Item 1.01 Entry into a Material definitive Agreement.
As previously disclosed, on January 27, 2022, Mountain Crest Acquisition Corp.
III, a Delaware corporation ("MCAE"), entered into that certain Agreement and
Plan of Merger, as amended by that certain Amendment to the Merger Agreement,
dated as of June 7, 2022 (the "Merger Agreement"), by and among MCAE, Etao
International Group Inc., a Cayman Islands corporation (the "Etao"), and
Wensheng Liu, in his capacity as Etao's Shareholders Representative (the "Etao
Shareholders' Representative"), pursuant to which, among other things, (1) MCAE
will merge with and into a to be formed Cayman Islands company ("Purchaser"),
with the Purchaser being the surviving corporation in the merger (the
"Redomestication Merger") and (2) Etao will merge with and into a to be formed
Cayman Islands company and the wholly owned subsidiary of the Purchaser ("Merger
Sub"), with Etao as the surviving corporation in the merger (the "Acquisition
Merger"), and, after giving effect to the Acquisition Merger, Etao being a
wholly owned subsidiary of Purchaser and the Purchaser will change its name to
Etao International Co., Ltd. (collectively, the "Business Combination"). Subject
to the terms of the Merger Agreement, as amended, and customary adjustments set
forth therein, the aggregate consideration for the Business Combination and
related transactions is expected to be approximately $1.0 billion of equity
consideration, as set forth in the Merger Agreement. The Merger Agreement, as
amended, provides, that the outside date for the closing of the Business
Combination was October 5, 2022 (the "Outside Date"). All capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Merger Agreement.
On June 30, 2022, MCAE formed ETAO International Co., Ltd., a Cayman Islands
exempted company and a wholly owned subsidiary of MCAE, to be the Purchaser
under the Merger Agreement. Also on June 30, 2022, MCAE formed ETAO Merger Sub,
Inc., a Cayman Islands exempted company and wholly owned subsidiary of ETAO
International Co., Ltd., to be the Merger Sub under the Merger Agreement. On
July 26, 2022, MCAE, Etao, Etao Shareholders' Representative, ETAO International
Co., Ltd. and ETAO Merger Sub, Inc., entered into a Joinder Agreement to the
Merger Agreement, that expressly amended and modified the Merger Agreement, by
admitting ETAO International Co., Ltd. and ETAO Merger Sub, Inc. as parties to
the Merger Agreement and fully binding them to all of the covenants, terms,
representation, warranties, rights, obligations and conditions of the Merger
Agreement applicable to such party as though an original party thereto.
On October 17, 2022, MCAE, Etao and the Etao Shareholders' Representative
entered into a further amendment to the Agreement and Plan of Merger (the
"Amendment No. 2") that expressly amended and modified the Merger Agreement.
Specifically, the Amendment No. 2 extended the Outside Date for the closing of
the Business Combination from October 5, 2022 to February 20, 2023. In the event
that the Business Combination shall not be consummated prior to February 20,
2023, then either MCAE or the Etao Shareholders' Representative may terminate
the Merger Agreement, provided that such terminating party, MCAE, on the one
hand, or Etao or the Etao Shareholders' Representative, on the other hand, has
not otherwise failed to materially perform its obligations under the Merger
Agreement. If the parties do not terminate the Merger Agreement within five
business days of the Outside Date, then Etao shall be responsible to pay all
costs and expenses incurred in connection with MCAE's obtaining any and all
extensions to the deadline in which MCAE is required to complete the Business
Combination.
The foregoing summary of Amendment No.2 does not purport to be complete and is
qualified in its entirety by reference to the actual Amendment No.2 which is
filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated
herein by reference.
IMPORTANT NOTICES
Important Notice Regarding Forward-Looking Statements
This Current Report on Form 8-K contains certain "forward-looking statements"
within the meaning of the Securities Act of 1933 and the Securities Exchange Act
of 1934, both as amended. Statements that are not historical facts, including
statements about the pending transactions described above, and the parties'
perspectives and expectations, are forward-looking statements. Such statements
include, but are not limited to, statements regarding the proposed transaction,
including the anticipated initial enterprise value and post-closing equity
value, the benefits of the proposed transaction, integration plans, expected
synergies and revenue opportunities, anticipated future financial and operating
performance and results, including estimates for growth, the expected management
and governance of the combined company, and the expected timing of the
transactions. The words "expect," "believe," "estimate," "intend," "plan" and
similar expressions indicate forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject to various
risks and uncertainties, assumptions (including assumptions about general
economic, market, industry and operational factors), known or unknown, which
could cause the actual results to vary materially from those indicated or
anticipated.
The forward-looking statements are based on the current expectations of the
management of MCAE and the Company, as applicable, and are inherently subject to
uncertainties and changes in circumstances and their potential effects and speak
only as of the date of such statement. There can be no assurance that future
developments will be those that have been anticipated. These forward-looking
statements involve a number of risks, uncertainties or other assumptions that
may cause actual results or performance to be materially different from those
expressed or implied by these forward-looking statements including: risks
related to the Company's businesses and strategies; the ability to complete the
proposed business combination due to the failure to obtain approval from MCAE's
stockholders or satisfy other closing conditions in the definitive merger
agreement; the amount of any redemptions by existing holders of MCAE's common
stock; the ability to recognize the anticipated benefits of the business
combination; other risks and uncertainties included under the header "Risk
Factors" in the Form 10-K for the year ended December 31, 2021 filed by MCAE on
March 7, 2022, the Registration Statement to be filed by MCAE, the final
prospectus of MCAE for its initial public offering, dated May 17, 2021; and in
MCAE's other filings with the SEC. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or anticipated by such
forward-looking statements. Accordingly, you are cautioned not to place undue
reliance on these forward-looking statements. Forward-looking statements relate
only to the date they were made, and MCAE, the Company and their subsidiaries
undertake no obligation to update forward-looking statements to reflect events
or circumstances after the date they were made except as required by law or
applicable regulation.
Additional Information and Where to Find It
In connection with the transaction described herein, MCAE and and/or its
subsidiaries will file relevant materials with the Securities and Exchange
Commission (the "SEC"), including the Registration Statement on Form F-4 and a
proxy statement (the "Registration Statement"). The Registration Statement will
include a proxy statement to be distributed to holders of MCAE's common stock in
connection with MCAE's solicitation of proxies for the vote by MCAE shareholders
with respect to the proposed transaction and other matters as described in the
Registration Statement, as well as the prospectus relating to the offer of
securities to be issued to the Company's stockholders in connection with the
proposed business combination. After the Registration Statement has been filed
and declared effective, MCAE will mail a definitive proxy statement, when
available, to its stockholders. Investors and security holders and other
interested parties are urged to read the Registration Statement, any amendments
thereto and any other documents filed with the SEC carefully and in their
entirety when they become available because they will contain important
information about MCAE, the Company and the proposed business combination.
Additionally, MCAE will file other relevant materials with the SEC in connection
with the business combination. Copies of these documents may be obtained free of
charge at the SEC's web site at www.sec.gov. Securityholders of MCAE are urged
to read the Registration Statement and the other relevant materials when they
become available before making any voting decision with respect to the proposed
business combination because they will contain important information. The
Registration Statement and proxy statement, once available, may also be obtained
without charge at the SEC's website at www.sec.gov or by writing to MCAE at 311
West 43rd Street, 12th Floor, New York, NY 10036. INVESTORS AND SECURITY HOLDERS
OF MCAE ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE
TRANSACTIONS THAT MCAE WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MCAE, THE COMPANY AND THE
TRANSACTIONS.
Participants in Solicitation
MCAE, the Company and their respective directors and executive officers may be
deemed participants in the solicitation of proxies with respect to the proposed
business combination under the rules of the SEC. Securityholders may obtain more
detailed information regarding the names, affiliations, and interests of certain
of MCAE's executive officers and directors in the solicitation by reading MCAE's
Registration Statement and other relevant materials filed with the SEC in
connection with the proposed business combination when they become available.
Information about MCAE's directors and executive officers and their ownership of
MCAE common stock is set forth in MCAE's Form 10-K for the year ended December
31, 2021, as modified or supplemented by any Form 3 or Form 4 filed with the SEC
since the date of that filing. Other information regarding the interests of
MCAE's participants in the proxy solicitation, which in some cases, may be
different than those of their stockholders generally, will be set forth in the
Registration Statement relating to the proposed business combination when it
becomes available. These documents can be obtained free of charge at the SEC's
web site at www.sec.gov.
The Company and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the stockholders of MCAE in
connection with the proposed business combination. A list of the names of such
directors and executive officers and information regarding their interests in
the proposed business combination will be included in the Registration Statement
for the proposed business combination.
No Offer or Solicitation
This Current Report on Form 8-K is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or in respect of
the transactions described above and shall not constitute an offer to sell or a
solicitation of an offer to buy the securities of MCAE or the Company, nor shall
there be any sale of any such securities in any state or jurisdiction in which
such offer, solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such state or jurisdiction. No
offering of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended, or an
exemption therefrom.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description
2.1* Amendment No. 2 to the Agreement and Plan of Merger, dated October
17, 2022 by and between Mountain Crest Acquisition Corp. III, ETAO
International Group, and Wensheng Liu, in his capacity as Etao
Shareholders' Representative
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