following terms shall have the meanings set forth below:
“Exchange
Ratio” means means (i) the Company Merger Shares as of the First Merger Effective Time divided by (ii) the total number
of Class A and Class B ordinary shares of the Company.
“Company
Merger Shares” means a number of Pubco shares equal to the quotient determined by dividing (a) the Aggregate Merger Consideration
Amount by (b) the “Per Share Price”.
“Per
Share Price” means the lower of (i) $10.26 (as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations
and the like after the Closing) or (ii) the Redemption Price.
“Redemption
Price” means an amount equal to the price at which each share of Purchaser ordinary share is redeemed or converted pursuant
to the Redemption (as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing).
Representations
and Warranties
The
Business Combination Agreement contains a number of representations and warranties made by the parties as of the date of such agreement
or other specific dates solely for the benefit of certain of the parties to the Business Combination Agreement, which in certain cases
are subject to specified exceptions and materiality, Material Adverse Effect (as defined below), knowledge and other qualifications contained
in the Business Combination Agreement or in information provided pursuant to certain disclosure schedules to the Business Combination
Agreement. “Material Adverse Effect” as used in the Business Combination Agreement means with respect to any
specified person or entity, any fact, event, occurrence, change or effect that has had or would reasonably be expected to have, individually
or in the aggregate, a material adverse effect on the business, assets, liabilities, results of operations or condition (financial or
otherwise) of such person and its subsidiaries, taken as a whole, or the ability of such person or any of its subsidiaries on a timely
basis to consummate the transactions contemplated by the Business Combination Agreement or the Ancillary Documents to which it is a party
or bound or to perform its obligations hereunder or thereunder, in each case subject to certain customary exceptions. The representations
and warranties made by the parties are customary for transactions similar to the Transactions.
In
the Business Combination Agreement, the Company made certain customary representations and warranties to East Stone, including among
others, related to the following: (1) corporate matters, including due organization, existence and good standing; (2) authority and binding
effect relative to execution and delivery of the Business Combination Agreement and other ancillary documents; (3) capitalization; (4)
subsidiaries; (5) governmental approvals; (6) non-contravention; (7) financial statements; (8) absence of certain changes; (9) compliance
with laws; (10) Company permits; (11) litigation; (12) material contracts; (13) intellectual property; (14) taxes and returns; (15) real
property; (16) personal property; (17) title to and sufficiency of assets; (18) employee matters; (19) benefit plans; (20) environmental
matters; (21) transactions with related persons; (22) insurance; (23) top suppliers; (24) certain business practices; (25) Investment
Company Act; (26) finders and brokers; (27) information supplied; (28) independent investigation; and (29) exclusivity of representations
and warranties.
In
the Business Combination Agreement, East Stone made certain customary representations and warranties to the Company and the Pubco, including
among others, related to the following: (1) corporate matters, including due organization, existence and good standing; (2) authority
and binding effect relative to execution and delivery of the Business Combination Agreement and other ancillary documents; (3) governmental
approvals; (4) non-contravention; (5) capitalization; (6) the Securities and Exchange Commission (the “SEC”)
filings, East Stone financials, and internal controls; (7) absence of certain changes; (8) compliance with laws; (9) actions, orders
and permits; (10) taxes and returns; (11) employees and employee benefit plans; (12) properties; (13) material contracts; (14) transactions
with affiliates; (15) Investment Company Act and the JOBS Act; (16) finders and brokers; (17) certain business practices; (18) insurance;
(19) information supplied; (20) independent investigation; (21) the trust account; (22) registration and listing; and (23) termination
of prior merger agreements.
In
the Business Combination Agreement, the Pubco, the First Merger Sub and the Second Merger Sub made customary representations and warranties
to East Stone, including among others, related to the following: (1) organization and good standing; (2) authority and binding effect
relative to execution and delivery of the Business Combination Agreement and other ancillary documents; (3) governmental approvals; (4)
non-contravention; (5) capitalization; (6) activities of the Pubco, the First Merger Sub and the Second Merger Sub; (7) finders and brokers;
(8) Investment Company Act; (9) information supplied; (10) independent investigation; and (11) exclusivity of representations and warranties.
None
of the representations and warranties of the parties shall survive the Closing except for certain representations and warranties of East
Stone concerning its aggregate liabilities and prior merger agreements, which shall survive until the first anniversary of the Closing
Date. The Losses incurred as a result of the breach of such surviving warranties will be indemnified through the issuance of certain
Pubco Shares at no consideration.
Covenants
of the Parties
Each
party agreed in the Business Combination Agreement to use its commercially reasonable efforts to effect the Closing. The Business Combination
Agreement also contains certain customary covenants by each of the parties during the period between the signing of the Business Combination
Agreement and the earlier of the Closing or the termination of the Business Combination Agreement in accordance with its terms, including
covenants regarding: (1) the provision of access to their properties, books and personnel; (2) the operation of their respective businesses
in the ordinary course of business; (3) provision of financial statements of Target Companies; (4) East Stone’s public filings;
(5) “no shop” obligations (which will commence from the initial confidential or public submission of the Registration Statement
to the SEC and exceptions; (6) no insider trading; (7) notifications of certain breaches, consent requirements or other matters; (8)
efforts to consummate the Closing and obtain third party and regulatory approvals and efforts to cause the Pubco to maintain its status
as a “foreign private issuer” under the U.S. Securities Exchange Act of 1934 Rule 3b-4; (9) further assurances; (10) public
announcements; (11) confidentiality; (12) indemnification of directors and officers and tail insurance; (13) use of trust proceeds after
the Closing; (14) efforts to support a private placement or backstop arrangements, if sought; (15) the loan to be granted by the Company
to East Stone if the Extension of East Stone is approved; (16) intended tax treatment of the Mergers; (17) a cash incentive payable to
each of the current holders of the Company’s shares (the “Sellers”) after the Closing; (18) additional
review by East Stone of information regarding the Target Companies (the “Additional Review”).
The
parties also agreed to take all necessary actions to cause the Pubco’s board of directors immediately after the Closing to consist
of a board of seven directors comprised of: (i) two persons that are designated by East Stone prior to the Closing as independent directors;
and (ii) five persons that are designated by the Company prior to the Closing.
East
Stone and the Pubco also agreed to jointly prepare, and the Pubco shall file with the SEC, a registration statement on Form S-4 or F-4
(as amended, the “Registration Statement”) in connection with the registration under the Securities Act of
1933, as amended (the “Securities Act”) of the issuance of securities of Pubco to the holders of the ordinary
shares, rights and warrants of the Purchaser and the Company and containing a proxy statement/prospectus for the purpose of soliciting
proxies from the shareholders of East Stone for the matters relating to the Transactions to be acted on at the special meeting of the
shareholders of East Stone and providing such shareholders an opportunity to participate in the redemption of their public shares of
East Stone upon the Closing (the “Redemption”).
Conditions
to Closing
The
obligations of the parties to consummate the Transactions are subject to various conditions, including the following mutual conditions
of the parties unless waived: (i) the approval of the Business Combination Agreement and the Transactions and related matters by the
requisite vote of East Stone’s shareholders; (ii) obtaining material regulatory approvals; (iii) no law or order preventing or
prohibiting the Transactions; (iv) East Stone having at least $5,000,001 in net tangible assets as of the Closing, after giving effect
to the completion of the Redemption and any private investment in public entity (PIPE) financing that has been funded; (v) amendment
by the shareholders of the Pubco of the Pubco’s memorandum and articles of association; (vi) the effectiveness of the Registration
Statement; (vii) appointment of the post-closing directors of the Pubco; and (viii) Nasdaq listing requirements having been fulfilled.
In
addition, unless waived by the Company, the obligations of the Company, the Pubco, the First Merger Sub and the Second Merger Sub to
consummate the Transactions are subject to the satisfaction of the following Closing conditions, in addition to customary certificates
and other closing deliveries: (i) the representations and warranties of East Stone being true and correct on and as of the Closing (subject
to Material Adverse Effect); (ii) East Stone having performed in all material respects its obligations and complied in all material respects
with its covenants and agreements under the Business Combination Agreement required to be performed or complied with by it on or prior
the date of the Closing; (iii) absence of any Material Adverse Effect with respect to East Stone since the date of the Business Combination
Agreement which is continuing and uncured; (iv) receipt by the Company and the Pubco of the Founders Registration Rights Agreement Amendment;
(v) each of the Founder Lock-Up Agreements entered into by and among the Pubco, the Purchaser Representative, the Company, East Stone
and each holder of the Founder Shares shall be in full force and effect as of the Closing; (vi) each of the Sellers shall have received
from Pubco a registration rights agreement covering the merger consideration shares received by the Sellers duly executed by the Pubco;
and (vii) East Stone shall have obtained a written waiver issued in writing by JHD (defined below) concerning the general and full waiver
of the liabilities of East Stone under the JHD Agreement (defined below) and any ancillary documents to the foregoing.
Unless
waived by East Stone, the obligations of East Stone, to consummate the Transactions are subject to the satisfaction of the following
Closing conditions, in addition to customary certificates and other closing deliveries: (i) the representations and warranties of the
Company, the Pubco, the First Merger Sub, and the Second Merger Sub being true and correct on and as of the Closing (subject to Material
Adverse Effect on the Target Companies, taken as a whole); (ii) the Company, the Pubco, the First Merger Sub, and the Second Merger Sub
having performed in all material respects the respective obligations and complied in all material respects with their respective covenants
and agreements under the Business Combination Agreement required to be performed or complied with on or prior the date of the Closing;
(iii) absence of any Material Adverse Effect with respect to the Target Companies (taken as a whole) since the date of the Business Combination
Agreement which is continuing and uncured; (iv) the Non-Competition Agreement and each Seller Lock-Up Agreement shall be in full force
and effect from the Closing; (v) no factual finding in the Addition Review period would result in a failure of condition (i) in this
paragraph to be satisfied, or East Stone has not delivered a notice to the Company within the Addition Review period setting forth such
finding, or such failure is cured within 20 days after such notice from East Stone; and (vi) receipt by East Stone of the Founders Registration
Rights Agreement Amendment duly executed by the Pubco.
Termination
The
Business Combination Agreement may be terminated at any time prior to the Closing by either East Stone or the Company if the Closing
does not occur by August 24, 2022 or such other date as may be extended for only one time pursuant to the Business Combination Agreement.
The
Business Combination Agreement may also be terminated under certain other customary and limited circumstances at any time prior the Closing,
including, among other reasons: (i) by mutual written consent of East Stone and the Company; (ii) by either East Stone or the Company
if a governmental authority of competent jurisdiction shall have issued an order or taken any other action permanently restraining, enjoining
or otherwise prohibiting the Transactions, and such order or other action has become final and non-appealable; (iii) by the Company for
East Stone’s uncured breach of the Business Combination Agreement, such that the related Closing condition would not be met; (iv)
by East Stone for the uncured breach of the Business Combination Agreement by the Company, the Pubco, the First Merger Sub, or the Second
Merger Sub, such that the related Closing condition would not be met; (v) by either East Stone or the Company if East Stone holds its
shareholder meeting to approve the Business Combination Agreement and the Transactions, and such approval is not obtained; (vi) by the
Company in accordance with the “no shop” provision; (vii) by East Stone only within 15 days following the delivery of the
Final EY Report if such report satisfies the description set forth in the Business Combination Agreement.
If
the Business Combination Agreement is terminated, all further obligations of the parties under the Business Combination Agreement (except
for certain obligations related to confidentiality, effect of termination, fees and expenses, trust fund waiver, miscellaneous and definitions
to the foregoing) will terminate, no party to the Business Combination Agreement will have any further liability to any other party thereto
except for liability for fraud or for willful breach of the Business Combination Agreement prior to termination, and the Note (as defined
below) and any extension loan provided by the Company to East Stone will become immediately due and payable.
Trust
Account Waiver
The
Company, the Pubco, the First Merger Sub and the Second Merger Sub have agreed that they and their affiliates will not have any right,
title, interest or claim of any kind in or to any monies in East Stone’s trust account held for its public shareholders, and have
agreed not to, and waived any right to, make any claim against the trust account (including any distributions therefrom).
Related
Agreements and Documents
Lock-Up
Agreements
Simultaneously
with the execution of the Business Combination Agreement, the Pubco, the Purchaser Representative, the Company and East Stone have entered
into lock-up agreements with certain holders of the Founder Shares and with certain Sellers. These lock-up agreements provide for a lock-up
period commencing on the Closing Date and ending: (a) with respect to shares held by the controlling shareholder of the Company, (x)
12-month anniversary of the Closing Date with respect to 50% of such shares, (y) 18-month anniversary of the Closing Date with respect
to 25% of such shares, (z) 24-month anniversary of the Closing Date with respect to 25% of such shares, and (b) with respect to the shares
held by certain Founders and certain other Sellers, (x) 6-month anniversary of the Closing Date with respect to 30% of such shares, and
(y) 1-year anniversary of the Closing Date with respect to 70% of such shares.
Shareholder
Support Agreement
Simultaneously
with the execution of the Business Combination Agreement, East Stone, the Company, and certain shareholders of the Company have entered
into a Shareholder Support Agreement (the “Shareholder Support Agreement”), pursuant to which, among other
things, the shareholders of the Company have agreed (a) to support the adoption of the Business Combination Agreement and the approval
of the Transactions, subject to certain customary conditions, and (b) not to transfer any of their subject shares (or enter into any
arrangement with respect thereto), subject to certain customary conditions. The form of Shareholder Support Agreement is attached to
this Form 8-K as Exhibit 10.2.
Insider
Letter Amendment
Simultaneously
with the execution of the Business Combination Agreement, East Stone, the Company, the Purchaser Representative, Double Ventures Holdings
Limited (the “Sponsor”), the Pubco, Xiaoma (Sherman) Lu and Chunyi (Charlie) Hao have entered into an amendment
(the “Insider Letter Amendment”) to that certain letter agreement, dated February 19, 2020 (the “Insider
Letter”), by and among East Stone, the Sponsor and the directors, officers or other initial shareholders of East Stone
named therein, pursuant to which the Pubco is added as a Party to the Insider Letter, and the lock-up period set forth in the Insider
Letter, as applied to the Primary Initial Shareholders (as defined therein) with respect to their Founder Shares after Closing, was amended
to be identical to the lock-up period set forth in the lock up agreement for the Founders. The executed Insider Letter Amendment is attached
to this Form 8-K as Exhibit 10.3.
The
Business Combination Agreement contains representations, warranties and covenants that the respective parties made to each other as of
the date of such agreement or other specific dates. The assertions embodied in those representations, warranties, covenants and agreements
were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed
to by the parties in connection with negotiating such agreement. The Business Combination Agreement has been filed to provide investors
with information regarding its terms, but it is not intended to provide any other factual information about East Stone, the Company or
any other party to the Business Combination Agreement. In particular, the representations and warranties, covenants and agreements contained
in the Business Combination Agreement, which were made only for purposes of such agreement and as of specific dates, were solely for
the benefit of the parties to the Business Combination Agreement, may be subject to limitations agreed upon by the contracting parties
(including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the
Business Combination Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable
to the contracting parties that differ from those applicable to investors and reports and documents filed with the SEC. Investors should
not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual
state of facts or condition of any party to the Business Combination Agreement. In addition, the representations, warranties, covenants
and agreements and other terms of the Business Combination Agreement may be subject to subsequent waiver or modification. Moreover, information
concerning the subject matter of the representations and warranties and other terms may change after the date of the Business Combination
Agreement, which subsequent information may or may not be fully reflected in East Stone’s public disclosures.
The
form of the lock-up agreements, the form of shareholder support agreement, and the executed Insider Letter Amendment are filed with this
Current Report on Form 8-K as Exhibits 10.1, 10.2, and 10.3 respectively, and are incorporated herein by reference, and the foregoing
descriptions of the lock-up agreements, the shareholder support agreement, and the Insider Letter Amendment are qualified in their entirety
by reference thereto.
PROMISSORY
NOTE
In
connection with the transactions contemplated by the Business Combination Agreement, the Company issued to East Stone an unsecured promissory
note effective upon the execution thereof (the “Note”) of up to an aggregate amount of $1,000,000, which funds
will solely be used to pay certain third party service fees and expenses of East Stone in connection with the Business Combination. The
first tranche of the Note of $300,000 will be disbursed to East Stone within five calendar days of the execution of the Business Combination
Agreement, and the second tranche of $700,000 will be drawn down and paid directly to East Stone’s third-party service providers
in connection with the consummation of the Transactions as such expenses are incurred. The Note bears no interest and will be due and
payable (subject to the waiver against trust provisions) on the earlier of (i) the one year anniversary of the date of disbursing the
first tranche of the Note, (ii) the date of closing of a business combination between East Stone and a third party other than the Company,
(iii) the date of closing of the transactions contemplated by the Business Combination Agreement, (iv) the date of the occurrence of
an Event of Default, and (v) the date of termination of the Business Combination Agreement. The Note may be repaid, at the Company’s
discretion, (i) in cash or (ii) in the East Stone’s ordinary shares, based on a conversion price of $10.26 per share, or, if lower,
the then-applicable redemption price of East Stone’s public shares, subject to the terms of the Business Combination Agreement.
The
Note was issued pursuant to an exemption from registration contained in Section 4(a)(2) of the Securities Act.
For
the purposes of the Note, the following term shall have the meaning set forth below:
“Event
of Default” means (i) failure by East Stone to pay the principal amount or any portion thereof when due; (ii) the commencement
by East Stone of a voluntary case under any applicable bankruptcy or similar law; or (iii) the entry of a decree or order in respect
of East Stone in an involuntary case under any applicable bankruptcy or similar law.
A
copy of the Note is filed as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated herein by reference. The disclosures
set forth in this Item 1.01 are intended to be summaries only and are qualified in their entirety by reference to the Note.
PIPE
TRANSACTION
In
connection with the execution of the Business Combination Agreement, on April 21, 2022, East Stone and the Pubco have entered into a
subscription agreement (the “PIPE Subscription Agreement”) with an investor (the “PIPE Investor”),
pursuant to which, among other things, the Pubco has agreed to issue and sell to the PIPE Investor, and the PIPE Investor has agreed
to subscribe for and purchase, certain ordinary shares of the Pubco for a purchaser price at the Per Share Price and at an aggregate
purchase price of $200,000,000, in a private placement (the “PIPE”).
The
PIPE Subscription Agreement contains customary representations and warranties of each of East Stone, Pubco and the PIPE Investor, and
customary conditions to closing, including the consummation of the business combination between East Stone and the Company. The purpose
of the PIPE is to raise additional capital for use by the combined company following the Closing.
The
securities sold in connection with the PIPE were sold under the exemption from registration provided by Section 4(a)(2) of the Securities
Act.
A
form of the PIPE Subscription Agreement is filed as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference.
The disclosures set forth in this Item 1.01 are intended to be summaries only and are qualified in their entirety by reference to the
form of the PIPE Subscription Agreement.
Item
1.02 Termination of a Material Definitive Agreement.
As
previously disclosed, East Stone has entered into that certain Second Amended and Restated Business Combination Agreement, dated October
7, 2021 (as amended, the “JHD Agreement”) with JHD Holdings (Cayman) Limited, a Cayman Islands company (“JHD”),
JHD Technologies Limited (“JHD Pubco”), Yellow River MergerCo Limited (“JHD Merger Sub”),
a British Virgin Islands company and a wholly-owned subsidiary of JHD Pubco, the Purchaser Representative, Yellow River (Cayman) Limited,
a Cayman Islands company, each of the holders of JHD’s capital shares, and Double Ventures Holdings Limited, a British Virgin Islands
business company.
As
previously disclosed in the current report on Form 8-K of East Stone on April 18, 2022, East Stone has terminated the JHD Agreement.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
disclosure contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
Item
3.02 Unregistered Sale of Equity Securities
The
disclosure set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.
Item
8.01 Other Events
On
April 21, 2022, East Stone issued a press release announcing the execution of the Business Combination Agreement, which corrects an inadvertent
error with respect to the Company’s enterprise value and replaces the press release issued by East Stone on April 16, 2022. A copy
of the updated press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01
Financial Statements and Exhibits.
(d)
Exhibits
| * | The
exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish
supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. |
ADDITIONAL
INFORMATION
The
Pubco intends to file with the SEC, a Registration Statement (as may be amended), which will include a preliminary proxy statement of
East Stone and a prospectus in connection with the proposed Transactions involving East Stone, the Purchaser Representative, the Pubco,
Muse Merger Sub I Limited, Muse Merger Sub II Limited and the Company pursuant to the Business Combination Agreement. The definitive
proxy statement and other relevant documents will be mailed to shareholders of East Stone as of a record date to be established for voting
on East Stone’s proposed Transactions with the Company. SHAREHOLDERS OF EAST STONE AND OTHER INTERESTED PARTIES ARE URGED TO READ,
WHEN AVAILABLE, THE PRELIMINARY PROXY STATEMENT, AND AMENDMENTS THERETO, AND THE DEFINITIVE PROXY STATEMENT IN CONNECTION WITH EAST STONE’S
SOLICITATION OF PROXIES FOR THE SPECIAL MEETING OF ITS SHAREHOLDERS TO BE HELD TO APPROVE THE TRANSACTIONS BECAUSE THESE DOCUMENTS WILL
CONTAIN IMPORTANT INFORMATION ABOUT EAST STONE, THE COMPANY, PUBCO AND THE TRANSACTIONS. Shareholders will also be able to obtain copies
of the Registration Statement and the proxy statement/prospectus, without charge, once available, on the SEC’s website at www.sec.gov
or by directing a request to East Stone by contacting its Chief Financial Officer, Chunyi (Charlie) Hao, c/o East Stone Acquisition Corporation,
25 Mall Road, Suite 330, Burlington, MA 01803, at (781) 202-9128 or at hao@estonecapital.com.
DISCLAIMER
This
report and the exhibits hereto shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall
there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration
or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act.
NO
ASSURANCES
There
can be no assurance that the proposed Transactions will be completed, nor can there be any assurance, if the Transactions are completed,
that the potential benefits of combining the companies will be realized. The description of the Transactions contained herein is only
a summary and is qualified in its entirety by reference to the definitive agreements relating to the Transactions, copies of which have
been filed by East Stone with the SEC as exhibits to this report.
PARTICIPANTS
IN THE SOLICITATION
The
Pubco, East Stone and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies
from the shareholders of East Stone in connection with the Transactions. Information regarding the officers and directors of East Stone
is set forth in East Stone’s annual report on Form 10-K, which was filed with the SEC on April 15, 2022. Additional information
regarding the interests of such potential participants will also be included in the Registration Statement (and will be included in the
definitive proxy statement/prospectus for the Transactions) and other relevant documents filed with the SEC.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
The
information in this report includes “forward-looking statements” within the meaning of the “safe harbor” provisions
of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words
such as “estimate,” “plan,” “project,” “forecast,” “intend,” “may,”
“will,” “expect,” “continue,” “should,” “would,” “anticipate,”
“believe,” “seek,” “target,” “predict,” “potential,” “seem,”
“future,” “outlook” or other similar expressions that predict or indicate future events or trends or that are
not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking
statements include, but are not limited to, (1) statements regarding estimates and forecasts of financial and performance metrics and
projections of market opportunity and market share; (2) references with respect to the anticipated benefits of the proposed Transactions
and the projected future financial performance of East Stone and the Company’s operating companies following the proposed Transactions;
(3) changes in the market for the Company’s products and services and expansion plans and opportunities; (4) the Company’s
unit economics; (5) the sources and uses of cash of the proposed Transactions; (6) the anticipated capitalization and enterprise value
of the combined company following the consummation of the proposed Transactions; (7) the projected technological developments of the
Company and its competitors; (8) anticipated short- and long-term customer benefits; (9) current and future potential commercial and
customer relationships; (10) the ability to manufacture efficiently at scale; (11) anticipated investments in research and development
and the effect of these investments and timing related to commercial product launches; and (12) expectations related to the terms and
timing of the proposed Transactions. These statements are based on various assumptions, whether or not identified in this report, and
on the current expectations of the Company’s and East Stone’s management and are not predictions of actual performance. These
forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by
any 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 the Company and East Stone. These forward-looking statements are subject to a number of risks and uncertainties, including the occurrence
of any event, change or other circumstances that could give rise to the termination of the Business Combination Agreement; the risk that
the Transactions disrupt current plans and operations as a result of the announcement and consummation of the Transactions described
herein; the inability to recognize the anticipated benefits of the Transactions; the lack of a third-party fairness opinion in determining
whether or not to pursue the proposed Transactions; the ability to obtain or maintain the listing of the Pubco’s securities on
The Nasdaq Stock Market, following the Transactions, including having the requisite number of shareholders; costs related to the Transactions;
changes in domestic and foreign business, market, financial, political and legal conditions; risks relating to the uncertainty of the
projected financial information with respect to the Company; the Company’s ability to successfully and timely develop, manufacture,
sell and expand its technology and products, including implement its growth strategy; the Company’s ability to adequately manage
any supply chain risks, including the purchase of a sufficient supply of critical components incorporated into its product offerings;
risks relating to the Company’s operations and business, including information technology and cybersecurity risks, failure to adequately
forecast supply and demand, loss of key customers and deterioration in relationships between the Company and its employees; the Company’s
ability to successfully collaborate with business partners; demand for the Company’s current and future offerings; risks that orders
that have been placed for the Company’s products are cancelled or modified; risks related to increased competition; risks relating
to potential disruption in the transportation and shipping infrastructure, including trade policies and export controls; risks that the
Company is unable to secure or protect its intellectual property; risks of product liability or regulatory lawsuits relating to the Company’s
products and services; risks that the post-combination company experiences difficulties managing its growth and expanding operations;
the uncertain effects of the COVID-19 pandemic and certain geopolitical developments; the inability of the parties to successfully or
timely consummate the proposed Transactions, including the risk that any required shareholder or regulatory approvals are not obtained,
are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the
proposed Transactions; the outcome of any legal proceedings that may be instituted against the Company, East Stone or Pubco or other
following announcement of the proposed Transactions and transactions contemplated thereby; the ability of the Company to execute its
business model, including market acceptance of its planned products and services and achieving sufficient production volumes at acceptable
quality levels and prices; technological improvements by the Company’s peers and competitors; and those risk factors discussed
in documents of Pubco and East Stone filed, or to be filed, with the SEC. If any of these risks materialize or our assumptions prove
incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional
risks that neither East Stone nor the Company presently know or that East Stone and the Company currently believe are immaterial that
could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements
reflect East Stone’s and the Company’s expectations, plans or forecasts of future events and views as of the date of this
report. East Stone and the Company anticipate that subsequent events and developments will cause East Stone’s and the Company’s
assessments to change. However, while East Stone and the Company may elect to update these forward-looking statements at some point in
the future, East Stone and the Company specifically disclaim any obligation to do so. Readers are referred to the most recent reports
filed with the SEC by East Stone. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak
only as of the date made, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new
information, future events or otherwise.
SIGNATURE
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.
|
East
Stone Acquisition Corporation |
|
|
|
Date:
April 21, 2022 |
By: |
/s/
Xiaoma (Sherman) Lu |
|
|
Name: |
Xiaoma
(Sherman) Lu |
|
|
Title: |
Chief Executive Officer |
11
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