INTRODUCTORY NOTE REGARDING THE BUSINESS COMBINATION
On July 16, 2021 (the Closing and such date, the Closing Date), we consummated the business combination pursuant
to that certain Agreement and Plan of Merger dated March 11, 2021 (the Merger Agreement), by and among Empower Ltd., a Cayman Islands exempted company (Empower), Empower Merger Sub I Inc., a Delaware corporation and a
direct wholly owned subsidiary of Empower (Merger Sub I), Empower Merger Sub II LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Empower (Merger Sub II), and Holley Intermediate Holdings,
Inc., a Delaware corporation (Holley Intermediate).
The Merger Agreement provided for, among other things, the following
transactions: (i) Empower changed its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the
Domestication), and, in connection with the Domestication, (A) each outstanding Class A ordinary share of Empower, par value $0.0001 per share (the Empower Class A Shares), converted automatically into one
share of our common stock, par value $0.001 per share (the Common Stock), and (B) each outstanding Class B ordinary share of Empower, par value $0.0001 per share (the Founder Shares), converted automatically into one
share of our Common Stock; and (ii) following the Domestication, (A) Merger Sub I merged with and into Holley Intermediate, with Holley Intermediate surviving as a wholly owned subsidiary of Empower (Merger I),
(B) immediately following Merger I, Holley Intermediate merged with and into Merger Sub II, with Merger Sub II surviving as a limited liability company and a wholly owned subsidiary of Empower (Merger II and, together with Merger I,
the Mergers). The transactions set forth in the Merger Agreement, including the Mergers, constituted a Business Combination as contemplated by Empowers amended and restated memorandum and articles of association.
Pursuant to the Merger Agreement, at the Closing, all outstanding shares of Holley Intermediate common stock as of immediately prior to the effective time of Merger I were cancelled and Holley Parent Holdings, LLC, the sole stockholder of Holley
Intermediate (the Holley Stockholder), received $264,717,627.49 in cash and 67,673,884 shares of Common Stock (at a deemed value of $10.00 per share). Upon the Closing, Empower changed its name to Holley Inc. and its trading symbol of
its Common Stock on the New York Stock Exchange (the NYSE) from EMPW to HLLY.
Concurrent with the
execution of the Merger Agreement, Empower entered into certain Subscription Agreements, dated as of March 11, 2021, by and between Empower, on the one hand, and certain investors (PIPE Investors) on the other hand (collectively,
the PIPE Subscription Agreements) pursuant to which, among other things, the PIPE Investors agreed to subscribe for and purchase, and Empower agreed to issue and sell to the PIPE Investors an aggregate of 24,000,000 shares of Common
Stock, at a per share price of $10.00 for an aggregate purchase price of $240,000,000, concurrent with the Closing, on the terms and subject to the conditions set forth therein (the PIPE Financing).
Concurrent with the execution of the Merger Agreement, Empower entered into that certain Sponsor Agreement (the Sponsor Agreement)
with Empower Sponsor Holdings LLC, a Delaware limited liability company (the Sponsor), and the Holley Stockholder, whereby the Sponsor agreed to (i) waive certain of its anti-dilution and conversion rights with respect to the
Founder Shares and (ii) an earn-out in respect of 2,187,500 Founder Shares (the Earn-Out Shares) vesting in two equal tranches upon the achievement of specified conditions. The Earn-Out Shares will be forfeited by the Sponsor if the
applicable conditions are not satisfied before July 16, 2028 (seven years after the Closing Date). See the section entitled Certain Relationships and Related Party TransactionsEmpowerFounder Shares.
Concurrent with the execution of the Merger Agreement, Empower and Empower Funding, LLC, a Delaware limited liability company and an affiliate
of the Sponsor (the A&R FPA Investor) entered into that certain Amended and Restated Forward Purchase Agreement (the A&R FPA), pursuant to which the A&R FPA Investor agreed to purchase an aggregate of 5,000,000
units of Empower (the Empower Units), each Empower unit representing a right to acquire one share of Common Stock and one-third of one warrant to purchase Common Stock at an exercise price of $11.50 per share (each a Public
Warrant), for $50,000,000 in the aggregate. On July 9, 2021, Empower and the A&R FPA Investor entered into that certain Assignment and
ii