Item 1.01. Entry into a Material Definitive Agreement.
This section describes the material provisions
of the Merger 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 Merger 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 Merger Agreement.
General Description of the Merger
On June 10, 2021, Venus Acquisition Corporation,
a Cayman Islands exempted company (the “Purchaser” or “Venus”), VIYI Algorithm Inc., a Cayman Islands exempted
company (“Viyi” or the “Company”), Venus Merger Sub Corp., a Cayman Islands exempted company and wholly-owned
subsidiary of the Purchaser (the “Merger Sub”) and WiMi Hologram Cloud Inc., a Cayman Islands company and the legal
and beneficial owner of a majority of the issued and outstanding voting securities of the Company (“Majority Shareholder”),
entered into a Merger Agreement (the "Merger Agreement"). A copy of the Merger Agreement without exhibits
or disclosure schedule is included in this Form 8-K as Exhibit 2.1. WiMi Hologram Cloud, Inc. (NASDAQ: WIMI) holds approximately 73%
of the share capital of Viyi.
Pursuant to the Merger Agreement, upon the terms
and subject to the conditions of the Merger Agreement and in accordance with the Cayman Islands Companies Act (as revised) (the “Cayman
Companies Act”), the parties intend to effect a business combination transaction whereby the Merger Sub will merge with and
into the Company, with the Company being the surviving entity (the Company is hereinafter referred to for the periods from and after the
Merger Effective Time as the “Surviving Corporation”) and becoming a wholly owned Subsidiary of Venus (the “Merger”)
on the terms and subject to the conditions set forth in this Agreement and simultaneously with the Closing Purchaser will change its name
to “MicroAlgo Inc.”
The Board
of Directors of both Venus an Viyi and the stockholders of Viyi have approved the Merger Agreement and the transactions contemplated by
it.
The Merger is expected to close in the third quarter
of 2021, following the receipt of the required approval by Venus’ stockholders and the fulfillment of other customary closing conditions.
Merger Consideration
Pursuant to the Merger Agreement, the merger is
structured as s stock for stock transaction and is intended to be qualified as a tax-free reorganization. The terms of the merger provide
for a valuation of VIYI Algo and its subsidiaries and businesses of $400,000,000. Based upon a per share value of $10.10 per share, the
VIYI Algo stockholders will receive approximately 39,600,000 ordinary shares of Venus which will represent approximately 85% of the combined
outstanding shares following the closing, assuming no redemptions by the Venus stockholders and assuming conversion of the Venus outstanding
rights into 485,000 ordinary shares. As of June 9, 2021, there were 6,050,000 ordinary shares
of Venus issued and outstanding (including 4,600,000 ordinary shares subject to possible redemption).
At the Effective
Time all outstanding options and other convertible securities of Viyi will be cancelled or converted into ordinary shares of Viyi and
exchanged for Venus’ ordinary shares as part of the consideration described above.
Post
Closing Corporate Governance.
Pursuant
to the terms of the Merger Agreement, the parties agreed that the Board of Directors of Venus will be comprised of 5 members, four of
whom will be nominated by VIYI. In order to continue to satisfy Nasdaq Stock Market listing standards, at least 3 of the members of the
Board of Directors will be independent in accordance with Nasdaq listing rules.
Representations and Warranties
The Merger Agreement contains representations
and warranties of each of the parties thereto that are customary for transactions of this type, including with respect to the operations
and financial condition of Venus and Viyi.
In the Merger Agreement, Viyi and WiMi Hologram
Cloud, Inc., as its majority shareholder make certain representations and warranties (with certain exceptions set forth in the disclosure
schedule to the Merger Agreement) to Purchaser Parties relating to the Company on the following aspects: (1) corporate existence and power,
(2) authorization, (3) governmental authorization, (4) non-contravention, (5) capital structure, (6) organizational documents, (7) Subsidiaries,
(8) financial statements, (9) books and records, (10) absence of certain changes, (11) properties, title to the Company’s assets,
(12) litigation, (13) contracts, (14) licenses and permits, (15) compliance with laws, (16) compliance with anti-corruption laws, (17)
intellectual property, (18) employees, (19) employment matters, (20) tax matters, (21) environmental laws, (22) finders’ fees, (23)
status as not an investment company, (24) Affiliate transactions, (25) Proxy/Registration Statement.
In the Merger Agreement, Purchaser Parties make
certain representations and warranties to the Company on the following aspects: (1) corporate existence and power, (2) authorization,
(3) governmental authorization, (4) non-contravention, (5) finders’ fees, (6) issuance of shares, (7) capitalization, (8) information
supplied, (9) trust account, (10) listing on Nasdaq, (11) board approval, (12) Purchaser SEC Documents and financial statements, (13)
litigation, (14) compliance with laws, (15) compliance with anti-corruption and sanction laws, (16) not an investment company, (17) tax
matters, (18) contracts, (19) business activities, (20) registration statement and proxy statement, (21) backstop investment, (22) no
outside reliance. The Purchaser Parties make no representation or warranty on other aspect.
Covenants of the Parties
Each of the parties to the Merger Agreement agrees
to the following covenants:
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From the date of the Merger Agreement to the Closing Date, conduct their respective business only in ordinary
course and not take certain acts without written consent from the other parties.
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From the date of the Merger Agreement to the earlier of the Closing Date and the termination of the Merger
Agreement, the Company and the Purchaser Parties shall and shall cause each of their respective directors, officers, Affiliates, managers,
consultants, employees, representatives and agents not to solicit or approve an Alternative Transaction and inform the others of any Alternative
Proposal.
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From the date of the Merger Agreement to the Closing Date (inclusive), the Company on one hand and the
Purchaser Parties on the other hand shall provide the other party access to information relating to such party’s business.
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Each of the Company on one hand and the Purchaser Parties on the other hand shall notify the other upon
occurrence of certain events.
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As promptly as reasonably practicable after the execution of the Merger Agreement, Purchaser Parties shall
prepare and file a registration statement that includes the proxy statement with the SEC and each of the Purchaser Parties and the Company
will furnish to the other all information concerning itself and its Subsidiaries, officers, directors, managers, shareholders and other
equityholders that may be reasonably requested in connection with such Proxy/Registration Statement or other filing or application required
by Authority in connection with the Transactions.
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Each of the parties will and cause its Subsidiaries to use reasonable best efforts to obtain material
consents of third party required to consummate the Transactions.
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Each of the parties will use reasonable best efforts to take and cause to be done all things necessary
or desirable and cooperate with the others to consummate the Transactions.
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The Company agreed to the following additional
covenants: (1) compliance with laws, (2) delivery of the requisite PCAOB Financials for the quarter ending June 30, 2021 no later than
August 15, 2021, and (3) waive claims against Trust Account money.
The Purchaser Parties agree to the following additional
covenants: (1) from the date of the Merger Agreement through the Effective Time, to ensure Purchaser’s listing on Nasdaq and to
reserve new trading symbol prior to the Effective Time, (2) from the date of the Merger Agreement through the Closing, keep current and
timely file all SEC filings and comply with its reporting obligations, (3) appropriate disbursement of Trust Account funds, (4) election
of Purchaser’s directors and officers in accordance with the composition contemplated under the Merger Agreement, (5) indemnification
and insurance coverage for director and officers of the Company and Purchaser, (6) execution and delivery of backstop investment agreement
(as further described below in this Form 8-K), (7) adopting Section 16 board resolutions, (8) notifying the Company of any shareholder
litigation and (9) delivery of the finalized consideration allocation statement.
In addition, Venus agreed to prepare and file
a proxy/registration statement on Form S-4 with the SEC to provide for (i) approval of the Merger and related transactions contemplated
by the Merger Agreement; (ii) approval by the Venus stockholders of an increase in the authorized share capital to 200,000,000 shares;
(iii) approval of a name change to MicroAlgo Inc.; (iv) the election of new directors in accordance with the Merger Agreement. The proxy/registration
statement will also provide for the registration for resale of the ordinary shares being issued to the Viyi shareholders as part of the
merger consideration, subject to the lock-up restrictions described elsewhere in this Form 8-K.
Conditions to Closing
Consummation of the Closing is conditioned on:
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with respect to all parties: (a) no injunction, (b) no action, (c) effectiveness of the Proxy/Registration
statement and no stop order thereof, (d) Purchaser Shareholders’ Approval and
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with respect to the Purchaser Parties: (a) Company’s performance of its obligations, (b) Company’s
representations and warranties being true and correct, (c) no Company Material Adverse Effect.
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with respect to the Company: (a) Purchaser Parties’ performance of their obligations, (b) Purchaser
Parties’ representations and warranties being true and correct, (c) no Purchaser Material Adverse Effect, (d) Purchaser Parties’
compliance with reporting obligations, (e) listing approval by the Nasdaq Stock Market of the Consideration Shares, (f) election of directors
to Purchaser’s board pursuant to Merger Agreement, (g) Purchaser’s name has changed to “MicroAlgo Inc.” and the
authorized share capital being increased to 200,000,000 ordinary shares, (h) effectiveness of the Form S-4 proxy/registration statement
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Termination
The Merger Agreement may be terminated by either
the Purchaser Parties or the Company if Closing has not occurred by September 30, 2021.
The Purchaser Parties may terminate the Merger
Agreement by written notice to Company if Company has materially breached any covenant, agreement, representations and warranties and
failed to cure such breach within 15 days after notification of breach.
The Company may terminate the Merger Agreement
by written notice to the Purchaser Parties if any Purchaser Party has materially breached any covenant, agreement, representations and
warranties and failed to cure such breach within 15 days after notification of breach.
The Merger Agreement shall become void forthwith
upon termination.
OTHER AGREEMENTS
Registration Rights Agreement
Concurrently with the execution
and delivery of the Merger Agreement, the Purchaser and the Company Shareholders and the Backstop Provider (as described elsewhere in
this Form 8-K) are entering into a registration rights agreement to provide for the resale registration with respect to the Consideration
Shares received by the Company Shareholders in the Merger.
The foregoing description of the
registration Rights Agreement is subject to and qualified in its entirety by reference to the full text of the form of Registration Rights
Agreement, a copy of which is attached as Exhibit 10.1 hereto, and the terms of which are incorporated herein by reference.
Lock-up Agreements
Concurrently with the closing
of the merger, Purchaser will enter into a lock-up agreement with each of its IPO sponsor and the Company Shareholders with respect
to the Consideration Shares received by the Company Shareholders in the Merger. The Lock-up Agreement provides that except for an
aggregate of 2,000,000 ordinary shares received by the of the Company Shareholders, all shares held by the parties to the Lock-up
agreements will be subject to restrictions of sale, transfer or assignment as follows: (A) 50% of the shares until the earlier of
(i) six (6) months after the date of the consummation of the Merger or (ii) the date on which the closing price of our ordinary
shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for
any 20 trading days within any 30-trading day period commencing after the Merger and (B) the remaining 50% of the shares may not be
transferred, assigned or sold until six (6) months after the date of the consummation of the Merger.
Backstop Agreement/PIPE financing
Concurrently with the execution of the Merger Agreement, Venus has
entered into a binding backstop agreement for (i) the backstop provider to purchase ordinary shares in open market transactions and (ii)
purchase from Venus ordinary shares in a private placement transaction exempt from registration under the Securities Act of 1933, as amended.
Any purchases, either from Venus shareholders seeking to redeem ordinary shares, or from Venus are limited to up to $10 million in gross
amount. The backstop provider has agreed that any ordinary shares acquired by it will not be subject to redemption under Venus corporate
organizational documents and also waived any claims against Venus’ Trust Account.
The foregoing description of the
Backstop Agreement is subject to and qualified in its entirety by reference to the full text of the form of Backstop Agreement, a copy
of which is attached as Exhibit 10.2 hereto, and the terms of which are incorporated herein by reference.
Company Transaction Support
Agreement From Company Shareholders
Concurrently with the execution
of the Merger Agreement, Venus entered into a Company Transaction Support Agreement with all of the Company Shareholders pursuant to which
the Company Shareholders agreed, among other things, (i) not to redeem any of Venus Ordinary Shares which may be owned by them which may
be acquired prior to the Closing; (ii) to vote at any meeting of the stockholders of Venus and Viyi all such Venus Ordinary Shares or
Viyi Ordinary Shares, as the case may be, in favour of the Merger and the transactions contemplated by the Merger Agreement and in favour
of the other proposals contained in the Venus Proxy/Registration Statement; (iii) to be bound by certain other covenants and agreements
related to the Business Combination and (iv) to be bound by certain transfer restrictions with respect to such Viyi Ordinary Shares prior
to the Closing, in each case, on the terms and subject to the conditions set forth in the Transaction Support Agreement.
The foregoing description of the
Transaction Support Agreement is subject to and qualified in its entirety by reference to the full text of the form of the Transaction
Support Agreement, a copy of which is attached as Exhibit 10.3 hereto, and the terms of which are incorporated herein by reference.
Non-competition and non-solicitation
agreement
In connection with the Closing,
the Purchaser, the Company will enter into a non-compete and non-solicitation agreement with each of the Company Shareholders in favour
of the Purchaser and the Company.