S-4 1 d179539ds4.htm S-4 S-4
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As filed with the United States Securities and Exchange Commission on July 16, 2021

Registration No. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

CITIC CAPITAL ACQUISITION CORP.*

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Cayman Islands   6770   N/A
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

28/F CITIC Tower

1 Tim Mei Avenue

Central, the Hong Kong Special Administrative Region of the People’s Republic of China

+852-3710-6888

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Edward Truitt Maples Fiduciary Services (Delaware) Inc.

4001 Kennett Pike, Suite 302

Wilmington, Delaware 19807

(302) 731-1612

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Joel L. Rubinstein
White & Case LLP

1221 Avenue of the Americas

New York, New York 10020

(212) 819-8200

 

Kevin K. Rooney
Karen Elizabeth Deschaine
Sale Kwon
Rowook Park
Cooley LLP

3175 Hanover Street

Palo Alto, California 94304

(650) 843-5000

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and all other conditions to the business combination described in the enclosed proxy statement / prospectus have been satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     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 7(a)(2)(B) of the Securities Act.  ☐


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If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

Exchange Act Rule 13e-4(i) (Cross-Border Issuer  Tender Offer)

    

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party  Tender Offer)

    

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of

securities to be registered

 

Amount

to be

registered(1)

 

Proposed

maximum
offering price
per share security

 

Proposed

maximum
aggregate offering price

  Amount of
registration fee

Common stock(2)(3)

  34,500,000   $9.89(4)   $341,205,000.00(4)   $37,225.47

Redeemable warrants(2)(5)

  21,320,000   $1.01(6)   $21,533,200.00(6)   $2,349.27

Common stock(2)(7)

  99,406,130   $9.89(4)   $983,126,625.70(4)   $107,259.11

Total

          $1,345,864,825.70   $146,833.85

 

 

(1)

Immediately prior to the consummation of the Merger described in the proxy statement / prospectus forming part of this registration statement (the “proxy statement / prospectus”), CITIC Capital Acquisition Corp., a Cayman Islands exempted company incorporated with limited liability (“CCAC”), intends to effect a deregistration under the Cayman Islands Companies Act (As Revised) and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which CCAC’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware (the “Domestication”). All securities being registered will be issued by CCAC (after the Domestication), the continuing entity following the Domestication, which will be renamed “Quanergy Systems, Inc.” (“Quanergy PubCo”), as further described in the proxy statement / prospectus. As used herein, “Quanergy PubCo” refers to CCAC after the Domestication, including after such change of name.

(2)

Pursuant to Rule 416(a) of the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share splits, share dividends or similar transactions.

(3)

The number of shares of common stock of Quanergy PubCo being registered represents the number of Class A ordinary shares of a par value of US$0.0001 each of CCAC that were registered pursuant to the Registration Statement on Form S-1 (333-236006) (the “IPO Registration Statement”) and offered by CCAC in its initial public offering (the “CCAC public shares”). The CCAC public shares will be automatically converted by operation of law into shares of common stock of Quanergy PubCo in the Domestication (“Quanergy PubCo public shares”).

(4)

Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Class A ordinary shares of CCAC (the company to which Quanergy PubCo will succeed following the Domestication) on the NYSE on July 15, 2021 ($9.89 per Class A ordinary share) (such date being within five business days of the date that this registration statement was first filed with the SEC). This calculation is in accordance with Rule 457(f)(1) of the Securities Act.

(5)

The number of redeemable warrants to acquire shares of common stock of Quanergy PubCo being registered represents the number of redeemable warrants to acquire CCAC public shares that were registered pursuant to the initial public offering registration statements referenced in note (3) above and offered by CCAC in its initial public offering (the “CCAC public warrants”). The CCAC public warrants will be automatically converted by operation of law into redeemable warrants to acquire shares of common stock of Quanergy PubCo in the Domestication (“Quanergy PubCo public warrants”).

(6)

Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the warrants of CCAC (the company to which Quanergy PubCo will succeed following the Domestication) on the NYSE on July 15, 2021 ($1.01 per warrant) (such date being within five business days of the date that this registration statement was first filed with the SEC). This calculation is in accordance with Rule 457(f)(1) of the Securities Act.

(7)

The number of shares of common stock of Quanergy PubCo being registered represents the sum of: (a) 72,464,004 shares of Quanergy PubCo common stock to be issued in connection with the Merger described herein;and (b) the product of (i) 1,043,510 shares of Quanergy common stock reserved for issuance upon the exercise of options to purchase Quanergy common stock outstanding as of July 15, 2021 and that may be issued after such date pursuant to the terms of the Merger Agreement as amended on June 28, 2021 (collectively, the “Merger Agreement”) described herein, which will convert into options to purchase shares of Quanergy PubCo common stock in accordance with the terms of the Merger Agreement described herein and (ii) an exchange ratio of 4.0045 shares of Quanergy PubCo common stock for each share of Quanergy common stock; (c) the product of (i) 3,159,029 shares of Quanergy common stock reserved for issuance upon the exercise of warrants to purchase Quanergy common stock outstanding as of July 15, 2021 and that may be issued after such date pursuant to the terms of the Merger Agreement described herein, which will convert into warrants to purchase shares of Quanergy PubCo common stock in accordance with the terms of the Merger Agreement described herein and (ii) an exchange ratio of 4.0045 shares of Quanergy PubCo common stock for each share of Quanergy common stock (d) the product of (i) 2,525,546 shares of Quanergy common stock reserved for issuance upon the exercise of restricted stock units outstanding as of July 15, 2021 and that may be issued after such date pursuant to the terms of the Merger Agreement described herein, which will convert into the right to receive an issuance of shares of Quanergy PubCo common stock in accordance with the terms of the Merger Agreement described herein and (ii) an exchange ratio of 4.0045 shares of Quanergy PubCo common stock for each share of Quanergy common stock.

* Prior to the consummation of the Merger described herein, the Registrant intends to effect a deregistration under the Cayman Islands Companies Act (As Revised) and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which the Registrant’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. All securities being registered will be issued by CITIC Capital Acquisition Corp. (after its domestication as a corporation incorporated in the State of Delaware), the continuing entity following the Domestication, which will be renamed “Quanergy Systems, Inc.”

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this preliminary proxy statement / prospectus is not complete and may be changed. The registrant may not sell the securities described in this preliminary proxy statement / prospectus until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary proxy statement / prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED JULY 16, 2021

PRELIMINARY—PROXY STATEMENT FOR

EXTRAORDINARY GENERAL MEETING OF

CITIC CAPITAL ACQUISITION CORP.

(A CAYMAN ISLANDS EXEMPTED COMPANY)

PROSPECTUS FOR

133,906,130 SHARES OF COMMON STOCK AND

21,320,000 REDEEMABLE WARRANTS

OF

CITIC CAPITAL ACQUISITION CORP.

(TO BE RENAMED “QUANERGY SYSTEMS, INC.”

FOLLOWING ITS DOMESTICATION

AS A CORPORATION INCORPORATED IN THE STATE OF DELAWARE,

IN CONNECTION WITH THE BUSINESS COMBINATION DESCRIBED HEREIN)

The board of directors of CITIC Capital Acquisition Corp., a Cayman Islands exempted company incorporated with limited liability (“CCAC” and, after the Domestication as described below, “Quanergy PubCo”), has unanimously approved (1) the domestication of CCAC as a Delaware corporation (which will be renamed Quanergy Systems, Inc. prior to the consummation of the Business Combination) (the “Domestication”); (2) the merger of CITIC Capital Merger Sub Inc. (“Merger Sub”), a Delaware corporation and direct wholly owned subsidiary of CCAC, with and into Quanergy Systems, Inc., a Delaware corporation (“Quanergy”) (the “Merger”, and, together with the Domestication, the “Business Combination”), with Quanergy surviving the Merger as a wholly owned subsidiary of Quanergy PubCo, pursuant to the terms of the Agreement and Plan of Merger, dated as of June 21, 2021, as amended on June 28, 2021, by and among CCAC, Merger Sub and Quanergy, attached to this proxy statement / prospectus as Annex A and Annex B (collectively, the “Merger Agreement”), as more fully described elsewhere in this proxy statement / prospectus; and (3) the other transactions contemplated by the Merger Agreement and documents related thereto. In connection with the Business Combination, CCAC will change its name to “Quanergy Systems, Inc.” Quanergy PubCo and CCAC, following the Domestication, are both referred to herein as the Company.

As a result of and upon the effective time of the Domestication, (1) each of the then issued 6,900,000 Class B ordinary shares, par value $0.0001 per Class B ordinary share, of CCAC (the “CCAC Class B ordinary shares”) will convert automatically, on a one-for-one basis, into a CCAC Class A ordinary share (as defined below), (2) immediately following the conversion described in clause (1), each of the then issued 27,600,000 Class A ordinary shares, par value $0.0001 per Class A ordinary share, of CCAC (the “CCAC Class A ordinary shares”), will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of Quanergy PubCo (the “Quanergy PubCo common stock”), (3) each of the then issued and outstanding 21,320,000 redeemable warrants of CCAC (the “CCAC warrants”) will convert automatically into a redeemable warrant to purchase one share of Quanergy PubCo common stock (the “Quanergy PubCo warrants”) pursuant to the Warrant Agreement, dated February 10, 2020 (the “Warrant Agreement”), between CCAC and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, and (4) each of the then issued and outstanding units of CCAC that have not been previously separated into the underlying CCAC Class A ordinary shares and underlying CCAC warrants upon the request of the holder thereof (the “CCAC units”), will be cancelled and will entitle the holder thereof to one share of Quanergy PubCo common stock and one-half of one Quanergy PubCo warrant. No fractional Quanergy PubCo warrants will be issued upon separation of the CCAC units. Accordingly, this proxy statement / prospectus covers the 27,600,000 shares of Quanergy PubCo common stock and 13,800,000 Quanergy PubCo warrants to be issued in the Domestication in respect of the CCAC Class A ordinary shares and CCAC warrants which were initially included in the CCAC Units sold in CCAC’s initial public offering.

As a result of and upon the Closing (as defined below), among other things, all outstanding shares of Quanergy Capital Stock (as defined below) (after giving effect to the conversion of all of 2023 Quanergy Convertible Notes (as defined below) into Quanergy common stock) as of immediately prior to the effective time of the Merger, and, together with shares of Quanergy common stock reserved in respect of Quanergy Awards and Quanergy Warrants (each as defined below and as described further in the immediately succeeding paragraphs) outstanding as of immediately prior to the Closing that will be converted into awards or warrants, as the case may be, based on Quanergy PubCo common stock, will be cancelled in exchange for the right to receive, or the


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reservation of, an aggregate of 97,000,000 shares of Quanergy PubCo common stock (at a deemed value of $10.00 per share) or, as applicable, shares underlying awards or warrants, as the case may be, based on Quanergy PubCo common stock, representing a fully-diluted pre-transaction equity value of Quanergy of $970 million (the “Aggregate Merger Consideration”). The portion of the Aggregate Merger Consideration reflecting the conversion of the Quanergy Awards and Quanergy Warrants is calculated assuming that all Quanergy PubCo Options (defined below) and Quanergy PubCo Converted Warrants (defined below) are net-settled (although Quanergy PubCo Options may, by their terms, be cash-settled, resulting in additional dilution).

With respect to Quanergy PubCo Converted Warrants received in respect of warrants to purchase shares of Quanergy common stock (“Quanergy Warrants”) that are outstanding immediately prior to the Closing and cash exercised after the Closing, up to 12,650,163 additional shares of Quanergy PubCo common stock may be issued. Accordingly, this proxy statement / prospectus also relates to the issuance by Quanergy PubCo of such 12,650,163 shares of Quanergy PubCo common stock issued upon the exercise of the Quanergy Warrants following the Merger described herein.

All (i) options to purchase shares of Quanergy common stock (“Quanergy Options”) and (ii) Quanergy Restricted Stock Unit Awards outstanding as of immediately prior to the Merger (together, the “Quanergy Awards”) will be converted into (a) options to purchase shares of Quanergy PubCo common stock (“Quanergy PubCo Options”) and (b) restricted shares of Quanergy PubCo common stock (“Quanergy PubCo Restricted Stock”), respectively. Accordingly, this proxy statement / prospectus also relates to the issuance by Quanergy PubCo of 10,113,352 Quanergy PubCo Restricted Stock in the Merger and 4,178,611 shares of Quanergy PubCo common stock upon the exercise of the Quanergy PubCo Options following the Merger. See “BCA Proposal—Consideration—Treatment of Quanergy Options and Restricted Stock.”

The CCAC units, CCAC Class A ordinary shares and CCAC warrants are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols “CCAC.U,” “CCAC” and “CCAC WS,” respectively. CCAC will apply for listing, to be effective at the time of the Business Combination, of Quanergy PubCo common stock and Quanergy PubCo Warrants on the NYSE under the proposed symbols “QNGY” and “QNGY WS”, respectively. Quanergy PubCo will not have units traded.

CCAC will hold an extraordinary general meeting (the “extraordinary general meeting”) to consider matters relating to the Business Combination at                 , Eastern Time, on                 , 2021. For the purposes of Cayman Islands law and the amended and restated memorandum and articles of association of CCAC (as may be amended from time to time, the “Cayman Constitutional Documents”), the physical location of the extraordinary general meeting shall be at the offices of White & Case LLP at 1221 Avenue of the Americas, New York, New York 10020, or you or your proxyholder will be able to attend and vote at the extraordinary general meeting online by visiting                  and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the extraordinary general meeting, registered shareholders and beneficial shareholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement / prospectus.

If you have any questions or need assistance voting your common stock, please call Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call at (203) 658-9400, or by emailing [CCAC.info]@investor.morrowsodali.com. The notice of the extraordinary general meeting and the proxy statement / prospectus relating to the Business Combination will be available at https://                .

This proxy statement / prospectus provides shareholders of CCAC with detailed information about the proposed Business Combination and other matters to be considered at the extraordinary general meeting of CCAC. We encourage you to read this entire document, including the Annexes and other documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described under the heading “Risk Factors” beginning on page 55 of this proxy statement / prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT / PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT / PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

This proxy statement / prospectus is dated                2021, and

is first being mailed to CCAC’s shareholders on or about                2021.


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CITIC Capital Acquisition Corp.

A Cayman Islands Exempted Company

(Company Incorporation Number 355190)

P.O. Box 309, Ugland House

Grand Cayman

KY1-1104

Cayman Islands

Dear CITIC Capital Acquisition Corp. Shareholders:

You are cordially invited to attend the extraordinary general meeting (the “extraordinary general meeting”) of CITIC Capital Acquisition Corp., a Cayman Islands exempted company incorporated with limited liability (“CCAC” and, after the Domestication, as described below, “Quanergy PubCo”), at                 , Eastern Time, on                 , 2021. For the purposes of Cayman Islands law and the amended and restated memorandum and articles of association of CCAC (as may be amended from time to time, the “Cayman Constitutional Documents”), the physical location of the extraordinary general meeting shall be at the offices of White & Case LLP at 1221 Avenue of the Americas, New York, New York 10020, or you or your proxyholder will be able to attend and vote at the extraordinary general meeting online by visiting https://                 and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the extraordinary general meeting, registered shareholders and beneficial shareholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement / prospectus.

At the extraordinary general meeting, CCAC shareholders will be asked to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of June 21, 2021, as amended on June 28, 2021 (as the same may be further amended, the “Merger Agreement”), by and among CCAC, CITIC Capital Merger Sub Inc. (“Merger Sub”), a Delaware corporation and direct wholly owned subsidiary of CCAC, and Quanergy Systems, Inc. (“Quanergy”), a Delaware corporation, a copy of which is attached to the accompanying proxy statement / prospectus as Annex A and Annex B (the “BCA Proposal”). The Merger Agreement provides for, among other things, following the Domestication of CCAC to Delaware as described below, the merger of Merger Sub with and into Quanergy (the “Merger”), with Quanergy surviving the Merger as a wholly owned subsidiary of Quanergy PubCo, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in the accompanying proxy statement / prospectus.

As a condition to the consummation of the Merger, the board of directors of CCAC (the “CCAC Board”) has unanimously approved a change of CCAC’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication” and, together with the Merger, the “Business Combination”). As described in this proxy statement / prospectus, you will be asked to consider and vote upon a proposal to approve the Domestication (the “Domestication Proposal”). In connection with the consummation of the Business Combination, CCAC will change its name to “Quanergy Systems, Inc.”

As a result of and upon the effective time of the Domestication, (1) each of the then issued 6,900,000 Class B ordinary shares, par value $0.0001 per Class B ordinary share, of CCAC (the “CCAC Class B ordinary shares”) will convert automatically, on a one-for-one basis, into a CCAC Class A ordinary share (as defined below), (2) immediately following the conversion described in clause (1), each of the then issued 27,600,000 Class A ordinary shares, par value $0.0001 per Class A ordinary share, of CCAC (the “CCAC Class A ordinary shares”), will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of Quanergy PubCo (the “Quanergy PubCo common stock”), (3) each of the then issued and outstanding 21,320,000 redeemable warrants of CCAC (the “CCAC warrants”) will convert automatically into a redeemable warrant to purchase one share of Quanergy PubCo common stock (the “Quanergy PubCo warrants”) pursuant to the Warrant Agreement, dated February 10, 2020 (the “Warrant Agreement”), between

 

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CCAC and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, and (4) each of the then issued and outstanding units of CCAC that have not been previously separated into the underlying CCAC Class A ordinary shares and underlying CCAC warrants upon the request of the holder thereof (the “CCAC units”), will be cancelled and will entitle the holder thereof to one share of Quanergy PubCo common stock and one-half of one Quanergy PubCo warrant. No fractional Quanergy PubCo warrants will be issued upon separation of the CCAC units. As used herein, “public shares” shall mean the CCAC Class A ordinary shares (including those that underlie the CCAC units) that were registered pursuant to the Registration Statement on Form S-1 (333-236006) and the shares of Quanergy PubCo common stock issued as a matter of law upon the conversion thereof on the effective date of the Domestication. For further details, see “Domestication Proposal.”

You will be asked to consider and vote upon (1) a proposal to approve by ordinary resolution and adopt the Agreement and Plan of Merger, dated as of June 21, 2021 as amended on June 28, 2021 (collectively, the “Merger Agreement”), by and among CCAC, Merger Sub and Quanergy (the “BCA Proposal”), (2) a proposal to approve by special resolution the change of CCAC’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication Proposal”), (3) a proposal to approve by special resolution the proposed new certificate of incorporation (“Proposed Certificate of Incorporation”) and the proposed new bylaws (“Proposed Bylaws”) of CCAC (the “Organizational Documents Proposal”), (4) seven separate proposals to approve, by special resolution, material differences between the Cayman Constitutional Documents and the Proposed Certificate of Incorporation and the Proposed Bylaws (collectively, the “Advisory Organizational Documents Proposals”), (5) a proposal, to approve by ordinary resolution, for purposes of complying with the applicable provisions of NYSE Listing Rule 312.03, the issuance of Quanergy PubCo common stock to (a) the PIPE Investors (as defined below), pursuant to the PIPE Investment (as defined in the accompanying proxy statement / prospectus) and (b) certain stockholders of Quanergy pursuant to the Merger Agreement (the “Stock Issuance Proposal”), (6) a proposal to approve by ordinary resolution and adopt the Quanergy PubCo 2021 Incentive Award Plan (the “Equity Incentive Plan Proposal”), (7) a proposal to approve by ordinary resolution the Quanergy PubCo 2021 Employee Stock Purchase Plan (the “ESPP Proposal”), and (8) a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”). The Business Combination will be consummated only if the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal and the ESPP Proposal (collectively, the “Condition Precedent Proposals”) are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal and the Advisory Organizational Documents Proposals are not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in the accompanying proxy statement / prospectus, which each shareholder is encouraged to read carefully and in its entirety.

As a result of and upon the Closing, among other things, all outstanding shares of Quanergy Capital Stock (after giving effect to the conversion of all of 2023 Quanergy Convertible Notes into Quanergy common stock) as of immediately prior to the effective time of the Merger, and, together with shares of Quanergy common stock reserved in respect of Quanergy Awards and Quanergy Warrants outstanding as of immediately prior to the Closing that will be converted into awards or warrants, as the case may be, based on Quanergy PubCo common stock, will be cancelled in exchange for the right to receive an aggregate of 97,000,000 shares of Quanergy PubCo common stock (at a deemed value of $10.00 per share) (which, in the case of Quanergy Awards and Quanergy Warrants, will be shares underlying awards based on Quanergy PubCo common stock) representing a fully-diluted pre-transaction equity value of Quanergy of $970 million (the “Aggregate Merger Consideration”). The portion of the Aggregate Merger Consideration reflecting the conversion of the Quanergy Awards and Quanergy Warrants is calculated assuming that all Quanergy PubCo Options and Quanergy PubCo Converted Warrants are net-settled (although Quanergy PubCo Options may by their terms be cash-settled, resulting in additional dilution).

 

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CCAC has entered into subscription agreements (the “Subscription Agreements”) with certain institutional and accredited investors, including, among others, certain existing equityholders of Quanergy (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to purchase, in the aggregate, 4,000,000 shares of Quanergy PubCo common stock at $10.00 per share for an aggregate commitment amount of $40 million (the “PIPE Investment Amount”). The closings under the Subscription Agreements will occur substantially concurrently with the Closing. In connection with the Business Combination, certain other related agreements have been, or will be entered into on or prior to the date of the Closing, including (i) the Sponsor Support Agreement (as defined below), (ii) the Quanergy Holders Support Agreement (as defined below), (iii) the Registration Rights Agreement (as defined below), and (iv) the Lock-up Agreement. For additional information, see “BCA Proposal—Related Agreements.”

Pursuant to the Cayman Constitutional Documents, a holder (a “public shareholder”) of public shares, which excludes shares held by the Sponsor, may request that CCAC redeem all or a portion of such shareholder’s public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public shareholders may elect to redeem their public shares even if they vote “for” the BCA Proposal or any other Condition Precedent Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank and the public shares will not be redeemed for cash, even if their holders have properly exercised redemption rights with respect to such public shares. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers the certificates for its shares (if any) along with the redemption forms to Continental Stock Transfer & Trust Company, CCAC’s transfer agent, Quanergy PubCo will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of CCAC’s initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of Quanergy PubCo common stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of CCAC—Redemption Rights” in the accompanying proxy statement / prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 20% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 20% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash.

The Sponsor and each director and each officer of CCAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, and to waive their redemption rights in connection with the consummation of the Business Combination with respect to any CCAC ordinary shares held by them, in the case of the Sponsor, subject also to the terms and conditions contemplated by the Sponsor Support Agreement, dated as of June 21, 2021, a copy of which is attached as Annex C to this proxy statement / prospectus (the “Sponsor Support Agreement”). The CCAC ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement / prospectus, the Sponsor (whose members include CCAC’s directors and officers) owns 20% of the issued CCAC ordinary shares.

 

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Under the Quanergy Holders Support Agreement (as defined below), certain stockholders of Quanergy have agreed to, among other things, on the fifth Business Day (as defined in the Merger Agreement) following the date at which the SEC declares effective the registration statement on Form S-4 of which this proxy statement / prospectus is a part, to execute and deliver a written consent with respect to the outstanding shares of Quanergy common stock and preferred stock held by such stockholders of Quanergy adopting the Merger Agreement and related transactions and approving the Business Combination, a copy of which is attached as Annex D to this proxy statement / prospectus (the “Quanergy Holders Support Agreement”). The shares of Quanergy common stock and preferred stock that are owned by the stockholders of Quanergy and subject to the Quanergy Holders Support Agreements represent a majority of the outstanding voting power of Quanergy common stock and preferred stock (on an as-converted basis).

The Merger Agreement provides that the obligations of Quanergy to consummate the Merger are conditioned on, among other things, that as of the Closing, the amount of cash available in the trust account, after deducting the amount required to satisfy CCAC’s obligations to its shareholders that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (if any) plus the PIPE Investment Amount actually received by CCAC substantially concurrently with the Closing, is at least equal to $175,000,000. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will CCAC redeem public shares in an amount that would cause its net tangible assets to be less than $5,000,001.

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of CCAC and Quanergy, (ii) effectiveness of the registration statement on Form S-4 of which this proxy statement / prospectus is a part, (iii) expiration or termination of the waiting period under the HSR Act and the achievement of CFIUS clearance (as contemplated by the Merger Agreement), (iv) receipt of approval for listing on the NYSE of the shares of Quanergy PubCo common stock to be issued in connection with the Merger, (v) that, after redemption, CCAC’s net tangible assets shall be no less than $5,000,001 upon Closing and (vi) the absence of certain specified injunctions. In addition, Quanergy’s obligations to consummate the Merger are also conditioned on, among other things, the satisfaction or waiver of the Minimum Cash Condition (as defined in the Merger Agreement). There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.

The CCAC units, CCAC Class A ordinary shares and CCAC warrants are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols “CCAC.U,” “CCAC” and “CCAC WS,” respectively. CCAC will apply for listing, to be effective at the time of the Business Combination, of Quanergy PubCo common stock and Quanergy PubCo warrants on the NYSE under the proposed symbols “QNGY” and “QNGY WS”, respectively. Quanergy PubCo will not have units traded. It is a condition of the consummation of the Business Combination that CCAC receives confirmation from the NYSE that the securities have been approved for listing on the NYSE, but there can be no assurance such listing conditions will be met or that CCAC will obtain such confirmation from the NYSE. If such listing conditions are not met or if such confirmation is not obtained, the Business Combination will not be consummated unless the NYSE listing condition set forth in the Merger Agreement is waived.

CCAC is providing the accompanying proxy statement / prospectus and accompanying proxy card to CCAC’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information about the extraordinary general meeting, the Business Combination and other related business to be considered by CCAC’s shareholders at the extraordinary general meeting is included in the accompanying proxy statement / prospectus. Whether or not you plan to attend the extraordinary general meeting, all of CCAC’s shareholders are urged to read the accompanying proxy statement / prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described under the heading “Risk Factors beginning on page 55 of this proxy statement / prospectus.

 

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After careful consideration, the CCAC Board has unanimously approved the Business Combination and unanimously recommends that shareholders vote “FOR” adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to CCAC’s shareholders in the accompanying proxy statement / prospectus. When you consider the recommendation of these proposals by the CCAC Board, you should keep in mind that CCAC’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal—Interests of CCAC’s Directors and Officers in the Business Combination” in the accompanying proxy statement / prospectus for a further discussion of these considerations.

The approval of each of the Domestication Proposal, the Organizational Documents Proposal and the Advisory Organizational Documents Proposals requires the affirmative vote of holders of a majority of at least two-thirds of the CCAC ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. The approval of each of the BCA Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal, the ESSP Proposal and the Adjournment Proposal require the affirmative vote of a majority of the CCAC ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement / prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal and the Advisory Organizational Documents Proposals are not conditioned upon the approval of any other proposal set forth in the accompanying proxy statement / prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR PUBLIC SHARES TO CCAC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. YOU MAY TENDER YOUR PUBLIC SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR PUBLIC SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE PUBLIC SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE PUBLIC SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE PUBLIC SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

 

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On behalf of CCAC’s board of directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

 

Sincerely,

 

Fanglu Wang

Chief Executive Officer and Director (Principal Executive Officer)

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT / PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT / PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement / prospectus is dated                 , 2021 and is first being mailed to shareholders on or about                 , 2021.

 

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CITIC Capital Acquisition Corp.

A Cayman Islands Exempted Company

(Company Incorporation Number 355190)

P.O. Box 309, Ugland House

Grand Cayman

KY1-1104

Cayman Islands

NOTICE OF EXTRAORDINARY GENERAL MEETING

TO BE HELD ON                 , 2021

TO THE SHAREHOLDERS OF CITIC CAPITAL ACQUISITION CORP.:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “extraordinary general meeting”) of CITIC Capital Acquisition Corp., a Cayman Islands exempted company incorporated with limited liability, company incorporation number 355190 (“CCAC”), will be held at                 , Eastern Time, on                 , 2021. For the purposes of Cayman Islands law and the amended and restated memorandum and articles of association of CCAC (the “Cayman Constitutional Documents”), the physical location of the extraordinary general meeting shall be at the offices of White & Case LLP at 1221 Avenue of the Americas, New York, New York 10020, or you or your proxyholder will be able to attend and vote at the extraordinary general meeting online by visiting                  and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the extraordinary general meeting, registered shareholders and beneficial shareholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in this proxy statement / prospectus. You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes:

 

   

Proposal No. 1—The BCA Proposal—to consider and vote upon a proposal to approve by ordinary resolution and adopt the Agreement and Plan of Merger, dated as of June 21, 2021, as amended on June 28 2021 (collectively, the “Merger Agreement”), by and among CCAC, Merger Sub and Quanergy (copies of which are attached to this proxy statement / prospectus as Annex A and Annex B, respectively). The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Quanergy (the “Merger”), with Quanergy surviving the Merger as a wholly owned subsidiary of Quanergy PubCo (as defined below), in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement / prospectus (the “BCA Proposal”).

The full text of the resolution to be passed is as follows:

RESOLVED, as an ordinary resolution, that the Company’s entry into the Merger Agreement, dated as of June 21, 2021, as amended on June 28, 2021 (collectively, the “Merger Agreement”), by and among CCAC, CITIC Capital Merger Sub Inc. (“Merger Sub”), a Delaware corporation and subsidiary of CCAC, and Quanergy Systems, Inc. (“Quanergy”), a Delaware corporation, (a copy of which is attached to the proxy statement / prospectus as Annex A and Annex B), pursuant to which, among other things, following the Domestication of CCAC to Delaware as described below, the merger of Merger Sub with and into Quanergy (the “Merger”), with Quanergy surviving the Merger as a wholly owned subsidiary of Quanergy PubCo, in accordance with the terms and subject to the conditions of the Merger Agreement, be approved, ratified and confirmed in all respects.”

 

   

Proposal No. 2—The Domestication Proposal—to consider and vote upon a proposal to approve by special resolution, (i) the change of CCAC’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands pursuant to Article 49 of the amended and restated memorandum and articles of association of CCAC and registering by way of continuation and

 

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domesticating as a corporation incorporated under the laws of the State of Delaware; (ii) conditional upon, and with effect from, the registration of CCAC in the State of Delaware as a corporation incorporated under the laws of the State of Delaware: (a) the name of CCAC be changed to “Quanergy Systems, Inc.”; (b) and the current memorandum and articles of association of CCAC be amended so as to be replaced in their entirety with the Proposed Organizational Documents (as defined below); (c) the registered office of the Company be changed to VCorp Services, LLC, 1013 Centre Road Suite 403-B Wilmington, County of New Castle, Delaware 19805; (d) Corporation Service Company (CSC) be instructed to undertake all necessary steps in order to continue the legal existence of CCAC in the State of Delaware as a corporation incorporated under the laws of the State of Delaware; and (e) Maples Corporate Services Limited be instructed to file notice of the resolutions relating to the Domestication with the Registrar of Companies in and for the Cayman Islands (the “Domestication” and, together with the Merger, the “Business Combination”). The Domestication will be effected immediately prior to the Business Combination by CCAC filing a certificate of corporate domestication and the proposed new certificate of incorporation of Quanergy PubCo (“Proposed Certificate of Incorporation”) with the Delaware Secretary of State and filing an application to de-register with the Registrar of Companies of the Cayman Islands. Upon the effectiveness of the Domestication, CCAC will become a Delaware corporation and will change its corporate name to “Quanergy Systems, Inc.” and all outstanding securities of CCAC will convert to outstanding securities of “Quanergy Systems, Inc.”, as described in more detail in the accompanying proxy statement / prospectus (the “Domestication Proposal”).

The full text of the resolution to be passed is as follows:

RESOLVED, as a special resolution, that (a) the Company be de-registered in the Cayman Islands pursuant to Article 49 of the current Amended and Restated Articles of Association of the Company and be registered by way of continuation as a corporation in the state of Delaware; (b) conditional upon, and with effect from, the registration of the Company in the State of Delaware as a corporation with the laws of the State of Delaware, the registered office of the Company be changed to VCorp Services, LLC, 1013 Centre Road Suite 403-B Wilmington, County of New Castle, Delaware 19805; (c) Corporation Service Company (CSC) be instructed to undertake all necessary steps in order to continue the legal existence of the Company in the State of Delaware as a corporation incorporated under the laws of the State of Delaware; and (d) Maples Corporate Services Limited be instructed to file notice of the resolutions relating to the de-registration with the Registrar of Companies in and for the Cayman Islands.”

 

   

Proposal No. 3—Organizational Documents Proposal—to consider and vote upon a proposal to approve by special resolution the proposed new certificate of incorporation (the “Proposed Certificate of Incorporation”) and the proposed new bylaws (the “Proposed Bylaws” and, together with the Proposed Certificate of Incorporation, the “Proposed Organizational Documents” (copies of which are attached to this proxy statement / prospectus as Annex J and Annex I, respectively)) of CITIC Capital Acquisition Corp. (a corporation incorporated in the State of Delaware following the filing with and acceptance by the Secretary of State of Delaware of the certificate of domestication in accordance with Section 388 of the Delaware General Corporation Law (the “DGCL”)), which will be renamed “Quanergy Systems, Inc.” in connection with the Business Combination (CCAC after the Domestication, including after such change of name, is referred to herein as “Quanergy PubCo”) (the “Organizational Documents Proposal”). The form of each of the Proposed Certificate of Incorporation and Proposed Bylaws is attached to this proxy statement / prospectus as Annex J and Annex I, respectively;

The full text of the resolution to be passed is as follows:

RESOLVED, as a special resolution, that conditional upon, and with effect from, the registration of the Company in Delaware as a Delaware corporation under the laws of the State of Delaware:

 

  (a)

the name of the Company be changed to “Quanergy Systems, Inc.”; and

 

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  (b)

the Memorandum and Articles of Association of the Company currently in effect be amended and restated by the deletion in their entirety and the substitution in their place of the Proposed Certificate of Incorporation and Proposed Bylaws (copies of which are attached to the proxy statement / prospectus as Annex J and Annex I, respectively), with such principal changes as described in Advisory Organizational Documents Proposals A-G set out in the resolutions below.”

 

   

Proposal No. 4—Advisory Organizational Documents Proposals—to consider and vote upon the following seven separate proposals (collectively, the “Advisory Organizational Documents Proposals”) to approve, by special resolution, the following material differences between the Cayman Constitutional Documents and the Proposed Organizational Documents:

(A) Advisory Organizational Documents Proposal 4A—to authorize the change in the authorized share capital of CCAC from (i) 200,000,000 CCAC Class A ordinary shares of a par value of US$0.0001 each, 20,000,000 CCAC Class B ordinary shares of a par value of US$0.0001 each and 1,000,000 CCAC Preference Shares of a par value of US$0.0001 each to (ii) 300,000,000 shares of Quanergy PubCo common stock and 10,000,000 shares of Quanergy PubCo preferred stock (“Advisory Organizational Documents Proposal 4A”);

(B) Advisory Organizational Documents Proposal 4B—to approve an exclusive forum provision, pursuant to which the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware, shall be the exclusive forum for certain actions under Delaware law, and the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act (“Advisory Organizational Documents Proposal 4B”);

(C) Advisory Organizational Documents Proposal 4C—to approve a provision electing not to be governed by Section 203 of the DGCL relating to takeovers by interested stockholders but to provide other similar restrictions regarding takeovers by interested stockholders (“Advisory Organizational Documents Proposal 4C”);

(D) Advisory Organizational Documents Proposal 4D—to approve provisions providing that the affirmative vote of the holders of at least 66 2/3% of the total voting power of all the then outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, will be required to amend, alter, repeal or rescind all or any portion of Article V(B), Article VII, Article VIII, Article IX, Article X, Article XI, Article XII and Article XIII of the Proposed Certificate of Incorporation (“Advisory Organizational Documents Proposal 4D”);

(E) Advisory Organizational Documents Proposal 4E—to approve provisions permitting the removal of a director only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of all of the then outstanding shares of voting stock of the Corporation entitled to vote at an election of directors (“Advisory Organizational Documents Proposal 4E”);

(F) Advisory Organizational Documents Proposal 4F—to approve provisions providing that any action required or permitted to be taken by the stockholders of the Company must be effected at an annual or special meeting of the stockholders of the Company, and shall not be taken by written consent in lieu of a meeting (“Advisory Organizational Documents Proposal 4F”); and

(G) Advisory Organizational Documents Proposal 4G—to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with

 

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the Proposed Certificate of Incorporation and Proposed Bylaws in connection with the consummation of the Business Combination (copies of which are attached to this proxy statement / prospectus as Annex J and Annex I, respectively), including (1) changing the company name from “CITIC Capital Acquisition Corp.” to “Quanergy Systems, Inc.,” (2) making Quanergy PubCo’s corporate existence perpetual, and (3) removing certain provisions related to CCAC’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which the CCAC Board believes is necessary to adequately address the needs of Quanergy PubCo after the Business Combination (“Advisory Organizational Documents Proposal 4G”).

The full text of the resolutions to be passed is as follows:

RESOLVED, as a special resolution, that each of the following material differences between the Cayman Constitutional Documents and the Proposed Organizational Documents be approved on an advisory non-binding basis:

 

  (a)

to authorize the change in the authorized share capital of CCAC from (i) 200,000,000 CCAC Class A ordinary shares of a par value of US$0.0001 each, 20,000,000 CCAC Class B ordinary shares of a par value of US$0.0001 each and 1,000,000 CCAC Preference Sharesof a par value of US$0.0001 each to (ii) 300,000,000 shares of Quanergy PubCo common stock and 10,000,000 shares of Quanergy PubCo preferred stock;

 

  (b)

to approve an exclusive forum provision, pursuant to which the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware, shall be the exclusive forum for certain actions under Delaware law, and the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act;

 

  (c)

to authorize electing not to be governed by Section 203 of the DGCL relating to takeovers by interested stockholders but to provide other similar restrictions regarding takeovers by interested stockholders;

 

  (d)

to approve provisions providing that the affirmative vote of the holders of at least 66 2/3% of the total voting power of all the then outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, will be required to amend, alter, repeal or rescind all or any portion of Article V(B), Article VII, Article VIII, Article IX, Article X, Article XI, Article XII and Article XIII of the Proposed Certificate of Incorporation;

 

  (e)

to approve provisions permitting the removal of a director only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of all of the then outstanding shares of voting stock of the Corporation entitled to vote at an election of directors;

 

  (f)

to approve provisions providing that any action required or permitted to be taken by the stockholders of the Company must be effected at an annual or special meeting of the stockholders of the Company, and shall not be taken by written consent in lieu of a meeting; and

 

  (g)

to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Certificate of Incorporation and Proposed Bylaws in connection with the consummation of the Business Combination, including (1) changing the company name from “CITIC Capital Acquisition Corp.” to “Quanergy Systems, Inc.,” (2) making Quanergy PubCo’s corporate existence perpetual, and

 

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  (3) removing certain provisions related to CCAC’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which CCAC’s board of directors believes is necessary to adequately address the needs of Quanergy PubCo after the Business Combination.”

 

   

Proposal No. 5—The Stock Issuance Proposal—to consider and vote upon a proposal to approve by ordinary resolution for purposes of complying with the applicable provisions of NYSE Listing Rule 312.03, the issuance of Quanergy PubCo common stock to the PIPE Investors pursuant to the PIPE Investment (the “Stock Issuance Proposal”);

The full text of the resolution to be passed is as follows:

RESOLVED, as an ordinary resolution, that, for the purposes of complying with the applicable provisions of Section 312.03 of the NYSE’s Listed Company Manual, the issuance of shares of Quanergy PubCo common stock pursuant to the Merger Agreement and the PIPE Investment, including to the stockholders of Quanergy and the PIPE Investors, be approved in all respects.”

 

   

Proposal No. 6—The Equity Incentive Plan Proposal—to consider and vote upon a proposal to approve by ordinary resolution the Quanergy PubCo 2021 Incentive Award Plan (a copy of which is attached to this proxy statement / prospectus as Annex G) (the “Equity Incentive Plan Proposal”);

The full text of the resolution to be passed is as follows:

RESOLVED, as an ordinary resolution, that the Company’s adoption of Quanergy Systems, Inc. 2021 Equity Incentive Plan and any form award agreements thereunder, be approved, ratified and confirmed in all respects.”

 

   

Proposal No. 7—The ESPP Proposal—to consider and vote upon a proposal to approve by ordinary resolution the Quanergy PubCo 2021 Employee Stock Purchase Plan (a copy of which is attached to this proxy statement / prospectus as Annex F) (the “ESPP Proposal”);

The full text of the resolution to be passed is as follows:

RESOLVED, as an ordinary resolution, that the Company’s adoption of the Quanergy Systems, Inc. 2021 Employee Stock Purchase Plan and any form award agreements thereunder, be approved, ratified and confirmed in all respects.”

 

   

Proposal No. 8—The Adjournment Proposal—to consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”).

The full text of the resolution to be passed is as follows:

RESOLVED, as an ordinary resolution, that the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting be approved.”

Each of Proposals No. 1, 2, 3, 5, 6 and 7 is cross-conditioned on the approval of each other. The Adjournment Proposal and the Advisory Organizational Documents Proposals are not cross-conditioned upon the approval of any other proposal set forth in this proxy statement / prospectus.

These items of business are described in this proxy statement / prospectus, which we encourage you to read carefully and in its entirety before voting.

 

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Only holders of record of CCAC ordinary shares at the close of business on                  are entitled to notice of and to vote at and to have their votes counted at the extraordinary general meeting and any adjournment of the extraordinary general meeting.

This proxy statement / prospectus and accompanying proxy card is being provided to CCAC’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournment of the extraordinary general meeting. Whether or not you plan to attend the extraordinary general meeting, all of CCAC’s shareholders are urged to read this proxy statement / prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described under the heading “Risk Factors” beginning on page 55 of this proxy statement / prospectus.

After careful consideration, the CCAC Board has unanimously approved the Business Combination and unanimously recommends that shareholders vote “FOR” adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to CCAC’s shareholders in this proxy statement / prospectus. When you consider the recommendation of these proposals by the CCAC Board, you should keep in mind that CCAC’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal—Interests of CCAC’s Directors and Officers in the Business Combination” in this proxy statement / prospectus for a further discussion of these considerations.

Pursuant to the Cayman Constitutional Documents, a holder of public shares (as defined herein) (a “public shareholder”) may request of CCAC that Quanergy PubCo redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

  (ii)

submit a written request to Continental Stock Transfer & Trust Company, CCAC’s transfer agent (“Continental”), that Quanergy PubCo redeem all or a portion of your public shares for cash; and

 

  (iii)

deliver your certificates for public shares (if any) along with the redemption forms to Continental, physically or electronically through The Depository Trust Company (“DTC”).

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to                 , Eastern Time, on                 , 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental, CCAC’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem public shares regardless of if or how they vote in respect of the BCA Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank and the public shares will not be redeemed for cash, even if their holders have properly exercised redemption rights with respect to such public shares.

If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, CCAC’s

 

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transfer agent, Quanergy PubCo will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of CCAC’s initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of Quanergy PubCo common stock that will be redeemed promptly after consummation of the Business Combination. See “Extraordinary General Meeting of CCAC—Redemption Rights” in this proxy statement / prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act, will be restricted from redeeming its public shares with respect to more than an aggregate of 20% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 20% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash.

CITIC Capital Acquisition LLC, a Delaware limited liability company and shareholder of CCAC (the “Sponsor”), and each director of CCAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, and to waive their redemption rights in connection with the consummation of the Business Combination with respect to any CCAC ordinary shares held by them, in the case of the Sponsor, subject also to the terms and conditions contemplated by the Sponsor Support Agreement, dated as of June 21, 2021, a copy of which is attached to this proxy statement / prospectus as Annex C (the “Sponsor Support Agreement”). The CCAC ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement / prospectus, the Sponsor (whose members include CCAC’s directors and officers) owns 20% of the issued CCAC ordinary shares.

The Merger Agreement provides that the obligations of Quanergy to consummate the Merger are conditioned on, among other things, that as of Closing, the amount of cash available in the trust account, after deducting the amount required to satisfy CCAC’s obligations to its shareholders (if any) that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (such amount, the “Trust Amount”) plus the PIPE Investment Amount actually received by CCAC substantially concurrently with the Closing, is at least equal to $175,000,000. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will CCAC redeem public shares in an amount that would cause its net tangible assets to be less than $5,000,001.

The Merger Agreement is also subject to the satisfaction or waiver of certain other customary closing conditions as described in the accompanying proxy statement / prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such conditions in of the Merger Agreement.

The approval of each of the Domestication Proposal, the Organizational Documents Proposal and the Advisory Organizational Documents Proposals requires the affirmative vote of holders of a majority of at least two-thirds of the CCAC ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. The approval of each of the BCA Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal, the ESPP Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the CCAC ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

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Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in this proxy statement / prospectus to make sure that your public shares are represented at the extraordinary general meeting. If you hold your public shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your public shares are represented and voted at the extraordinary general meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal and the Advisory Organizational Documents Proposals are not conditioned upon the approval of any other proposal set forth in this proxy statement / prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your public shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Your attention is directed to the remainder of the proxy statement / prospectus following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read this proxy statement / prospectus carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your ordinary shares, please you may call Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call at (203) 658-9400, or by emailing [CCAC.info]@investor.morrowsodali.com. This notice of extraordinary general meeting and the proxy statement / prospectus are available at https://                .

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors of CITIC Capital Acquisition Corp.,

                , 2021

 

 

Fanglu Wang

Chief Executive Officer and Director (Principal Executive Officer)

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO CCAC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

 

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TABLE OF CONTENTS

 

     Page  

References to Additional Information

     1  

About This Document

     2  

Market and Industry Data

     3  

Selected Definitions

     4  

Cautionary Statement regarding Forward-looking Statements

     9  

Questions and Answers for Shareholders of CCAC

     12  

Summary of the Proxy Statement / Prospectus

     31  

Selected Unaudited Pro Forma Condensed Combined Financial Information

     52  

Market Price and Dividend Information

     54  

Risk Factors

     55  

Extraordinary General Meeting of CCAC

     109  

BCA Proposal

     117  

Domestication Proposal

     169  

Organizational Documents Proposal

     177  

Advisory Organizational Documents Proposals

     179  

Stock Issuance Proposal

     188  

Equity Incentive Plan Proposal

     190  

ESPP Proposal

     198  

Adjournment Proposal

     203  

U.S. Federal Income Tax Considerations

     204  

Unaudited Pro Forma Condensed Combined Financial Information

     220  

Information About CCAC

     231  

CCAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations

     239  

Information About Quanergy

     243  

Quanergy’s Management’s Discussion and Analysis of Financial Condition and Results of Operations

     258  

Management of Quanergy Pubco following the Business Combination

     278  

Executive Compensation of Quanergy

     286  

Beneficial Ownership of Securities

     294  

Certain Relationships and Related Party Transactions

     299  

Comparison of Corporate Governance and Shareholder Rights

     307  

Description of Quanergy PubCo Securities

     310  

Securities Act Restrictions on Resale of Quanergy PubCo Securities

     314  

Stockholder Proposals and Nominations

     315  

Shareholder Communications

     317  

Legal Matters

     318  

Experts

     319  

Our Transfer Agent and Warrant Agent

     320  

Delivery of Documents to Shareholders

     321  

Enforceability of Civil Liability

     322  

Where You Can Find More Information; Incorporation by Reference

     323  

Index to Financial Statements

     F-1  

Annex A Merger Agreement

     A-1  

Annex B Merger Agreement Amendment

     B-1  

Annex C Sponsor Support Agreement

     C-1  

Annex D Quanergy Holders Support Agreement

     D-1  

Annex E Form of Amended and Restated Registration Rights Agreement

     E-1  

Annex F Form of Quanergy PubCo 2021 Employee Stock Purchase Plan

     F-1  

Annex G Form of Quanergy PubCo 2021 Equity Incentive Plan

     G-1  

Annex H Cayman Constitutional Documents of CCAC

     H-1  

 

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REFERENCES TO ADDITIONAL INFORMATION

This proxy statement / prospectus incorporates important information that is not included in or delivered with this proxy statement / prospectus. This information is available for you to review through the SEC’s website at www.sec.gov.

You may request copies of this proxy statement / prospectus or other information concerning CCAC, without charge, by written request to Fanglu Wang, CITIC Capital Acquisition Corp., 28/F CITIC Tower, 1 Tim Mei Avenue, Central, the Hong Kong Special Administrative Region of the People’s Republic of China, Tel: +852-3710-6888; or Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call at (203) 658-9400, or by emailing [CCAC.info]@investor.morrowsodali.com, or from the SEC through the SEC website at the address provided above.

In order for you to receive timely delivery of the documents in advance of the extraordinary general meeting of CCAC to be held on                , 2021, you must request the information no later than four business days prior to the date of the extraordinary general meeting, by                 , 2021.

 

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ABOUT THIS DOCUMENT

This document, which forms part of a registration statement on Form S-4 filed with the SEC by CCAC, constitutes a prospectus of CCAC under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of common stock of CCAC to be issued to CCAC’s stockholders pursuant to the Domestication and to Quanergy’s stockholders under the Merger Agreement. This document also constitutes a proxy statement of CCAC under Section 14(a) of the Exchange Act.

You should rely only on the information contained or incorporated by the reference into this proxy statement / prospectus. No one has been authorized to provide you with information that is difference from that contained in, or incorporated by reference into, this proxy statement / prospectus. This proxy statement / prospectus is dated as of the date set forth on the cover hereof. You should not assume that the information contained in this proxy statement / prospectus is accurate as of any date other than that date. You should not assume that the information incorporated by reference into this proxy statement / prospectus is accurate as of any date other than the date of such incorporated document. Neither the mailing of this proxy statement / prospectus to CCAC stockholders nor the issuance by CCAC of its common stock in connection with the Business Combination will create any implication to the contrary.

Information contained in this proxy statement / prospectus regarding CCAC has been provided by CCAC and information contained in this proxy statement / prospectus regarding Quanergy has been provided by Quanergy.

This proxy statement / prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

 

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MARKET AND INDUSTRY DATA

This proxy statement / prospectus contains information concerning the market and industry in which Quanergy conducts its business. Quanergy operates in an industry in which it is difficult to obtain precise industry and market information. Quanergy has obtained market and industry data in this proxy statement / prospectus from industry publications and from surveys or studies conducted by third parties that it believes to be reliable. Quanergy cannot assure you of the accuracy and completeness of such information, and it has not independently verified the market and industry data contained in this proxy statement / prospectus or the underlying assumptions relied on therein. As a result, you should be aware that any such market, industry and other similar data may not be reliable. Industry and market data is subject to change and cannot always be verified with complete certainty due to limits on availability and reliability of raw data, the voluntary nature of data gathering process and other limitations and uncertainties inherent in any statistical survey. While Quanergy is not aware of any misstatements regarding any industry data presented in this proxy statement / prospectus, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the section entitled “Risk Factors” below.

You also may obtain additional proxy cards and other information related to the proxy solicitation by contacting the appropriate contact listed above. You will not be charged for any of these documents that you request.

For a more detailed description of the information incorporated by reference in this proxy statement / prospectus and how you may obtain it, see the section entitled “Where You Can Find More Information; Incorporation by Reference” beginning on page 323.

 

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SELECTED DEFINITIONS

Unless otherwise stated or unless the context otherwise requires the terms “we,” “us,” “our” and CCAC refer to CITIC Capital Acquisition Corp., and the terms “Quanergy Systems, Inc.”, “combined company” and “post-combination company” refer to Quanergy Systems, Inc. and its subsidiaries following the consummation of the Business Combination.

Unless otherwise stated in this proxy statement / prospectus or the context otherwise requires, references to:

 

   

“2021 Plan” are to the Quanergy PubCo 2021 Equity Incentive Plan attached to this proxy statement / prospectus as Annex G;

 

   

“2022 Quanergy Convertible Notes” are to an outstanding convertible promissory note issued by Quanergy pursuant to a note purchase agreement, dated as of March 15, 2018, by and among Quanergy and the investors listed on Schedule I thereto;

 

   

“2023 Quanergy Convertible Notes” are to an outstanding convertible promissory note, as amended on February 4, 2021, issued by Quanergy pursuant to a note and warrant purchase agreement, dated as of March 25, 2020, by and among Quanergy and the investors listed on Schedule I thereto, as amended on April 7, 2020, August 14, 2020 and February 4, 2021;

 

   

“Aggregate Merger Consideration” are to a fully-diluted pre-transaction equity value of Quanergy of $970 million;

 

   

“Business Combination” are to the Domestication together with the Merger;

 

   

“Cayman Constitutional Documents” are to CCAC’s Amended and Restated Memorandum and Articles of Association attached to this proxy statement / prospectus as Annex H, as amended from time to time;

 

   

“Cayman Islands Companies Law” are to the Cayman Islands Companies Act (As Revised);

 

   

“CCAC” are to CITIC Capital Acquisition Corp. prior to its domestication as a corporation in the State of Delaware;

 

   

“CCAC Board” are to the board of directors of CCAC;

 

   

“CCAC Class A ordinary shares” are to CCAC’s Class A ordinary shares, par value $0.0001 per Class A ordinary share;

 

   

“CCAC Class B ordinary shares” are to CCAC’s Class B ordinary shares, par value $0.0001 per Class B ordinary share;

 

   

“CCAC Preference Shares” are to CCAC’s preference shares, par value $0.0001 per share;

 

   

“CCAC units” and “units” are to the units of CCAC, each unit representing one CCAC Class A ordinary share and one-half of one redeemable warrant to acquire one CCAC Class A ordinary share, that were offered and sold by CCAC in its initial public offering and registered pursuant to the IPO registration statement (less the number of units that have been separated into the underlying public shares and underlying warrants upon the request of the holder thereof);

 

   

“CFIUS” are to the Committee on Foreign Investment in the United States;

 

   

“Closing” are to the closing of the Business Combination;

 

   

“Closing Date” are to the date of closing of the Business Combination;

 

   

“Company,” “we,” “us” and “our” are to CCAC prior to its domestication as a corporation in the State of Delaware and to Quanergy PubCo after its domestication as a corporation incorporated in the State of Delaware, including after its change of name to Quanergy Systems, Inc.;

 

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“Condition Precedent Approvals” are to the approval at the extraordinary general meeting of the Condition Precedent Proposals;

 

   

“Condition Precedent Proposals” are to the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal and the ESPP Proposal, collectively;

 

   

“Continental” are to Continental Stock Transfer & Trust Company, CCAC’s transfer agent;

 

   

“COVID-19 Measures” are to any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester, safety or similar law, directive, guidelines or recommendations promulgated by any industry group or any governmental authority, including the Centers for Disease Control and Prevention and the World Health Organization, in each case, in connection with or in response to COVID-19, including the CARES Act and Families First Act;

 

   

“Credit Suisse” are to Credit Suisse Securities (USA) LLC;

 

   

“DGCL” are to the General Corporation Law of the State of Delaware;

 

   

“Domestication” are to the domestication of CITIC Capital Acquisition Corp. as a corporation incorporated in the State of Delaware;

 

   

“DTC” means the Depository Trust Company;

 

   

“EBITDA” means earnings before interest, taxes, depreciation and amortization;

 

   

“ESPP” are to the Quanergy PubCo 2021 Employee Stock Purchase Plan attached to this proxy statement / prospectus as Annex F;

 

   

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

 

   

“Existing Articles” are to the current amended and restated articles of association of CCAC;

 

   

“founder shares” are to the CCAC Class B ordinary shares purchased by the Sponsor in a private placement prior to the initial public offering, and the CCAC Class A ordinary shares that will be issued upon the conversion thereof;

 

   

“GAAP” are to accounting principles generally accepted in the United States of America;

 

   

“HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

 

   

“initial public offering” are to CCAC’s initial public offering that was consummated on February 13, 2020;

 

   

“IPO registration statement” are to the Registration Statement on Form S-1 (333-236006) filed by CCAC in connection with its initial public offering, which became effective on February 10, 2020;

 

   

“IRS” are to the U.S. Internal Revenue Service;

 

   

“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

 

   

“LiDAR” are to Light Detection and Ranging;

 

   

“Lock-Up Agreement” are to the lock-up agreement between CCAC and certain shareholders of Quanergy named in Exhibit A therein and other persons named in Exhibit B therein;

 

   

“Merger” are to the merger of Merger Sub with and into Quanergy, with Quanergy surviving the merger as a wholly owned subsidiary of Quanergy PubCo;

 

   

“Merger Sub” are to CITIC Capital Merger Sub Inc.;

 

   

“Minimum Cash Condition” are to the amount of cash available in the trust account being at least equal to $175,000,000 following the extraordinary general meeting, the sum of (x) all of the proceeds of CCAC’s initial public offering and private placements of its warrants, after deducting the amount

 

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required to satisfy CCAC’s obligations to its shareholders (if any) that exercise their rights to redeem their CCAC Class A Ordinary Shares plus (y) the PIPE Investment;

 

   

“Merger Agreement” is to the Agreement and Plan of Merger, dated as of June 21, 2021, as amended on June 28, 2021, by and among CCAC, Merger Sub and Quanergy, attached to this proxy statement / prospectus as Annex A and Annex B, respectively;

 

   

“NYSE” are to the New York Stock Exchange;

 

   

“ordinary shares” are to the CCAC Class A ordinary shares and the CCAC Class B ordinary shares, collectively;

 

   

“Person” are to any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or instrumentality or other entity of any kind;

 

   

“PIPE Investment” are to the purchase of shares of Quanergy PubCo common stock pursuant to the Subscription Agreements;

 

   

“PIPE Investment Amount” are to the aggregate gross purchase price received by CCAC prior to or substantially concurrently with Closing for the shares in the PIPE Investment;

 

   

“PIPE Investors” or “PIPE Financing” are to those certain institutional and accredited investors participating in the PIPE Investment pursuant to the Subscription Agreements and certain investors are related to Quanergy;

 

   

“private placement warrants” are to the CCAC private placement warrants outstanding as of the date of this proxy statement / prospectus and the warrants of Quanergy PubCo issued as a matter of law upon the conversion thereof at the time of the Domestication;

 

   

“pro forma” are to giving pro forma effect to the Business Combination and related transactions;

 

   

“Proposed Bylaws” are to the proposed bylaws of Quanergy PubCo upon the effective date of the Domestication attached to this proxy statement / prospectus as Annex I;

 

   

“Proposed Certificate of Incorporation” are to the proposed certificate of incorporation of Quanergy PubCo upon the effective date of the Domestication attached to this proxy statement / prospectus as Annex J;

 

   

“Proposed Organizational Documents” are to the Proposed Certificate of Incorporation and the Proposed Bylaws;

 

   

“public shareholders” are to holders of public shares, whether acquired in CCAC’s initial public offering or acquired in the secondary market;

 

   

“public shares” are to the CCAC Class A ordinary shares (including those that underlie the CCAC units) that were offered and sold by CCAC in its initial public offering and registered pursuant to the IPO registration statement or the shares of Quanergy PubCo common stock issued as a matter of law upon the conversion thereof at the time of the Domestication, as context requires;

 

   

“public warrants” are to the redeemable warrants (including those that underlie the CCAC units) that were offered and sold by CCAC in its initial public offering and registered pursuant to the IPO registration statement or the redeemable warrants of Quanergy PubCo issued as a matter of law upon the conversion thereof at the time of the Domestication, as context requires;

 

   

“Quanergy” are to Quanergy Systems, Inc. prior to the Business Combination, which will become a wholly owned subsidiary of Quanergy PubCo as a result of the Business Combination and change its name from Quanergy Systems, Inc. to Quanergy Systems, Inc.;

 

   

“Quanergy Awards” are to Quanergy Options and Quanergy Restricted Stock Unit Awards;

 

   

“Quanergy Board” are to the board of directors of Quanergy;

 

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“Quanergy Capital Stock” are to shares of Quanergy common stock and Quanergy preferred stock;

 

   

“Quanergy common stock” are to shares of Quanergy common stock, par value $0.00001 per share;

 

   

“Quanergy Convertible Notes” are 2022 Quanergy Convertible Notes and 2023 Quanergy Convertible Notes;

 

   

“Quanergy Holders Support Agreement” are to that certain Support Agreement, dated June 21, 2021, by and among Quanergy, CCAC, each officer and director of Quanergy and certain other stockholders of Quanergy as set forth therein attached to this proxy statement / prospectus as Annex D, as amended and modified from time to time;

 

   

“Quanergy Options” are to options to purchase shares of Quanergy common stock;

 

   

“Quanergy preferred stock” are to Quanergy preferred stock, of which (A) 2,231,248 shares are designated as Series Seed Preferred Stock, par value $0.0001 per share, all of which are issued and outstanding, (B) 495,417 shares are designated as Series Seed-2 Preferred Stock, par value $0.0001 per share, all of which are issued and outstanding, (C) 3,233,871 shares are designated as Series A Preferred Stock, par value $0.0001 per share, all of which are issued and outstanding, (D) 790,500 shares are designated as Series A Plus Preferred Stock, par value $0.0001 per share, all of which are issued and outstanding, (E) 778,839 shares are designated as Series B Preferred Stock, par value $0.0001 per share, all of which are issued and outstanding and (F) 165,237 shares are designated as Series C Preferred Stock, par value $0.0001 per share, all of which are issued and outstanding;

 

   

“Quanergy PubCo” or “New Quanergy” are to CCAC after the Domestication and its name change from CITIC Capital Acquisition Corp. to Quanergy Systems, Inc.;

 

   

“Quanergy PubCo common stock” are to shares of Quanergy PubCo common stock, par value $0.0001 per share;

 

   

“Quanergy PubCo Converted Warrants” are to warrants to purchase shares of Quanergy PubCo common stock;

 

   

“Quanergy PubCo Options” are to options to purchase shares of Quanergy PubCo common stock;

 

   

“Quanergy PubCo Restricted Stock” are to restricted shares of Quanergy PubCo common stock;

 

   

“Quanergy PubCo Warrants” are to the warrants of Quanergy PubCo to purchase capital stock of Quanergy PubCo;

 

   

“Quanergy Restricted Stock Unit Awards” are to an award of restricted stock units covering Quanergy common stock;

 

   

“Quanergy Warrants” are to the warrants of Quanergy to purchase capital stock of Quanergy;

 

   

“redemption” are to each redemption of public shares for cash pursuant to the Cayman Constitutional Documents and the Proposed Organizational Documents;

 

   

“Registration Rights Agreement” are to the Amended and Restated Registration Rights Agreement to be entered into at Closing, by and among Quanergy PubCo, the Sponsor, certain members of the Sponsor and certain stockholders of Quanergy PubCo attached to this proxy statement / prospectus as Annex E, as amended and modified from time to time;

 

   

“Sarbanes Oxley Act” are to the Sarbanes-Oxley Act of 2002;

 

   

“SEC” are to the United States Securities and Exchange Commission;

 

   

“Securities Act” are to the Securities Act of 1933, as amended;

 

   

“Sponsor” are to CITIC Capital Acquisition LLC, a Delaware limited liability company;

 

   

“Sponsor Support Agreement” are to that certain Support Agreement, dated June 21, 2021, by and among the Sponsor, CCAC and Quanergy attached to this proxy statement / prospectus as Annex C, as amended and modified from time to time;

 

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“Subscription Agreements” are to the subscription agreements pursuant to which the PIPE Investment will be consummated each in the form attached to this proxy statement / prospectus as Annex M, as amended and modified from time to time;

 

   

“trust account” are to the trust account established at the consummation of CCAC’s initial public offering at J.P. Morgan Chase Bank, N.A. and maintained by Continental, acting as trustee;

 

   

“Trust Agreement” are to the Investment Management Trust Agreement, dated February 10, 2020, by and between CCAC and Continental Stock Transfer & Trust Company, as trustee;

 

   

“Velodyne” are to Velodyne Lidar, Inc.;

 

   

“warrants” are to the public warrants and the private placement warrants; and

 

   

“Warrant Agreement” are to the warrant agreement dated February 10, 2020, between CCAC and Continental.

Unless otherwise stated in this proxy statement / prospectus or the context otherwise requires, all references in this proxy statement / prospectus to CCAC Class A ordinary shares, shares of Quanergy PubCo common stock, convertible notes or warrants include such securities underlying the units.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement / prospectus contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for future operations, including as they relate to the potential Business Combination, of CCAC. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this proxy statement / prospectus, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When CCAC discusses its strategies or plans, including as they relate to the potential Business Combination, it is making projections, forecasts or forward-looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, CCAC’s management.

Forward-looking statements in this proxy statement / prospectus may include, for example, statements about:

 

   

the benefits of the Business Combination;

 

   

CCAC’s ability to complete the Business Combination or, if CCAC does not consummate the Business Combination, any other initial business combination;

 

   

satisfaction or waiver (if applicable) of the conditions to the Merger, including, among other things:

 

   

the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of CCAC and Quanergy, (ii) effectiveness of the registration statement on Form S-4 of which this proxy statement / prospectus is a part, (iii) expiration or termination of the waiting period under the HSR Act and the achievement of CFIUS clearance (as contemplated by the Merger Agreement), (iv) receipt of approval for listing on the NYSE of the shares of Quanergy PubCo common stock to be issued in connection with the Merger, (v) that after redemption, CCAC’s net tangible assets shall be no less than $5,000,001 upon Closing and (vi) the absence of certain specified injunctions; and

 

   

(i) the Domestication will have been completed, and (ii) the amount of cash available in (x) the trust account, following the extraordinary general meeting, into which substantially all of the proceeds of CCAC’s initial public offering and private placements of its warrants have been deposited for the benefit of CCAC, certain of its public shareholders and the underwriters of CCAC’s initial public offering, after deducting the amount required to satisfy CCAC’s obligations to its shareholders (if any) that exercise their rights to redeem their CCAC Class A Ordinary Shares pursuant to the Cayman Constitutional Documents plus (y) the PIPE Investment, is at least equal to $175,000,000;

 

   

the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

   

the projected financial information, anticipated growth rate, and market opportunity of Quanergy PubCo;

 

   

the ability to obtain or maintain the listing of Quanergy PubCo common stock and Quanergy PubCo warrants on the NYSE following the Business Combination;

 

   

our public securities’ potential liquidity and trading;

 

   

CCAC officers and directors allocating their time to other businesses and potentially having conflicts of interest with CCAC’s business or in approving the Business Combination;

 

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the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

 

   

the impact of the regulatory environment and complexities with compliance related to such environment;

 

   

factors relating to the business, operations and financial performance of Quanergy and its subsidiaries, including:

 

   

Quanergy’s history of operating losses;

 

   

the ability of Quanergy to achieve and maintain profitability in the future;

 

   

Quanergy’s future capital needs following the Business Combination;

 

   

demand for Quanergy’s products and the drivers of that demand;

 

   

adoption of LiDAR technology generally and of Quanergy’s digital LiDAR technology, in particular;

 

   

the implementation, market acceptance and success of Quanergy’s products and technology in the autonomous vehicle industry and in potential new categories for LiDAR technology;

 

   

competition in Quanergy’s industry, the advantages of Quanergy’s products and technology over competing products and technology existing in the market, and competitive factors including with respect to technological capabilities, cost and scalability;

 

   

unforeseen safety issues with Quanergy’s products that could result in injuries to people;

 

   

adverse conditions in the global Sensing Solutions Market or the global economy more generally, including the impact of health epidemics such as the COVID-19 pandemic;

 

   

the ability of Quanergy to manage its growth effectively;

 

   

the success of Quanergy’s strategic relationships with third parties;

 

   

Quanergy’s international expansion plans;

 

   

Quanergy’s ability to develop additional products and product offerings;

 

   

Quanergy’s limited manufacturing capacity and plans to depend primarily on a small number of contract manufacturers and manufacturing partners in the future;

 

   

Quanergy’s reliance on sole source suppliers and Quanergy’s contract manufacturers’ ability to source components on a timely basis;

 

   

the ability of Quanergy to maintain and protect its intellectual property;

 

   

the outcome of any known and unknown litigation and regulatory proceedings;

 

   

Quanergy’s ability to recruit and retain qualified personnel;

 

   

the ability of Quanergy to maintain an effective system of internal control over financial reporting; and

 

   

other factors detailed under the section entitled “Risk Factors.”

The forward-looking statements contained in this proxy statement / prospectus are based on current expectations and beliefs concerning future developments and their potential effects on us or Quanergy. There can be no assurance that future developments affecting us or Quanergy will be those that CCAC or Quanergy have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond CCAC’s control or the control of Quanergy) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

 

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These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” beginning on page 55 of this proxy statement / prospectus. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. CCAC and Quanergy undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

You should not place undue reliance on these forward-looking statements in deciding how your vote should be cast or in voting your shares on the proposals set out in this proxy statement / prospectus. Before any CCAC shareholder grants its proxy or instructs how its vote should be cast or votes on the proposals to be put to the extraordinary general meeting, such stockholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement / prospectus may adversely affect us.

 

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QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF CCAC

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the extraordinary general meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to CCAC’s shareholders. CCAC urges shareholders to read this proxy statement / prospectus, including the Annexes and the other documents referred to herein, carefully and in their entirety to fully understand the proposed Business Combination and the voting procedures for the extraordinary general meeting, which will be held at                 , Eastern Time, on                 , 2021, at the offices of White & Case LLP located at 1221 Avenue of the Americas, New York, NY 10020, or virtually via live webcast. To participate in the extraordinary general meeting, visit https://                 and enter the 12 digit control number included on your proxy card. You may register for the extraordinary general meeting as early as                 , Eastern Time, on                 , 2020. If you hold your public shares through a bank, broker or other nominee, you will need to take additional steps to participate in the extraordinary general meeting, as described in this proxy statement.

 

Q:

Why am I receiving this proxy statement / prospectus?

 

A:

CCAC shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Merger Agreement and approve the Business Combination. The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Quanergy, with Quanergy surviving the merger as a wholly owned subsidiary of Quanergy PubCo, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement / prospectus. See the section entitled “BCA Proposal” for more detail.

A copy of each of the Merger Agreement as amended on June 28, 2021 is attached to this proxy statement / prospectus as Annex A and Annex B and you are encouraged to read it in its entirety.

As a condition to the Merger, CCAC will change its jurisdiction of incorporation by effecting a deregistration under the Cayman Islands Companies Law and a domestication under Section 388 of the DGCL, pursuant to which CCAC’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. As a result of and upon the effective time of the Domestication, (1) each of the then issued CCAC Class B ordinary shares will convert automatically, on a one-for-one basis, into a CCAC Class A ordinary share, (2) immediately following the conversion described in clause (1), each of the then issued CCAC Class A ordinary shares will convert automatically, on a one-for-one basis, into a share of Quanergy PubCo common stock; (3) each of the then issued and outstanding CCAC warrants will convert automatically into a Quanergy PubCo warrant, pursuant to the Warrant Agreement, dated as of February 10, 2020, between CCAC and Continental Stock Transfer & Trust Company, and (4) each of the then issued and outstanding CCAC units that have not been previously separated into the underlying CCAC Class A ordinary shares and underlying CCAC warrants upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of Quanergy PubCo common stock and one-half of one Quanergy PubCo warrant. No fractional Quanergy PubCo warrants will be issued upon separation of the CCAC units. See “Domestication Proposal” for additional information.

The provisions of the Proposed Organizational Documents will differ materially from the Cayman Constitutional Documents. Please see “What amendments will be made to the current constitutional documents of CCAC?” below.

THE VOTE OF SHAREHOLDERS IS IMPORTANT. SHAREHOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT / PROSPECTUS, INCLUDING EACH OF THE PROPOSALS BEING PRESENTED AT THE MEETING, THE ANNEXES AND THE ACCOMPANYING FINANCIAL STATEMENTS OF CCAC AND QUANERGY, CAREFULLY AND IN ITS ENTIRETY.

 

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Q:

What proposals are shareholders of CCAC being asked to vote upon?

 

A:

At the extraordinary general meeting, CCAC is asking holders of ordinary shares to consider and vote upon:

 

   

a proposal to approve and adopt by ordinary resolution the Merger Agreement;

 

   

a proposal to approve by special resolution the Domestication;

 

   

a proposal to approve by special resolution the Proposed Organizational Documents;

 

   

the following seven separate proposals to approve by special resolution on an advisory basis and as required by applicable SEC guidance, the following material differences between the Cayman Constitutional Documents and the Proposed Organizational Documents:

 

   

to authorize the change in the authorized share capital of CCAC from (i) 200,000,000 CCAC Class A ordinary shares, 20,000,000 CCAC Class B ordinary shares and 1,000,000 CCAC Preference Shares to (ii) 300,000,000 shares of Quanergy PubCo common stock and 10,000,000 shares of Quanergy PubCo preferred stock;

 

   

to approve an exclusive forum provision, pursuant to which the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware, shall be the exclusive forum for certain actions under Delaware law, and the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act;

 

   

to approve a provision electing not to be governed by Section 203 of the DGCL relating to takeovers by interested stockholders but to provide other similar restrictions regarding takeovers by interested stockholders;

 

   

to approve provisions providing that the affirmative vote of the holders of at least 66 2/3% of the total voting power of all the then outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, will be required to amend, alter, repeal or rescind all or any portion of Article V(B), Article VII, Article VIII, Article IX, Article X, Article XI, Article XII and Article XIII of the Proposed Certificate of Incorporation;

 

   

to approve provisions permitting the removal of a director only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of all of the then outstanding shares of voting stock of the Corporation entitled to vote at an election of directors;

 

   

to approve provisions providing that any action required or permitted to be taken by the stockholders of the Company must be effected at an annual or special meeting of the stockholders of the Company, and shall not be taken by written consent in lieu of a meeting; and

 

   

to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Certificate of Incorporation and Proposed Bylaws in connection with the consummation of the Business Combination, including (1) changing the company name from “CITIC Capital Acquisition Corp.” to “Quanergy Systems, Inc.,” (2) making Quanergy PubCo’s corporate existence perpetual, and (3) removing certain provisions related to CCAC’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which the CCAC Board believes is necessary to adequately address the needs of Quanergy PubCo after the Business Combination;

 

   

a proposal to approve by ordinary resolution, for purposes of complying with applicable listing rules of the NYSE, the issuance of (a) shares of Quanergy PubCo common stock to the PIPE Investors, pursuant to the PIPE Investment and (b) shares of Quanergy PubCo common stock to certain stockholders of Quanergy pursuant to the Merger Agreement;

 

   

a proposal to approve by ordinary resolution the 2021 Plan;

 

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a proposal to approve by ordinary resolution the ESPP; and

 

   

a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting.

If CCAC’s shareholders do not approve each of the Condition Precedent Proposals, then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated. See “BCA Proposal,” “Domestication Proposal,” “Organizational Documents Proposal,” “Stock Issuance Proposal”, “Equity Incentive Plan Proposal” and “ESPP Proposal”.

CCAC will hold the extraordinary general meeting to consider and vote upon these proposals. This proxy statement / prospectus contains important information about the Business Combination and the other matters to be acted upon at the extraordinary general meeting. Shareholders of CCAC should read it carefully.

After careful consideration, the CCAC Board has determined that the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposal, each of the Advisory Organizational Documents Proposals, the Stock Issuance Proposal, the Equity Incentive Plan Proposal, the ESPP Proposal and the Adjournment Proposal are in the best interests of CCAC and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of one or more of CCAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of CCAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, CCAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal—Interests of CCAC’s Directors and Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

Are the proposals conditioned on one another?

 

A:

Yes. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Advisory Organizational Documents Proposals and the Adjournment Proposal are not conditioned upon the approval of any other proposal.

 

Q:

Why is CCAC proposing the Business Combination?

 

A:

CCAC was organized to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination, with one or more businesses or entities.

Based on its due diligence investigations of Quanergy and the industry in which it operates, including the financial and other information provided by Quanergy in the course of CCAC’s due diligence investigations, the CCAC Board believes that the Business Combination with Quanergy is in the best interests of CCAC and its shareholders and presents an opportunity to increase shareholder value. However, there can be no assurances of this. See “BCA Proposal—CCAC Board’s Reasons for the Approval of the Business Combination” for additional information.

 

Q:

What material negative factors did the CCAC Board consider in connection with the Business Combination?

Although the CCAC Board believes that the Business Combination with Quanergy presents a unique business combination opportunity and is in the best interests of CCAC and shareholders, the CCAC Board did consider certain potentially material negative factors in arriving at that conclusion. These factors

 

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are discussed in greater detail in the section entitled “BCA Proposal—CCAC Board’s Reasons for the Approval of the Business Combination,” as well as in the sections entitled “Risk Factors—Risks Related to Quanergy’s Business and Industry.”

 

Q:

Did the CCAC Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A:

Yes. The CCAC Board received a fairness opinion from Duff & Phelps LLP (“Duff & Phelps”) as to the fairness, from a financial point of view and as of the date of such opinion, of the consideration to be paid by CCAC to the stockholders of Quanergy in the Business Combination. Please see the section entitled “BCA Proposal – Recommendation of the CCAC Board”.

 

Q:

What will the stockholders of Quanergy receive in return for CCAC’s acquisition of all of the issued and outstanding equity interests of Quanergy?

 

A:

As a result of and upon the Closing, among other things, all outstanding shares of Quanergy Capital Stock (after giving effect to the conversion of all of 2023 Quanergy Convertible Notes into Quanergy common stock) as of immediately prior to the effective time of the Merger, together with shares of Quanergy common stock reserved in respect of Quanergy Awards and Quanergy Warrants outstanding as of immediately prior to the Closing that will be converted into awards and warrants based on Quanergy PubCo common stock, will be cancelled in exchange for the right to receive, or the reservation of, an aggregate of 97,000,000 shares of Quanergy PubCo common stock (at a deemed value of $10.00 per share) or, as applicable, shares underlying awards and warrants based on Quanergy PubCo common stock, representing a pre-transaction fully-diluted equity value of Quanergy of $970 million. The portion of the Aggregate Merger Consideration reflecting the conversion of the Quanergy Awards and Quanergy Warrants is calculated assuming that all Quanergy PubCo Options and Quanergy PubCo Converted Warrants are net-settled (although Quanergy PubCo Options may by their terms be cash-settled, resulting in additional dilution). For further details, see “BCA Proposal—The Merger Agreement—Consideration—Aggregate Merger Consideration.”

 

Q:

What equity stake will current CCAC shareholders and the stockholders of Quanergy hold in Quanergy PubCo immediately after the consummation of the Business Combination?

 

A:

It is anticipated that, following the Business Combination, (1) CCAC’s public shareholders are expected to own approximately 20.4% of the outstanding Quanergy PubCo common stock, (2) the stockholders of Quanergy (without taking into account any public shares held by the stockholders of Quanergy prior to the consummation of the Business Combination or purchased in the PIPE Investment) are expected to own approximately 71.6% of the outstanding Quanergy PubCo common stock, (3) the Sponsor and related parties are expected to collectively own approximately 5.1% of the outstanding Quanergy PubCo common stock and (4) the PIPE Investors are expected to own approximately 3.0% of the outstanding Quanergy PubCo common stock. These percentages assume (i) that no public shareholders exercise their redemption rights in connection with the Business Combination, (ii) (a) the vesting of all shares of Quanergy PubCo common stock received in respect of the Quanergy PubCo Restricted Shares, and (b) the vesting and exercise of all Quanergy PubCo Options for shares of Quanergy PubCo common stock (assuming that all Quanergy PubCo Options are net-settled), (c) the exercise of all Quanergy PubCo Converted Warrants for shares of Quanergy Pubco common stock (assuming that all Quanergy PubCo Converted Warrants are net-settled), (d) the vesting of all shares of Quanergy Restricted Stock Unit Awards and the settlement of all Adjusted Restricted Stock Unit Awards received in respect of the Quanergy Restricted Stock Unit Awards into shares of Quanergy PubCo common stock, and (e) the conversion of all of 2023 Quanergy Convertible Notes into Quanergy common stock (assuming the conversion date of September 30, 2021), (iii) that Quanergy PubCo issues shares of Quanergy PubCo common stock as the Aggregate Merger Consideration

 

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  pursuant to the Merger Agreement, which in the aggregate equals 97,000,000 shares of Quanergy PubCo common stock (assuming that all Quanergy PubCo Options and Quanergy PubCo Converted Warrants are net-settled), (iv) that Quanergy PubCo issues 4,000,000 shares of Quanergy PubCo common stock to the PIPE Investors pursuant to the PIPE Investment and (v) subject to the foregoing assumptions, immediately prior to the Closing, Quanergy has the same capitalization as it had as of June 8, 2021. If the actual facts are different from these assumptions, the percentage ownership retained by the Company’s existing shareholders in the combined company will be different.

The following table illustrates varying ownership levels in Quanergy PubCo immediately following the consummation of the Business Combination based on the assumptions above.

 

     Assuming
No
Redemptions
(Shares)
     %
Ownership
    Assuming
Maximum
Redemptions
(Shares)
     %
Ownership
 

Quanergy Stockholders

     97,000,000        71.6     97,000,000        80.0

PIPE investors

     4,000,000        3.0     4,000,000        3.3

CCAC Class A ordinary shares(1)

     27,600,000        20.4     13,414,029        11.1

CCAC Class B ordinary shares

     6,900,000        5.1     6,900,000        5.7
  

 

 

      

 

 

    

Pro forma common stock outstanding at March 31, 2020

     135,500,000          121,314,029     
  

 

 

      

 

 

    

 

  (1)

Reflects maximum redemptions of 14,185,971 shares. The maximum redemption amount is derived considering the minimum cash requirement of $175.0 million.

For further details, see “BCA Proposal—The Merger Agreement—Consideration—Aggregate Merger Consideration.

 

Q:

How has the announcement of the Business Combination affected the trading price of the CCAC Class A ordinary shares?

 

A:

On June 20, 2021, the trading date before the public announcement of the Business Combination, CCAC’s public units, CCAC Class A ordinary shares and warrants closed at $10.39, $9.96 and $0.98, respectively.

 

Q:

Will the Company obtain new financing in connection with the Business Combination?

 

A:

Yes. The PIPE Investors have agreed to purchase in the aggregate approximately 4,000,000 shares of Quanergy PubCo common stock, for approximately $40,000,000 of gross proceeds, in the PIPE Investment. The PIPE Investment is contingent upon, among other things, the closing of the Business Combination. See “BCA Proposal—Related Agreements—Subscription Agreements.”

 

Q:

Why is CCAC proposing the Domestication?

 

A:

The CCAC Board believes that there are significant advantages to us that will arise as a result of a change of CCAC’s domicile to Delaware. Further, the CCAC Board believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. The CCAC Board believes that there are several reasons why a registration by way of continuation as a corporation in Delaware is in the best interests of the Company and its shareholders, including (i) the prominence, predictability and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors. Each of the foregoing are discussed in greater detail in the section entitled “Domestication Proposal—Reasons for the Domestication.”

 

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To effect the Domestication, CCAC will file a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which CCAC will be domesticated and continue as a Delaware corporation.

The approval of the Domestication Proposal is a condition to the closing of the Merger under the Merger Agreement. The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting.

 

Q:

What amendments will be made to the current constitutional documents of CCAC?

 

A:

The consummation of the Business Combination is conditioned, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, CCAC’s shareholders are also being asked to consider and vote upon a proposal to approve the Domestication and replace the Cayman Constitutional Documents, in each case, under the Cayman Islands Companies Law, with the Proposed Organizational Documents, in each case, under the DGCL, which differ materially from the Cayman Constitutional Documents in the following respects:

 

    

Cayman Constitutional
Documents

  

Proposed Organizational
Documents

Authorized Shares (Advisory Organizational Documents Proposal 4A)    The Cayman Constitutional Documents authorize 221,000,000 shares, divided into 200,000,000 CCAC Class A ordinary shares, 20,000,000 CCAC Class B ordinary shares and 1,000,000 CCAC Preference Shares.    The Proposed Organizational Documents authorize 310,000,000 shares, consisting of Quanergy PubCo shares of 300,000,000 common stock and 10,000,000 shares of Quanergy PubCo preferred stock.
   See paragraph 5 of the Existing Memorandum.    See Article IV of the Proposed Certificate of Incorporation.
Exclusive Forum Provision (Advisory Organizational Documents Proposal 4B)    The Cayman Constitutional Documents do not contain a provision adopting an exclusive forum for certain shareholder litigation.   

The Proposed Organizational Documents adopt (i) Delaware as the exclusive forum for certain stockholder litigation and (ii) the federal district courts of the United States of America as the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

 

These provisions are inapplicable to suits brought to enforce any liability or duty created by the Exchange Act and any stockholder litigation for which the federal courts of the United States of America have exclusive jurisdiction.

      See Article XII of the Proposed Certificate of Incorporation.
Takeovers by Interested Stockholders    The Cayman Constitutional Documents do not provide restrictions on takeovers    The Proposed Organizational Documents will have Quanergy PubCo elect not to be governed by Section 203

 

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Cayman Constitutional
Documents

  

Proposed Organizational
Documents

(Advisory Organizational Documents Proposal 4C)    of CCAC by a related shareholder following a business combination.    of the DGCL relating to takeovers by interested stockholders but will provide other similar restrictions regarding takeovers by interested stockholders.
      See Article X of the Proposed Certificate of Incorporation.
Adoption of Supermajority Vote Requirement to Amend the Proposed Organizational Documents (Advisory Organizational Documents Proposal 4D)    The Cayman Constitutional Documents provide that amendments to change CCAC’s name, alter or add to the Articles or certain sections of the Memorandum or to reduce its share capital or any capital redemption reserve fund may be made by a special resolution under Cayman Islands law, being the affirmative vote of holders of a majority of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general meeting.    The Proposed Organizational Documents require the affirmative vote of at least two-thirds of the voting power of the outstanding shares to (i) adopt, amend or repeal the Proposed Bylaws, and to (ii) amend, alter, repeal or rescind Articles V(B), VII, VIII, IX, X, XI, XII and XIII of the Certificate of Incorporation.
   See Article 18.3 of the Cayman Constitutional Documents.    See Article XIII of the Proposed Certificate of Incorporation.
Removal of Directors (Advisory Organizational Documents Proposal 4E)    The Cayman Constitutional Documents provide that before a Business Combination, holders of Class B Shares may remove any director, and that after a Business Combination, shareholders may by an Ordinary Resolution remove any director.    The Proposed Organizational Documents permit the removal of a director only for cause and only by the affirmative vote of the holders of at least a majority of the outstanding shares entitled to vote at an election of directors.
   See Article 31 of the Cayman Constitutional Documents.    Article VII, subsection (C) of the Proposed Certificate of Incorporation.
Action by Written Consent of Stockholders (Advisory Organizational Documents Proposal 4F)   

The Cayman Constitutional Documents permit shareholders to approve matters by unanimous written resolution.

 

See Article 1 definition of Ordinary Resolution and Article 31.4 of the Cayman Constitutional Documents.

  

The Proposed Organizational Documents require stockholders to take action at an annual or special meeting and prohibit stockholder action by written consent in lieu of a meeting.

 

Article VIII, subsection (A) of the Proposed Certificate of Incorporation.

Other Changes In Connection With Adoption of the Proposed Organizational Documents (Advisory Organizational Documents Proposal 4G)    The Cayman Constitutional Documents include provisions related to CCAC’s status as a blank check company prior to the consummation of a business combination.    The Proposed Organizational Documents do not include such provisions related to CCAC’s status as a blank check company, which no longer will apply upon consummation of the Merger, as CCAC will cease to be a blank check company at such time.
   See Article 51 of the Cayman Constitutional Documents.   

 

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Q:

How will the Domestication affect my ordinary shares, warrants and units?

 

A:

As a result of and upon the effective time of the Domestication, (1) each of the then issued 6,900,000 CCAC Class B ordinary shares will convert automatically, on a one-for-one basis, into a CCAC Class A ordinary share, (2) immediately following the conversion described in clause (1), each of the then issued 27,600,000 CCAC Class A ordinary shares will convert automatically, on a one-for-one basis, into a share of Quanergy PubCo common stock, (3) each of the then issued and outstanding 21,320,000 CCAC warrants will convert automatically into a Quanergy PubCo warrant, pursuant to the Warrant Agreement, and (4) each of the then issued and outstanding units of CCAC that have not been previously separated into the underlying CCAC Class A ordinary shares and underlying CCAC warrants upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of Quanergy PubCo common stock and one-half of one Quanergy PubCo warrant. No fractional Quanergy PubCo warrants will be issued upon separation of the CCAC units. See “Domestication Proposal” for additional information.

 

Q:

What are the material U.S. federal income tax consequences of the Domestication?

 

A:

As discussed more fully under “U.S. Federal Income Tax Considerations,” CCAC intends for the Domestication to qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Assuming that the Domestication so qualifies, and subject to the “passive foreign investment company” (“PFIC”) rules discussed below and under “U.S. Federal Income Tax Considerations—I. U.S. Holders—A. Tax Effects of the Domestication to U.S. Holders—5. PFIC Considerations,” U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—I. U.S. Holders”) will be subject to Section 367(b) of the Code and, as a result:

 

   

A U.S. Holder who beneficially owns (directly, indirectly or constructively) 10% or more of the total combined voting power of all classes of CCAC stock entitled to vote or 10% or more of the total value of all classes of CCAC stock (a “10% U.S. Shareholder”) on the date of the Domestication must include in income as a dividend deemed paid by CCAC the “all earnings and profits amount” attributable to the CCAC Class A ordinary shares it directly owns within the meaning of Treasury Regulations under Section 367 of the Code;

 

   

A U.S. Holder whose CCAC Class A ordinary shares have a fair market value of $50,000 or more and who, on the date of the Domestication, is not a 10% U.S. Shareholder will recognize gain (but not loss) with respect to its CCAC Class A ordinary shares in the Domestication or, in the alternative, may elect to recognize the “all earnings and profits” amount attributable to such U.S. Holder’s CCAC Class A ordinary shares; and

 

   

A U.S. Holder whose CCAC Class A ordinary shares have a fair market value of less than $50,000 on the date of the Domestication and who, on the date of the Domestication, is not a 10% U.S. Shareholder, should not be required to recognize any gain or loss or include any part of the “all earnings and profits amount” in income under Section 367 of the Code in connection with the Domestication.

CCAC does not expect to have significant cumulative earnings and profits, if any, on the date of the Domestication.

As discussed more fully under “U.S. Federal Income Tax Considerations—I. U.S. Holders—A. Tax Effects of the Domestication to U.S. Holders—5. PFIC Considerations,” CCAC believes that it is likely classified as a PFIC for U.S. federal income tax purposes. In such case, notwithstanding the U.S. federal income tax consequences of the Domestication discussed in the foregoing, proposed Treasury Regulations under Section 1291(f) of the Code (which have a retroactive effective date), if finalized in their current form, generally would require a U.S. Holder to recognize gain on the exchange of CCAC Class A ordinary shares or warrants for Quanergy PubCo common stock or warrants pursuant to the Domestication. Any such gain would be taxable income with no corresponding receipt of cash in the Domestication. The tax on any such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based

 

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on a complex set of rules. In addition, the proposed Treasury Regulations provide coordinating rules with other sections of the Code, including Section 367(b), which affect the manner in which the rules under such other sections apply to transfers of PFIC stock. However, it is difficult to predict whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted and how any such Treasury Regulations would apply. Importantly, however, U.S. Holders that make or have made certain elections discussed further under “U.S. Federal Income Tax Considerations—I. U.S. Holders—A. Tax Effects of the Domestication to U.S. Holders—5. PFIC Considerations—d. QEF Election and Mark-to-Market Election” with respect to their CCAC Class A ordinary shares are generally not subject to the same gain recognition rules under the currently proposed Treasury Regulations under Section 1291(f) of the Code. Currently, there are no elections available that apply to CCAC warrants, and the application of the PFIC rules to CCAC warrants is unclear. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see “U.S. Federal Income Tax Considerations—I. U.S. Holders.”

Each U.S. Holder of CCAC Class A ordinary shares or warrants is urged to consult its own tax advisor concerning the application of the PFIC rules, including the proposed Treasury Regulations, to the exchange of CCAC Class A ordinary shares and warrants for Quanergy PubCo common stock and warrants pursuant to the Domestication.

Additionally, the Domestication may cause Non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—II. Non-U.S. Holders”) to become subject to U.S. federal income withholding taxes on any amounts treated as dividends paid in respect of such Non-U.S. Holder’s Quanergy PubCo common stock after the Domestication.

The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor regarding the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “U.S. Federal Income Tax Considerations.”

 

Q.

Do I have redemption rights?

 

A:

If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement / prospectus. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the BCA Proposal. If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?”

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 20% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 20% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash.

The Sponsor (whose members include CCAC’s directors and officers) has agreed to waive its redemption rights with respect to all of the founder shares in connection with the consummation of the Business Combination. The founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

 

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Q:

How do I exercise my redemption rights?

 

A:

If you are a public shareholder and wish to exercise your right to redeem the public shares, you must:

(i) (a) hold public shares, or (b) if you hold public shares through CCAC units, you elect to separate your CCAC units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

(ii) submit a written request to Continental, CCAC’s transfer agent, that Quanergy PubCo redeem all or a portion of your public shares for cash; and

(iii) deliver your certificates for public shares (if any) along with the redemption forms to Continental, CCAC’s transfer agent, physically or electronically through the DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to             , Eastern Time, on             , 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

The address of Continental, CCAC’s transfer agent, is listed under the question “Who can help answer my questions?” below.

Holders of CCAC units must elect to separate the CCAC units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their CCAC units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the CCAC units into the underlying public shares and public warrants, or if a holder holds CCAC units registered in its own name, the holder must contact Continental, CCAC’s transfer agent, directly and instruct them to do so.

Public shareholders will be entitled to request that their public shares be redeemed for a pro rata portion of the amount then on deposit in the trust account calculated as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the trust account and not previously released to us (net of taxes payable). For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued public share. However, the proceeds deposited in the trust account could become subject to the claims of CCAC’s creditors, if any, which could have priority over the claims of the public shareholders, regardless of whether such public shareholders vote or, if they do vote, irrespective of if they vote for or against the BCA Proposal. Therefore, the per share distribution from the trust account in such a situation may be less than originally expected due to such claims. Whether you vote, and if you do vote irrespective of how you vote, on any proposal, including the BCA Proposal, will have no impact on the amount you will receive upon exercise of your redemption rights. It is expected that the funds to be distributed to public shareholders electing to redeem their public shares will be distributed promptly after the consummation of the Business Combination.

Any request to redeem public shares, once made, may be withdrawn at any time until the deadline for submitting redemption requests and thereafter, with our consent, until the Closing (as defined below). If a holder of a public share delivers its shares in connection with an election to redeem and subsequently decides prior to the deadline for submitting redemption requests not to elect to exercise such rights, it may simply request that CCAC instruct the transfer agent to return the shares (physically or electronically). The holder can make such request by contacting the transfer agent, at the address or email address listed in this proxy statement / prospectus.

Any corrected or changed written exercise of redemption rights must be received by Continental, CCAC’s transfer agent, prior to the vote taken on the BCA Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s certificates for public shares (if any) along with the redemption forms have been delivered (either physically or electronically) to Continental, CCAC’s agent, at least two business days prior to the vote at the extraordinary general meeting.

 

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If a holder of public shares properly makes a request for redemption and the certificates for public shares (if any) along with the redemption forms are delivered as described above, then, if the Business Combination is consummated, Quanergy PubCo will redeem the public shares for a pro rata portion of funds deposited in the trust account, calculated as of two business days prior to the consummation of the Business Combination. The redemption will take place following the Domestication and, accordingly, it is shares of Quanergy PubCo common stock that will be redeemed immediately after consummation of the Business Combination.

If you are a holder of public shares and you exercise your redemption rights, such exercise will not result in the loss of any warrants that you may hold.

 

Q:

If I am a holder of CCAC units, can I exercise redemption rights with respect to my CCAC units?

 

A:

No. Holders of issued and outstanding CCAC units must elect to separate the CCAC units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your CCAC units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the CCAC units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Continental, CCAC’s transfer agent, directly and instruct them to do so. You are requested to cause your public shares to be separated and delivered to Continental, CCAC’s transfer agent, along with the redemption forms by             , Eastern Time, on             , 2021 (two business days before the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

The U.S. federal income tax consequences of exercising your redemption rights with respect to your CCAC Class A ordinary shares to receive cash from the trust account in exchange for Quanergy PubCo common stock depend on your particular facts and circumstances. It is possible that you may be treated as selling such Quanergy PubCo common stock and, as a result, recognize capital gain or capital loss. It is also possible that the redemption may be treated as a distribution for U.S. federal income tax purposes. Whether a redemption of shares of Quanergy PubCo common stock qualifies for sale treatment will depend largely on the total number of shares of Quanergy PubCo stock you are treated as owning before and after the redemption (including any Quanergy PubCo stock that you constructively own as a result of owning Quanergy PubCo warrants and any Quanergy PubCo stock that you directly or indirectly acquire pursuant to the Business Combination or the PIPE Investment) relative to all of the Quanergy PubCo stock outstanding both before and after the redemption. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “U.S. Federal Income Tax Considerations.”

Additionally, because the Domestication will occur prior to the redemption of any shareholder, U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—I. U.S. Holders”) exercising redemption rights will be subject to the potential tax consequences of Section 367 of the Code as well as potential tax consequences of the U.S. federal income tax rules relating to PFICs. The tax consequences of Section 367 of the Code and the PFIC rules are discussed more fully below under “U.S. Federal Income Tax Considerations—I. U.S. Holders.”

All holders considering exercising redemption rights are urged to consult their tax advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws.

TAX MATTERS ARE COMPLICATED, AND THE TAX CONSEQUENCES OF EXERCISING YOUR REDEMPTION RIGHTS WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE EXERCISE OF REDEMPTION RIGHTS TO YOU IN YOUR PARTICULAR CIRCUMSTANCES.

 

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Q:

What happens to the funds deposited in the trust account after consummation of the Business Combination?

 

A:

Following the closing of CCAC’s initial public offering, an amount equal to $276,000,000 million ($10.00 per unit) of the net proceeds from CCAC’s initial public offering and the sale of the private placement warrants was placed in the trust account. As of March 31, 2021 there was $277,852,728 in investments and cash held in the Trust Account and $603,712 of cash held outside the Trust Account available for working capital purposes. As of March 31, 2021, funds in the trust account totaled $277,852,728 and were comprised entirely of U.S. government treasury bills, notes or bonds with a maturity of 180 days or less or in certain money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the Closing), (2) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Cayman Constitutional Documents to modify the substance or timing of CCAC’s obligation to redeem 100% of the public shares if it does not complete a business combination by February 13, 2022 and (3) the redemption of all of the public shares if CCAC is unable to complete a business combination by February 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), subject to applicable law.

Upon consummation of the Business Combination, the funds deposited in the trust account will be released to pay holders of CCAC public shares who properly exercise their redemption rights; to pay transaction fees and expenses associated with the Business Combination; and for working capital and general corporate purposes of Quanergy PubCo following the Business Combination. See “Summary of the Proxy Statement / Prospectus—Sources and Uses of Funds for the Business Combination.”

 

Q:

What happens if a substantial number of the public shareholders vote in favor of the BCA Proposal and exercise their redemption rights?

 

A:

Our public shareholders are not required to vote in respect of the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders.

The Merger Agreement provides that the obligations of Quanergy to consummate the Merger are conditioned on, among other things, that the amount of cash available in the trust account at Closing must be at least equal to the Minimum Cash Amount. If such conditions are not met, and such conditions are not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, in no event will CCAC redeem public shares in an amount that would cause its net tangible assets to be less than $5,000,001.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of CCAC and Quanergy, (ii) effectiveness of the registration statement on Form S-4 of which this proxy statement / prospectus is a part, (iii) expiration or termination of the waiting period under the HSR Act and the achievement of CFIUS clearance (as contemplated by the Merger Agreement), (iv) receipt of approval for listing on the NYSE of the shares of Quanergy PubCo common stock to be issued in connection with the Merger, (v) that after redemption, CCAC’s net tangible assets shall be no less than $5,000,001 upon Closing and (vi) the absence of certain specified injunctions. In addition, Quanergy’s obligations to consummate the Merger are also conditioned on, among other things, the satisfaction or waiver of the Minimum Cash Condition. We cannot assume you that the parties to the Merger Agreement would waive such conditions.

 

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For more information about conditions to the consummation of the Business Combination, see “BCA Proposal—The Merger Agreement.”

 

Q:

When do you expect the Business Combination to be completed?

 

A:

It is currently expected that the Business Combination will be consummated in the second half of 2021. This date depends, among other things, on the approval of the proposals to be put to CCAC shareholders at the extraordinary general meeting. However, such meeting could be adjourned if the Adjournment Proposal is adopted by CCAC’s shareholders at the extraordinary general meeting and CCAC elects to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. For a description of the conditions for the completion of the Business Combination, see “BCA Proposal—The Merger Agreement.”

 

Q:

What happens if the Business Combination is not consummated?

 

A:

CCAC will not complete the Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Merger Agreement. If CCAC is not able to complete the Business Combination with Quanergy by February 13, 2022 and is not able to complete another business combination by such date, in each case, as such date may be extended pursuant to the Cayman Constitutional Documents, CCAC will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

 

Q:

What do I need to do now?

 

A:

CCAC urges you to read this proxy statement / prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder or warrant holder. CCAC’s shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement / prospectus and on the enclosed proxy card.

 

Q:

How do I vote?

 

A:

If you are a holder of record of ordinary shares on the record date for the extraordinary general meeting, you may vote in person at the extraordinary general meeting or by submitting a proxy for the extraordinary general meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage-paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote in person, obtain a valid proxy from your broker, bank or nominee.

 

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Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement / prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker, bank or nominee as to how to vote your shares. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the shareholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares and you should instruct your broker to vote your shares in accordance with directions you provide. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal.

 

Q:

Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication?

 

A:

Neither CCAC’s shareholders nor CCAC’s warrant holders have appraisal rights in connection with the Business Combination or the Domestication under Cayman Islands law or under the DGCL.

 

Q:

When and where will the extraordinary general meeting be held?

 

A:

The extraordinary general meeting will be held at             , Eastern Time, on             , 2021, at the offices of White & Case LLP located at 1221 Avenue of the Americas, New York, NY 10020, or virtually via live webcast at             , or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

 

Q:

Who is entitled to vote at the extraordinary general meeting?

 

A:

CCAC has fixed            , 2021 as the record date for the extraordinary general meeting. If you were a shareholder of CCAC at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the extraordinary general meeting.

 

Q:

How many votes do I have?

 

A:

CCAC shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were 34,500,000 ordinary shares issued, of which             were issued public shares.

 

Q:

What constitutes a quorum?

 

A:

A quorum of CCAC shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued ordinary shares entitled to vote at the

 

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  extraordinary general meeting are represented in person or by proxy. As of the record date for the extraordinary general meeting, 17,250,001 ordinary shares would be required to achieve a quorum.

 

Q:

What vote is required to approve each proposal at the extraordinary general meeting?

 

   

BCA Proposal: The approval of the BCA Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

   

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

   

Organizational Documents Proposal: The approval of the Organizational Documents Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

   

Advisory Organizational Documents Proposals: The separate approval of each of the Advisory Organizational Documents Proposals, each of which is a non-binding vote, requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

   

Stock Issuance Proposal: The approval of the Stock Issuance Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

   

Equity Incentive Plan Proposal: The approval of the Equity Incentive Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

   

ESPP Proposal: The approval of the ESPP Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

   

Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

Q:

What are the recommendations of the CCAC Board?

 

A:

The CCAC Board believes that the BCA Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of CCAC’s shareholders and unanimously recommends that its shareholders vote “FOR” the approval of the BCA Proposal, “FOR” the approval of the Domestication Proposal, “FOR” the approval of the Organizational Documents Proposal, “FOR” the approval, on an advisory basis, of each of the separate Advisory Organizational Documents Proposals, “FOR” the approval of the Stock Issuance Proposal, “FOR” the approval of the Equity Incentive Plan Proposal, “FOR” the approval of the ESPP Proposal and “FOR” the approval of the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

 

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The existence of financial and personal interests of one or more of CCAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of CCAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, CCAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal—Interests of CCAC’s Directors and Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

How does the Sponsor intend to vote its shares?

 

A:

The Sponsor has agreed to vote all the founder shares and any other public shares it may hold in favor of all the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement / prospectus, the Sponsor (whose members include CCAC’s directors and officers) owns 20% of the issued ordinary shares.

At any time at or prior to the Business Combination, subject to applicable securities laws (including with respect to material non-public information), the Sponsor, the existing stockholders of Quanergy or our or their respective directors, officers, advisors or respective affiliates may (i) purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or elect to redeem, or indicate an intention to redeem, public shares, (ii) execute agreements to purchase such shares from such investors in the future, or (iii) enter into transactions with such investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of the Condition Precedent Proposals or not redeem their public shares. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of CCAC’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, the existing stockholders of Quanergy or our or their respective directors, officers, advisors, or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of (1) satisfaction of the requirement that holders of a majority of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the BCA Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal, the ESSP Proposal and the Adjournment Proposal, (2) satisfaction of the requirement that holders of a majority of at least two-thirds of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the Domestication Proposal, the Organizational Documents Proposal, and the Advisory Organizational Documents Proposal, (3) satisfaction of the Minimum Cash Condition, (4) otherwise limiting the number of public shares electing to redeem and (5) CCAC’s net tangible assets being at least $5,000,001.

Entering into any such arrangements may have a depressive effect on our ordinary shares (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination). If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved.

The existence of financial and personal interests of one or more of CCAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of CCAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, CCAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section

 

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entitled “BCA Proposal—Interests of CCAC’s Directors and Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

What happens if I sell my CCAC ordinary shares before the extraordinary general meeting?

 

A:

The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting but the transferee, and not you, will have the ability to redeem such shares (if time permits), so long as such transferee takes the required steps to elect to redeem such shares at least two business days prior to the extraordinary general meeting.

 

Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. Shareholders may send a later-dated, signed proxy card to CCAC’s Chief Executive Officer and Director at CCAC’s address set forth below so that it is received by CCAC’s Chief Executive Officer and Director prior to the vote at the extraordinary general meeting (which is scheduled to take place on                 , 2021) or attend the extraordinary general meeting in person and vote. Shareholders also may revoke their proxy by sending a notice of revocation to CCAC’s Chief Executive Officer and Director, which must be received by CCAC’s Chief Executive Officer and Director prior to the vote at the extraordinary general meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote.

 

Q:

What happens if I fail to take any action with respect to the extraordinary general meeting?

 

A:

If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a stockholder or warrant holder of Quanergy PubCo. If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder or warrant holder of CCAC. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination (if time permits).

 

Q:

How can I vote my shares without attending the extraordinary general meeting?

 

A:

If you are a shareholder of record of our CCAC Shares as of the close of business on the Record Date, you can vote by proxy by mail by following the instructions provided in the enclosed proxy card or at the extraordinary general meeting. Please note that if you are a beneficial owner of CCAC Shares, you may vote by submitting voting instructions to your broker, bank or nominee, or otherwise by following instructions provided by your broker, bank or nominee. Telephone and internet voting will be available to beneficial owners. Please refer to the vote instruction form provided by your broker, bank or nominee.

 

Q:

What happens if I vote against the BCA Proposal?

 

A:

If you vote against the BCA Proposal, but the BCA Proposal still obtains the requisite shareholder approval described in this proxy statement / prospectus, then the BCA Proposal will be approved and, assuming the approval of the Domestication Proposal, the Stock Issuance Proposal, the Organizational Documents Proposal, the Advisory Organizational Documents Proposal, the Equity Incentive Plan Proposal and the ESPP Proposal and the satisfaction or waiver of the other conditions to the closing of the Merger, the Business Combination will be consummated in accordance with the terms of the Merger Agreement.

 

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If you vote against the BCA Proposal and the BCA Proposal does not obtain the requisite vote at the extraordinary general meeting, then the BCA Proposal will fail and we will not consummate the BCA. If we do not consummate the BCA Proposal, we may continue to try to complete a business combination with a different target business until February 13, 2022. If we fail to complete an initial business combination by February 13, 2022, then we will be required to dissolve and liquidate the Trust Account by returning then-remaining funds in the Trust Account to the Public Shareholders.

 

Q:

What should I do with my share certificates, warrant certificates or unit certificates?

 

A:

Our shareholders who exercise their redemption rights must deliver (either physically or electronically) their share certificates (if any) along with the redemption forms to Continental, CCAC’s transfer agent, prior to the extraordinary general meeting.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to             , Eastern Time, on             , 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Our warrant holders should not submit the certificates relating to their warrants. Public shareholders who do not elect to have their public shares redeemed for the pro rata share of the trust account should not submit the certificates relating to their public shares.

Upon the Domestication, holders of CCAC units, CCAC Class A ordinary shares, CCAC Class B ordinary shares and warrants will receive shares of Quanergy PubCo common stock and warrants, as the case may be, without needing to take any action and, accordingly, such holders should not submit any certificates relating to their units, CCAC Class A ordinary shares (unless such holder elects to redeem the public shares in accordance with the procedures set forth above), CCAC Class B ordinary shares or warrants.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement / prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting?

 

A:

CCAC will pay the cost of soliciting proxies for the extraordinary general meeting. CCAC has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the extraordinary general meeting. CCAC has agreed to pay Morrow Sodali LLC a fee of $35,000, plus disbursements. CCAC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of CCAC Class A ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of CCAC Class A ordinary shares and in obtaining voting instructions from those owners. CCAC’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Where can I find the voting results of the extraordinary general meeting?

 

A:

The preliminary voting results will be expected to be announced at the extraordinary general meeting. CCAC will publish final voting results of the extraordinary general meeting in a Current Report on Form 8-K within four business days after the extraordinary general meeting.

 

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Q:

Who can help answer my questions?

 

A:

If you have questions about the Business Combination or if you need additional copies of the proxy statement / prospectus or the enclosed proxy card, you should contact:

Morrow Sodali LLC

470 West Avenue

Stamford, CT 06902

Telephone: (800) 662-5200

(Banks and brokers can call: (203) 658-9400)

Email: [CCAC.info]@investor.morrowsodali.com

You also may obtain additional information about CCAC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information; Incorporation by Reference.” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver the certificates for your public shares (if any) along with the redemption forms (either physically or electronically) to Continental, CCAC’s transfer agent, at the address below prior to the extraordinary general meeting. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to             , Eastern Time, on             , 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. If you have questions regarding the certification of your position or delivery of your share certificates (if any) along with the redemption forms, please contact:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT / PROSPECTUS

This summary highlights selected information from this proxy statement / prospectus and does not contain all of the information that is important to you. To better understand the Proposals to be submitted for a vote at the extraordinary general meeting, including the Business Combination, whether or not you plan to attend such meeting, you should read this entire document carefully, including the Merger Agreement as amended on June 28, 2021, which are attached as Annex A and Annex B to this proxy statement / prospectus. The Merger Agreement is the legal document that governs the Business Combination and the other transactions that will be undertaken in connection therewith. The Merger Agreement is also described in detail in this proxy statement / prospectus in the section entitled “BCA Proposal—The Merger Agreement.” You should also read the section entitled “Risk Factors” beginning on page 55 of this proxy statement / prospectus and the section entitled “Where You Can Find More Information; Incorporation by Reference” beginning on page 323 of this proxy statement / prospectus.

The Parties to the Business Combination

CCAC

CCAC is a blank check company incorporated on September 9, 2019 as a Cayman Islands exempted company incorporated with limited liability for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On November 14, 2019, the Sponsor paid $25,000, or approximately $0.004 per share, to cover certain of CCAC’s offering costs in exchange for 5,750,000 founder shares. Effective December 10, 2019, the Sponsor transferred 718,750 founder shares to Henri Arif for a purchase price of $3,125 (the same per-share price initially paid by the Sponsor), resulting in the Sponsor holding 5,031,250 founder shares. On February 10, 2020, CCAC effected a share capitalization of 1,150,000 shares and as a result the Sponsor held 6,037,500 founder shares and Mr. Henri Arif held 862,500 founder shares. On May 7, 2020, the Sponsor transferred 22,000 founder shares to Mr. Ross Haghighat for no consideration and on February 10, 2021, the Sponsor transferred 13,000 founder shares to Mr. Mark B. Segall for no consideration. As of March 31, 2021, the Sponsor held 6,002,500 founder shares.

On February 13, 2020, CCAC consummated its initial public offering of 27,600,000 units, including 3,600,000 units issued pursuant to the exercise in full of the underwriters’ over-allotment option, with each unit consisting of one CCAC Class A ordinary share and one-half of one public warrant. The units were sold at a price of $10.00 per unit, generating gross proceeds to CCAC of $276,000,000. Each warrant entitles the holder to purchase one CCAC Class A ordinary share at a price of $11.50 per CCAC Class A ordinary share, subject to adjustment. Concurrently with the closing of the initial public offering, the Sponsor purchased an aggregate of 7,520,000 warrants at a price of $1.00 per warrant, generating gross proceeds to CCAC of $7,520,000.

Following the closing of CCAC’s initial public offering, a total of $276 million ($10.00 per unit) of the proceeds from its initial public offering and the sale of the private placement warrants was placed in the trust account. As of March 31, 2021 there was $277,852,728 in investments and cash held in the Trust Account and $603,712 of cash held outside the Trust Account available for working capital purposes. As of March 31, 2021, $0 of the funds had been withdrawn from the Trust Account to fund CCAC’s working capital expenses.

The CCAC units, CCAC Class A ordinary shares and CCAC warrants are currently listed on the NYSE under the symbols “CCAC,” “CCAC.U” and “CCAC.WS,” respectively.

CCAC’s principal executive office is located at 28/F CITIC Tower, 1 Tim Mei Avenue, the Hong Kong Special Administrative Region of the People’s Republic of China. Its telephone number is +852-3710-6888. CCAC’s corporate website address is http://www.spacbyccac.com. CCAC’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement / prospectus.


 

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Merger Sub

CITIC Capital Merger Sub Inc. (“Merger Sub”) is a Delaware corporation and a wholly owned subsidiary of CCAC. Merger Sub does not own any material assets or operate any business. Merger Sub’s principal executive office is located at 28/F CITIC Tower, 1 Tim Mei Avenue, Central, the Hong Kong Special Administrative Region of the People’s Republic of China. Its telephone number is +852-3710-6888.

Quanergy

Quanergy is a Delaware corporation incorporated on December 3, 2012. Quanergy is a leading provider of LiDAR (Light Detection and Ranging) sensors and smart perception solutions. Quanergy’s principal executive office is located at 433 Lakeside Drive, Sunnyvale, California 94085. Its telephone number is +1 (408) 245-9500.

Proposals to be put to the Shareholders of CCAC at the Extraordinary General Meeting

The following is a summary of the proposals to be put to the extraordinary general meeting of CCAC and certain transactions contemplated by the Merger Agreement. Each of the proposals below, except the Adjournment Proposal and the Advisory Organizational Documents Proposals, is cross-conditioned on the approval of each other. The Adjournment Proposal and the Advisory Organizational Documents Proposals are not conditioned upon the approval of any other proposal set forth in this proxy statement / prospectus. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting.

BCA Proposal

As discussed in this proxy statement / prospectus, CCAC is asking its shareholders to approve by ordinary resolution and adopt the Agreement and Plan of Merger, dated as of June 21, 2021, as amended on as June 28, 2021, by and among CCAC, Merger Sub and Quanergy, a copy of which is attached to this proxy statement / prospectus as Annex A and Annex B. The Merger Agreement provides for, among other things, following the Domestication of CCAC to Delaware as described below, the merger of Merger Sub with and into Quanergy, with Quanergy surviving the merger as a wholly owned subsidiary of Quanergy PubCo, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement / prospectus. After consideration of the factors identified and discussed in the section entitled “BCA Proposal—CCAC Board’s Reasons for the Approval of the Business Combination,” the CCAC Board concluded that the Business Combination met the requirements disclosed in the prospectus for CCAC’s initial public offering, including that the business of Quanergy and its subsidiaries had a fair market value equal to at least 80% of the net assets held in the trust account (excluding the amount of any deferred underwriting discount held in trust) at the time of CCAC’s signing the Merger Agreement. For more information about the transactions contemplated by the Merger Agreement, see “BCA Proposal.”

Aggregate Merger Consideration

As a result of and upon the Closing, among other things, all outstanding shares of Quanergy Capital Stock as of immediately prior to the effective time of the Merger and, together with shares of Quanergy common stock reserved in respect of Quanergy Awards and Quanergy Warrants outstanding as of immediately prior to the Closing that will be converted into awards or warrants, as the case may be, based on Quanergy PubCo common stock, as more fully described elsewhere in this proxy statement / prospectus, will be cancelled in exchange for the right to receive, or the reservation of, an aggregate of 97,000,000 shares of Quanergy PubCo common stock (at a deemed value of $10.00 per share) (which, in the case of Quanergy Awards and Quanergy Warrants, will be shares underlying awards or warrants, as the case may be, based on Quanergy PubCo common stock)


 

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representing a fully-diluted pre-transaction equity value of Quanergy of $970 million. The portion of the Aggregate Merger Consideration reflecting the conversion of the Quanergy Awards and Quanergy Warrants is calculated assuming that all Quanergy PubCo Options and Quanergy PubCo Converted Warrants are net-settled (although Quanergy PubCo Options may by their terms be cash-settled, resulting in additional dilution). For further details, see “BCA Proposal—The Merger Agreement—Consideration—Aggregate Merger Consideration.”

Closing Conditions

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of CCAC and Quanergy, (ii) effectiveness of the registration statement on Form S-4 of which this proxy statement / prospectus is a part, (iii) expiration or termination of the waiting period under the HSR Act and the achievement of CFIUS clearance (as contemplated by the Merger Agreement), (iv) receipt of approval for listing on the NYSE of the shares of Quanergy PubCo common stock to be issued in connection with the Merger, (v) that, after redemption, CCAC’s net tangible assets shall be no less than $5,000,001 upon Closing and (vi) the absence of certain specified injunctions.

Other conditions to Quanergy’s obligations to consummate the Merger include, among others, that as of the Closing, (i) the Domestication will have been completed, and (ii) the amount of cash available in (x) the trust account (the “Trust Account”), following the extraordinary general meeting, into which substantially all of the proceeds of CCAC’s initial public offering and private placements of its warrants have been deposited for the benefit of CCAC, certain of its public shareholders and the underwriters of CCAC’s initial public offering, after deducting the amount required to satisfy CCAC’s obligations to its shareholders (if any) that exercise their rights to redeem their CCAC Class A Ordinary Shares pursuant to the Cayman Constitutional Documents plus (y) the PIPE Investment, is at least equal to $175,000,000. For further details, see “BCA Proposal—The Merger Agreement.

Domestication Proposal

If the BCA Proposal is approved, then CCAC will ask its shareholders to approve by special resolution the Domestication Proposal. The CCAC Board has unanimously approved the Domestication Proposal and believes that there are significant advantages to us that will arise as a result of a change of CCAC’s domicile to Delaware. The Domestication Proposal, if approved, will authorize a change of CCAC’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while CCAC is currently governed by the Cayman Islands Companies Law, upon the Domestication, Quanergy PubCo will be governed by the DGCL. There are differences between Cayman Islands corporate law and Delaware corporate law as well as the Cayman Constitutional Documents and the Proposed Organizational Documents. CCAC encourages shareholders to carefully review the information in “Comparison of Corporate Governance and Shareholder Rights” beginning on page 307 of this proxy statement / prospectus. Approval of the Domestication Proposal is a condition to the consummation of the Business Combination.

As a result of and upon the effective time of the Domestication, (1) each of the then issued 6,900,000 CCAC Class B ordinary shares will convert automatically, on a one-for-one basis, into a CCAC Class A ordinary share, (2) immediately following the conversion described in clause (1), each of the then issued 27,600,000 CCAC Class A ordinary shares will convert automatically, on a one-for-one basis, into a share of Quanergy PubCo common stock, (3) each of the then issued and outstanding 21,320,000 CCAC warrants will convert automatically into a Quanergy PubCo warrant, pursuant to the Warrant Agreement, and (4) each CCAC unit will be cancelled and will entitle the holder thereof to one share of Quanergy PubCo common stock and one-half of one Quanergy PubCo warrant. No fractional Quanergy PubCo warrants will be issued upon separation of the CCAC units.


 

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For further details, see “Domestication Proposal” beginning on page 169 of this proxy statement / prospectus.

Organizational Documents Proposal

If the BCA Proposal and the Domestication Proposal are approved, CCAC will ask its shareholders to approve the Organizational Documents Proposal in connection with the replacement of the Cayman Constitutional Documents, under the Cayman Islands Companies Law, with the Proposed Organizational Documents, under the DGCL. The CCAC Board has unanimously approved the Organizational Documents Proposal and believes such proposal is necessary to adequately address the needs of Quanergy PubCo after the Business Combination. Approval of the Organizational Documents Proposal is a condition to the consummation of the Business Combination.

For additional information, see “Organizational Documents Proposal” beginning on page 177 of this proxy statement / prospectus.

Advisory Organizational Documents Proposals

If the BCA Proposal, the Domestication Proposal and the Organizational Documents Proposals are approved, CCAC will ask its shareholders to approve seven separate Advisory Organizational Documents Proposals in connection with the replacement of the Cayman Constitutional Documents, under the Cayman Islands Companies Law, with the Proposed Organizational Documents, under the DGCL. The CCAC Board has unanimously approved the Advisory Organizational Documents Proposals and believes such proposals are necessary to adequately address the needs of Quanergy PubCo after the Business Combination. Approval of the Advisory Organizational Documents Proposals is advisory only and is not a condition to the consummation of the Business Combination.

A brief summary of each of the Advisory Organizational Documents Proposals is set forth below. These summaries are qualified in their entirety by reference to the complete text of the Proposed Organizational Documents.

(A) Advisory Organizational Documents Proposal 4A—to authorize the change in the authorized share capital of CCAC from (i) 200,000,000 CCAC Class A ordinary shares of a par value of US$0.0001 each, 20,000,000 CCAC Class B ordinary shares of a par value of US$0.0001 each and 1,000,000 CCAC Preference Shares of a par value of US$0.0001 each to (ii) 300,000,000 shares of Quanergy PubCo common stock and 10,000,000 shares of Quanergy PubCo preferred stock (“Advisory Organizational Documents Proposal 4A”);

(B) Advisory Organizational Documents Proposal 4B—to approve an exclusive forum provision, pursuant to which the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware, shall be the exclusive forum for certain actions under Delaware law, and the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act (“Advisory Organizational Documents Proposal 4B”);

(C) Advisory Organizational Documents Proposal 4C—to approve a provision electing not to be governed by Section 203 of the DGCL relating to takeovers by interested stockholders but to provide other similar restrictions regarding takeovers by interested stockholders (“Advisory Organizational Documents Proposal 4C”);

(D) Advisory Organizational Documents Proposal 4D—to approve provisions providing that the affirmative vote of the holders of at least 66 2/3% of the total voting power of all the then outstanding shares


 

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of stock of the Company entitled to vote thereon, voting together as a single class, will be required to amend, alter, repeal or rescind all or any portion of Article V(B), Article VII, Article VIII, Article IX, Article X, Article XI, Article XII and Article XIII of the Proposed Certificate of Incorporation (“Advisory Organizational Documents Proposal 4D”);

(E) Advisory Organizational Documents Proposal 4E—to approve provisions permitting the removal of a director only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of all of the then outstanding shares of voting stock of the Corporation entitled to vote at an election of directors (“Advisory Organizational Documents Proposal 4E”);

(F) Advisory Organizational Documents Proposal 4F—to approve provisions providing that any action required or permitted to be taken by the stockholders of the Company must be effected at an annual or special meeting of the stockholders of the Company, and shall not be taken by written consent in lieu of a meeting (“Advisory Organizational Documents Proposal 4F”); and

(G) Advisory Organizational Documents Proposal 4G—to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Certificate of Incorporation and Proposed Bylaws in connection with the consummation of the Business Combination (copies of which are attached to this proxy statement / prospectus as Annex J and Annex I, respectively), including (1) changing the company name from “CITIC Capital Acquisition Corp.” to “Quanergy Systems, Inc.,” (2) making Quanergy PubCo’s corporate existence perpetual, and (3) removing certain provisions related to CCAC’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which the CCAC Board believes is necessary to adequately address the needs of Quanergy PubCo after the Business Combination (“Advisory Organizational Documents Proposal 4G”).

The Proposed Organizational Documents differ in certain material respects from the Cayman Constitutional Documents and CCAC encourages shareholders to carefully review the information set out in the section entitled “Advisory Organizational Documents Proposals” beginning on page 179 of this proxy statement / prospectus and the full text of the Proposed Organizational Documents of Quanergy PubCo.

Stock Issuance Proposal

Assuming the BCA Proposal, the Domestication Proposal and the Organizational Documents Proposal, are approved, CCAC’s shareholders are also being asked to approve by ordinary resolution the Stock Issuance Proposal for purposes of complying with the applicable provisions of NYSE Listing Rule 312.03. For additional information, see “Stock Issuance Proposal” beginning on page 188 of this proxy statement / prospectus.

Equity Incentive Plan Proposal

Assuming the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal are approved, CCAC’s shareholders are also being asked to approve by ordinary resolution the 2021 Plan. For additional information, see “Equity Incentive Plan Proposal” beginning on page 190 of this proxy statement / prospectus.

ESPP Proposal

Assuming the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal are approved, CCAC’s shareholders are also being asked to approve by ordinary resolution the ESPP. For additional information, see “ESPP Proposal” beginning on page 198 of this proxy statement / prospectus.


 

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Adjournment Proposal

If, based on the tabulated vote, there are not sufficient votes at the time of the extraordinary general meeting to authorize CCAC to consummate the Business Combination (because any of the Condition Precedent Proposals have not been approved (including as a result of the failure of any other cross-conditioned Condition Precedent Proposals to be approved)), the CCAC Board may submit a proposal to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies. For additional information, see “Adjournment Proposal” beginning on page 203 of this proxy statement / prospectus.

CCAC Board’s Reasons for the Approval of the Business Combination

In considering the Business Combination, the CCAC Board considered multiple positive factors including the following, although not weighted or in any order of significance:

Targets with unique and disruptive technologies and products. CCAC intended to target companies with revolutionary technologies and products originated outside of, but which have the potential to generate primary revenues within, its core markets. CCAC believes that Quanergy has satisfied this criteria with its competitive advantage in OPA technology.

CCAC believes Quanergy is the most valuable company in the LiDAR market as a leading provider of next-generation optical phased array (“OPA”) technology focused on the automotive and Internet of Things (“IoT”) markets. Quanergy developed a disruptive solid-state LiDAR technology which utilises OPA, a platform crucial for high volume economics, reliability and performance. CCAC belives OPA technology would be a potential game-changer for the automotive industry as it is the solid-state technology best suited to scale for the automotive market. Quanergy is the only major LiDAR provider to harness the potential of OPA, and with existing commercial products available today. In addition, IoT markets present significant and immediate revenue growth opportunities. Furthermore, Quanergy’s products have already been successfully applied to markets in Asia, and with meaningful future growth prospects given the size of Asia’s automotive and industrial sectors.

Fundamentally sound companies with the potential to further improve under CCAC’s ownership. CCAC believes its management team’s experience in its target sectors and network of industry contacts provides the potential to generate opportunities to enhance the financial and operational efficiencies of the target business, and potentially offer an attractive return for its shareholders.

Quanergy is an established technology leader in LiDAR sensors and 3D perception software that enable automation and insights into mission-critical IoT applications, with a network of over 350 customers and 40 strategic relationships. CCAC believes that Quanergy can benefit from the extensive international business network of CCAC’s management, particularly in China and other Asian markets. With the addition of CCAC’s expertise and resources, Quanergy is expected to be optimally positioned as a market leader in the LiDAR sector.

Experienced and visionary management team. CCAC intended to seek targets with an established management team that it can complement by selectively supplementing the business’s existing management team (including senior management) with members of its management team or with proven leaders from its network to enhance shareholder value.

Quanergy satisfies this criteria in that Quanergy has an experienced mangament team with proven public company credentials, who are committed to developing a truly solid-state LiDAR sensor and pioneering smart awareness based on OPA technology. The mangament team brings years of combined experience in the development, commercialization and mass production on a global scale of products requiring specialized skills in photonics, optics, optoelectronics, energy mechatronics, robotics, advanced learning, mico/nanofabrication, automation, artificial intelligence, machine learning and controls.


 

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PIPE commitment. The PIPE Investors have committed to purchase $40 million in Quanergy PubCo common stock at $10.00 per share. This shows support for the Business Combination and reduces the minimum required cash from the trust account.

Seller’s retained interest. Quanergy’s existing shareholders are rolling 100% of their equity and will own approximately 72% stake in the pro forma company which shows an ongoing equity commitment.

Growth opportunities. The expected proceeds raised in the proposed Business Combination and related transactions are expected to be used to further advance Quanergy’s growth strategy, including accelerating research and development, funding working capital, paying down all debt and establishing a currency for potential future acquisitions. CCAC believes that Quanergy would benefit from the capital infusion to recapitalize existing financial obligations, provide growth capital and provide necessary working capital in case of short-term financial distress.

For a more complete description of the CCAC Board’s reasons for approving the Business Combination, including other factors and risks considered by the CCAC Board, see the section entitled “BCA Proposal—CCAC Board’s Reasons for the Approval of the Business Combination” beginning on page 158 of this proxy statement / prospectus.

Related Agreements

This section describes certain additional agreements entered into or to be entered into pursuant to the Merger Agreement. For additional information, see “BCA Proposal—Related Agreements” beginning on page 136 of this proxy statement / prospectus.

Merger Agreement Amendment

On June 28, 2021, CCAC, Merger Sub and Quanergy entered into the First Amendment to Agreement and Plan of Merger (the “Merger Agreement Amendment”), pursuant to which the Merger Agreement was amended to provide that CCAC will not designate a director to the board of directors of Quanergy immediately following the Effective Time under Section 7.6(a) of the Merger Agreement. For additional information, see “BCA Proposal—Merger Agreement Amendment” beginning on page 136 of this proxy statement / prospectus.

Sponsor Support Agreement

In connection with the execution of the Merger Agreement, CCAC, the Sponsor and Quanergy entered into the Sponsor Support Agreement, dated as of June 21, 2021. Pursuant to the Sponsor Support Agreement, Sponsor agreed to, among other things, (i) vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement and (ii) for a certain period of time as set out in the Sponsor Support Agreement, not elect to cause CCAC to redeem any securities beneficially owned or owned of record by the Sponsor, or submit any of its securities for redemption, in connection with the transactions contemplated by the Merger Agreement or otherwise. For additional information, see “BCA Proposal—Related Agreements—Sponsor Support Agreement” beginning on page 136 of this proxy statement / prospectus.

Quanergy Holders Support Agreement

In connection with the execution of the Merger Agreement, CCAC entered into a support agreement with Quanergy and certain stockholders of Quanergy, dated as of June 21, 2021, a copy of which is attached to the accompanying proxy statement / prospectus as Annex D (the “Quanergy Holders Support Agreement”). Pursuant


 

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to Quanergy Holders Support Agreement, such stockholders of Quanergy agreed to, among other things, on the fifth Business Day (as defined in the Merger Agreement) following the date at which the SEC declares effective the registration statement on Form S-4 of which this proxy statement / prospectus is a part, to execute and deliver a written consent with respect to the outstanding shares of Quanergy common stock and preferred stock held by the stockholders of Quanergy adopting the Merger Agreement and related transactions and approving the Business Combination. For additional information, see “BCA Proposal—Related Agreements—Quanergy Holders Support Agreement” beginning on page 137 of this proxy statement / prospectus.

Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, Quanergy PubCo, the Sponsor, certain members of the Sponsor, and certain stockholders of Quanergy PubCo will enter into the Registration Rights Agreement, pursuant to which Quanergy PubCo will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Quanergy PubCo common stock and other equity securities of Quanergy PubCo that are held by the parties thereto from time to time. For additional information, see “BCA Proposal—Related Agreements—Registration Rights Agreement” beginning on page 137 of this proxy statement / prospectus.

Lock-Up Agreement

Centain stockholders of Quanergy are also subject to restrictions on transfer with respect to the shares of Quanergy PubCo common stock pursuant to the Lock-Up Agreement to be entered into at the Closing by and between CCAC and certain stockholders of Quanergy. Such restrictions with respect to the shares of Quanergy PubCo common stock held by Quanergy stockholders begin at Closing and end on the date that is six months after Closing, or are subject to an early price-based release if (a) the price of the shares equals or exceeds $12.00 per share for any twenty trading days within any thirty-day trading period, or (b) CCAC completes a transaction that results in public shareholders having the right to exchange their common stock for cash, securities or other property. For additional information, see “BCA Proposal—Related Agreements—Lock-Up Agreement” beginning on page 138 of this proxy statement / prospectus.

Subscription Agreements

In connection with the execution of the Merger Agreement, CCAC entered into Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors agreed to purchase, in the aggregate, 4,000,000 shares of Quanergy PubCo common stock at $10.00 per share for an aggregate commitment amount of $40,000,000. The closings under the Subscription Agreements will occur substantially concurrently with the Closing. Additionally, pursuant to the Subscription Agreements, the PIPE Investors agreed to waive any claims that they may have at the Closing or in the future as a result of, or arising out of, the Subscription Agreements against CCAC, including with respect to the trust account. For additional information, see “BCA Proposal—Related Agreements—Subscription Agreements” beginning on page 137 of this proxy statement / prospectus.

Ownership of Quanergy PubCo following Business Combination

As of the date of this proxy statement / prospectus, there are 34,500,000 ordinary shares issued, which includes the 6,900,000 founder shares held by the Sponsor (whose members include CCAC’s directors and officers) and the 27,600,000 public shares. As of the date of this proxy statement / prospectus, there is outstanding an aggregate of 21,320,000 warrants, which includes the 7,520,000 private placement warrants held by the Sponsor and 13,800,000 public warrants. Each whole warrant entitles the holder thereof to purchase one CCAC Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one share of Quanergy PubCo common stock. Therefore, as of the date of this proxy statement / prospectus (without giving effect to the Business Combination), the CCAC fully diluted share capital would be 48,300,000 ordinary shares.


 

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It is anticipated that, following the Business Combination, (1) CCAC’s public shareholders are expected to own approximately 20.4% of the outstanding Quanergy PubCo common stock, (2) the stockholders of Quanergy (without taking into account any public shares held by the stockholders of Quanergy prior to the consummation of the Business Combination or purchased in the PIPE Investment) are expected to own approximately 71.6% of the outstanding Quanergy PubCo common stock, (3) the Sponsor and related parties are expected to collectively own approximately 5.1% of the outstanding Quanergy PubCo common stock and (4) the PIPE Investors are expected to own approximately 3.0% of the outstanding Quanergy PubCo common stock. These percentages assume (i) that no public shareholders exercise their redemption rights in connection with the Business Combination, (ii) (a) the vesting of all shares of Quanergy PubCo common stock received in respect of the Quanergy PubCo Restricted Shares and (b) the vesting and exercise of all Quanergy PubCo Options for shares of Quanergy PubCo common stock (assuming that all Quanergy PubCo Options are net-settled), (c) the exercise of all Quanergy PubCo Converted Warrants for shares of Quanergy PubCo common stock (assuming that all Quanergy PubCo Converted Warrants are net-settled), (d) the vesting of all shares of Quanergy Restricted Stock Unit Awards and the settlement of all Adjusted Restricted Stock Unit Awards received in respect of the Quanergy Restricted Stock Unit Awards into shares of Quanergy PubCo common stock, and (e) the conversion of all of 2023 Quanergy Convertible Notes into Quanergy Common Stock (assuming the conversion date of September 30, 2021), (iii) that Quanergy PubCo issues shares of Quanergy PubCo common stock as the Aggregate Merger Consideration pursuant to the Merger Agreement, which in the aggregate equals 97,000,000 shares of Quanergy PubCo common stock (assuming that all Quanergy PubCo Options and all Quanergy PubCo Converted Warrants are net-settled), (iv) that Quanergy PubCo issues 4,000,000 shares of Quanergy PubCo common stock to the PIPE Investors pursuant to the PIPE Investment and (v) subject to the foregoing assumptions, immediately prior to the Closing, Quanergy has the same capitalization as it had as of June 8, 2021. If the actual facts are different from these assumptions, the percentage ownership retained by the Company’s existing shareholders in the combined company will be different.

The following table illustrates varying ownership levels in Quanergy PubCo immediately following the consummation of the Business Combination based on the assumptions above.

 

     Assuming No
Redemptions
(Shares)
     %
Ownership
    Assuming
Maximum
Redemptions
(Shares)
     %
Ownership
 

Quanergy Stockholders

     97,000,000        71.6     97,000,000        80.0

PIPE investors

     4,000,000        3.0     4,000,000        3.3

CCAC Class A ordinary shares(1)

     27,600,000        20.4     13,414,029        11.1

CCAC Class B ordinary shares

     6,900,000        5.1     6,900,000        5.7

Pro forma common stock outstanding at March 31, 2020

     135,500,000          121,314,029     
  

 

 

      

 

 

    
  (1)

Reflects maximum redemptions of 14,185,971 shares. The maximum redemption amount is derived considering the minimum cash requirement of $175.0 million.

Date, Time and Place of Extraordinary General Meeting of CCAC’s Shareholders

The extraordinary general meeting of the shareholders of CCAC will be held at                 , Eastern Time, on                 , 2021, at the offices of White & Case LLP at 1221 Avenue of the Americas, New York, New York 10020, or virtually via live webcast at                 , to consider and vote upon the proposals to be put to the extraordinary general meeting, including if necessary, the Adjournment Proposal, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, each of the Condition Precedent Proposals have not been approved.


 

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Registering for the Special Meeting

Any shareholder wishing to attend the extraordinary general meeting should register for the extraordinary general meeting by                 , 2021 at                 . To register for the extraordinary general meeting, please follow these instructions as applicable to the nature of your ownership of ordinary shares:

 

   

If your shares are registered in your name with Continental Stock Transfer & Trust Company and you wish to attend the online-only meeting, go to                 , enter the 12-digit control number included on your proxy card or notice of the extraordinary general meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Just prior to the start of the extraordinary general meeting you will need to log back into the extraordinary general meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

 

   

Beneficial shareholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the extraordinary general meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial shareholders who e-mail a valid legal proxy will be issued a 12-digit meeting control number that will allow them to register to attend and participate in the extraordinary general meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the extraordinary general meeting with a link and instructions for entering the extraordinary general meeting. Beneficial shareholders should contact Continental Stock Transfer & Trust Company at least five (5) business days prior to the extraordinary general meeting date in order to ensure access.

Voting Power; Record Date

CCAC shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned ordinary shares at the close of business on                 , 2021, which is the record date for the extraordinary general meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. CCAC warrants do not have voting rights. As of the close of business on the record date, there were                 ordinary shares issued, of which                  were public shares, with the rest being held by CCAC’s initial shareholders.

Quorum and Vote of CCAC Shareholders

A quorum of CCAC shareholders is necessary to hold a valid meeting. A quorum will be present at the CCAC general meeting if the holders of a majority of the issued shares entitled to vote at the extraordinary general meeting are represented in person or by proxy (which would include presence at the extraordinary general meeting). Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as a vote cast at the extraordinary general meeting.

As of the record date for the extraordinary general meeting,                  ordinary shares would be required to achieve a quorum.

The Sponsor has agreed to vote all of its ordinary shares in favor of the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement / prospectus, the Sponsor (whose members include CCAC’s directors and officers) owns 20% of the issued ordinary shares.


 

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The proposals presented at the extraordinary general meeting require the following votes:

 

   

BCA Proposal: The approval of the BCA Proposal requires an ordinary resolution, being the affirmative vote for the proposal by the holders of a majority of the ordinary shares who, being present and entitled to vote at the extraordinary general meeting to approve the BCA Proposal, vote at the quorate extraordinary general meeting.

 

   

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote for the proposal by the holders of a majority of at least two-thirds of the ordinary shares who, being present and entitled to vote at the extraordinary general meeting to approve the Domestication Proposal, vote at the quorate extraordinary general meeting.

 

   

Organizational Documents Proposal: The approval of the Organizational Documents Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote for the proposal by the holders of a majority of at least two-thirds of the ordinary shares who, being present and entitled to vote at the extraordinary general meeting to approve the Organizational Documents Proposal, vote at the quorate extraordinary general meeting.

 

   

Advisory Organizational Documents Proposals: The separate approval of each of the Advisory Organizational Documents Proposals, each of which is a non-binding vote, requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote for each of the Advisory Organizational Documents Proposals by the holders of a majority of at least two-thirds of the ordinary shares who, being present and entitled to vote at the extraordinary general meeting to approve each such Advisory Organizational Documents Proposal, vote at the quorate extraordinary general meeting.

 

   

Stock Issuance Proposal: The approval of the Stock Issuance Proposal requires an ordinary resolution, being the affirmative vote for the proposal by the holders of a majority of the ordinary shares who, being present and entitled to vote at the extraordinary general meeting to approve the Stock Issuance Proposal, vote at the quorate extraordinary general meeting.

 

   

Equity Incentive Plan Proposal: The approval of the Equity Incentive Plan Proposal requires an ordinary resolution, being the affirmative vote for the proposal by the holders of a majority of the ordinary shares who, being present and entitled to vote at the extraordinary general meeting to approve the Equity Incentive Plan Proposal, vote at the quorate extraordinary general meeting.

 

   

ESPP Proposal: The approval of the ESPP Proposal requires an ordinary resolution, being the affirmative vote for the proposal by the holders of a majority of the ordinary shares who, being present and entitled to vote at the extraordinary general meeting to approve the ESPP Proposal, vote at the extraordinary general meeting.

 

   

Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution, being the affirmative vote for the proposal by the holders of a majority of the ordinary shares who, being present and entitled to vote at the extraordinary general meeting to approve the Adjournment Proposal, vote at the quorate extraordinary general meeting.

Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as a vote cast at the extraordinary general meeting.


 

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Redemption Rights

Pursuant to the Cayman Constitutional Documents, a public shareholder may request of CCAC that Quanergy PubCo redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

   

hold public shares or if you hold public shares through CCAC units, you elect to separate your CCAC units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

   

submit a written request to Continental Stock Transfer & Trust Company (“Continental”), CCAC’s transfer agent, that Quanergy PubCo redeem all or a portion of your public shares for cash; and

 

   

deliver the certificates for your public shares (if any) along with the redemption forms to Continental physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to                 , Eastern Time, on                 , 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of CCAC units must elect to separate the CCAC units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their CCAC units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the CCAC units into the underlying public shares and public warrants, or if a holder holds CCAC units registered in its own name, the holder must contact Continental directly and instruct them to do so. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the BCA Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank and the public shares will not be redeemed for cash, even if their holders have properly exercised redemption rights with respect to such public shares. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers the certificates for its shares (if any) along with the redemption forms to Continental, Quanergy PubCo will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of Quanergy PubCo common stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of CCAC—Redemption Rights” in this proxy statement / prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 20% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 20% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash.

The Sponsor has agreed to vote in favor of the Business Combination, regardless of how CCAC’s public shareholders vote. The Sponsor and each director and each officer of CCAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in the case of the Sponsor,


 

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subject also to the terms and conditions contemplated by the Sponsor Support Agreement. As of the date of this proxy statement / prospectus, the Sponsor (whose members include CCAC’s directors and officers) owns 20% of the issued ordinary shares.

Holders of the warrants will not have redemption rights with respect to the warrants.

Appraisal Rights

Neither CCAC shareholders nor CCAC warrant holders have appraisal rights in connection with the Business Combination or the Domestication under Cayman Islands law or under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. CCAC has engaged Morrow Sodali LLC to assist in the solicitation of proxies.

If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the extraordinary general meeting. A shareholder also may change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting of CCAC—Revoking Your Proxy.”

Interests of CCAC’s Directors and Officers in the Business Combination

When you consider the recommendation of CCAC’s board of directors in favor of approval of the BCA Proposal, you should keep in mind that the Sponsor and CCAC’s directors and executive officers have interests in such proposal that are different from, or in addition to, those of CCAC shareholders and warrant holders generally. These interests include, among other things, the interests listed below:

 

   

Prior to CCAC’s initial public offering, the Sponsor purchased 5,750,000 CCAC Class B ordinary shares for an aggregate purchase price of $25,000, or approximately $0.004 per founder shares. Effective December 10, 2019, the Sponsor transferred 718,750 founder shares to Mr. Henri Arif for a purchase price of $3,125 (the same per-share price initially paid by the Sponsor), resulting in our sponsor holding 5,031,250 founder shares. On February 10, 2020, CCAC effected a share capitalization of 1,150,000 shares and as a result the Sponsor held 6,037,500 founder shares and Mr. Henri Arif held 862,500 founder shares. On May 7, 2020, the Sponsor transferred 22,000 founder shares to Mr. Ross Haghighat for no consideration and on February 10, 2021, the Sponsor transferred 13,000 founder shares to Mr. Mark B. Segall for no consideration. As of March 31, 2021, the Sponsor held 6,002,500 founder shares. As a result of the significantly lower investment per CCAC Class B ordinary share of our Sponsor as compared with the investment per public share of CCAC’s public shareholders, a transaction which results in an increase in the value of the investment of the Sponsor may result in a decrease in the value of the investment of our public shareholders.

 

   

If CCAC does not consummate a business combination by February 13, 2022 (or if such date is extended at a duly called extraordinary general meeting, such later date), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, liquidating and dissolving, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the 6,900,000 CCAC Class B ordinary shares owned by the Sponsor, its affiliates and the directors of CCAC would be worthless because following the redemption of the public shares, CCAC would likely have few, if any, net assets. Additionally, in such event, the 7,520,000 private placement warrants purchased by the Sponsor simultaneously with the consummation of CCAC’s initial public offering for an aggregate purchase price of $7,520,000 will expire worthless.


 

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CCAC’s directors, Mr. Arif, Mr. Ross Haghighat and Mr. Mark B. Segall, also have a direct or indirect economic interest in such private placement warrants and/or in the 6,900,000 CCAC Class B ordinary shares owned by the Sponsor or its affiliates. The 6,900,000 shares of Quanergy PubCo common stock into which the 6,900,000 CCAC Class B ordinary shares held by the Sponsor will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $                 million based upon the closing price of $                 per public share on the NYSE on                , 2021, the most recent practicable date prior to the date of this proxy statement / prospectus. However, given that such shares of Quanergy PubCo common stock will be subject to certain restrictions, including those described elsewhere in this proxy statement / prospectus, CCAC believes such shares have less value. The 7,520,000 Quanergy PubCo warrants into which the 7,520,000 private placement warrants held by the Sponsor will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $                million based upon the closing price of $                 per public warrant on the NYSE on                , 2021, the most recent practicable date prior to the date of this proxy statement / prospectus.

 

   

Accordingly, CCAC’s Sponsor, officers and directors will lose their entire investment of $7,545,000, consisting of the Sponsor’s $25,000 initial investment and the Sponsor’s $7,520,000 private placement warrant purchase price, if CCAC does not complete a business combination by February 13, 2022.

 

   

Pursuant to that certain letter agreement, dated as of February 10, 2020, by and among the CCAC and the Sponsor, in connection with CCAC’s initial public offering, the Sponsor and other signatories (each of whom is a member of CCAC’s board of directors and/or management team) is subject to certain restrictions on transfer with respect to: (i) the Founder Shares (as defined in such letter agreement); and (ii) private placement warrants (as defined in such letter agreement). Such restrictions on the Founder Shares end on the date that is one year after Closing, or are subject to an early price-based release if: (a) the price of the shares equals or exceeds $12.00 per share for any twenty trading days within any thirty-day trading period at least 150 days after the Business Combination, or (b) CCAC completes a transaction that results in public shareholders having the right to exchange the CCAC Class A ordinary shares for cash, securities or other property. The restrictions on the private placement warrants end on 30 days after the completion of a business combination.

 

   

The Sponsor irrevocably and unconditionally agreed that during the period commencing on June 21, 2021 and ending on the earliest of (a) the effective time of the Merger, and (b) such date and time of the termination of the Merger Agreement (as amended on June 28, 2021) in accordance with its terms, such Sponsor shall not elect to cause CCAC to redeem any of the 6,900,000 CCAC Class B ordinary shares and 7,520,000 private placement warrants beneficially owned or owned of record by such Sponsor, or submit any of such securities for redemption, in connection with the transactions contemplated by the Merger Agreement or otherwise.

 

   

Affiliates of our Sponsor and our directors own equity interests in Quanergy as of the date of this proxy statement / prospectus. On April 5, 2017 and May 5, 2017, Tharsis Funds, affiliates of Mr. Arif, Tharsis Capital, acquired an aggregate of 246,250 common shares from certain shareholders in Quanergy, representing approximately 1.79% of the fully diluted share capital of Quanergy as of May 5, 2017. On October 17, 2018, (i) CCSRF, an affiliate of Mr. Fanglu Wang and Mr. Eric Chan, CCSRF Vision (Cayman) Investment Limited, acquired 82,372 shares of Quanergy on an as-converted and as-exercised basis, representing approximately 0.58% of the fully diluted share capital of Quanergy, and (ii) affiliates of Mr. Arif, Tharsis Capital, acquired 16,968 additional shares of Quanergy on an as-converted and as-exercised basis, which, taken in total with the previous acquisition of shares, represented approximately 1.86% of the fully diluted share capital of Quanergy. Between January 1, 2019 and July 1, 2020, CCSRF acquired additional equity securities from certain existing


 

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holders of shares of Series C preferred stock, which, taken in total with the previous acquisition of equity, represented approximately 0.94% of the fully diluted share capital of Quanergy, and Tharsis Funds acquired additional equity securities from certain existing holders of shares of Series C preferred stock, which, taken in total with the previous acquisition of equity, represented approximately 1.91% of the fully diluted share capital of Quanergy, in each case, as of July 1, 2020. Immediately following the Closing, CCSRF and Tharsis Funds are expected to receive approximately 1,954,961 and 1,359,083 Quanergy PubCo shares, respectively, on an as-converted and as-exercised basis based on Quanergy’s capitalization on June 8, 2021.

 

   

None of Mr. Arif, Mr. Wang and Mr. Chan, nor any other affiliate of CCAC were involved in the management or guarantee of Quanergy in relation to its consideration of the Business Combination and alternative transactions. The potential interests of Mr. Henri, Mr. Wang and Mr. Chan were properly disclosed to the CCAC Board, and the CCAC Board considered these interests, among other matters, in evaluating and negotiating the business combination and transaction agreements and in recommending to CCAC’s stockholders that they vote in favor of the proposals presented at the CCAC special meeting, including the Business Combination Proposal. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the CCAC special meeting, including the Business Combination Proposal.

 

   

CCAC’s Sponsor, officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if CCAC fails to complete a business combination by February 13, 2022.

 

   

CCAC’s existing directors and officers will be eligible for continued indemnification and continued coverage under CCAC’s directors’ and officers’ liability insurance policy after the Merger and pursuant to the Merger Agreement.

 

   

Following the Closing, CCAC’s Sponsor would be entitled to the repayment of any working capital loan and advances that have been made to CCAC and remain outstanding. If CCAC does not complete an initial business combination within the required period, CCAC may use a portion of its working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used for this purpose.

 

   

CCAC’s Sponsor, officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them related to identifying, investigating, negotiating and completing an initial business combination, including repayment of any other loans and advances made. However, if CCAC fails to consummate a business combination by February 13, 2022, they will not have any claim against the trust account for reimbursement. Accordingly, CCAC may not be able to reimburse these expenses if the Business Combination or another business combination is not completed by such date.

 

   

Pursuant to the Registration Rights Agreement, the Sponsor, certain of its respective affiliates and certain stockholders of Quanergy will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of Quanergy PubCo common stock and warrants held by such parties following the consummation of the Business Combination.

 

   

The Proposed Certificate of Incorporation will contain a provision expressly electing that Quanergy PubCo will not to be governed by Section 203 (Delaware’s “interested stockholder” statute) of the DGCL, although it will provide other restrictions regarding takeovers by interested stockholders

The Sponsor has agreed to vote in favor of the Business Combination, regardless of how CCAC’s public shareholders vote. The Sponsor and each director and each officer of CCAC have agreed to, among other things,


 

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vote in favor of the Merger Agreement and the transactions contemplated thereby, in the case of the Sponsor, subject also to the terms and conditions contemplated by the Sponsor Support Agreement. As of the date of this proxy statement / prospectus, the Sponsor (whose members include CCAC’s directors and officers) owns 20% of the issued ordinary shares.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material non-public information regarding CCAC or CCAC’s securities, the Sponsor, Quanergy our or their respective directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of CCAC’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, Quanergy or their respective directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of (1) satisfaction of the requirement that holders of a majority of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the BCA Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal, the ESPP Proposal and the Adjournment Proposal, (2) satisfaction of the requirement that holders of a majority of at least two-thirds of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the Domestication Proposal, the Organizational Documents Proposal, and the Advisory Organizational Documents Proposals, (3) satisfaction of the Minimum Cash Condition, (4) otherwise limiting the number of public shares electing to redeem and (5) CCAC’s net tangible assets being at least $5,000,001.

Entering into any such arrangements may have a depressive effect on the ordinary shares (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination). If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved.

The existence of financial and personal interests of one or more of CCAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of CCAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, CCAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “—Interests of CCAC’s Directors and Officers in the Business Combination” for a further discussion of these considerations.

Opinion of Duff & Phelps, the CCAC Board’s Financial Advisor

On February 18, 2021, CCAC retained Duff & Phelps to serve as an independent financial advisor to the CCAC Board to provide to the CCAC Board a fairness opinion in connection with the Business Combination. On June 21, 2021, Duff & Phelps verbally rendered its opinion to CCAC Board, which was subsequently confirmed in writing by delivery of its opinion, dated June 21, 2021 (the “Opinion”), addressed to the CCAC Board that, as


 

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of the date of the Opinion and subject to and based on the assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in such Opinion, the consideration to be paid by CCAC in the Business Combination was fair, from a financial point of view, to CCAC.

In selecting Duff & Phelps, the CCAC Board considered, among other things, the fact that Duff & Phelps is a reputable investment banking firm with experience in the mobility sector and a global leader in providing fairness opinions to boards of directors. Duff & Phelps is continuously engaged in the valuation of businesses and their securities and the provision of fairness opinions in connection with various transactions.

The full text of the Opinion is attached hereto as Annex K and is incorporated into this document by reference. The summary of the Opinion set forth herein is qualified in its entirety by reference to the full text of the Opinion. CCAC’s stockholders are urged to read the Opinion carefully and in its entirety for a discussion of the procedures followed, assumptions made, other matters considered and limits of the review undertaken by Duff & Phelps in connection with such Opinion.

Recommendation to Shareholders of CCAC

CCAC’s board of directors believes that the BCA Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of CCAC’s shareholders and unanimously recommends that its shareholders vote “FOR” the approval of the BCA Proposal, “FOR” the approval of the Domestication Proposal, “FOR” the approval of the Organizational Documents Proposal, “FOR” the approval, on an advisory basis, of each of the separate Advisory Organizational Documents Proposals, “FOR” the approval of the Stock Issuance Proposal, “FOR” the approval of the Equity Incentive Plan Proposal and “FOR” the approval of the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of CCAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of CCAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, CCAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal—Interests of CCAC’s Directors and Officers in the Business Combination” for a further discussion of these considerations.


 

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Sources and Uses of Funds for the Business Combination

The following table summarizes the sources and uses for funding the transactions contemplated by the Merger Agreement. Where actual amounts are not known or knowable, the figures below represent CCAC’s good faith estimate of such amounts assuming a Closing as of                 , 2021.

 

(in millions)

   Assuming No
Redemption
     Assuming
Maximum
Redemption
 

Sources

     

Proceeds from Trust Account

   $ 277.8      $ 0  

PIPE Investment

     40.0        40.0  

Quanergy’s Equity(1)

     970.0        970.0  

CCAC Cash on Balance Sheet(2)

     0.6        0.6  
  

 

 

    

 

 

 

Total Sources

   $ 1,288.4      $ 1,010.6  
  

 

 

    

 

 

 

Uses

     

Cash on Balance Sheet(2)

   $ 0.6      $ 0.6  

Quanergy’s Equity(1)

     970        970  

Transaction costs

     35.0        35.0  
  

 

 

    

 

 

 

Total Uses

   $ 1,005.6      $ 1,005.6  
  

 

 

    

 

 

 
(1)

Quanergy PubCo common stock to be issued at a deemed value of $10.00 per share.

(2)

Based on cash on hand as of March 31, 2021.

(3)

Includes deferred underwriting commission of approximately $9.66 million and estimated transaction expenses

U.S. Federal Income Tax Considerations

For a discussion summarizing certain U.S. federal income tax considerations of the Domestication and an exercise of redemption rights in connection with the Business Combination, please see “U.S. Federal Income Tax Considerations” beginning on page 204 of this proxy statement / prospectus.

Expected Accounting Treatment

The Domestication

There will be no accounting effect or change in the carrying amount of the consolidated assets and liabilities of the Company as a result of the Domestication. The business, capitalization, assets and liabilities and financial statements of Quanergy PubCo immediately following the Domestication will be the same as those of CCAC immediately prior to the Domestication.

The Business Combination

We expect the Business Combination to be accounted for as a reverse recapitalization in accordance with GAAP. Under the guidance in ASC 805, CCAC is expected to be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination is expected to be reflected as the equivalent of Quanergy issuing stock for the net assets of CCAC, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded.

Regulatory Matters

Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (“FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust


 

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Division of the Department of Justice (“Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Business Combination is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the two filings of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. On July 6, 2021, CCAC and Quanergy filed the required forms under the HSR Act with respect to the Business Combination with the Antitrust Division and the FTC and requested early termination. On                 , both CCAC and Quanergy received notice that early termination had been granted.

At any time before or after consummation of the Business Combination, notwithstanding termination of the respective waiting periods under the HSR Act, the Antitrust Division or the FTC, or any state or foreign governmental authority could take such action under applicable antitrust laws as such authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination, conditionally approving the Business Combination upon divestiture of assets, subjecting the completion of the Business Combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. CCAC cannot assure you that the Antitrust Division, the FTC, any state attorney general or any other government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, CCAC cannot assure you as to its result.

Neither CCAC nor Quanergy are aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

On July 13, 2021, CCAC and Quanergy submitted a joint voluntary declaration of the Business Combination to the Committee on Foreign Investment in the United States (“CFIUS”) under Section 721 of the Defense Production Act of 1950, as amended. Approval of the Business Combination by CFIUS is a condition to each party’s obligations to complete the Business Combination, and the parties’ completion of the Business Combination is therefore contingent upon CFIUS Clearance as defined in the Merger Agreement.

Emerging Growth Company

CCAC is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in CCAC’s periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. CCAC has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, CCAC, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make


 

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comparison of CCAC’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

CCAC will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of CCAC’s initial public offering, (b) in which CCAC has total annual gross revenue of at least $1.07 billion or (c) in which CCAC is deemed to be a large accelerated filer, which means the market value of CCAC’s common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which CCAC has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

Additionally, CCAC is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. CCAC will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of its common equity held by non-affiliates exceeds $700 million as of the prior June 30th or (2) the market value of its common equity exceeds $250 million and its annual revenues exceeds $100 million during such fiscal year.

Risk Factors

Unless the context requires otherwise, references to “Quanergy,” “we,” “us,” “our” and “the Company” in this section are to the business and operations of Quanergy prior to the Business Combination and the business and operations of Quanergy PubCo as directly or indirectly affected by Quanergy by virtue of Quanergy PubCo’s ownership of the business of Quanergy following the Business Combination.

In evaluating the proposals to be presented at the extraordinary general meeting, shareholders should carefully read this proxy statement / prospectus and especially consider the factors discussed in the sections titled “Summary of the Proxy Statement / Prospectus—Risk Factors” and “Risk Factors” beginning on page 50 and page 55 of this proxy statement / prospectus. In particular, such risks include, but are not limited to, the following:

 

   

We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability.

 

   

We will require additional capital to meet our financial obligations and support planned business growth, and this capital might not be available on acceptable terms or at all.

 

   

We operate in evolving markets, which make it difficult to evaluate our business and prospects. If markets for LiDAR products, including autonomous driving, security & smart spaces, mapping, robotics, industrial and other commercial applications, develop more slowly than we expect, or long-term end-customer adoption rates and demand are slower than we expect, our operating results and growth prospects could be harmed.

 

   

Product integration could face complications or unpredictable difficulties, which may adversely impact customer adoption of our products and our financial performance.

 

   

The market for LiDAR sensors is highly competitive and many companies are actively focusing on LiDAR technology or competing technologies based on camera, radar or other technologies. If we fail to differentiate ourselves and compete successfully with these companies, many of which have substantially greater resources, our products may become obsolete and it will be difficult for us to attract customers and our business will be harmed.


 

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Our Optical Phased Array (OPA) based product could fail to meet industry requirements for range, resolution or general performance or we could fall short of our cost objections for OPA-based LiDAR, thereby limiting our revenue potential.

 

   

Developments in alternative non-LiDAR technologies may adversely affect the demand for LiDAR sensors.

 

   

If we are not able to effectively grow our global sales and marketing organization, or maintain or grow an effective network of distributors, value-added resellers, and integrators, our business prospects, results of operations and financial condition could be adversely affected.

 

   

We continue to implement strategic initiatives designed to grow our business. These initiatives may prove more costly than we currently anticipate and we may not succeed in increasing our revenue in an amount sufficient to offset the costs of these initiatives and to achieve and maintain profitability.

 

   

We have limited manufacturing capacity and intend to depend primarily on a small number of contract manufacturers and manufacturing partners in the future. Our operations could be disrupted if we encounter delays or other problems with these contract manufacturers.

 

   

We may incur significant direct or indirect liabilities in connection with our product warranties which could adversely affect our business and operating results.

 

   

We have been and may continue to be subject to litigation regarding intellectual property rights that could be costly, including claims that we are infringing third party intellectual property, whether successful or not, and could result in the loss of rights important to our products or otherwise harm our business.

 

   

We are subject to, and must remain in compliance with, numerous laws and governmental regulations across various jurisdictions concerning the manufacturing, use, distribution and sale of our products.

 

   

The effects of the COVID-19 pandemic could have a material adverse effect on our business, financial results, and results of operations.

 

   

We have identified a material weakness in our internal control over financial reporting, and if we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock may be materially adversely affected.

 

   

The Sponsor has agreed to vote in favor of the Business Combination, regardless of how CCAC’s public shareholders vote.

 

   

We may be forced to close the Business Combination even if we determined it is no longer in our shareholders’ best interest.

 

   

Since the Sponsor and CCAC’s directors and officers have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with Quanergy is appropriate as our initial business combination. Such interests include that Sponsor will lose its entire investment in us if our business combination is not completed.

 

   

The exercise of CCAC’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in CCAC’s shareholders’ best interest.


 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial information (the “summary pro forma information”) gives effect to the Business Combination and the PIPE Investment included elsewhere in this proxy statement / prospectus. Under both the no redemptions and the maximum redemptions scenario, the Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, CCAC will be treated as the “acquired” company for accounting and financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Quanergy issuing equity for the net assets of CCAC, accompanied by a recapitalization. The net assets of CCAC will be stated at historical cost, with no goodwill or other intangible assets recorded. The summary unaudited pro forma condensed combined balance sheet data as of March 31, 2021 gives effect to the Business Combination and PIPE Investment as if they had occurred on March 31, 2021. The summary unaudited pro forma condensed combined statement of operations data for the three months ended March 31, 2021 gives effect to the Business Combination and PIPE Investment as if they had occurred on January 1, 2021.

The summary pro forma data has been derived from and should be read in conjunction with the more detailed unaudited pro forma condensed combined financial information (the “pro forma financial statements”) of CCAC appearing elsewhere in this proxy statement / prospectus and the accompanying notes to the pro forma financial statements. The pro forma financial statements are based upon, and should be read in conjunction with, the historical consolidated financial statements and related notes of CCAC and Quanergy for the applicable periods included in this proxy statement / prospectus.

The summary pro forma data has been presented for informational purposes only and are not necessarily indicative of what Quanergy’s and CCAC’s financial position or results of operations actually would have been had the Business Combination and PIPE Investment been completed as of the dates indicated. In addition, the summary pro forma data does not purport to project the future financial position or operating results of Quanergy PubCo.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below:

 

   

Assuming No Redemption Scenario: This scenario assumes that no shares of CCAC’s redeemable common stock will be redeemed;

 

   

Assuming Maximum Redemption Scenario: This scenario assumes that CCAC’s public stockholders holding 14,185,971 of CCAC’s public shares exercise their redemption rights and that such shares are redeemed for their pro rata share ($10.07 per share) of the funds in the Trust Account for aggregate


 

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redemption proceeds of $142.9 million. The Merger Agreement includes a minimum cash available requirement that CCAC will need to have a minimum of $175.0 million of funds, net of any share redemptions.

 

(in thousands, except per share data)    Pro Forma
Combined
(Assuming No
Redemptions)
     Pro Forma
Combined
(Assuming
Maximum
Redemptions)
 

Summary Unaudited Pro Forma Condensed Combined

     

Statement of Operations Data for the Three Months Ended March 31, 2021

     

Total revenue

   $ 383      $ 383  

Net loss

   $ (26,917    $ (26,917

Net loss per share – basic and diluted

   $ (0.22    $ (0.25

Weighted-average shares outstanding – basic and diluted

     123,611,187        109,425,216  

Summary Unaudited Pro Forma Condensed Combined

     

Statement of Operations Data for the Year Ended December 31, 2020

     

Total revenue

   $ 3,015      $ 3,015  

Net loss

   $ (63,336    $ (63,336

Net loss per share – basic and diluted

   $ (0.51    $ (0.58

Weighted-average shares outstanding – basic and diluted

     123,611,187        109,425,216  

Summary Unaudited Pro Forma Condensed Combined

     

Balance Sheet Data as of March 31, 2021

     

Cash and cash equivalents

   $ 306,781      $ 163,928  

Total current assets

   $ 320,796      $ 177,943  

Total assets

   $ 340,093      $ 197,240  

Total current liabilities

   $ 6,959      $ 6,959  

Total liabilities

   $ 16,994      $ 16,994  

Total stockholders’ equity

   $ 323,099      $ 180,246  

 

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MARKET PRICE AND DIVIDEND INFORMATION

CCAC units, CCAC Class A ordinary shares and public warrants are currently listed on the NYSE under the symbols “CCAC.U” and “CCAC” and “CCAC WS,” respectively.

The most recent closing price of the units, common stock and redeemable warrants as of July 15, 2021, the last trading day before announcement of the execution of the Merger Agreement, was $10.38, $9.89 and $1.01, respectively. As of                 , 2021, the record date for the extraordinary general meeting, the most recent closing price for each unit, common stock and redeemable warrant was                 ,                  and                 , respectively.

Holders of the units, public shares and public warrants should obtain current market quotations for their securities. The market price of CCAC’s securities could vary at any time before the Business Combination.

Holders

As of the date of this proxy statement / prospectus there was 27,600,000 holder of record of CCAC’s Class A ordinary shares, 6,900,000 holders of record of CCAC’s Class B ordinary shares, 27,600,000 holder of record of CCAC units and 21,320,000 holders of CCAC warrants. See “Beneficial Ownership of Securities.”

Dividend Policy

CCAC has not paid any cash dividends on its CCAC Class A ordinary shares to date and does not intend to pay cash dividends prior to the completion of the Business Combination. The payment of cash dividends in the future will be dependent upon the revenues and earnings, if any, capital requirements and general financial condition of Quanergy PubCo subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of Quanergy PubCo’s board of directors. CCAC’s board of directors is not currently contemplating and does not anticipate declaring share dividends nor is it currently expected that Quanergy PubCo’s board of directors will declare any dividends in the foreseeable future. Further, the ability of Quanergy PubCo to declare dividends may be limited by the terms of financing or other agreements entered into by Quanergy PubCo or its subsidiaries from time to time.

Price Range of Quanergy’s Securities

Historical market price information regarding Quanergy is not provided because there is no public market for Quanergy’s securities. For information regarding Quanergy’s liquidity and capital resources, see “Quanergy’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” beginning on page 272 of this proxy statement / prospectus.


 

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RISK FACTORS

Shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement / prospectus, including the financial statements and notes to the financial statements included herein, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement / prospectus. Certain of the following risk factors apply to the business and operations of Quanergy and will also apply to the business and operations of Quanergy PubCo following the completion of the Business Combination. If any of the following risks actually occurs, it may have a material adverse effect on the business, results of operations or financial condition of Quanergy or Quanergy PubCo and could adversely affect the trading price of its common stock following the business combination. The risks described in this “Risk Factors’’ section may also be incorrect or may change. If the risks and uncertainties that Quanergy or Quanergy PubCo plan for are incorrect or incomplete, or if Quanergy or Quanergy PubCo fail to fully understand and manage these risks successfully this failure may have a material adverse effect on the business, financial condition and results of operation of Quanergy PubCo following the Business Combination. The following risks should be read in conjunction with the financial statements and notes to the financial statements included herein.

Unless the context requires otherwise, references to “Quanergy,” “we,” “us,” “our” and “the Company” in this section are to the business and operations of Quanergy prior to the Business Combination and the business and operations of Quanergy PubCo as directly or indirectly affected by Quanergy by virtue of Quanergy PubCo’s ownership of the business of Quanergy following the Business Combination.

Risks Related to Our Industry and Business

We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability.

We have experienced net losses in each year since our inception. In the years ended December 31, 2020 and 2019, we incurred net losses of $35.8 million and $42.4 million, respectively, and in the three months ended March 31, 2021, we incurred net losses of $14.7 million. You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance. We expect these losses to continue for at least the next several years as we expand our product offering and continue to scale our commercial operations and research and development program. As of March 31, 2021, we had an accumulated deficit of $258.8 million. Even if we are able to increase sales of our products, there can be no assurance that we will ever be profitable.

We expect we will continue to incur significant losses for the foreseeable future as we:

 

   

continue to hire additional personnel and make investments in research and development in order to develop technology and related software;

 

   

increase our sales and marketing functions, including expansion of our customer support and distribution capabilities;

 

   

hire additional personnel to support compliance requirements in connection with being a public company; and

 

   

expand operations and manufacturing.

If our products do not achieve sufficient market acceptance, our revenue growth rate may be slower than we expect, we may not be able to increase revenue enough to offset the increase in operating expenses resulting from investments, and we will not become profitable. If we fail to become profitable, or if we are unable to fund our continuing losses we may be unable to continue our business operations. There can be no assurance that we will ever achieve or sustain profitability.

 

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We will require additional capital to meet our financial obligations and support planned business growth, and this capital might not be available on acceptable terms or at all.

Historically, we have funded our operations since inception primarily through equity, and equity-linked notes. We intend to continue to make significant investments to support planned business growth and will require additional funds to respond to business challenges, including the need to develop new sensing products and technology, maintain adequate levels of inventory to support demand requirements of our distributors and customers, improve our operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our then existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing we secure, the debt holders would have rights senior to the holders of our common stock to make claims on our assets, and the terms could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we were to violate the restrictive covenants, we could incur penalties, increased expenses and an acceleration of the payment terms of our outstanding debt, which could in turn harm our business.

Because our decision to issue securities or raise financing in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future issuances of debt or equity securities. As a result, our stockholders bear the risk of future issuances reducing the value of our common stock and diluting their interests. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

We operate in evolving markets, which make it difficult to evaluate our business and prospects. If markets for LiDAR products, including autonomous driving, security & smart spaces, mapping, robotics, industrial and other commercial applications, develop more slowly than we expect, or long-term end-customer adoption rates and demand are slower than we expect, our operating results and growth prospects could be harmed.

While LiDAR has existed for some time for terrestrial and aerial mapping applications and for research and development level automotive applications, the concept of low cost and high volume LiDAR for markets like automotive, security & smart spaces and mapping applications is relatively new and rapidly evolving, making our business and prospects difficult to evaluate. The growth and profitability of these markets (collectively, the “Sensing Solutions Market”) and the level of demand and market acceptance for LiDAR technology are subject to a high degree of uncertainty. The future growth of our business depends on the growth of these Sensing Solutions Market. We cannot be certain that this will happen. If consumers do not perceive meaningful benefits of LiDAR technology, then these markets may develop more slowly than we expect, which could adversely impact our operating results and our ability to grow our business.

If our customers and partners are unable to maintain and increase acceptance of LiDAR technology, our business, results of operations, financial condition and growth prospects would be adversely affected.

Our future operating results will depend on the ability of our customers and partners to create, maintain and increase acceptance of LiDAR technology. There is no assurance that our customers and partners can achieve these objectives. Acceptance of our LiDAR technology in the global Sensing Solutions Market depends upon many factors, including regulatory requirements applicable to such markets, evolving safety standards and perceptions, cost and consumer preferences. Market acceptance of LiDAR technology also depends on the ability of market participants, including us, to resolve technical challenges facing the Sensing Solutions Market in a timely and cost-effective manner. Consumers will also need to be made aware of the advantages of the LiDAR

 

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technology compared to competing technologies, specifically those with different sensor arrays, such as camera, and radar in automotive, and camera, infrared and microwave in security. If consumer acceptance of LiDAR technology in the global Sensing Solutions Market does not occur or occurs more slowly than we expect, sales of our products could also be adversely affected.

Product integration could face complications or unpredictable difficulties, which may adversely impact customer adoption of our products and our financial performance.

Our products typically function as part of a system, and are therefore integrated with other sensing technologies, software products and customer applications. Required integration efforts can be time consuming and costly and there is no guarantee that results will be satisfactory to the end customer. These challenges are even more present in the automotive sector where components are subject to as much as several years of product and design validation before they are fitted into a vehicle program. While the company works with system integrators which lend their experience to these workstreams, there is no guarantee that unforeseen delays or setback would not arise that would impair our ability to launch with key programs across our sectors of focus.

The market for LiDAR sensors is highly competitive and many companies are actively focusing on LiDAR technology or competing technologies based on camera, radar or other technologies. If we fail to differentiate ourselves and compete successfully with these companies, many of which have substantially greater resources, our products may become obsolete and it will be difficult for us to attract customers and our business will be harmed.

The LiDAR sensor market is becoming increasingly competitive and global. Our competitors are numerous and they compete with us directly by offering LiDAR products and indirectly by attempting to solve some of the same challenges with different technology. We face competition from camera and radar companies, other developers of LiDAR products, and other technology and supply companies, some of which have already completed SPAC transactions and have significantly greater resources than we do. Some examples of our competitors include Velodyne, Innoviz Technologies Ltd., Aeva, Inc., Luminar Technologies, Inc., Hesai Technology Co., Ltd., AEye, Ouster, Inc., and Ibeo Automotive Systems GmbH among others.

Over the last few years we have seen a proliferation of entrants into the LiDAR market with various technical approaches intended to reduce the size of the LiDAR sensors, such as flash LiDAR, micro-electro-mechanical system (MEMS) mirrors, and downsized macroscale oscillating technology. Concurrently, in non-automotive applications we have seen increased competition as companies have sought to offset the delayed introduction of autonomous vehicles by focusing in other areas. While we believe that our solid-state approach will yield a desired reduction in size, cost and reliability that customers require, we expect competition will remain stiff from new companies with products based on existing and new technologies. We also think more companies will look to compete with us by offering paired hardware/software solutions to compete with our smart spaces / security applications. Our products may become obsolete as LiDAR and other competing technologies continue to progress.

This increased competition could result in pricing pressure, lower revenue and gross profit. To remain competitive and maintain our position as a leading sensing technology provider, we need to continuously invest in product research and development, service and support, and product distribution infrastructure as well as sales and marketing. We may not have sufficient resources to continue to make the investments needed to maintain our competitive position. In addition, certain of our competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales, marketing and other resources than us. These competitors may also be able to adapt more quickly to new or emerging technologies or standards and may be able to deliver products and services at a lower cost. Increased competition could reduce our market share, revenue and operating margins, increase our operating costs, harm our competitive position and otherwise harm our business.

 

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Autonomous and highly automated vehicles rely on a complex set of technologies, and there is no assurance that the rate of acceptance and adoption of these technologies will increase in the near future or that a market for fully autonomous vehicles will develop.

Autonomous and highly automated driving relies on a complex set of technologies, which requires the coordinated development of sensing, mapping, object detection and classification as well as path planning and navigation. These functions and capabilities are in different stages of development, and their reliability must continue to improve in order to meet the higher standards required for autonomous driving. Sensing technology provides information to the car and includes the physical sensors, as well as object classification and perception software. In many cases, it will be sold as part of a system where it must work within the core autonomous driving platform of an original equipment manufacturer. If customer technology is not ready to be deployed in vehicle models when our sensing technology is ready for adoption, launch of production could be delayed, perhaps for a significant time period, which could materially adversely affect our business, results of operations and financial condition.

There are a number of additional challenges to autonomous driving, all of which are outside of our control, including market acceptance of autonomous driving, particularly fully autonomous driving, national or state certification requirements and other regulatory measures, concerns regarding litigation, cyber security risks, as well as a general aversion by some consumers to the idea of self-driving vehicles. There can be no assurance that the market will accept any vehicle model, including a vehicle containing our technology, in which case our future business, results of operations and financial condition could be adversely affected.

Our ability to market our LiDAR technology outside of automotive applications may take longer than we anticipate and may not be successful.

We are investing in and pursuing market opportunities outside of the automotive markets, including in mapping applications for topography and surveying, security, industrial automation and smart city and smart spaces initiatives. We believe that our future revenue growth, if any, will depend in part on our ability to expand within new markets such as these and to enter new markets as they emerge. Each of these markets presents distinct risks and, in many cases, requires us to address the particular requirements of that market. For example, our ability to sell into the mapping end markets could be negatively impacted if our customers in that segment utilize alternative LiDAR technologies for aerial and terrestrial mapping. Smart spaces customers could find alternative methods to address flow management requirements. And within industrial the industrial markets, our success is highly dependent on presenting a compelling and differentiated price-performance advantage relative to established players in the market.

With the exception of industrial automation, the market for LiDAR technology outside of automotive applications is relatively new, rapidly developing and unproven in many markets or industries. Many of our customers in these areas are still in the testing and development phases and it cannot be certain that they will commercialize products or systems with our LiDAR products or at all. We cannot be certain that LiDAR will be sold into these markets at scale. Adoption of LiDAR products, including our products, outside of the automotive industry will depend on numerous factors, including: whether the technological capabilities of LiDAR and LiDAR-based products meet users’ current or anticipated needs, whether the benefits of designing LiDAR into larger sensing systems outweigh the costs, complexity and time needed to deploy such technology or replace or modify existing systems that may have used other modalities such as cameras and radar, whether users in other applications can move beyond the testing and development phases and proceed to commercializing systems supported by LiDAR technology and whether LiDAR developers, such as us, can keep pace with rapid technological change in certain developing markets and the global response to the COVID-19 pandemic. If LiDAR technology does not achieve commercial success outside of the automotive industry, or if the market develops at a pace slower than we expect, our business, results of operation and financial condition will be materially and adversely affected.

 

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Our new product lines could face difficulties gaining market traction and adversely impact the Company’s financial performance.

One of the challenges inherent in developing hardware is long development times. Our products have lengthy design, test & validation and production cycles that can require multiple iterations. There can be no guarantee that by the time a product comes to market it will have the right performance, specifications, and cost to address the use cases it was originally designed for. Conversely, even if the characteristics of the product are correct for its original purpose, there is the additional risk that the needs of the market may have evolved and changed requiring further alterations to the product or a different solution which could significantly impact demand for our products.

The S 3 program was developed with automotive requirements in mind encompassing factors such as range, resolution, horizontal and vertical field of view, and of course cost and reliability. There can be no assurance that our devices will meet customer requirements for all of these specifications or that they will outperform products developed by our competitors. Additionally, as discussed in the risk factor above, given the significant development time required with multiple iterations of customized silicon, it is possible original equipment manufacturers (OEM) requirements may shift away from the product requirements that our LiDAR sensors were originally designed for. Such an outcome would materially impact our revenue plans particularly in out years where the contribution from automotive is expected to be most meaningful.

Currently, the largest part of our M Series sales are for flow management solutions like security, smart city, and smart spaces applications. While we have seen promising levels of activity from potential end users evaluating LiDAR for these applications, the technology is relatively new to this market and there can be no guarantee that industry adoption will occur at the pace contemplated in our forecasts. Conversely, LiDAR has been an important technology for the industrial market for some time, supported by well-established players like Sick AG, P&F and Hokuyo. While the company has a presence in port automation and is expecting to expand its position through new product introductions, there is a risk that these products could fail to gain traction against very well established competitors in these end markets.

Our Optical Phased Array (“OPA”) based product could fail to meet industry requirements for range, resolution or general performance or we could fall short of our cost objections for OPA-based LiDAR, thereby limiting our revenue potential.

Our OPA-based solid state LiDAR was designed and developed from the ground up. All the main semiconductor components are custom designed in-house and fabricated and packaged by third party partners. Each generation of technology node consists of iterations of one or multiple components. The integration of all these together with the rest of the electrical, mechanical and firmware modules is a complex system integration exercise. Problems could arise during this process to cause the planned product to fall short on some requirements, including range, resolution, other performance parameters, or cost objections. The resulting delay could slow down our time-to-market efforts, limit our revenue potential or lead to negative impressions on customer engagements, any of which would harm our business.

Unforeseen safety issues with our products could result in injuries to people which could result in adverse effects on our business and reputation.

Our LiDAR utilizes lasers for performing 3D sensing. While we have developed system components designed to prevent our LiDAR lasers from harming human eyes, in the event that an unforeseen issue arises that results in serious injury, our reputation or brand may be damaged and we could face legal claims for breach of contract, product liability, tort or breach of warranty as a result of these problems. Defending such a lawsuit, regardless of its merit, could be costly and may divert management’s attention and adversely affect the market’s perception of our Company and our products. In addition, our business liability insurance coverage could be inadequate with respect to a claim and future coverage may be unavailable on acceptable terms or at all.

 

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We create innovative technology by designing and developing unique components. A failure to achieve scale may affect our ability to sell at competitive prices, limit our customer base or may lead to losses.

We incur significant costs related to procuring the raw materials and components required to manufacture our high-performance LiDAR systems, assembling LiDAR systems and compensating our personnel. If our volumes do not ramp up as planned we may be unable to obtain anticipated material costs benefits, or expected levels of fixed cost absorption that are needed to achieve our targeted margins and our operating results, business and prospects will be harmed. Furthermore, many of the factors that impact our operating costs are beyond our control. For example, the costs of our raw materials and components could increase due to shortages as global demand for these products increases.

The manufacture of our LiDAR systems is a complex process, and it is often difficult for companies to achieve acceptable product yields which could decrease available supply and increase costs. LiDAR system yields depend on both our product design and the manufacturing processes of our manufacturing partners. Because low yields may result from either design defects or process difficulties, we may not identify yield problems until well into the production cycle, when an actual product defect exists and can be analyzed and tested. In addition, many of these yield problems are difficult to diagnose and time consuming or expensive to remedy.

Developments in alternative non-LiDAR technologies may adversely affect the demand for LiDAR sensors.

Significant developments in alternative technologies, such as cameras and radar, may materially and adversely affect our business, prospects, financial condition and operating results in ways we do not currently anticipate. Existing and other camera and radar technologies may emerge as customers’ preferred alternative to our solutions. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced products in the autonomous vehicle industry, which could result in the loss of competitiveness of our LiDAR solutions, decreased revenue and a loss of market share to competitors. Our research and development efforts may not be sufficient to adapt to changes in technology. For example, although we believe that LiDAR technology is, and will continue to be, a critical component to the active safety and autonomous vehicle markets it is possible that other sensor types, such as camera or radar or yet another disruptive modality based on new or existing technology, will achieve acceptance or dominance in the market. If such competing technology gains acceptance by the market, regulators and safety organizations in place of or as a substitute for LiDAR technology, our business, results of operations and financial condition would be adversely affected

As technologies change, we plan to upgrade or adapt our LiDAR solutions with the latest technology. However, our solutions may not compete effectively with alternative systems if we are not able to source and integrate the latest technology into our existing LiDAR solutions.

Adverse conditions in the global Sensing Solutions Market or the global economy more generally could have adverse effects on our results of operations.

Our business partially depends on, and is directly affected by, the global Sensing Solution Markets. As in any manufacturing industry, production and sales can be cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rate levels and credit availability, consumer confidence, raw material costs, availability of competing products or technologies, environmental impact, governmental incentives and regulatory requirements, and political volatility, especially in growth markets. Original equipment manufacturers which make products that may incorporate our sensing solution (e.g., car makers that ultimately sell completed vehicles to consumers) (“OEMs”) may experience difficulties from weakened economies and tightened credit markets. The industrial market may see weakened demand for instillations in the areas of robotics and AGVs. In the flow management space we could continue to see project delays in key areas like airports, ports, intersections, and security applications as infrastructure upgrades are delayed. Any significant adverse change in any of these factors, including, but not limited to, general economic conditions could have a material adverse effect on our business, results of operations and financial condition.

 

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If we are not able to effectively grow our global sales and marketing organization, or maintain or grow an effective network of distributors, value-added resellers, and integrators, our business prospects, results of operations and financial condition could be adversely affected.

Our future success will depend on our ability to train, retain and motivate skilled sales managers and direct sales representatives with significant technical knowledge and understanding of our products. Because of the competition for their skill set, we may not be able to attract or retain such personnel on reasonable terms. If we are unable to grow our global sales and marketing organization, we may not be able to increase our revenue, which would adversely affect our business, financial condition and results of operations.

Additionally, our growth outlook relies on adding a number of strategic channel partners to our network to help support the sales of our products. It may take time to identify and add these partners, to train new personnel to market and support our products. In addition, our distributors may not successfully market and sell our products and may not devote sufficient time and resources that we believe are necessary to enable our products to develop, achieve or sustain market acceptance. Any of these factors could reduce our revenue or impair our revenue growth in affected markets, increase our costs in those markets or damage our reputation. As a result of our reliance on third-party distributors, we may be subject to disruptions and increased costs due to factors beyond our control, including labor strikes, third-party errors and other issues. If the services of any of these third-party distributors become unsatisfactory, we may experience delays in meeting our customers’ demands and we may be unable to find a suitable replacement on a timely basis or on commercially reasonable terms. Any failure to deliver products in a timely manner may damage our reputation and could cause us to lose potential customers.

We currently have and target many customers, suppliers and production counterparties that are large corporations with substantial negotiating power, exacting product, quality and warranty standards and potentially competitive internal solutions. If we are unable to sell our products to these customers or are unable to enter into agreements with customers, suppliers and production counterparties on satisfactory terms, our prospects and results of operations will be adversely affected.

Several of our customers and potential customers are large, multinational corporations with substantial negotiating power relative to us. These large, multinational corporations also have significant development resources, which may allow them to acquire or develop independently, or in partnership with others, competitive technologies. Meeting the technical requirements and securing design wins with any of these companies will require a substantial investment of our time and resource. We cannot assure you that our products will secure design wins from these or other companies or that we will generate meaningful revenue from the sales of our products to these key potential customers. If our products are not selected by these large corporations or if these corporations develop or acquire competitive technology, it will have an adverse effect on our business.

Our business would be adversely affected if not enough customers and partners, including OEMs, were to adopt our products or those customers and partners that adopt our products were to change their design or systems and not include our products in future models.

We currently have no high-volume automotive OEM that has adopted our products in its ADAS/AV systems. For the most part our principal customers and partners have been in mapping, flow management, and industrial applications where rates of adoption of our products are still low. We will need to expand our customer base and partner network rapidly to grow our sales revenue. If not enough customers and partners were to adopt our products or those customers and partners that adopt our products were to determine not to incorporate our products in their future models generally due to a change to their model design, systems or otherwise, our business, results of operations and financial condition would be adversely affected.

 

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We invest effort and money seeking customers’ validation of our products in the Sensing Solutions Market, and there can be no assurance that we will win their acceptance in a timely manner or at all. If we do not win sufficient acceptance from our customers, our future business, results of operations and financial condition could be adversely affected.

We invest significant effort and money in proof of concepts and pilot programs designed to get customers familiar with our sensing solution for their products and systems. Customers in the Sensing Solution Markets will acquire our products from us or our partners and integrate them into their products and systems that they manufacture. The Company could fail to secure proof of concept opportunities for new products, or fail to perform during proof of concept opportunities and expend our resources without obtaining such “design wins.” In addition, the firm with the winning design may have an advantage with the customer going forward because of the established relationship between the winning firm and such customer, which could make it more difficult for such firm’s competitors to win the designs for other products and systems such customer produces. If we fail to win a significant number of customer design competitions in the future, our business, results of operations and financial condition would be adversely affected.

We must successfully manage product introductions and transitions in order to remain competitive.

We must continually develop new and improved sensing solutions that meet changing consumer demands. Moreover, the introduction of new products is a complex task, involving significant expenditures in research and development, promotion and sales channel development, and management of existing inventories to reduce the cost associated with returns and slow moving inventory. As new sensing solutions are introduced, we have to monitor closely the inventory at our contract manufacturers, and phase out the manufacture of prior versions in a controlled manner. Moreover, we must introduce new sensing solutions in a timely and cost-effective manner, and we must secure production orders for those solutions from our contract manufacturers and component suppliers. The development of new sensing solutions is a highly complex process, and while we have a large number of product introductions coming, the successful development and introduction of new sensing solutions depends on a number of factors, including the following:

 

   

the accuracy of our forecasts for market requirements beyond near term visibility;

 

   

our ability to anticipate and react to new technologies and evolving consumer trends;

 

   

our development, licensing or acquisition of new technologies;

 

   

our timely completion of new designs and development;

 

   

the ability of our contract manufacturers to cost-effectively manufacture our new sensing solutions;

 

   

the availability of materials and key components used in the manufacture of our new sensing solutions; and

 

   

our ability to attract and retain world-class research and development personnel.

If any of these or other factors becomes problematic, we may not be able to develop and introduce new sensing solutions in a timely or cost-effective manner, and our business may be harmed.

Our international expansion plans, if implemented, will subject us to a variety of risks that may harm our business.

We have limited experience managing the administrative aspects of a global organization. While we intend to continue to explore opportunities to expand our business in international Sensing Solution Markets in which we see compelling opportunities, we may not be able to create or maintain international market demand for our products. In addition, as we expand our operations internationally, our support organization will face additional challenges, including those associated with delivering support, training and documentation in languages other than English. We may also be subject to new statutory restrictions and risks. If we invest substantial time and resources to expand our international operations and are unable to do so successfully and in a timely manner, our business and financial condition may be harmed.

 

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In the course of expanding our international operations and operating overseas, we will be subject to a variety of risks, including:

 

   

differing regulatory requirements, including tax laws, trade laws, labor regulations, tariffs, export quotas, custom duties or other trade restrictions;

 

   

greater difficulty supporting and localizing our products;

 

   

challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, compensation and benefits and compliance programs;

 

   

differing legal and court systems, including limited or unfavorable intellectual property protection;

 

   

risk of change in international political or economic conditions;

 

   

restrictions on the repatriation of earnings; and

 

   

working capital constraints.

In the automotive industry, the period of time from a design win to implementation is long, and we are subject to the risks of cancellation or postponement of contracts or unsuccessful implementation.

Our products are technologically complex, incorporate many technological innovations and are often intended for use in safety applications. Prospective OEM customers generally must make significant commitments of resources to test and validate our products before including them in any particular product or system. The development cycles of our products with new OEM customers can be long after a design win, if we successfully obtain it, depending on the OEM and the complexity of the product and system in question. These development cycles may make it necessary for us to invest our resources prior to realizing any revenues from the OEMs that adopted our product. Further, we are subject to the risk that an OEM cancels or postpones implementation of our technology, as well as that we will not be able to implement our technology successfully. Further, our sales could be less than forecast if the ultimate product or system is unsuccessful in the Sensing Solution Markets, including for reasons unrelated to our product or technology. Long development cycles and product cancellations or postponements may adversely affect our business, results of operations and financial condition.

Continued pricing pressures and customer cost reduction initiatives may result in lower than anticipated margins, or losses, which may adversely affect our business.

Cost-cutting initiatives adopted by our customers often result in increased downward pressure on pricing. We expect that the Company’s agreements with our customers may require step-downs in pricing over the term of the agreement or, if commercialized, over the period of production. In addition, our customers may reserve the right to terminate their supply contracts for convenience, which enhances their ability to obtain price reductions. Automotive OEMs also possess significant leverage over their suppliers, because the automotive component supply industry is highly competitive, serves a limited number of customers and has a high fixed cost base. We expect to be subject to substantial continuing pressure from customers and suppliers to reduce the price of our products. It is possible that pricing pressures beyond our expectations could intensify as customers, industry-wide, pursue restructuring, consolidation and cost-cutting initiatives. If we are unable to generate sufficient production cost savings in the future to offset price reductions, our gross margin and profitability would be adversely affected.

We continue to implement strategic initiatives designed to grow our business. These initiatives may prove more costly than we currently anticipate and we may not succeed in increasing our revenue in an amount sufficient to offset the costs of these initiatives and to achieve and maintain profitability.

We continue to make investments and implement initiatives designed to grow our business, including:

 

   

investing in research and development;

 

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expanding our sales and marketing efforts to attract new customers across industries;

 

   

investing in new applications and markets for our products;

 

   

further enhancing our manufacturing processes and partnerships; and

 

   

investing in legal, accounting, and other administrative functions necessary to support our operations as a public company.

These initiatives may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue, if at all, in an amount sufficient to offset these higher expenses and to achieve and maintain profitability. The market opportunities we are pursuing are at an early stage of development, and it may be many years before the end markets we expect to serve generate significant demand for our products at scale, if at all.

In addition, our revenue may be adversely affected for a number of reasons, including the development and/or market acceptance of new technology that competes with our LiDAR products, failure of our customers to commercialize systems that include our LiDAR solutions, our inability to effectively manage our inventory or manufacture products at scale, our failure to enter new markets or to attract new customers or expand orders from existing customers or due to increasing competition. Furthermore, it is difficult to predict the size and growth rate of our target markets, customer demand for our products, commercialization timelines, developments in sensing and related technology, the entry of competitive products, or the success of existing competitive products and services. Accordingly, we do not expect to achieve profitability over the near term. If our revenue does not grow over the long term, our ability to achieve and maintain profitability may be adversely affected, and the value of its business may significantly decrease.

If our efforts to build a strong brand and maintain customer satisfaction and loyalty are not successful, or we are subject to negative publicity, we may not be able to attract or retain customers, and our business may be harmed.

Building and maintaining a strong brand is important to attract and retain customers, as potential customers have a number of choices among on a variety of sensing solutions. Successfully building a brand is a time consuming and comprehensive endeavor, and can be positively and negatively impacted by any number of factors. Our competitors may be able to achieve and maintain brand awareness and market share more quickly and effectively than we can. Customer use case optimization issues associated with new product launches could also impair our brand perception. If we are unable to execute on building a strong brand, it may be difficult to differentiate our business from our competitors in the marketplace.

Risks Related to Manufacturing and Supply

We have limited manufacturing capacity and intend to depend primarily on a small number of contract manufacturers and manufacturing partners in the future. Our operations could be disrupted if we encounter delays or other problems with these contract manufacturers.

Our “in house” manufacturing operation is primarily focused on new product introductions and prototype builds, and as such we rely on a small number of contract manufacturers for production. Our contract manufacturers and manufacturing partners are vulnerable to capacity constraints and reduced component availability, and our control over delivery schedules, manufacturing yields and costs is limited particularly when components are in short supply or when we introduce a new sensor or sensing system. In addition, we have limited control over our contract manufacturers’ quality systems and controls, and therefore must rely on them to manufacture our products to our quality and performance standards and specifications, and we must remain in agreement on the substantive commercial terms governing our commercial relationships with these suppliers. Delays, component shortages and other manufacturing and supply problems could impair the retail distribution of our products and ultimately our brand. Furthermore, any adverse change in our contract manufacturers’ financial or business condition could disrupt our ability to supply products to our distributors and customers.

 

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If our primary and secondary contract manufacturers or manufacturing partners fails for any reason to continue manufacturing our products in required volumes and at high quality levels, or at all, we would have to identify, select and qualify new acceptable alternative contract manufacturers. Alternative contract manufacturers may not be in a position to satisfy our production requirements at commercially reasonable prices or to our quality and performance standards within the required time line. Any significant interruption in manufacturing would require us to reduce our supply of products to our distributors and customers, which in turn would reduce our revenue and growth.

We have little experience manufacturing our products at full commercial scale. If our products are adopted by a large number of customers and/or by customers requiring a large amount of supply, we will face certain risks associated with scaling up our manufacturing capabilities to support such mass commercial production.

We do not have experience in manufacturing our products on a mass scale. If our products are adopted by a large number of customers and/or by customers requiring a large amount of supply, we may need to expand our manufacturing facilities, add manufacturing personnel and ensure that validated processes are consistently implemented in our facilities and potentially enter into relationships with third-party manufacturers. The upgrade and expansion of our facilities may require additional regulatory approvals. In addition, it will be costly and time-consuming to expand our facilities and recruit necessary additional personnel. If we are unable to expand our manufacturing facilities in compliance with regulatory requirements or to hire additional necessary manufacturing personnel, we may encounter delays or additional costs in achieving our research, development and commercialization objectives, including researching and developing new sensing solutions, which could materially damage our business and financial prospects.

If we fail to accurately forecast our manufacturing requirements and manage our inventory with our contract manufacturers, we could incur additional costs, be required to write-down the value of our inventory and other assets, experience manufacturing delays and lose revenue.

We bear supply risk under our contract manufacturing arrangements. Lead times for the materials and components that our contract manufacturers order on our behalf through different component suppliers vary significantly and depend on numerous factors, including the specific supplier, contract terms and market demand for a component at a given time. Lead times for certain key materials and components incorporated into our products are currently lengthy, requiring our contract manufacturers to order materials and components several months in advance. If we overestimate our production requirements, our contract manufacturers may purchase excess components and build excess inventory. If our contract manufacturers, at our request, purchase excess components that are unique to our products, we could be required to pay for these excess components. If we incur costs to cover excess supply commitments, this would harm our business.

Conversely, if we underestimate our requirements, our contract manufacturers may have inadequate component inventory, which could interrupt the manufacturing of our products and result in delays or cancellation of orders from distributors and customers. If we fail to accurately forecast our manufacturing requirements, our business may be harmed.

Our products incorporate key components, including computer chips, from sole source suppliers and if our contract manufacturers are unable to source these components on a timely basis, due to fabrication capacity issues or other material supply constraints, or if there are interruptions in our, or our contract manufacturers, relationships with these third party suppliers, we will not be able to deliver our products to our distributors and customers which would adversely impact our business.

We depend on sole source suppliers for key components in our products. These sole source suppliers could be constrained by fabrication capacity issues or material supply issues, stop producing such components, cease operations or be acquired by, or enter into exclusive arrangements with, our competitors or other companies. In many cases, we do not have long-term supply agreements with these suppliers. Instead, our contract

 

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manufacturers typically purchase the components required to manufacture our products on a purchase order basis. As a result, most of these suppliers can stop selling to us at any time, requiring us to find another source, or can raise their prices, which could impact our gross margins. Any such interruption or delay may force us to seek similar components from alternative sources, which may not be available.

Our reliance on sole source suppliers involves a number of additional risks, including risks related to:

 

   

supplier capacity constraints;

 

   

price increases;

 

   

timely delivery;

 

   

component quality; and

 

   

delays in, or the inability to execute on, a supplier roadmap for components and technologies.

Any interruption in the supply of sole source components for our products could adversely affect our ability to meet scheduled deliveries to our distributors and customers, result in lost sales and higher expenses and harm our business.

Our manufacturing costs may remain elevated and result in a market price for our product above the price that customers are willing to pay.

If the cost of manufacturing our LiDAR products remains high, we will be forced to charge our customers a high price for the product in order to cover our costs and earn a profit. While we expect our products will benefit from significant cost reduction over time from scale and planned redesigns, there is no guarantee that these efforts will be successful, or that these savings won’t be offset by additional required content. If the price of our products is too high, customers may be reluctant to purchase our products, especially if lower priced alternative products are available, and we may not be able to sell our products in sufficient volumes to recover our costs of development and manufacture or to earn a profit.

Our suppliers could raise prices on key components, which may adversely affect our profitability.

Significant increases in the cost of certain components used in our products, to the extent they are not timely reflected in the price we charge our customers, could materially and adversely impact our results. For example, over the last 6 months we have experienced significant increases in prices for electronic components, as well as significantly increased lead times. We sought to address these increases by carrying safety stock of critical components, evaluating alternative components, suppliers and processes, reviewing component substitution opportunities, and aggressively negotiating larger quantities with our vendors to ensure adequate supply. Certain of our key component manufacturers and suppliers have the ability, in our contracts, to periodically increase their prices. Accordingly, we cannot assure you that we will not face increased prices in the future or, if we do, whether we will be effective in containing margin pressures from any further component price increases.

Components used in our sensors may fail as a result of manufacturing, design or other defects over which we have no control and render our devices permanently inoperable.

We rely on third-party component suppliers to provide certain functionalities needed for the operation and use of our devices. Any errors or defects in such third-party technology could result in errors in our sensors that could harm our business. If these components have a manufacturing, design or other defect, they can cause our sensors to fail and render them permanently inoperable. As a result, we may have to replace these sensors at our sole cost and expense. Should we have a widespread problem of this kind, our reputation in the market could be adversely affected and our replacement of these sensors would harm our business.

 

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Our sensors and sensing systems are highly technical and could be vulnerable to hardware errors or software bugs, which may harm our reputation and our business.

Bugs and errors could diminish performance, create security vulnerabilities, affect data quality in logs or interfere with interpretation of data, and cause malfunctions or even permanently disabled sensors. Some errors may only be detected under certain circumstances or after extended use. We update our software and firmware on a regular basis, in spite of extensive quality screening, if a bug were to occur in the process of an update, it could result in devices becoming inoperable or permanently disabled.

We offer a limited warranty on all sensors and any such defects discovered in our products could result in loss of revenue or delay in revenue recognition, loss of customer goodwill and increased service costs, any of which could harm our business, operating results and financial condition. We could also face claims for product or information liability, tort or breach of warranty. Defending a lawsuit, regardless of its merit, is costly and may divert management’s attention and adversely affect the market’s perception of us and our devices. In addition, if our business liability insurance coverage proves inadequate or future coverage is unavailable on acceptable terms or at all, our business could be harmed.

We may incur significant direct or indirect liabilities in connection with our product warranties which could adversely affect our business and operating results.

We typically offer a limited product warranty that requires our products to conform to the applicable specifications and be free from defects in materials and workmanship for a limited warranty period. As a result of increased competition and changing standards in our target markets, we may be required to increase our warranty period length and the scope of our warranty. To be competitive, we may be required to implement these increases before we are able to determine the economic impact of an increase. Accordingly, we may be at risk that any such warranty increase could result in foreseeable and unforeseeable losses for the company.

Risks Related to Intellectual Property

If we fail to protect or enforce our intellectual property or proprietary rights, our business and operating results could be harmed.

We regard the protection of our patents, trade secrets, copyrights, trademarks, trade dress, domain names and other intellectual property or proprietary rights as critical to our success. We strive to protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We seek to protect our confidential proprietary information, in part, by entering into confidentiality agreements and invention assignment agreements with all our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology. However, we cannot be certain that we have executed such agreements with all parties who may have helped to develop our intellectual property or who had access to our proprietary information, nor can we be certain that our agreements will not be breached. Any party with whom we have executed such an agreement could potentially breach that agreement and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. We cannot guarantee that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Detecting the disclosure or misappropriation of a trade secret and enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, time-consuming and could result in substantial costs and the outcome of such a claim is unpredictable. Further, the laws of certain foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property or proprietary rights both in the United States and abroad. If we are unable to prevent the disclosure of our trade secrets to third parties, or if our competitors independently develop any of our trade secrets, we may not be able to establish or maintain a competitive advantage in our market, which could harm our business.

 

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We have 22 technology patents granted and have filed an additional eight applications and will in the future file patent applications on inventions that we deem to be innovative. There is no guarantee that our patent applications will be issued as granted patents, that the scope of the protection gained will be sufficient or that an issued patent may subsequently be deemed invalid or unenforceable. Patent laws, and scope of coverage afforded by them, have recently been subject to significant changes, such as the change to “first-to-file” from “first-to-invent” resulting from the Leahy-Smith America Invents Act. This change in the determination of inventorship may result in inventors and companies having to file patent applications more frequently to preserve rights in their inventions, which may favor larger competitors that have the resources to file more patent applications. Another change to the patent laws may incentivize third parties to challenge any issued patent in the United States Patent and Trademark Office (the “USPTO”), as opposed to having to bring such an action in U.S. federal court. Any invalidation of a patent claim could have a significant impact on our ability to protect the innovations contained within our devices and could harm our business.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions to maintain patent applications and issued patents. We may fail to take the necessary actions and to pay the applicable fees to obtain or maintain our patents. Non-compliance with these requirements can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to use our technologies and enter the market earlier than would otherwise have been the case.

We pursue the registration of our domain names, trademarks and service marks in the United States and in certain locations outside the United States. We are seeking to protect our trademarks, patents and domain names in an increasing number of jurisdictions, a process that is expensive and time-consuming and may not be successful or which we may not pursue in every location.

Litigation may be necessary to enforce our intellectual property or proprietary rights, protect our trade secrets or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs, adverse publicity or diversion of management and technical resources, any of which could adversely affect our business and operating results. If we fail to maintain, protect and enhance our intellectual property or proprietary rights, our business may be harmed.

We are currently involved in patent litigation proceedings with Velodyne in the Northern District of California and an appeal from the Patent Trial and Appeal Board at the U.S. Patent and Trademark Office.

In August 2016, Velodyne alleged patent infringement and threatened litigation against us. In response, we filed a complaint in the Northern District of California seeking a declaratory judgment of non-infringement of Velodyne’s patent. Velodyne filed its answer and counterclaim for infringement of its patent and we filed our answer on January 16, 2017. In October 2017, the court issued a claim construction order construing eight terms in Velodyne’s patent. In November 2017, we filed two petitions for inter partes review (“IPR”) before the Patent Trial and Appeal Board at the U.S. Patent and Trademark Office (“PTAB”), asserting that all asserted claims of Velodyne’s patent are invalid over prior art. In January 2018, the court granted a stipulation filed by the parties, staying the district court litigation until the patent office decided whether to grant or deny our pending petitions. In March 2018, Velodyne filed its responses to both of the Company’s petitions. In May 2018, the PTAB instituted both IPRs on all petitioned claims and issued Final Written Decisions finding all petitioned claims are not invalid. We petitioned for rehearing in June 2019, which the PTAB denied in May 2020, Quanergy filed an appeal to the Court of Appeals for the Federal Circuit (“CAFC”) for each IPR (consolidated as docket no. CAFC-20-2070). Oral argument was held on July 7, 2021. We are currently awaiting a decision from the CAFC. Nevertheless, this litigation, as with any other litigation, is subject to uncertainty and an unfavorable outcome may result in a material adverse impact on our business, results of operations, financial position, and overall trends.

 

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We have been and may continue to be subject to litigation regarding intellectual property rights that could be costly, including claims that we are infringing third party intellectual property, whether successful or not, and could result in the loss of rights important to our products or otherwise harm our business.

Third parties, including Velodyne (referenced in preceding risk factor) have asserted, and may in the future assert, that we have infringed, misappropriated or otherwise violated their intellectual property rights. As we face increasing competition, the possibility of intellectual property rights claims against us will grow. Plaintiffs who have no relevant product revenue may not be deterred by our own issued patent and pending patent applications in bringing intellectual property rights claims against us. The cost of patent litigation or other proceedings, even if resolved in our favor, could be substantial. Some of our competitors may be better able to sustain the costs of such litigation or proceedings because of their substantially greater financial resources. Patent litigation and other proceedings may also require significant management time and divert management from our business. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our ability to compete in the marketplace. The occurrence of any of the foregoing could harm our business.

As a result of intellectual property infringement claims, or to avoid potential claims, we may choose or be required to seek licenses from third parties. These licenses may not be available on commercially reasonable terms, or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive, with the potential for our competitors to gain access to the same intellectual property. In addition, the rights that we secure under intellectual property licenses may not include rights to all of the intellectual property owned or controlled by the licensor, and the scope of the licenses granted to us may not include rights covering all of the products and services provided by us and our licensees. Furthermore, an adverse outcome of a dispute may require us to pay damages, potentially including treble damages and attorneys’ fees, if we are found to have willfully infringed a party’s intellectual property; cease making, licensing or using technologies that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to redesign our solutions; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies, content or materials; and to indemnify our partners and other third parties. In addition, any lawsuits regarding intellectual property rights, regardless of their success, could be expensive to resolve and would divert the time and attention of our management and technical personnel.

In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, designs, experiences, work flows, data, processes, software and know-how.

We rely on proprietary information (such as trade secrets, know-how and confidential information) to protect intellectual property that may not be patentable or subject to copyright, trademark, trade dress or service mark protection, or that we believe is best protected by means that do not require public disclosure. We generally seek to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment agreements that contain non-disclosure and non-use provisions with our employees, consultants, contractors and third parties. However, we may fail to enter into the necessary agreements, and even if entered into, these agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of our proprietary information, may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information. We have limited control over the protection of trade secrets used by our current or future manufacturing partners and suppliers and could lose future trade secret protection if any unauthorized disclosure of such information occurs. In addition, our proprietary information may otherwise become known or be independently developed by our competitors or other third parties. To the extent that our employees, consultants, contractors, advisors and other third parties use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain protection for our proprietary information could adversely affect our competitive business position. Furthermore, laws regarding trade secret rights in certain markets where we operate may afford little or no protection to its trade secrets.

 

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We also rely on physical and electronic security measures to protect our proprietary information, but we cannot provide assurance that these security measures will not be breached or provide adequate protection for our property. There is a risk that third parties may obtain and improperly utilize our proprietary information to our competitive disadvantage. We may not be able to detect or prevent the unauthorized use of such information or take appropriate and timely steps to enforce our intellectual property rights.

If we are unable to obtain necessary or desirable third-party technology licenses, our ability to develop new products or enhancements may be impaired.

We utilize commercially available off-the-shelf technology in the development of our devices. As we continue to introduce new features or improvements, we may be required to license additional technologies from third parties. These third-party licenses may be unavailable to us on commercially reasonable terms, if at all. If we are unable to obtain necessary third-party licenses, we may be required to obtain substitute technologies with lower quality or performance standards, or at a greater cost, any of which could harm the competitiveness of our business.

Under certain of our agreements, we are required to provide indemnification in the event our technology is alleged to infringe upon the intellectual property rights of third parties.

In certain of our agreements we indemnify our licensees, manufacturing partners and suppliers. We could incur significant expenses defending these partners if they are sued for patent infringement based on allegations related to our technology. In addition, if a partner were to lose a lawsuit and in turn seek indemnification from us, we could be subject to significant monetary liabilities. While such contracts typically give us multiple remedies for addressing instances of infringements, such remedies (e.g. product modification, purchase of licenses) could be expensive and difficult to administer.

Risks Related to Compliance

We may become involved in legal and regulatory proceedings and commercial or contractual disputes, which could have an adverse effect on our profitability and financial position.

We may be, from time to time, involved in litigation, regulatory proceedings and commercial or contractual disputes that may be significant. These matters may include, without limitation, disputes with our suppliers and customers, intellectual property claims, stockholder litigation, government investigations, class action lawsuits, personal injury claims, environmental issues, customs and VAT disputes and employment and tax issues. In addition, we have in the past and could face in the future a variety of labor and employment claims against us, related to but not limited to general employment practices and wrongful acts. In such matters, private parties or other entities may seek to recover from us indeterminate amounts in penalties or monetary damages. These types of lawsuits could require significant management time and attention or could involve substantial legal liability, and/or substantial expenses to defend. Often these cases raise complex factual and legal issues and create risks and uncertainties. No assurances can be given that any proceedings and claims will not have a material adverse impact on our consolidated financial position or that our established reserves or our available insurance will mitigate this impact.

We are subject to, and must remain in compliance with, numerous laws and governmental regulations across various jurisdictions concerning the manufacturing, use, distribution and sale of our products.

We manufacture and sell products that contain electronic components, and such components may contain materials that are subject to government regulation in both the locations where we manufacture and assembles our products, as well as the locations where we sell our products. For example, certain regulations limit the use of lead in electronic components. Since we operate on a global basis, this is a complex process which requires continuous monitoring of regulations and an ongoing compliance process to ensure that we, and our suppliers,

 

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are in compliance with all existing regulations. If there is an unanticipated new regulation that significantly impacts our use of various components or requires more expensive components, that regulation could materially adversely affect our business, results of operations and financial condition.

Some of our customers also require that we comply with their own unique requirements relating to these matters.

Our products are designed to meet the compliance requirements for the applicable use and in the majority of geographies. There is possibility that some customers may require us to comply with their unique requirements for some specific applications or for their region that have additional regulatory requirements. Any requirements for customization or modification would likely increase our time-to-market for such products which could materially adversely impact our business, results of operations and financial condition.

We are subject to various environmental laws and regulations that could impose substantial costs upon us.

Environmental pollution and climate change have been the subject of significant legislative and regulatory efforts on a global basis, and we believe this will continue both in scope and in the number of countries participating. In addition, as climate change issues become more prevalent, foreign, federal, state and local governments and our customers have increased their focus on environmental sustainability, which may result in new regulations and customer requirements, which could materially adversely impact our business, results of operations and financial condition. If we are unable to effectively address concerns about environmental impact, our reputation could be negatively impacted, and our business, results of operations or financial condition could suffer.

Any new or modified environmental regulations or laws may increase the cost of raw materials or components we use in our products. Environmental regulations require us to continually reduce product energy usage, monitor and exclude an expanding list of restricted substances and to participate in required recovery and recycling of our products. Environmental and health and safety laws and regulations can be complex, and we have limited experience complying with them. Capital and operating expenses needed to comply with environmental laws and regulations can be significant, and violations may result in substantial fines and penalties, third-party damages, suspension of production or a cessation of our operations.

If contamination is found at properties we operate or formerly operated, this may result in liability for us under environmental laws and regulations, including the Comprehensive Environmental Response, Compensation and Liability Act, which can impose liability for the full amount of remediation-related costs without regard to fault. Costs of complying with environmental laws and regulations and any claims concerning non-compliance, or liability with respect to contamination in the future, could have a material adverse effect on our financial condition or operating results.

We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. We can face criminal liability and other serious consequences for violations, which can harm our business.

We are subject to the U.S. Foreign Corrupt Practices Act, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the Money Laundering Control Act 18 U.S.C. §§ 1956 and 1957, and other anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors and other collaborators from authorizing, promising, offering or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector, and require that we keep accurate books and records and maintain internal accounting controls designed to prevent any such actions. We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors and other collaborators, even if we do not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export

 

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or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.

As we increase our international cross-border business and expand our operations abroad, we may continue to engage with business partners and third-party intermediaries to market our services and to obtain necessary permits, licenses and other regulatory approvals. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities. We cannot assure you that all of our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. As we increase our international business, our risks under these laws may increase.

Detecting, investigating and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources and attention from management. In addition, non-compliance with anti-corruption or anti-bribery laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties, injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage and other collateral consequences. If any subpoenas are received or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal proceeding, our business, operating results and financial condition could be materially harmed.

We are subject to governmental export controls and sanctions laws and regulations that could impair our ability to compete in international markets and subject us to liability if we are not in compliance with applicable laws. Changes to such laws and regulations, as well as changes to trade policy, import laws, and tariffs, may also have a material adverse effect on our business, financial condition and results of operations.

Exports of our products are subject to export controls and sanctions laws and regulations imposed by the U.S. government and administered by the U.S. Departments of State, Commerce, and Treasury. U.S. export control laws may require a license or other authorization to export products to certain destinations and end users. In addition, U.S. economic sanctions laws include restrictions or prohibitions on the sale or supply of most products and services to U.S. embargoed or sanctioned countries, governments, persons and entities, unless required export authorizations are obtained. Obtaining export licenses can be difficult, costly and time-consuming and we may not always be successful in obtaining such licenses, and our failure to obtain required export approval for our products or limitations on our ability to export or sell our products imposed by export control or sanctions laws may harm our revenues and adversely affect our business, financial condition, and results of operations. Non-compliance with these laws could have negative consequences, including government investigations, penalties and reputational harm.

Further, any changes in global political, regulatory and economic conditions or in laws and policies governing import/export control, economic sanctions, manufacturing, development and investment in the territories or countries where we currently purchase our components, sell our products, or conduct our business could result in the decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential end-customers. Any decreased use of our products or limitation on our ability to export or sell our products would adversely affect our business, results of operations and growth prospects. The U.S. has recently instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the United States and other countries where we conduct our business. A number of other nations have proposed or instituted similar measures directed at trade with the U.S. in response. As a result of these developments, there may be greater restrictions and economic disincentives on international trade that could adversely affect our business. It may be time-consuming and expensive for us to alter our business operations to adapt to or comply with any such

 

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changes, and any failure to do so could have a material adverse effect on our business, financial condition and results of operations.

Failures, or perceived failures, to comply with privacy, data protection, and information security requirements in the variety of jurisdictions in which we operate may adversely impact our business, and such legal requirements are evolving, uncertain and may require improvements in, or changes to, our policies and operations.

Our current and potential future operations and sales subject us to laws and regulations addressing privacy and the collection, use, storage, disclosure, transfer and protection of a variety of types of data. For example, the European Commission has adopted the General Data Protection Regulation and California recently enacted the California Consumer Privacy Act of 2018, both of which provide for potentially material penalties for non-compliance. These regimes may, among other things, impose data security requirements, disclosure requirements, and restrictions on data collection, uses, and sharing that may impact our operations and the development of our business. While, generally, we do not have access to, collect, store, process, or share information collected by our solutions unless our customers choose to proactively provide such information to us, our products may evolve both to address potential customer requirements or to add new features and functionality. Therefore, the full impact of these privacy regimes on our business is rapidly evolving across jurisdictions and remains uncertain at this time.

We may also be affected by cyber-attacks and other means of gaining unauthorized access to its products, systems, and data. For instance, cyber criminals or insiders may target us or third-parties with which we have business relationships in an effort to obtain data, or in a manner that disrupts our operations or compromises our products or the systems into which our products are integrated.

We are assessing the continually evolving privacy and data security regimes and measures we believe are appropriate in response. Since these data security regimes are evolving, uncertain and complex, especially for a global business like ours, we may need to update or enhance our compliance measures as our products, markets and customer demands further develop and these updates or enhancements may require implementation costs. The compliance measures we do adopt may prove ineffective. Any failure, or perceived failure, by us to comply with current and future regulatory or customer-driven privacy, data protection, and information security requirements, or to prevent or mitigate security breaches, cyber-attacks, or improper access to, use of, or disclosure of data, or any security issues or cyber-attacks affecting us, could result in significant liability, costs (including the costs of mitigation and recovery), and a material loss of revenue resulting from the adverse impact on our reputation and brand, loss of proprietary information and data, disruption to our business and relationships, and diminished ability to retain or attract customers and business partners. Such events may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity, and could cause customers and business partners to lose trust in us, which could have an adverse effect on our reputation and business.

Our use of open source software could impose limitations on our ability to commercialize our products.

We incorporate open source software in our products. While we are careful to use only those permissive licenses whose terms of use are well known, from time to time, companies that incorporate open source software into their products have faced claims challenging the ownership of open source software and/or compliance with open source license terms. Therefore, we could be subject to suits by parties claiming ownership of what we believe to be open source software or non-compliance with open source licensing terms. Although we monitor our use of open source software, the terms of many open source software licenses have not been interpreted by U.S. courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to sell our products. In such event, we could be required to make our proprietary software generally available to third parties, including competitors, at no cost, to seek licenses from third parties in order to continue offering our devices, to re-engineer our devices or to discontinue the sale of our

 

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products in the event re-engineering cannot be accomplished on a timely basis or at all, any of which could harm our business.

If we fail to comply with the laws and regulations relating to the collection of sales tax and payment of income taxes in the various states in which we do business, we could be exposed to unexpected costs, expenses, penalties and fees as a result of our non-compliance, which could harm our business.

By engaging in business activities in the United States, we become subject to various state laws and regulations, including requirements to collect sales tax from our sales within those states, and the payment of income taxes on revenue generated from activities in those states. A successful assertion by one or more states that we were required to collect sales or other taxes or to pay income taxes where we did not could result in substantial tax liabilities, fees and expenses, including substantial interest and penalty charges, which could harm our business.

General Risks

The effects of the COVID-19 pandemic could have a material adverse effect on our business, financial results, and results of operations.

The COVID-19 pandemic has caused significant volatility and disruption globally. The COVID-19 measures adopted by governments and businesses, including restrictions on travel and business operations and shelter in place and other quarantine orders, have affected our business, and could continue to adversely affect our business operations or the business operations of our customers. A significant portion of our revenue is project driven and has thus been impacted by the COVID-19 pandemic as certain key airport, smart city, and security installations have been pushed back. Further, the pandemic has slowed prototype work and new product introduction efforts due to employees’ inability to access our facilities, and temporarily disrupted the operations of certain of our suppliers. The full impact of the COVID-19 pandemic on our operations is unknown and will depend on factors outside of our control. The duration of the ongoing COVID-19 pandemic and the associated business interruptions may affect our sales, supply chain or the manufacture or distribution of products, which could result in a material adverse effect on our financial condition. Our response to the ongoing COVID-19 pandemic may prove to be inadequate. We may be unable to continue our operations in the manner that we did prior to the outbreak and we may endure interruptions, reputational harm, delays in product development and shipments, all of which could have an adverse effect on our business, operating results, and financial condition. The COVID-19 pandemic may also intensify or exacerbate other risks described in this Section.

We may pursue acquisitions, which involve a number of risks, and if we are unable to address and resolve these risks successfully, such acquisitions could harm our business.

We have acquired and may in the future acquire businesses, products or technologies to expand our offerings and capabilities and business. We have evaluated, and expect to continue to evaluate, a wide array of potential strategic transactions. Any acquisition could be material to our financial condition and results of operations and any anticipated benefits from an acquisition may never materialize. In addition, the process of integrating acquired businesses, products or technologies may create unforeseen operating difficulties and expenditures. Acquisitions in international markets would involve additional risks, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries. We may not be able to address these risks successfully, or at all, without incurring significant costs, delays or other operational problems and if we were unable to address such risks successfully our business could be harmed.

 

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If we were to lose the services of members of our senior management team, we may not be able to execute our business strategy.

Our success depends in large part upon the continued service of key members of our senior management team. In particular, each of our Chairman and Chief Executive Officer, Kevin J. Kennedy, Chief Development Officer and Co-Founder, Tianyue Yu, Chief Marketing Officer, Enzo Signore and Chief Financial Officer, Patrick Archambault, is critical to our overall management, as well as the continued development of our LiDAR technology, our culture and our strategic direction. All of our executive officers are at will employees, and we do not maintain any key person life insurance policies. The loss of any member of our senior management team could harm our business.

Our future success depends in part on recruiting and retaining key personnel and if we fail to do so, it may be more difficult for us to execute our business strategy. We are currently a small organization and will need to hire additional qualified personnel to effectively implement our strategic plan, and if we are unable to attract and retain highly qualified employees, we may not be able to continue to grow our business.

Our ability to compete and grow depends in large part on the efforts and talents of our employees. Our employees, particularly engineers and other product developers, are in high demand, and we devote significant resources to identifying, hiring, training, successfully integrating and retaining these employees. As competition with other companies increases, we may incur significant expenses in attracting and retaining high quality software and hardware engineers and other employees. The loss of employees or the inability to hire additional skilled employees as necessary to support the growth of our business and the scale of our operations could result in significant disruptions to our business, and the integration of replacement personnel could be time-consuming and expensive and cause additional disruptions to our business.

We believe a critical component to our success and our ability to retain our best people is our culture. As we continue to grow, we may find it difficult to maintain our entrepreneurial, execution-focused culture.

Our ability to effectively manage our anticipated growth and expansion of our operations will also require us to enhance our operational, financial and management controls and infrastructure, human resources policies and reporting systems. These enhancements and improvements will require significant capital expenditures and allocation of valuable management and employee resources.

We expect to experience significant growth in the scope and nature of our operations. Our ability to manage our operations and future growth will require us to continue to improve our operational, financial and management controls, compliance programs and reporting systems. We may not be able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, systems and procedures, which could have an adverse effect on our business, reputation and financial results. Additionally, rapid growth in our business may place a strain on our human and capital resources. Furthermore, we expect to continue to conduct our business internationally and anticipate increased business operations in the United States, Europe, Asia and elsewhere. These diversified, global operations place increased demands on our limited resources and require us to substantially expand the capabilities of our administrative and operational resources and to attract, train, manage and retain qualified management, technical, manufacturing, engineering, sales and other personnel. As our operations expand domestically and internationally, we will need to continue to manage multiple locations and additional relationships with various customers, partners, suppliers and other third parties across several markets.

If we have difficulty managing our growth in operating expenses, our business could be harmed.

We have recently experienced significant growth in research and development, sales and marketing, support services and operations. While we had managed to significantly pare back operating expenses over the last 18 months due to COVID, our spending rate has gone up with the non-recurrence of furlough and wage cuts

 

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implemented in 2020 as well as due to headcount increases. We expect to continue to spend meaningfully on these activities. We expect future growth will continue to place, significant demands on our management, as well as our financial and operational resources, to:

 

   

manage a larger organization;

 

   

hire more employees, including engineers with relevant skills and experience;

 

   

expand our manufacturing and distribution capacity;

 

   

increase our sales and marketing efforts;

 

   

broaden our customer support capabilities;

 

   

implement appropriate operational and financial systems;

 

   

expand internationally; and

 

   

maintain effective financial disclosure controls and procedures.

If we fail to manage our growth effectively, we may not be able to execute our business strategies and our business will be harmed.

If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on the effectiveness of our system of internal control. Our internal controls over financial reporting is a process designed to provide reasonable assurances regarding the reliability of our financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States. As a public company, we are required to comply with the Sarbanes-Oxley Act and other rules that govern public companies.

If we fail to maintain an effective system of internal controls, the accuracy and timing of our financial reporting may be adversely affected, our liquidity, our access to capital markets may be adversely affected, we may be unable to maintain or regain compliance with applicable securities laws, and the New York Stock Exchange listing requirements, we may be subject to regulatory investigations and penalties, investors may lose confidence in our financial reporting, and our stock price may decline.

We have identified a material weakness in our internal controls over financial reporting, and if we are unable to implement and maintain effective internal controls over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock may be materially adversely affected.

To date, we have never assessed our internal controls for the purpose of providing the reports required by the Sarbanes-Oxley Act. In a future assessment, we may identify deficiencies and be unable to remediate them before we must provide the required reports. In connection with the audit of our financial statements as of and for the year ended December 31, 2020, we and our independent registered public accounting firm identified a material weakness in our internal controls over financial reporting, related to a lack of effective internal management review controls not being precise enough to identify potentially material misstatements. Following identification of the material weakness, we have begun undertaking specific remediation actions to address the material weakness in our financial reporting including the implementation of more precise review controls, including review of journal entries, review of items capitalized to inventor, and various other internal controls, including enhanced review documentation for journal entries, new inventory policies, and various other internal controls.

 

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Furthermore, if in the future, we have a material weakness in our internal controls over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. In addition, as a public company we will be required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from the NYSE or other adverse consequences that would materially harm our business. In addition, we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, and other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation and our financial condition, or divert financial and management resources from our core business.

We are subject to risks associated with doing business globally.

Our operations are subject to risks inherent in conducting business globally and under the laws, regulations and customs of various jurisdictions and geographies. In addition to risks related to currency exchange rates, these risks include changes in exchange controls; changes in taxation; importation limitations; export control restrictions; changes in or violations of applicable laws, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act of 2010; economic and political instability; disputes between countries; diminished or insufficient protection of intellectual property; and disruption or destruction of operations in a significant geographic region regardless of cause, including war, terrorism, riot, civil insurrection or social unrest. Failure to comply with, or material changes to, the laws and regulations that affect our global operations could have an adverse effect on our business, results of operations and financial condition.

Any significant disruption in our computer systems or those of third parties we utilize in our operations could harm our business.

We rely on the expertise of our engineering, software development, and information technology teams for the performance and operation of our computer systems. Service interruptions, errors in our software or the unavailability of computer systems used in our operations could delay our product development. We utilize computer systems located either in our facilities or those of third-party server hosting providers and third-party Internet-based or cloud computing services. Although we generally enter into service level agreements with these parties, we exercise no control over their operations, which makes us vulnerable to any errors, interruptions or delays that they may experience. In the future, we may transition additional features of our services from our managed hosting systems to cloud computing services, which may require expenditures and engineering resources. Upon the expiration or termination of any of our agreements with third-party vendors, we may not be able to replace their services in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete. In addition, fires, floods, earthquakes, power losses, telecommunications failures, break-ins and similar events could damage these systems and hardware or cause them to fail completely. As we do not maintain entirely redundant systems, a disrupting event could result in prolonged downtime of our operations and could adversely affect our business. Any disruption in the services provided by these vendors could have adverse impacts on our business reputation, customer relations and operating results.

Our servers and those of the third parties we use in our operations may be vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions and delays in operations. Such significant disruptions of our, our third party vendors’ and/or business partners’ information technology systems or data security breaches, including in our remote work environment as a result of COVID-19, could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, confidential information (including trade

 

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secrets or other intellectual property, proprietary business information and personal information), and could result in financial, legal, business and reputational harm to us. We maintain insurance policies to cover losses relating to our systems. Though it is difficult to determine what harm may directly result from any specific interruption or breach, any failure to maintain performance, reliability, security and availability of our network infrastructure may harm our reputation. Any attempts by hackers to disrupt our products, website or computer systems, if successful, could harm our business, be expensive to remedy and damage our reputation. Efforts to prevent hackers from entering our computer systems or exploiting vulnerabilities in our products are expensive to implement and may not be effective in detecting or preventing intrusion or vulnerabilities. Such unauthorized access to data could damage our reputation and our business and could expose us of the risk to contractual damages, litigation and regulatory fines and penalties that could harm our business.

Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, global pandemics, and interruptions by man-made problems, such as network security breaches, computer viruses or terrorism. Material disruptions of our business or information systems resulting from these events could adversely affect our operating results.

We and some of the third-party service providers on which we depend for various support functions are vulnerable to damage from catastrophic events, such as power loss, natural disasters, terrorism, pandemics, and similar unforeseen events beyond our control.

If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, damaged critical infrastructure, or otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans we have in place are unlikely to provide adequate protection in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business.

Furthermore, integral parties in our supply chain are operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen and severe adverse events, such as the COVID-19 pandemic. If such an event were to affect our supply chain, it could have a material adverse effect on our business.

The adoption, maintenance and expansion of international embargo, economic or other sanctions against Russia may have a material adverse effect on our business, financial condition and results of operations.

In January 2018, pursuant to the Countering America’s Adversaries through Sanctions Act of 2017, the U.S. administration presented the U.S. Congress with a report on senior Russian political figures, “oligarchs” and “parastatal” entities. The list included the 96 wealthiest Russian businessmen, including Mr. Alisher Usmanov, who maintains a minority, but nevertheless significant ownership interest in Rising Tide V, LLC, one of our principal shareholders. New tensions in relations between Russia and U.S. could result in adoption and implementation of new sanctions. Although we are not aware of any intention on the part of the U.S. government to impose sanctions on Mr. Usmanov, if he were to become a target of sanctions, it could have a material adverse effect on our ability to access financing in the U.S. debt and equity markets.

Our financial statements contain disclosure regarding the substantial doubt about our ability to continue as a going concern. We will need additional financing to execute our business plan, to fund our operations and to continue as a going concern.

The report of our independent registered public accounting firm on our financial statements as of and for the year ended December 31, 2020 includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern. If we are unable to raise sufficient capital when needed, our business, financial condition and results of operations will be materially and adversely affected, and we will need to significantly modify our operational plans to continue as a going concern. If we are unable to continue as a going concern, we might have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our consolidated financial statements. The

 

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inclusion of a going concern explanatory paragraph by our auditors, our lack of cash resources and our potential inability to continue as a going concern may materially adversely affect our share price and our ability to raise new capital or to enter into critical contractual relations with third parties.

Our ability to use our net operating loss carryforwards may be limited.

As of December 31, 2020, we had U.S. federal and state net operating loss carryforwards of approximately $175.0 million and $127.1 million, respectively. Under legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, or the TCJA, as modified in 2020 by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, unused U.S. federal net operating losses generated in tax years beginning after December 31, 2017, will not expire and may be carried forward indefinitely, but the deductibility of such federal net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the TCJA or the CARES Act. Our ability to utilize our federal net operating carryforwards may be limited under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code. The limitations apply if we experience an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in the ownership of our equity by certain stockholders or groups of stockholders over a rolling three-year period. Similar provisions of state tax law may also apply to limit the use of our state net operating loss carryforwards. We have not yet completed a Section 382 analysis, and therefore, there can be no assurances that any previously experienced ownership changes have not materially limited our utilization of affected net operating loss carryforwards. Future changes in our stock ownership, including as a result of this offering, which may be outside of our control, may trigger an ownership change that materially impacts our ability to utilize pre-change net operating loss carryforwards. In addition, there may be periods during which the use of net operating loss carryforwards is suspended or otherwise limited. For example, in 2020, California generally suspended the use of California net operating loss carryforwards to offset taxable income in tax years beginning after 2019 and before 2023. Accordingly, our ability to use our net operating loss carryforwards to offset taxable income may be subject to such limitations or special rules that apply at the state level, which could adversely affect our results of operations.

Risks Related to the Business Combination

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to the CITIC Capital Acquisition Corp. (“CCAC”) prior to the consummation of the Business Combination.

The Sponsor has agreed to vote in favor of the Business Combination, regardless of how CCAC’s public shareholders vote.

The Sponsor and each director and officer of CCAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in the case of the Sponsor, subject also to the terms and conditions contemplated by the Sponsor Support Agreement. As of the date of this proxy statement / prospectus, the Sponsor owns 20.0% of CCAC’s issued ordinary shares.

We may be forced to close the Business Combination even if we determined it is no longer in our shareholders’ best interest.

Our public shareholders are protected from a material adverse event of Quanergy arising between the date of the Merger Agreement and the Closing primarily by the right to redeem their public shares for a pro rata portion of the funds held in the trust account, calculated as of two business days prior to the vote at the extraordinary general meeting. Accordingly, if a material adverse event were to occur after approval of the Condition Precedent Proposals at the extraordinary general meeting, we may be forced to close the Business Combination even if we determine it is no longer in our shareholders’ best interest to do so (as a result of such material adverse event) which could have a significant negative impact on our business, financial condition or results of operations.

Additionally, if we do not obtain shareholder approval at the extraordinary general meeting, Quanergy can obligate us to hold additional extraordinary general meetings to vote on the Condition Precedent Proposals until the earlier of such shareholder approval being obtained and December 31, 2021. This could limit our ability to seek an alternative business combination that our shareholders may prefer after such initial vote.

 

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Since the Sponsor and CCAC’s directors and officers have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with Quanergy is appropriate as our initial business combination. Such interests include that Sponsor will lose its entire investment in us if our business combination is not completed.

When you consider the recommendation of CCAC’s board of directors in favor of approval of the BCA Proposal, you should keep in mind that the Sponsor and CCAC’s directors and officers have interests in such proposal that are different from, or in addition to, those of CCAC shareholders and warrant holders generally. These interests include, among other things, the interests listed below:

 

   

Prior to CCAC’s initial public offering, the Sponsor purchased 5,750,000 CCAC Class B ordinary shares for an aggregate purchase price of $25,000, or approximately $0.004 per founder shares. Effective December 10, 2019, the Sponsor transferred 718,750 founder shares to Henri Arif for a purchase price of $3,125 (the same per-share price initially paid by the Sponsor), resulting in our sponsor holding 5,031,250 founder shares. On February 10, 2020, CCAC effected a share capitalization of 1,150,000 shares and as a result the Sponsor held 6,037,500 founder shares and Mr. Arif held 862,500 founder shares. On May 7, 2020, the Sponsor transferred 22,000 founder shares to Mr. Ross Haghighat for no consideration and on February 10, 2021, the Sponsor transferred 13,000 founder shares to Mr. Mark B. Segall for no consideration. As of March 31, 2021, the Sponsor held 6,002,500 founder shares. As a result of the significantly lower investment per CCAC Class B ordinary share of our Sponsor as compared with the investment per public share of CCAC’s public shareholders, a transaction which results in an increase in the value of the investment of the Sponsor may result in a decrease in the value of the investment of our public shareholders.

 

   

If CCAC does not consummate a business combination by February 13, 2022 (or if such date is extended at a duly called extraordinary general meeting, such later date), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, liquidating and dissolving, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the 6,900,000 CCAC Class B ordinary shares owned by the Sponsor, its affiliates and the directors of CCAC would be worthless because following the redemption of the public shares, CCAC would likely have few, if any, net assets. Additionally, in such event, the 7,520,000 private placement warrants purchased by the Sponsor simultaneously with the consummation of CCAC’s initial public offering for an aggregate purchase price of $7,520,000 will expire worthless.

 

   

CCAC’s directors, Mr. Arif, Mr. Ross Haghighat and Mr. Mark B. Segall, also have a direct or indirect economic interest in such private placement warrants and/or in the 6,900,000 CCAC Class B ordinary shares owned by the Sponsor or its affiliates. The 6,900,000 shares of Quanergy PubCo common stock into which the 6,900,000 CCAC Class B ordinary shares held by the Sponsor will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on the NYSE on 2021, the most recent practicable date prior to the date of this proxy statement / prospectus. However, given that such shares of Quanergy PubCo common stock will be subject to certain restrictions, including those described elsewhere in this proxy statement / prospectus, CCAC believes such shares have less value. The 7,520,000 Quanergy PubCo warrants into which the 7,520,000 private placement warrants held by the Sponsor will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public warrant on the NYSE on                , the most recent practicable date prior to the date of this proxy statement / prospectus.

 

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Accordingly, CCAC’s Sponsor, officers and directors will lose their entire investment of $7,545,000, consisting of the Sponsor’s $25,000 initial investment and the Sponsor’s $7,520,000 private placement warrant purchase price, if CCAC does not complete a business combination by February 13, 2022.

 

   

Pursuant to that certain letter agreement, dated as of February 10, 2020, by and among the CCAC and the Sponsor, in connection with CCAC’s initial public offering, the Sponsor and other signatories (each of whom is a member of CCAC’s board of directors and/or management team) is subject to certain restrictions on transfer with respect to: (i) the Founder Shares (as defined in such letter agreement); and (ii) private placement warrants (as defined in such letter agreement). Such restrictions on the Founder Shares end on the date that is one year after Closing, or are subject to an early price-based release if: (a) the price of the shares equals or exceeds $12.00 per share for any twenty trading days within any thirty-day trading period at least 150 days after the Business Combination, or (b) CCAC completes a transaction that results in public shareholders having the right to exchange the CCAC Class A ordinary shares for cash, securities or other property. The restrictions on the private placement warrants end on 30 days after the completion of a business combination.

 

   

The Sponsor irrevocably and unconditionally agreed that during the period commencing on June 21, 2021 and ending on the earliest of (a) the effective time of the Merger, and (b) such date and time of the termination of the Merger Agreement (as amended on June 28, 2021) in accordance with its terms, such Sponsor shall not elect to cause CCAC to redeem any of the 6,900,000 CCAC Class B ordinary shares and 7,520,000 private placement warrants beneficially owned or owned of record by such Sponsor, or submit any of such securities for redemption, in connection with the transactions contemplated by the Merger Agreement or otherwise.

 

   

Affiliates of our Sponsor and our directors own equity interests in Quanergy as of the date of this proxy statement / prospectus. On April 5, 2017 and May 5, 2017, Tharsis Funds, affiliates of Mr. Arif, Tharsis Capital, acquired an aggregate of 246,250 common shares from certain shareholders in Quanergy, representing approximately 1.79% of the fully diluted share capital of Quanergy as of May 5, 2017. On October 17, 2018, (i) CCSRF, an affiliate of Mr. Wang and Mr. Chan, CCSRF Vision (Cayman) Investment Limited, acquired 82,372 shares of Quanergy on an as-converted and as-exercised basis, representing approximately 0.58% of the fully diluted share capital of Quanergy, and (ii) affiliates of Mr. Arif, Tharsis Capital, acquired 16,968 additional shares of Quanergy on an as-converted and as-exercised basis, which, taken in total with the previous acquisition of shares, represented approximately 1.86% of the fully diluted share capital of Quanergy. Between January 1, 2019 and July 1, 2020, CCSRF acquired additional equity securities from certain existing holders of shares of Series C preferred stock, which, taken in total with the previous acquisition of equity, represented approximately 0.94% of the fully diluted share capital of Quanergy, and Tharsis Funds acquired additional equity securities from certain existing holders of shares of Series C preferred stock, which, taken in total with the previous acquisition of equity, represented approximately 1.91% of the fully diluted share capital of Quanergy, in each case, as of July 1, 2020. Immediately following the Closing, CCSRF and Tharsis Funds are expected to receive approximately 1,954,961 and 1,359,083 Quanergy PubCo shares, respectively, on an as-converted and as-exercised basis based on Quanergy’s capitalization on June 8, 2021.

 

   

None of Mr. Arif, Mr. Wang and Mr. Chan, nor any other affiliate of CCAC were involved in the management or guarantee of Quanergy in relation to its consideration of the Business Combination and alternative transactions. The potential interests of Mr. Henri, Mr. Wang and Mr. Chan were properly disclosed to the CCAC Board, and the CCAC Board considered these interests, among other matters, in evaluating and negotiating the business combination and transaction agreements and in recommending to CCAC’s stockholders that they vote in favor of the proposals presented at the CCAC special meeting, including the Business Combination Proposal. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the CCAC special meeting, including the Business Combination Proposal.

 

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CCAC’s Sponsor, officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if CCAC fails to complete a business combination by February 13, 2022.

 

   

CCAC’s existing directors and officers will be eligible for continued indemnification and continued coverage under CCAC’s directors’ and officers’ liability insurance policy after the Merger and pursuant to the Merger Agreement.

 

   

Following the Closing, CCAC’s Sponsor would be entitled to the repayment of any working capital loan and advances that have been made to CCAC and remain outstanding. If CCAC does not complete an initial business combination within the required period, CCAC may use a portion of its working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used for this purpose.

 

   

CCAC’s Sponsor, officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them related to identifying, investigating, negotiating and completing an initial business combination, including repayment of any other loans and advances made. However, if CCAC fails to consummate a business combination by February 13, 2022, they will not have any claim against the trust account for reimbursement. Accordingly, CCAC may not be able to reimburse these expenses if the Business Combination or another business combination is not completed by such date.

 

   

Pursuant to the Registration Rights Agreement, the Sponsor, certain of its respective affiliates and certain stockholders of Quanergy will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of Quanergy PubCo common stock and warrants held by such parties following the consummation of the Business Combination.

 

   

The Proposed Certificate of Incorporation will contain a provision expressly electing that Quanergy PubCo will not to be governed by Section 203 (Delaware’s “interested stockholder” statute) of the DGCL, although it will provide other restrictions regarding takeovers by interested stockholders.

The existence of financial and personal interests of one or more of CCAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of CCAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, CCAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “—Interests of CCAC’s Directors and Officers in the Business Combination” for a further discussion of these considerations.

The personal and financial interests of the Sponsor as well as CCAC’s directors and officers may have influenced their motivation in identifying and selecting Quanergy as a business combination target, completing an initial business combination with Quanergy and influencing the operation of the business following the initial business combination. In considering the recommendations of CCAC’s board of directors to vote for the proposals, its shareholders should consider these interests.

The exercise of CCAC’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in CCAC’s shareholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Merger Agreement, would require CCAC to agree to amend the Merger Agreement, to consent to certain actions taken by Quanergy or to waive rights that CCAC is entitled to under the Merger Agreement. Such events could arise because of changes

 

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in the course of Quanergy’s business or a request by Quanergy to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement. In any of such circumstances, it would be at CCAC’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors described in the preceding risk factors (and described elsewhere in this proxy statement / prospectus) may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is best for CCAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement / prospectus, CCAC does not believe there will be any changes or waivers that CCAC’s directors and executive officers would be likely to make after shareholder approval of the BCA Proposal has been obtained. While certain changes could be made without further shareholder approval, CCAC will circulate a new or amended proxy statement / prospectus and resolicit CCAC’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the BCA Proposal.

CCAC and Quanergy will incur significant transaction and transition costs in connection with the Business Combination.

CCAC and Quanergy have both incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination and operating as a public company following the consummation of the Business Combination. CCAC and Quanergy may also incur additional costs to retain key employees. Certain transaction costs incurred in connection with the Merger Agreement (including the Business Combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be paid by CCAC following the closing of the Business Combination.

The announcement of the proposed Business Combination could disrupt Quanergy’s relationships with its customers, suppliers, business partners and others, as well as its operating results and business generally.

Whether or not the Business Combination and related transactions are ultimately consummated, as a result of uncertainty related to the proposed transactions, risks relating to the impact of the announcement of the Business Combination on Quanergy’s business include the following:

 

   

its employees may experience uncertainty about their future roles, which might adversely affect Quanergy PubCo’s ability to retain and hire key personnel and other employees;

 

   

customers, suppliers, business partners and other parties with which Quanergy maintains business relationships may experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with Quanergy or fail to extend an existing relationship with Quanergy PubCo; and

 

   

Quanergy has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Business Combination.

If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact Quanergy and, in the future, Quanergy PubCo’s results of operations and cash available to fund its business.

Subsequent to the consummation of the Business Combination, Quanergy PubCo may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and its share price, which could cause you to lose some or all of your investment.

We cannot assure you that the due diligence conducted in relation to Quanergy has identified all material issues or risks associated with Quanergy, its business or the industry in which it competes. Furthermore, we cannot assure you that factors outside of Quanergy’s and our control will not later arise. As a result of these

 

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factors, we may be exposed to liabilities and incur additional costs and expenses and we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items that would not have an immediate impact on the Quanergy PubCo’s liquidity, the fact that Quanergy PubCo reports charges of this nature could contribute to negative market perceptions about Quanergy PubCo or its securities. In addition, charges of this nature may cause Quanergy PubCo to violate leverage or other covenants to which it may be subject. If any of these risks materialize, this could have a material adverse effect on our financial condition and results of operations and could contribute to negative market perceptions about our securities or Quanergy PubCo. Additionally, we have no indemnification rights against the stockholders of Quanergy under the Merger Agreement and all of the purchase price consideration will be delivered at the Closing.

Accordingly, any shareholders or warrant holders of CCAC who choose to remain Quanergy PubCo stockholders or warrant holders following the Business Combination could suffer a reduction in the value of their shares or warrants. Such shareholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement / prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

The historical financial results of Quanergy and unaudited pro forma financial information included elsewhere in this proxy statement / prospectus may not be indicative of what Quanergy PubCo’s actual financial position or results of operations would have been.

CCAC and Quanergy currently operate as separate companies and have had no prior history as a combined entity. The historical financial results of Quanergy included in this proxy statement / prospectus do not reflect the financial condition, results of operations or cash flows they would have achieved as a standalone public company during the periods presented or those Quanergy PubCo will achieve in the future. This is primarily the result of the following factors: (i) Quanergy PubCo will incur additional ongoing costs as a result of the Business Combination, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act; and (ii) Quanergy PubCo’s capital structure will be different from that reflected in Quanergy’s historical financial statements. Quanergy PubCo’s financial condition and future results of operations could be materially different from amounts reflected in its historical financial statements included elsewhere in this proxy statement / prospectus, so it may be difficult for investors to compare Quanergy PubCo’s future results to historical results or to evaluate its relative performance or trends in its business.

Similarly, the unaudited pro forma financial information in this proxy statement / prospectus is presented for illustrative purposes only and has been prepared based on a number of assumptions including, but not limited to, assuming no shares of CCAC’s redeemable common stock will be redeemed and assuming holders of the maximum number of public shares that could be redeemed for cash while still leaving sufficient cash available to consummate the Business Combination, will exercise their right to have their public shares redeemed for cash. The pro forma statement of operations does not reflect future nonrecurring charges resulting from the Business Combination. The unaudited pro forma financial information does not reflect future events that may occur after the Business Combination and does not consider potential impacts of future market conditions on revenues or expenses. There may be differences between preliminary estimates in the pro forma financial information and the final acquisition accounting, which could result in material differences from the pro forma information presented in this proxy statement / prospectus in respect of the estimated financial position and results of operations of the Company. Accordingly, such pro forma financial information may not be indicative of Quanergy PubCo’s future operating or financial performance and Quanergy PubCo’s actual financial condition and results of operations may vary materially from Quanergy PubCo’s pro forma results of operations and balance sheet contained elsewhere in this proxy statement / prospectus, including as a result of such assumptions not being accurate.

 

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In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate and other factors may affect the Quanergy PubCo’s financial condition or results of operations following the Closing. Any potential decline in the Quanergy PubCo’s financial condition or results of operations may cause significant variations in the stock price of the Quanergy PubCo’s. See “Selected Unaudited Pro Forma Condensed Combined Financial Information.”

Following the consummation of the Business Combination, our only significant asset will be our ownership interest in Quanergy and such ownership may not be sufficient to pay taxes or expenses, dividends or make distributions or loans to enable us to pay any dividends on Quanergy PubCo common stock or satisfy our other financial obligations.

Following the consummation of the Business Combination, we will have no direct operations and no significant assets other than our ownership of Quanergy. As a result, we will have no independent means of generating revenue or cash flow. We and certain investors, the stockholders of Quanergy, and directors and officers of Quanergy and its affiliates will become stockholders of Quanergy PubCo. We will depend on Quanergy for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company and taxes, and to pay any dividends with respect to Quanergy PubCo common stock. The financial condition and operating requirements of Quanergy may limit our ability to obtain cash from Quanergy. The earnings from, or other available assets of, Quanergy may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on Quanergy PubCo common stock or satisfy our other financial obligations.

Additionally, to the extent that we need funds and Quanergy and/or any of its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or Quanergy is otherwise unable to provide such funds, it could materially adversely affect the Company’s liquidity and financial condition.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our Business Combination.

CCAC does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for CCAC to complete an initial business combination with which a substantial majority of CCAC stockholders do not agree.

CCAC’s current charter does not provide a specified maximum redemption threshold, except that its charter provides that in no event will CCAC redeem its CCAC Class A ordinary shares in an amount that would cause its net tangible assets, or total shareholders’ equity, to fall below $5,000,001. The Merger Agreement provides that Quanergy’s obligation to consummate the Business Combination is conditioned on, among other things, that as of the Closing, the Minimum Cash Condition is satisfied. As a result, CCAC may be able to complete the Business Combination even though a substantial portion of its public stockholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to the Sponsors or CCAC’s or Quanergy’s directors, officers or advisors, or any of their respective affiliates. As of the date of this proxy statement / prospectus, no agreements with respect to the private purchase of public shares by CCAC or the persons described above have been entered into with any such investor or holder.

In the event the cash consideration we would be required to pay for all shares of CCAC Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy Minimum Cash Condition pursuant to the terms of the Merger Agreement exceeds the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any shares, all shares of CCAC Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternative business combination.

 

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The ability of CCAC’s shareholders to exercise redemption rights with respect to the CCAC Class A ordinary shares may prevent CCAC from completing the Business Combination or optimizing its capital structure.

CCAC does not know how many shareholders will ultimately exercise their redemption rights in connection with the Business Combination. As such, the Business Combination is structured based on CCAC’s expectations (and those of the other parties to the Merger Agreement) as to the number of shares that will be submitted for redemption. In addition, if a larger number of shares are submitted for redemption than CCAC initially expected, CCAC may need to seek to arrange for additional third-party financing to be able to deliver the Minimum Cash Condition at the Closing (or such lower cash amount designated by Quanergy if Quanergy waives the condition).

Although CCAC has obtained the Subscription Agreements in respect of the PIPE Investment, if too many public shareholders elect to redeem their shares, the PIPE Investment alone may be insufficient to complete the Business Combination, and additional third-party financing may not be available to CCAC. Even if such third-party financing is available, CCAC’s ability to obtain such financing is subject to restrictions set forth in the Merger Agreement, including the consent of Quanergy. For information regarding the parameters of such restrictions, please see the sections of this proxy statement / prospectus entitled “The BCA Proposal – The Merger Agreement – Covenants and Agreements” and “The BCA Proposal – Merger Agreement – Closing Conditions”.

For information on the consequences if the Business Combination is not completed or must be restructured, see the section entitled “Risk Factors – Risks if the Domestication and the Business Combination are not Consummated” in this proxy statement / prospectus.

There is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the trust account will put such shareholder in a better future economic position.

We can give no assurance as to the price at which a shareholder may be able to sell its public shares in the future following the completion of the transaction or any alternative business combination. Certain events following the consummation of any initial business combination, including the transactions, may cause an increase in CCAC’s share price, and may result in a lower value realized now than a shareholder might realize in the future had the shareholder not redeemed its shares. Similarly, if a shareholder does not redeem its shares, the shareholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a shareholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement / prospectus. A shareholder should consult the shareholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

If our shareholders fail to comply with the redemption requirements specified in this proxy statement / prospectus, they will not be entitled to redeem their shares of CCAC Class A ordinary shares for a pro rata portion of the Trust Account.

Holders of public shares are not required to affirmatively vote against the BCA Proposal in order to exercise their rights to redeem their shares for a pro rata portion of the Trust Account. In order to exercise their redemption rights, they are required to submit a request in writing and deliver their stock (either physically or electronically) to our transfer agent by                 , New York City time, on                , 2021. Shareholders electing to redeem their shares will receive their pro rata portion of the funds held in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to pay our taxes, calculated as of two business days prior to the anticipated consummation of the Business Combination.

 

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If a shareholder fails to receive notice of CCAC’s offer to redeem CCAC’s public shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

If, despite CCAC’s compliance with the proxy rules, a shareholder fails to receive CCAC’s proxy materials, such shareholder may not become aware of the opportunity to redeem its public shares. In addition, the proxy materials that we are furnishing to holders of our public shares in connection with the transaction describes the various procedures that must be complied with in order to validly redeem public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed.

If the conditions to the Merger Agreement are not met, the Business Combination may not occur.

Even if the Merger Agreement is approved by the shareholders of CCAC and Quanergy, specified conditions must be satisfied or waived before the parties to the Merger Agreement are obligated to complete the Business Combination. For a list of the material closing conditions contained in the Merger Agreement, see the section entitled “The BCA—Merger Agreement—Closing Conditions” of this proxy statement / prospectus. CCAC and Quanergy may not satisfy all of the closing conditions in the Merger Agreement. If the closing conditions are not satisfied or waived, the Business Combination will not occur, or will be delayed pending later satisfaction or waiver, and such delay may cause CCAC and Quanergy to each lose some or all of the intended benefits of the Business Combination.

We have a specified Minimum Cash Condition. This Minimum Cash Condition may make it more difficult for us to complete the Business Combination as contemplated.

The Merger Agreement provides that Quanergy’s obligation to consummate the Business Combination is conditioned on, among other things, that as of the Closing, the Minimum Cash Condition is satisfied.

This condition is for the sole benefit of Quanergy. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. The Merger Agreement also contains a mutual condition that CCAC as of the Closing, CCAC shall have net tangible assets of at least $5,000,001.

There can be no assurance that Quanergy could and would waive the Minimum Cash Condition. Furthermore, as provided in the Cayman Constitutional Documents, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. If such conditions are not met, and such conditions are not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated.

If such conditions are waived and the Business Combination is consummated with less than the Minimum Available Cash Amount in the trust account, the cash held by Quanergy PubCo and its subsidiaries (including Quanergy) in the aggregate, after the Closing may not be sufficient to allow us to operate and pay our bills as they become due. Furthermore, our affiliates are not obligated to make loans to us in the future (other than our Sponsor’s commitment to provide us loans in order to finance transaction costs in connection with a business combination). The additional exercise of redemption rights with respect to a large number of our public shareholders may make us unable to take such actions as may be desirable in order to optimize the capital structure of Quanergy PubCo after consummation of the Business Combination and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses and liabilities after the Closing. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.

 

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During the pendency of the Business Combination, CCAC will not be able to enter into a business combination with another party because of restrictions in the Merger Agreement. Furthermore, certain provisions of the Merger Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

Covenants in the Merger Agreement impede the ability of CCAC to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the Business Combination. As a result, CCAC may be at a disadvantage to its competitors during that period. In addition, while the Merger Agreement is in effect, neither CCAC nor Quanergy may solicit, assist, facilitate the making, submission or announcement of, or intentionally encourage any alternative acquisition proposal, such as a merger, material sale of assets or equity interests or other business combination, with any third party, even though any such alternative acquisition could be more favorable to CCAC’s shareholders than the Business Combination. In addition, if the Business Combination is not completed, these provisions will make it more difficult to complete an alternative business combination following the termination of the Merger Agreement due to the passage of time during which these provisions have remained in effect.

Certain insiders may elect to purchase shares from public shareholders prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of our securities.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material non-public information regarding us or CCAC’s securities, the Sponsor, Quanergy or our or their respective directors, officers, advisors or respective affiliates may purchase public shares or warrants from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares or warrants from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or warrants or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of CCAC’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, Quanergy or their directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of (1) satisfaction of the requirement that holders of a majority of the ordinary shares, represented in person or by proxy and entitled to vote at the quorate extraordinary general meeting, vote in favor of the BCA Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal, (2) satisfaction of the requirement that holders of a majority of at least two-thirds of the ordinary shares, represented in person or by proxy and entitled to vote at the quorate extraordinary general meeting, vote in favor of the Domestication Proposal and the Organizational Documents Proposals, (3) satisfaction of the Minimum Cash Condition, (4) otherwise limiting the number of public shares electing to redeem and (5) CCAC’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001. The purpose of such purchases of public warrants would be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination.

Entering into any such arrangements may have a depressive effect on the ordinary shares (e.g., by giving an investor or holder the ability to effectively purchase shares or warrants at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination). If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares or warrants by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the

 

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chances that such proposals would be approved. In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per share (which was the offering price per unit in CCAC’s initial public offering).

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of the company under the circumstances. WithumSmith+Brown, PC, our independent registered public accounting firm, will not execute agreements with us waiving such claims to the monies held in the trust account.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed our business combination within the required time period, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per share redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors.

The Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share, due to reductions in value of the trust assets, less taxes payable, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account (whether or not such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of our company. The Sponsor may not have sufficient funds available to satisfy those obligations. We have not asked the Sponsor to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our business combination, and you would receive such lesser amount per

 

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public share in connection with any redemption of your public shares. None of our directors or officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Our directors may decide not to enforce the indemnification obligations of our Sponsors, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

In the event that the proceeds in the trust account are reduced below the lesser of  (i) $10.00 per public share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, CCAC’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While we currently expect that CCAC’s independent directors would take legal action on our behalf against the Sponsor to enforce its indemnification obligations to us, it is possible that CCAC’s independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance, if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If CCAC’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.

We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.

We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive (and any other persons who may become an officer or director prior to the initial business combination will also be required to waive) any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

If, after we distribute the proceeds in the trust account to our public shareholders, CCAC files a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance”. As a result, a liquidator could, in certain circumstances, seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors or having acted in bad faith, thereby exposing it and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

 

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If, before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law, and may be included in our liquidation estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any liquidation claims deplete the trust account, the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could, in certain circumastances, be viewed as an unlawful payment which a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to a fine of $18,293.68 and to imprisonment for five years in the Cayman Islands.

The public stockholders will experience immediate dilution as a consequence of the issuance of Quanergy PubCo common stock as consideration in the Business Combination and the PIPE Investment and due to future issuances pursuant to the 2021 Plan. Having a minority share position may reduce the influence that our current stockholders have on the management of Quanergy PubCo.

It is anticipated that, following the Business Combination, (1) CCAC’s public shareholders are expected to own approximately 20.4% of the outstanding Quanergy PubCo common stock, (2) the stockholders of Quanergy (without taking into account any public shares held by the stockholders of Quanergy prior to the consummation of the Business Combination or purchased in the PIPE Investment) are expected to own approximately 71.6% of the outstanding Quanergy PubCo common stock, (3) the Sponsor and related parties are expected to collectively own approximately 3.0% of the outstanding Quanergy PubCo common stock and (4) the PIPE Investors are expected to own approximately 5.1% of the outstanding Quanergy PubCo common stock. These percentages assume (i) that no public shareholders exercise their redemption rights in connection with the Business Combination, (ii) (a) the vesting of all shares of Quanergy PubCo common stock received in respect of the Quanergy PubCo Restricted Shares, (b) the vesting and exercise of all Quanergy PubCo Options for shares of Quanergy PubCo common stock (assuming that all Quanergy PubCo Options are net-settled), (c) the exercise of all Quanergy PubCo Converted Warrants for shares of Quanergy Pubco common stock (assuming that all Quanergy PubCo Converted Warrants are net-settled), (d) the vesting of all shares of Quanergy Restricted Stock Unit Awards and the settlement of all Adjusted Restricted Stock Unit Awards received in respect of the Quanergy Restricted Stock Unit Awards into shares of Quanergy PubCo common stock, and (e) the conversion of all of 2023 Quanergy Convertible Notes into Quanergy Common Stock (assuming the conversion date of September 30, 2021), (iii) that Quanergy PubCo issues shares of Quanergy PubCo common stock as the Aggregate Merger Consideration pursuant to the Merger Agreement, which in the aggregate equals 97,000,000 shares of Quanergy PubCo common stock (assuming that all Quanergy PubCo Options and Quanergy PubCo Converted Warrants are net-settled), (iv) Quanergy PubCo issues 4,000,000 shares of Quanergy PubCo common stock to the PIPE Investors pursuant to the PIPE Investment and (v) subject ot the foregoing assumptions,

 

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immediately prior to the Closing, Quanergy has the same capitalization as it had as of June 8, 2021. If the actual facts are different from these assumptions, the percentage ownership retained by CCAC’s existing shareholders in the combined company will be different.

In addition, if the 2021 Plan is approved, Quanergy employees and consultants hold, and after Business Combination, are expected to be granted, equity awards under the 2021 Plan. You will experience additional dilution when those equity awards and purchase rights become vested and settled or exercisable, as applicable, for shares of Quanergy PubCo common stock.

Without limiting the other assumptions described under the section entitled “Summary of the Proxy Statement / Prospectus – Ownership of Quanergy PubCo following Business Combination” beginning on page 38 of this proxy statement / prospectus, these ownership percentages do not take into account (a) any warrants or options to purchase the Quanergy PubCo common stock that will be outstanding following the Business Combination, (b) any equity awards under the 2021 Plan and ESPP; and (c) any adjustments to the merger consideration pursuant to the Merger Agreement.

The issuance of additional common stock will significantly dilute the equity interests of existing holders of CCAC securities and may adversely affect prevailing market prices for our public shares or public warrants.

Warrants will become exercisable for Quanergy PubCo common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Outstanding warrants to purchase an aggregate of 21,320,000 shares of Quanergy PubCo common stock will become exercisable in accordance with the terms of the Warrant Agreement governing those securities. These warrants will become exercisable at any time commencing on the later of 30 days after the completion of the Business Combination and 12 months from the closing of CCAC’s initial public offering. The exercise price of these warrants will be $11.50 per share. To the extent such warrants are exercised, additional shares of Quanergy PubCo common stock will be issued, which will result in dilution to the holders of Quanergy PubCo common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of Quanergy PubCo common stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. See “ —Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment.

Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment.

The warrants were issued in registered form under a Warrant Agreement between Continental, as warrant agent, and CCAC. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period, convert the warrants into cash or shares or decrease the number of shares of Quanergy PubCo common stock purchasable upon exercise of a warrant.

 

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We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the shares of Quanergy PubCo common stock equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption to the warrants holders and provided certain other conditions are met. We will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares issuable upon exercise of the warrants is effective and a current prospectus relating to those shares is available throughout the 30-day redemption period, except if we elect to require the warrants to be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by the sponsor or any of its permitted transferees.

There can be no assurance that the shares of Quanergy PubCo common stock that will be issued in connection with the Business Combination will be approved for listing on the NYSE following the Closing, or that Quanergy PubCo will be able to comply with the continued listing rules of the NYSE.

CCAC’s units, public shares and public warrants are currently listed on the NYSE. The continued eligibility for listing of Quanergy PubCo’s securities may depend on, among other things, the number of our shares that are redeemed. If, after the Business Combination, the NYSE delists the shares of Quanergy PubCo common stock or public warrants from trading on its exchange for failure to meet its listing rules, Quanergy PubCo and its stockholders could face significant material adverse consequences including:

 

   

a limited availability of market quotations for our securities;

 

   

reduced liquidity for our securities;

 

   

a determination that shares of Quanergy PubCo common stock is a “penny stock” which will require brokers trading in shares of Quanergy PubCo common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” The Quanergy PubCo common stock and public warrants are covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state, other than the state of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if Quanergy PubCo’s securities were no longer listed on the NYSE, such securities would not qualify as covered securities and Quanergy PubCo would be subject to regulation in each state in which it offers its securities.

 

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CCAC’s and Quanergy’s ability to consummate the Business Combination, and the operations of Quanergy PubCo following the Business Combination, may be materially adversely affected by the recent coronavirus (COVID-19) pandemic.

The COVID-19 pandemic has resulted, and other infectious diseases could result, in a widespread health crisis that has and could continue to adversely affect the economies and financial markets worldwide, which may delay or prevent the consummation of the Business Combination, and the business of Quanergy or Quanergy PubCo following the Business Combination could be materially and adversely affected. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted.

The parties will be required to consummate the Business Combination even if Quanergy, its business, financial condition and results of operations are materially affected by COVID-19. The disruptions posed by COVID-19 have continued, and other matters of global concern may continue, for an extensive period of time, and if Quanergy is unable to recover from business disruptions due to COVID-19 or other matters of global concern on a timely basis, Quanergy’s ability to consummate the Business Combination and Quanergy PubCo’s financial condition and results of operations following the Business Combination may be materially adversely affected. Each of Quanergy and Quanergy PubCo may also incur additional costs due to delays caused by COVID-19, which could adversely affect Quanergy PubCo’s financial condition and results of operations.

The process of taking a company public by means of a business combination with a special purpose acquisition company is different from taking a company public through an initial public offering and may create risks for our unaffiliated investors.

An initial public offering involves a company engaging underwriters to purchase its shares and resell them to the public. An underwritten offering imposes statutory liability on the underwriters for material misstatements or omissions contained in the registration statement unless they are able to sustain the burden of providing that they did not know and could not reasonably have discovered such material misstatements or omissions. This is referred to as a “due diligence” defense and results in the underwriters undertaking a detailed review of an initial public offering company’s business, financial condition and results of operations. Going public via a business combination with a special purpose acquisition company does not involve any underwriters and may therefore result in less careful vetting of information that is presented to the public.

In addition, going public via a business combination with a special purpose acquisition company does not involve a book-building process as is the case in an initial public offering. In any initial public offering, the initial value of a company is set by investors who indicate the price at which they are prepare to purchase shares from the underwriters. In the case of a special purpose acquisition company transaction, the value of the company is established by means of negotiations between the target company, the special purpose acquisition company and, in many cases, “PIPE” investors who agree to purchase shares at the time of the business combination. The process of establishing the value of a company in a special purpose acquisition company business combination may be less effective than an initial public offering bookbuilding process and also does not reflect events that may have occurred between the date of the business combination agreement and the closing of the transaction. In addition, initial public offerings are frequently oversubscribed resulting in additional potential demand for shares in the aftermarket following the initial public offering. There is no such book of demand built up in connection with special purpose acquisition company transaction which may result in the share price being harder to sustain after the transaction.

The Business Combination may be subject to U.S. foreign investment regulations, which could delay the transaction, require the parties to adopt mitigation measures to address perceived national security issues, or cause the government to block the transaction entirely.

Under the “Exon-Florio Amendment” to the U.S. Defense Production Act of 1950, as amended (the “DPA”), the U.S. President has the power to disrupt or block certain foreign investments in U.S. businesses if he

 

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determines that such a transaction threatens U.S. national security. The Committee on Foreign Investment in the United States (“CFIUS”) has been delegated the authority to conduct national security reviews of certain foreign investments (“Covered Transactions”). CFIUS may impose mitigation conditions to grant clearance of a transaction.

CFIUS has long exercised jurisdiction to review “Covered Control Transactions” where an investment affords a foreign person control over a U.S. business. The Foreign Investment Risk Review Modernization Act (“FIRRMA”), enacted in 2018, amended the DPA to, among other things, expand CFIUS’s jurisdiction beyond acquisitions of control of U.S. businesses. Under FIRRMA, CFIUS also has jurisdiction over certain foreign non-controlling, non-passive investments in U.S. businesses that: (i) produce, design, test, manufacture, fabricate, or develop one or more “critical technologies” within the meaning of the Defense Production Act of 1950, as amended; (ii) own, operate, maintain, supply, manufacture, or service covered investment critical infrastructure; or (iii) collect and maintain sensitive personal data of U.S. citizens (“TID U.S. Businesses”), if the foreign investor receives specified triggering rights in connection with its investment (“Covered Investments”).

The Parties have agreed to cooperate and coordinate to prepare and submit a joint voluntary declaration to CFIUS to obtain CFIUS clearance of the Business Combination. However, the Parties are including in the declaration an argument that the Business Combination is not subject to CFIUS review because it is neither a Covered Control Transaction nor a Covered Investment. The Parties’ argument is based on two general points. First, the Business Combination will result in CITIC Capital Acquisition LLC (“CITIC LLC”) indirectly acquiring a 8.41% non-controlling voting interest in the Company through its interest in CCAC (assuming no redemption of shares by CCAC’s public shareholders). CITIC LLC will have the right to vote its shares but will not have the right to board representation or any other express rights to govern or control the Company as a result of the Business Combination. A 8.41% voting interest with no other governance rights does not afford CITIC LLC the power—direct or indirect, and whether or not exercised—to determine, direct, or decide important matters affecting the Company. Therefore, the Parties believe that CITIC LLC will not “control” the Company as a result of the Proposed Transaction, and the Proposed Transaction is not a Covered Control Transaction.

Second, the Company is not TID U.S. Businesses because it does not develop or design critical technologies, collect or maintain sensitive personal data, or engage in specified activities with respect to critical investment technology. Therefore, the Business Combination is not a Covered Investment.

Pursuant to the Merger Agreement, CCAC and the Company will cooperate and coordinate to prepare and submit a joint voluntary declaration to CFIUS to obtain CFIUS clearance, which is defined to include a determination by CFIUS that the Business Combination is not a Covered Transaction. If CFIUS determines that the Business Combination is a Covered Transaction, it could require the Parties to prepare and submit a joint notice to CFIUS, which could delay the Business Combination. Further, CFIUS could require the Parties to adopt mitigation measures to address perceived national security issues, or block the Business Combination entirely.

If you or a “group” of shareholders are deemed to hold in excess of 20% of the CCAC’s Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 20% of the CCAC’s Class A ordinary shares.

The Cayman Constitutional Documents provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in the IPO, which is referred to as the “Excess Shares.” In order to determine whether a shareholder is acting in concert or as a group with another shareholder, CCAC will require each public shareholder seeking to exercise redemption rights to certify to CCAC whether such shareholder is acting in concert or as a group with any other shareholder. Such certifications, together with other public information relating to stock ownership available to the CCAC at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which the CCAC makes the above-

 

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referenced determination. Your inability to redeem the Excess Shares will reduce your influence over CCAC’s ability to complete the Business Combination and you could suffer a material loss on your investment in CCAC if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if CCAC completes the Business Combination. As a result, you will continue to hold that number of CCAC Class A ordinary shares exceeding 20% and, in order to dispose of such shares, would be required to sell such shares in open market transactions, potentially at a loss. We cannot assure you that the value of suthe Excess Shares will appreciate over time following the initial business combination or that the market price of CCAC Class A ordinary shares will exceed the per-share redemption price. Notwithstanding the foregoing, shareholders may challenge CCAC’s determination as to whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.

However, such shareholders may vote all their shares (including Excess Shares) for or against the Business Combination without this limitation on redemption.

Additional Risks Related to Ownership of Quanergy PubCo Common Stock Following the Business Combination and Quanergy PubCo Operating as a Public Company

Quanergy PubCo does not intend to pay cash dividends for the foreseeable future.

Following the Business Combination, Quanergy PubCo currently intends to retain its future earnings, if any, to finance the further development and expansion of its business and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of Quanergy PubCo’s board of directors and will depend on its financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as its board of directors deems relevant.

If analysts do not publish research about Quanergy PubCo’s business or if they publish inaccurate or unfavorable research, Quanergy PubCo’s stock price and trading volume could decline.

The trading market for the common stock of Quanergy PubCo will depend in part on the research and reports that analysts publish about its business. Quanergy does not have any control over these analysts. If one or more of the analysts who cover Quanergy PubCo downgrade its common stock or publish inaccurate or unfavorable research about its business, the price of its common stock would likely decline. If few analysts cover Quanergy PubCo, demand for its common stock could decrease and its common stock price and trading volume may decline. Similar results may occur if one or more of these analysts stop covering Quanergy PubCo in the future or fail to publish reports on it regularly.

Quanergy PubCo’s business and operations could be negatively affected if it becomes subject to any securities litigation or shareholder activism, which could cause Quanergy PubCo to incur significant expense, hinder execution of business and growth strategy and impact its stock price.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Shareholder activism, which could take many forms or arise in a variety of situations, has been increasing recently. Volatility in the stock price of the Quanergy PubCo Class A ordinary shares or other reasons may in the future cause it to become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and Quanergy PubCo Board’s attention and resources from the Quanergy PubCo’s business. Additionally, such securities litigation and shareholder activism could give rise to perceived uncertainties as to Quanergy PubCo’s future, adversely affect its relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, Quanergy PubCo may be required to incur significant legal fees and other expenses related to any securities litigation and activist shareholder matters.

 

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Further, its stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and shareholder activism.

Future resales of Quanergy PubCo common stock after the consummation of the Business Combination may cause the market price of Quanergy PubCo’s securities to drop significantly, even if Quanergy PubCo’s business is doing well.

The Sponsor is subject to certain restrictions on transfer pursuant to that certain letter agreement, dated as of February 10, 2020, by and among the CCAC, the Sponsor, and the other parties signatory thereto with respect to: (i) the Founder Shares (as defined in such letter agreement); and (ii) private placement warrants (as defined in such letter agreement). Such restrictions on the Founder Shares end on the date that is one year after Closing, or are subject to an early price-based release if (a) the price of the shares equals or exceeds $12.00 per share for any twenty trading days within any thirty-day trading period at least 150 days after the Business Combination, or (b) CCAC completes a transaction that results in public shareholders having the right to exchange the CCAC Class A ordinary Shares for cash, securities or other property. The restrictions on the private placement warrants end on 30 days after the completion of a business combination. Certain stockholders of Quanergy are also subject to restrictions on transfer with respect to the shares of Quanergy PubCo common stock pursuant to the Lock-Up Agreement. Such restrictions with respect to the shares of Quanergy PubCo common stock held by Quanergy stockholders begin at Closing and end on the date that is 6 months after Closing, or are subject to an early price-based release if (a) the price of the shares equals or exceeds $12.00 per share for any twenty trading days within any thirty-day trading period, or (b) CCAC completes a transaction that results in public shareholders having the right to exchange their common stock for cash, securities or other property.

However, following the expiration of such lockup, the Sponsor and certain stockholders of Quanergy will not be restricted from selling shares of Quanergy PubCo’s common stock held by them, other than by applicable securities laws. Additionally, the PIPE Investors will not be restricted from selling any of their shares of our common stock following the closing of the Business Combination, other than by applicable securities laws. As such, sales of a substantial number of shares of Quanergy PubCo common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of Quanergy PubCo common stock. Upon completion of the Business Combination, the Sponsor and the stockholders of Quanergy (not including the shares of Quanergy PubCo common stock issued in the PIPE Investment pursuant to the terms of the Subscription Agreements and including the shares of Quanergy PubCo common stock reserved in respect of Quanergy Awards outstanding as of immediately prior to the Closing that will be converted into awards based on Quanergy PubCo common stock) will collectively own approximately 74.1% of the outstanding shares of Quanergy PubCo common stock, assuming that no additional public shareholders redeem their public shares in connection with the Business Combination. Assuming redemption of 14,185,971 public shares are redeemed in connection with the Business Combination, in the aggregate, the ownership of the Sponsor and the stockholders of Quanergy would fall to 12.4% of the outstanding shares of Quanergy PubCo common stock (not including the shares of Quanergy PubCo common stock issued in the PIPE Investment pursuant to the terms of the Subscription Agreements and including the shares of Quanergy PubCo common stock reserved in respect of Quanergy Awards outstanding as of immediately prior to the Closing that will be converted into awards based on Quanergy PubCo common stock).

The shares held by Sponsor and certain stockholders of Quanergy may be sold after the expiration of the applicable lock-up period under the said letter agreement and Lock-Up Agreement. As restrictions on resale end and registration statements (filed after the Closing to provide for the resale of such shares from time to time) are available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in Quanergy PubCo’s share price or the market price of Quanergy PubCo common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

 

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A market for Quanergy PubCo’s securities may not continue, which would adversely affect the liquidity and price of Quanergy PubCo’s securities.

Following the completion of the Business Combination, the price of Quanergy PubCo’s securities may fluctuate significantly due to the market’s reaction to the transactions and general market and economic conditions. An active trading market for Quanergy PubCo’s securities following the Business Combination may never develop or, if developed, it may not be sustained. In addition, the price of Quanergy PubCo’s securities after the Business Combination can vary due to general economic conditions and forecasts, Quanergy PubCo’s general business condition and the release of its financial reports. Additionally, if Quanergy PubCo’s securities are not listed on, or become delisted from, NYSE for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if Quanergy PubCo’s securities were quoted or listed on NYSE or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

If the Business Combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of Quanergy PubCo’s securities may decline.

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of CCAC’s securities prior to the Closing may decline. The market values of CCAC securities at the time of the transaction may vary significantly from their prices on the date the Merger Agreement was executed, the date of this proxy statement / prospectus, or the date on which our stockholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of Quanergy PubCo’s securities could contribute to the loss of all or part of your investment. Immediately prior to the transaction, there has not been a public market for Quanergy PubCo’s stock and trading in the shares of CCAC Class A ordinary shars has not been active. Accordingly, the valuation ascribed to Quanergy PubCo’s and CCAC Class A ordinary shares in the transaction may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for Quanergy PubCo’s securities develops and continues, the trading price of Quanergy PubCo’s securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in Quanergy PubCo’s securities and Quanergy PubCo’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of Quanergy PubCo’s securities may not recover and may experience a further decline.

Factors affecting the trading price of Quanergy PubCo’s securities following the Business Combination may include:

 

   

actual or anticipated fluctuations in Quanergy PubCo’s quarterly financial results or the quarterly financial results of companies perceived to be similar to Quanergy PubCo;

 

   

changes in the market’s expectations about Quanergy PubCo’s operating results;

 

   

the public’s reaction to Quanergy PubCo’s press releases, Quanergy PubCo’s other public announcements and our filings with the SEC;

 

   

speculation in the press or investment community;

 

   

success of competitors;

 

   

Quanergy PubCo’s operating results failing to meet the expectation of securities analysts or investors in a particular period;

 

   

changes in financial estimates and recommendations by securities analysts concerning Quanergy PubCo or the market in general;

 

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operating and stock price performance of other companies that investors deem comparable to Quanergy PubCo;

 

   

Quanergy PubCo’s ability to market new and enhanced products on a timely basis;

 

   

changes in laws and regulations affecting Quanergy PubCo’s business;

 

   

commencement of, or involvement in, litigation involving Quanergy PubCo;

 

   

changes in Quanergy PubCo’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of shares of Quanergy PubCo’s common stock available for public sale;

 

   

any major change in Quanergy PubCo’s board or management;

 

   

sales of substantial amounts of common stock by Quanergy PubCo’s directors, officers or significant stockholders or the perception that such sales could occur; and

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, breakouts of pandemics and epidemics and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of Quanergy PubCo’s securities irrespective of its operating performance. The stock market in general and NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of Quanergy PubCo’s securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies that investors perceive to be similar to Quanergy PubCo could depress its stock price regardless of its business, prospects, financial conditions or results of operations. A decline in the market price of Quanergy PubCo’s securities also could adversely affect its ability to issue additional securities and its ability to obtain additional financing in the future. In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert Quanergy PubCo’s management’s attention and resources, and could also require Quanergy PubCo to make substantial payments to satisfy judgments or to settle litigation.

Recent market volatility could impact the stock price and trading volume of Quanergy PubCo’s securities.

The trading market for Quanergy PubCo common stock could be impacted by recent market volatility. While Quanergy does not believe that it is more likely to be affected by market volatility than other public companies, recent stock run-ups, divergences in valuation ratios relative to those seen during traditional markets, high short interest or short squeezes, and strong and atypical retail investor interest in the markets may impact the demand for Quanergy PubCo common stock.

A possible “short squeeze” due to a sudden increase in demand of Quanergy PubCo common stock that largely exceeds supply may lead to price volatility in Quanergy PubCo common stock. Investors may purchase Quanergy PubCo common stock to hedge existing exposure or to speculate on the price of the Quanergy PubCo common stock. Speculation on the price of Quanergy PubCo common stock may involve both long and short exposures. To the extent aggregate short exposure exceeds the number of Quanergy PubCo common stock available for purchase (for example, in the event that large redemption requests dramatically affect liquidity), investors with short exposure may have to pay a premium to repurchase Quanergy PubCo common stock for delivery to lenders. Those repurchases may in turn, dramatically increase the price of the Quanergy PubCo common stock. This is often referred to as a “short squeeze.” A short squeeze could lead to volatile price movements in the Quanergy PubCo common stock that are not directly correlated to the operating performance of Quanergy.

 

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The obligations associated with being a public company will involve significant expenses and will require significant resources and management attention, which may divert from Quanergy PubCo’s business operations.

As a public company, Quanergy PubCo will become subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires the filing of annual, quarterly and current reports with respect to a public company’s business and financial condition. The Sarbanes-Oxley Act requires, among other things, that a public company establish and maintain effective internal control over financial reporting. As a result, Quanergy PubCo will incur significant legal, accounting and other expenses that Quanergy did not previously incur. Quanergy PubCo’s entire management team and many of its other employees will need to devote substantial time to compliance, and may not effectively or efficiently manage its transition into a public company.

These rules and regulations will result in Quanergy PubCo incurring substantial legal and financial compliance costs and will make some activities more time-consuming and costly. For example, these rules and regulations will likely make it more difficult and more expensive for Quanergy PubCo to obtain director and officer liability insurance, and it may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be difficult for Quanergy PubCo to attract and retain qualified people to serve on its board of directors, its board committees or as executive officers.

We may also be subject to more stringent state law requirements. For example, on September 30, 2018, the governor of California signed into law Senator Bill 826, which generally requires public companies with their principal executive office in California to have a minimum number of females on the company’s board of directors. By December 31, 2021, each public company with principal executive offices in California is required to have at least two females on its board of directors if the company has at least five directors, and at least three females on its board of directors if the company has at least six directors. Additionally, on September 30, 2020, California enacted AB 979, requiring public companies with their principal executive office in California to each have at least one director from an underrepresented community based on ethnicity and sexual orientation by December 31, 2021. By December 31, 2022, each of these companies will be required to have at least two directors from such underrepresented communities if such company has more than four but fewer than nine directors, or at least three directors from underrepresented communities if the company has nine or more directors. The new law does not provide a transition period for newly listed companies. The current anticipated composition of the board of directors of Quanergy PubCo includes one female director and one director from an underrepresented community. In order to meet the requirements of applicable California law, we expect to onboard the requisite number of female and diverse directors. If we fail to comply with these new laws, we could be fined by the California Secretary of State, with a $100,000 fine for the first violation and a $300,000 fine for each subsequent violation, and our reputation may be adversely affected. We cannot assure that we can recruit, attract and/or retain qualified members of the board and meet gender and diversity quotas as required by California law (provided that such laws are not repealed before the compliance deadlines), which may cause certain investors to divert their holdings in our securities and expose us to financial penalties and/or reputational harm.

We are currently an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and to the extent we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are currently an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not

 

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being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

Once we lose our “emerging growth company” status, we will no longer be able to take advantage of certain exemptions from reporting, and we will also be required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We will incur additional expenses in connection with such compliance and our management will need to devote additional time and effort to implement and comply with such requirements.

Risks Related to the Consummation of the Domestication

The Domestication may result in adverse tax consequences for holders of CCAC Class A ordinary shares and warrants, including holders exercising their redemption rights with respect to the CCAC Class A ordinary shares.

CCAC intends for the Domestication to qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code(an “F Reorganization”). If the Domestication fails to qualify as an F Reorganization, a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations—I. U.S. Holders”) of CCAC Class A ordinary shares or warrants generally would recognize gain or loss with respect to its CCAC Class A ordinary shares or warrants in an amount equal to the difference, if any, between the fair market value of the corresponding common stock or warrants of Quanergy PubCo received in the Domestication and the U.S. Holder’s adjusted tax basis in its CCAC Class A ordinary shares or warrants surrendered. Because the Domestication will occur prior to the redemption of U.S. Holders that exercise redemption rights with respect to CCAC Class A ordinary shares, U.S. Holders exercising such redemption rights will be subject to the potential tax consequences of the Domestication. Additionally, Non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—II. Non-U.S. Holders”) may become subject to withholding tax on any amounts treated as dividends paid on Quanergy PubCo common stock after the Domestication.

Assuming that the Domestication qualifies as an F Reorganization, subject to the PFIC rules discussed below, U.S. Holders generally will be subject to Section 367(b) of the Code, and, as a result:

 

   

A U.S. Holder who is a 10% U.S. Shareholder on the date of the Domestication must include in income as a dividend deemed paid by CCAC the “all earnings and profits amount” attributable to the CCAC

 

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Class A ordinary shares it directly owns within the meaning of Treasury Regulations under Section 367 of the Code;

 

   

A U.S. Holder whose CCAC Class A ordinary shares have a fair market value of $50,000 or more and who, on the date of the Domestication, is not a 10% U.S. Shareholder will recognize gain (but not loss) with respect to its CCAC Class A ordinary shares in the Domestication or, in the alternative, may elect to recognize the “all earnings and profits” amount attributable to such U.S. Holder’s CCAC Class A ordinary shares; and

 

   

A U.S. Holder whose CCAC Class A ordinary shares have a fair market value of less than $50,000 on the date of the Domestication and who, on the date of the Domestication, is not a 10% U.S. Shareholder, should not be required to recognize any gain or loss or include any part of the “all earnings and profits amount” in income under Section 367 of the Code in connection with the Domestication.

Additionally, even if the Domestication qualifies as an F Reorganization, proposed Treasury Regulations promulgated under Section 1291(f) of the Code (which may have a retroactive effective date) generally require that a U.S. person who disposes of stock of a PFIC (including for this purpose exchanging CCAC warrants for newly issued Quanergy PubCo warrants in the Domestication) must recognize gain equal to the excess of the fair market value of such PFIC stock over its adjusted tax basis, notwithstanding any other provision of the Code. CCAC believes that it is likely classified as a PFIC for U.S. federal income tax purposes. As a result, these proposed Treasury Regulations, if finalized in their current form, would generally require a U.S. Holder of CCAC Class A ordinary shares to recognize gain under the PFIC rules on the exchange of CCAC Class A ordinary shares for Quanergy PubCo common stock pursuant to the Domestication unless such U.S. Holder has made certain tax elections with respect to such U.S. Holder’s CCAC Class A ordinary shares. In addition, the proposed Treasury Regulations provide coordinating rules with other sections of the Code, including Section 367(b), which affect the manner in which the rules under such other sections apply to transfers of PFIC stock. These proposed Treasury Regulations, if finalized in their current form, would also apply to a U.S. Holder who exchanges CCAC warrants for newly issued Quanergy PubCo warrants; currently, however, the elections mentioned above do not apply to CCAC warrants (for discussion regarding the unclear application of the PFIC rules to CCAC warrants, see “U.S. Federal Income Tax Considerations—I. U.S. Holders—A. Tax Effects of the Domestication to U.S. Holders —5. PFIC Considerations”). Any gain recognized from the application of the PFIC rules described above would be taxable income with no corresponding receipt of cash. The tax on any such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on complex rules designed to offset the tax deferral to such U.S. Holder on the undistributed earnings, if any, of CCAC. It is not possible to determine at this time whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted or how any such Treasury Regulations would apply.

Upon consummation of the Business Combination, the rights of holders of Quanergy PubCo common stock arising under the DGCL as well as Proposed Organizational Documents will differ from and may be less favorable to the rights of holders of CCAC Class A ordinary shares arising under the Cayman Islands Companies Law as well as our current memorandum and articles of association.

Upon consummation of the Business Combination, the rights of holders of Quanergy PubCo common stock will arise under the Proposed Organizational Documents as well as the DGCL. Those new organizational documents and the DGCL contain provisions that differ in some respects from those in our current memorandum and articles of association and the Cayman Islands Companies Law and, therefore, some rights of holders of Quanergy PubCo common stock could differ from the rights that holders of CCAC Class A ordinary shares currently possess. For instance, while class actions are generally not available to shareholders under Cayman Islands Companies Law, such actions are generally available under the DGCL. This change could increase the likelihood that Quanergy PubCo becomes involved in costly litigation, which could have a material adverse effect on Quanergy PubCo.

 

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In addition, there are differences between the new organizational documents of Quanergy PubCo and the current constitutional documents of CCAC. For a more detailed description of the rights of holders of Quanergy PubCo common stock and how they may differ from the rights of holders of CCAC Class A ordinary shares, please see “Comparison of Corporate Governance and Shareholder Rights.” The forms of the Proposed Certificate of Incorporation and the Proposed Bylaws of Quanergy PubCo are attached as Annex J and Annex I, respectively, to this proxy statement / prospectus and we urge you to read them.

Delaware law and Quanergy PubCo’s Proposed Organizational Documents contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

The Proposed Organizational Documents that will be in effect upon consummation of the Business Combination, and the DGCL, contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, and therefore depress the trading price of Quanergy PubCo’s common stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of Quanergy PubCo’s board of directors or taking other corporate actions, including effecting changes in our management. Among other things, the Proposed Organizational Documents include provisions regarding:

 

   

providing for a classified board of directors with staggered, three-year terms which could delay the ability of stockholders to change the membership of a majority of the Quanergy PubCo’s Board;

 

   

the ability of Quanergy PubCo’s board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

 

   

the Quanergy PubCo Proposed Certificate of Incorporation will prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

 

   

the limitation of the liability of, and the indemnification of, Quanergy PubCo’s directors and officers;

 

   

the right of the Quanergy PubCo Board to elect a director to fill a vacancy created by the expansion of the Quanergy PubCo Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Quanergy PubCo Board;

 

   

the ability of Quanergy PubCo’s board of directors to amend the bylaws, which may allow Quanergy PubCo’s board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and

 

   

advance notice procedures with which stockholders must comply to nominate candidates to Quanergy PubCo’s board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in Quanergy PubCo’s board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of Quanergy PubCo.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in Quanergy PubCo’s board of directors or management.

 

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The provisions of the Proposed Certificate of Incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

Quanergy PubCo’s Proposed Certificate of Incorporation provides that, to the fullest extent permitted by law, and unless Quanergy PubCo consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on Quanergy PubCo’s behalf, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of Quanergy PubCo to Quanergy PubCo or Quanergy PubCo’s stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the DGCL or Quanergy PubCo’s Bylaws or Quanergy PubCo’s Certificate of Incorporation (as each may be amended from time to time), (iv) any action, suit or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (v) any action, suit or proceeding asserting a claim against Quanergy PubCo or any current or former director, officer or stockholder governed by the internal affairs doctrine.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to entertain such Securities Act claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Proposed Certificate of Incorporation will also provide that, unless Quanergy PubCo consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act; however, there is uncertainty as to whether a court would enforce such provision, and investors cannot waive compliance with federal securities laws and the rules and regulations thereunder. Notwithstanding the foregoing, the Proposed Certificate of Incorporation will provide that the exclusive forum provision will not apply to suits brought to enforce any cause of action arising under the Securities Act, any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

These provisions may have the effect of discouraging lawsuits against Quanergy PubCo’s directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against Quanergy PubCo, a court could find the choice of forum provisions contained in the Proposed Certificate of Incorporation to be inapplicable or unenforceable in such action.

Risks if the Domestication and the Business Combination are not Consummated

If we are not able to complete the Business Combination with Quanergy by February 13, 2022 nor able to complete another business combination by such date, in each case, as such date may be further extended pursuant to the Cayman Constitutional Documents, we would cease all operations except for the purpose of winding up and we would redeem our Class A ordinary shares and liquidate the trust account, in which case our public shareholders may only receive approximately $10.00 per public share and our warrants will expire worthless.

Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, the outbreak of COVID-19 continues to grow in the U.S. and, while the extent of the impact of the outbreak on CCAC will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party

 

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financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of the COVID-19 may negatively impact Quanergy PubCo’s business following the Business Combination.

If CCAC is not able to complete the Business Combination with Quanergy by February 13, 2022, nor able to complete another business combination by such date, in each case, as such date may be extended pursuant to the Cayman Constitutional Documents CCAC will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of CCAC’s remaining shareholders and its board of directors, liquidate and dissolve, subject, in each case, to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. In such case, our public shareholders may only receive approximately $10.00 per share and our warrants will expire worthless.

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares and/or public warrants, potentially at a loss.

Our public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of (1) our completion of an initial business combination (including the Closing), and then only in connection with those public shares that such public shareholder properly elected to redeem, subject to certain limitations; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Cayman Constitutional Documents to (A) modify the substance and timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of the public shares if we do not complete a business combination by February 13, 2022 or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption of the public shares if we have not completed an initial business combination by February 13, 2022, subject to applicable law. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. Holders of public warrants will not have any right to the proceeds held in the trust account with respect to the public warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares and/or public warrants, potentially at a loss.

If we have not completed our initial business combination, our public shareholders may be forced to wait until after February 13, 2022 before redemption from the trust account.

If we have not completed our initial business combination by February 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), we will distribute the aggregate amount then on deposit in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described in this proxy statement / prospectus. Any redemption of public shareholders from the trust account shall be affected automatically by function of the Cayman Constitutional Documents prior to any voluntary winding up. If we are required to wind-up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Cayman Islands Companies Law. In that case, investors may be forced to wait beyond February 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), before the redemption proceeds of the trust account become available to them, and they receive the return of their pro rata portion of the proceeds from the trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain

 

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provisions of our Cayman Constitutional Documents and only then in cases where investors have properly sought to redeem their public shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we have not completed our initial business combination within the required time period and do not amend certain provisions of our Cayman Constitutional Documents prior thereto.

If the net proceeds of CCAC’s initial public offering not being held in the trust account are insufficient to allow us to operate through to February 13, 2022 and we are unable to obtain additional capital, we may be unable to complete our initial business combination, in which case our public shareholders may only receive $10.00 per share, and our warrants will expire worthless.

As of March 31, 2021, CCAC had cash of $603,712 held outside the trust account, available for working capital and including for use by us to cover the costs associated with identifying a target business and negotiating a business combination and other general corporate uses. In addition, as of March 31, 2021, CCAC had total liabilities of $34,579,620.

The funds available to us outside of the trust account may not be sufficient to allow us to operate until February 13, 2022, assuming that our initial business combination is not completed during that time. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.

If we are required to seek additional capital, we would need to borrow funds from Sponsor, members of our management team or other third parties to operate or may be forced to liquidate. Neither the members of our management team nor any of their affiliates is under any further obligation to advance funds to CCAC in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to obtain additional financing, we may be unable to complete our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive approximately $10.00 per public share on our redemption of the public shares and the public warrants will expire worthless.

Because CCAC is incorporated under the laws of the Cayman Islands, in the event the Business Combination is not completed, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.

Because CCAC is currently incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests and your ability to protect your rights through the U.S. federal courts may be limited prior to the Domestication. CCAC is currently an exempted company incorporated with limited liability under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon CCAC’s directors or officers, or enforce judgments obtained in the United States courts against VIH’s directors or officers.

Until the Domestication is effected, CCAC’s corporate affairs are governed by the Cayman Constitutional Documents, the Companies Act of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of its directors to CCAC under the laws of the Cayman Islands are to a large extent governed by

 

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the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of CCAC’s shareholders and the fiduciary responsibilities of its directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a federal court of the United States.

CCAC has been advised by its Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (a) to recognize or enforce against CCAC judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (b) in original actions brought in the Cayman Islands, to impose liabilities against CCAC predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

The public shareholders of CCAC may have more difficulty in protecting their interests in the face of actions taken by management, members of the CCAC Board or controlling shareholders than they would as public shareholders of a U.S. company.

Our warrants are accounted for as liabilities in our financial statements and the changes in value of our warrants could have a material effect on our financial results.

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants. As a result of the SEC Statement, we reevaluated the accounting treatment of our 13,800,000 public warrants and 7,520,000 private placement warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.

As a result, we have included on our balance sheet as of December 31, 2020 and March 31, 2021 contained elsewhere in this proxy statement / prospectus are derivative liabilities related to our warrants. Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could

 

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be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our ordinary shares. In addition, potential targets may seek a special purpose acquisition company that does not have warrants that are accounted for as liability, which may make it more difficult for us to consummate an initial business combination with a target business.

The pro forma financial information included in this proxy statement / prospectus has been prepared on the assumption that the Private Warrants will continue to be treated as liabilities, but the Public Warrants will be treated as equity and an adjustment is made to reverse the remeasurement of warrant liabilities recorded in our historic balance sheet as of December 31, 2020 and March 31, 2021 as described in “Selected Unaudited Pro forma Condensed Combined Financial Information”. We cannot assure you that this assumption used in preparing the pro forma financial information may not prove to be accurate which could result in material differences between the preliminary estimates in the pro forma financial information and the final acquisition accounting.

We have identified a material weakness in our internal control over financial reporting as of December 31, 2020. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

Following this issuance of the SEC Statement, after consultation with our independent registered public accounting firm, our management concluded that, in light of the SEC Statement, we identified a material weakness in our internal controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.

As a result of such material weakness, the change in accounting for the warrants, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this proxy statement / prospectus, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a business combination transaction.

 

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EXTRAORDINARY GENERAL MEETING OF CCAC

General

CCAC is furnishing this proxy statement / prospectus to its shareholders as part of the solicitation of proxies by its board of directors for use at the extraordinary general meeting of CCAC to be held on                 , 2021, and at any adjournment thereof. This proxy statement / prospectus is first being furnished to CCAC’s shareholders on or about                , 2021 in connection with the vote on the proposals described in this proxy statement / prospectus. This proxy statement / prospectus provides CCAC’s shareholders with information they need to know to be able to vote or instruct their vote to be cast at the extraordinary general meeting.

Date, Time and Place

The extraordinary general meeting will be held on                 , 2021, at                 , Eastern Time, at the offices of White & Case LLP, at 1221 Avenue of the Americas, New York, New York, 10020, or you or your proxyholder will be able to attend and vote at the extraordinary general meeting online by visiting                  and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the extraordinary general meeting, registered shareholders and beneficial shareholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the proxy statement.

Purpose of the CCAC General Meeting

At the extraordinary general meeting, CCAC is asking holders of its ordinary shares to consider and vote upon:

 

   

the BCA Proposal;

 

   

the Domestication Proposal;

 

   

the Organizational Documents Proposal;

 

   

the Advisory Organizational Documents Proposals;

 

   

the Stock Issuance Proposal;

 

   

the Equity Incentive Plan Proposal;

 

   

the ESPP Proposal (collectively with the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Stock Issuance Proposal and the Equity Incentive Plan Proposal the “Condition Precedent Proposals”); and

 

   

the Adjournment Proposal.

Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal and the Advisory Organizational Documents Proposals are not conditioned upon the approval of any other proposal set forth in this proxy statement / prospectus.

Recommendation of CCAC Board of Directors

CCAC’s board of directors believes that the BCA Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of CCAC’s shareholders and unanimously recommends that its shareholders vote “FOR” the approval of the BCA Proposal, “FOR” the approval of the Domestication Proposal, “FOR” the approval of the Organizational Documents Proposal, “FOR” the approval, on an advisory basis, of each of the separate Advisory Organizational Documents Proposals, “FOR” the approval of the Stock Issuance Proposal, “FOR” the approval of the Equity Incentive Plan Proposal, “FOR” the approval of the ESPP

 

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Proposal and “FOR” the approval of the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of CCAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of CCAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, CCAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal — Interests of CCAC’s Directors and Officers in the Business Combination” beginning on page 161 of this proxy statement / prospectus for a further discussion of these considerations.

Record Date; Who is Entitled to Vote

CCAC shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned ordinary shares at the close of business on                 , 2021, which is the “record date” for the extraordinary general meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. CCAC warrants do not have voting rights. As of the close of business on the record date, there were                  ordinary shares issued, of which                  were issued public shares.

The Sponsor and each director and each officer of CCAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in the case of the Sponsor, subject also to the terms and conditions contemplated by the Sponsor Support Agreement, and waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them. The ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement / prospectus, the Sponsor (whose members include CCAC’s directors and officers) owns 20% of the issued ordinary shares.

Quorum

A quorum of CCAC shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. As of the record date for the extraordinary general meeting,                  ordinary shares would be required to achieve a quorum.

Abstentions and Broker Non-Votes

Proxies that are marked “abstain” and proxies relating to “street name” shares that are returned to CCAC but marked by brokers as “not voted” will be treated as shares present for purposes of determining the presence of a quorum on all matters, but they will not be treated as shares voted on the matter. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. CCAC believes all the proposals presented to the shareholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction.

Vote Required for Approval

The approval of the BCA Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting.

 

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The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of holders of a majority of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. The Domestication Proposal is conditioned on the approval of the BCA Proposal. Therefore, if the BCA Proposal is not approved, the Domestication Proposal will have no effect, even if approved by holders of ordinary shares.

The approval of the Organizational Documents Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of holders of a majority of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. The Organizational Documents Proposal is conditioned on the approval of the Domestication Proposal, and, therefore, also conditioned on approval of the BCA Proposal. Therefore, if the BCA Proposal and the Domestication Proposal are not approved, the Organizational Documents Proposal will have no effect, even if approved by holders of ordinary shares.

The approval of each of the Advisory Organizational Documents Proposals, each of which is a non-binding vote, requires a special resolution under Cayman Islands law, being the affirmative vote of holders of a majority of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. The Advisory Organizational Documents Proposals and the Adjournment Proposal are not conditioned upon any other proposal.

The approval of the Stock Issuance Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. The Stock Issuance Proposal is conditioned on approval of the BCA Proposal, the Domestication Proposal and the Organizational Documents Proposal. Therefore, if the BCA Proposal, the Domestication Proposal and the Organizational Documents Proposal are not approved, the Stock Issuance Proposal will have no effect, even if approved by holders of ordinary shares.

The approval of the Equity Incentive Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. The Equity Incentive Plan Proposal is conditioned on the approval of the Stock Issuance Proposal, and, therefore, also conditioned on approval of the BCA Proposal, the Domestication Proposal and the Organizational Documents Proposal. Therefore, if the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal are not approved, the Equity Incentive Plan Proposal will have no effect, even if approved by holders of ordinary shares.

The approval of the ESPP Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. The ESPP Proposal is conditioned on the approval of the Stock Issuance Proposal, and, therefore, also conditioned on approval of the BCA Proposal, the Domestication Proposal and the Organizational Documents Proposal. Therefore, if the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal are not approved, the ESPP Proposal will have no effect, even if approved by holders of ordinary shares.

The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the quorate extraordinary general meeting. The Adjournment Proposal and the Advisory Organizational Documents Proposals are not conditioned upon any other proposal.

 

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Voting Your Shares

Each CCAC ordinary share that you own in your name entitles you to one vote. Your proxy card shows the number of ordinary shares that you own. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

There are two ways to vote your ordinary shares at the extraordinary general meeting:

 

   

You Can Vote By Signing and Returning the Enclosed Proxy Card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by CCAC’s board “FOR” the approval of the BCA Proposal, “FOR” the approval of the Domestication Proposal, “FOR” the approval of the Organizational Documents Proposal, “FOR” the approval, on an advisory basis, of each of the separate Advisory Organizational Documents Proposals, “FOR” the approval of the Stock Issuance Proposal, “FOR” the approval of the Equity Incentive Plan Proposal, “FOR” the approval of the ESPP Proposal and “FOR” the approval of the Adjournment Proposal, in each case, if presented to the extraordinary general meeting. Votes received after a matter has been voted upon at the extraordinary general meeting will not be counted.

 

   

You Can Attend the General Meeting and Vote in Person.

 

   

If your shares are registered in your name with Continental Stock Transfer & Trust Company and you wish to attend the extraordinary general meeting, go to                 , enter the 12-digit control number included on your proxy card or notice of the extraordinary general meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Just prior to the start of the extraordinary general meeting you will need to log back into the extraordinary general meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

 

   

Beneficial shareholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the extraordinary general meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to [proxy@continentalstock.com]. Beneficial shareholders who e-mail a valid legal proxy will be issued a 12-digit meeting control number that will allow them to register to attend and participate in the extraordinary general meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the extraordinary general meeting with a link and instructions for entering the extraordinary general meeting. Beneficial shareholders should contact Continental Stock Transfer & Trust Company at least five (5) business days prior to the extraordinary general meeting date in order to ensure access.

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. If you wish to attend the meeting and vote in person or online and your shares are held in “street name,” you must obtain a legal proxy from your broker, bank or nominee. That is the only way CCAC can be sure that the broker, bank or nominee has not already voted your shares.

Revoking Your Proxy

If you are a CCAC shareholder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

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you may notify Fanglu Wang, Chief Executive Officer and Director of CCAC, in writing before the extraordinary general meeting that you have revoked your proxy; or

 

   

you may attend the extraordinary general meeting, revoke your proxy, and vote, as indicated above.

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker for information on how to change or revoke your voting instructions.

Who Can Answer Your Questions About Voting Your Shares

If you are a shareholder and have any questions about how to vote or direct a vote in respect of your ordinary shares, you may call Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call at (203) 658-9400, or by emailing [CCAC.info]@investor.morrowsodali.com.

Redemption Rights

Pursuant to the Cayman Constitutional Documents, a public shareholder may request of CCAC that Quanergy PubCo redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

   

(a) hold public shares, or (b) if you hold public shares through CCAC units, you elect to separate your CCAC units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

   

submit a written request to Continental, CCAC’s transfer agent, that Quanergy PubCo redeem all or a portion of your public shares for cash; and

 

   

deliver the certificates for your public shares (if any) along with the redemption forms to Continental, physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to                 , Eastern Time, on                 , 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Therefore, the election to exercise redemption rights occurs prior to the Domestication and the redemption is with respect to the Quanergy PubCo public shares that an electing public shareholder holds after the Domestication. For the purposes of the Cayman Constitutional Documents, the exercise of redemption rights shall be treated as an election to have such public shares redeemed for cash and references in this proxy statement / prospectus to “redemption” or “redeeming” shall be interpreted accordingly. Immediately following the Domestication and the consummation of the Business Combination, Quanergy PubCo shall satisfy the exercise of redemption rights by redeeming the corresponding public shares issued to the public shareholders that validly exercised their redemption rights.

Holders of CCAC units must elect to separate the CCAC units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their CCAC units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the CCAC units into the underlying public shares and public warrants, or if a holder holds CCAC units registered in its own name, the holder must contact Continental, CCAC’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem all or a portion of the public shares held by them, regardless of if or how they vote in respect of the BCA Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank and the public shares will not be redeemed for cash, even if their holders have properly exercised redemption rights with respect to such public shares. If the Business Combination is

 

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consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers the certificates for its shares (if any) along with the redemption forms to Continental, Quanergy PubCo will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of Quanergy PubCo common stock that will be redeemed immediately after consummation of the Business Combination.

If you hold the shares in “street name,” you will have to coordinate with your broker to have your shares certificated or delivered electronically. Quanergy PubCo public shares that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through DTC’s DWAC (deposit withdrawal at custodian) system. The transfer agent will typically charge the tendering broker $80 and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the proposed Business Combination is not consummated this may result in an additional cost to shareholders for the return of their shares.

Any request to redeem public shares, once made, may be withdrawn at any time until the deadline for submitting redemption requests and thereafter, with our consent, until the Closing (as defined below). If a holder of a public share delivers its shares in connection with an election to redeem and subsequently decides prior to the deadline for submitting redemption requests not to elect to exercise such rights, it may simply request that CCAC instruct the transfer agent to return the shares (physically or electronically). The holder can make such request by contacting the transfer agent, at the address or email address listed in this proxy statement / prospectus.

Any corrected or changed written exercise of redemption rights must be received by Continental prior to the vote taken on the BCA Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to Continental at least two business days prior to the vote at the extraordinary general meeting.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 20% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 20% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash.

The Sponsor and each director and each officer of CCAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in the case of the Sponsor, subject also to the terms and conditions contemplated by the Sponsor Support Agreement, and waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them. The ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement / prospectus, the Sponsor (whose members include CCAC’s directors and officers) owns 20% of the issued ordinary shares.

Holders of the warrants will not have redemption rights with respect to the warrants.

The closing price of public shares on                 , 2021, the most recent practicable date prior to the date of this proxy statement / prospectus, was $                . As of March 31, 2021 there was $277,852,728 in investments and cash held in the Trust Account and $603,712 of cash held outside the Trust Account available for working

 

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capital purposes. As of March 31, 2021, funds in the trust account totaled $277,852,728 and were comprised U.S. government treasury bills, notes or bonds with a maturity of 180 days or less or of money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, or approximately $10.00 per issued public share.

Prior to exercising redemption rights, public shareholders should verify the market price of the public shares as they may receive higher proceeds from the sale of their public shares in the public market than from exercising their redemption rights if the market price per public share is higher than the redemption price. CCAC cannot assure its shareholders that they will be able to sell their public shares in the open market, even if the market price per public share is higher than the redemption price, as there may not be sufficient liquidity in its securities when its shareholders wish to sell their public shares.

Appraisal Rights

Neither CCAC’s shareholders nor CCAC’s warrant holders have appraisal rights in connection with the Business Combination or the Domestication under Cayman Islands law or under the DGCL.

Proxy Solicitation

CCAC is soliciting proxies on behalf of the CCAC Board. This solicitation is being made by mail but also may be made by telephone or in person. CCAC and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. CCAC will file with the SEC all scripts and other electronic communications as proxy soliciting materials. CCAC will bear the cost of the solicitation.

CCAC has engaged Morrow Sodali LLC to assist in the solicitation process and will pay Morrow Sodali LLC a fee of $35,000, plus disbursements.

CCAC will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. CCAC will reimburse them for their reasonable expenses.

CCAC Initial Shareholders

As of the date of this proxy statement / prospectus, there are 34,500,000 ordinary shares issued, which includes the 6,900,000 founder shares held by the Sponsor (whose members include CCAC directors and officers) and the 27,600,000 public shares. As of the date of this proxy statement / prospectus, there is outstanding an aggregate of 21,320,000 warrants, which includes the 7,520,000 private placement warrants held by the Sponsor and the 13,800,000 public warrants.

At any time at or prior to the Business Combination, subject to applicable securities laws (including with respect to material non-public information), the Sponsor, the existing stockholders of Quanergy or CCAC or their respective directors, officers, advisors or respective affiliates may (i) purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or elect to redeem, or indicate an intention to redeem, public shares, (ii) execute agreements to purchase such shares from such investors in the future, or (iii) enter into transactions with such investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of the Condition Precedent Proposals or not redeem their public shares. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of CCAC’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, the existing stockholders of Quanergy or CCAC or their respective directors, officers, advisors, or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The

 

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purpose of such share purchases and other transactions would be to increase the likelihood of (1) satisfaction of the requirement that holders of a majority of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the BCA Proposal, the Stock Issuance Proposal, Equity Incentive Plan Proposal, the ESPP Proposal and the Adjournment Proposal, (2) satisfaction of the requirement that holders of a majority of at least two-thirds of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the Domestication Proposal, the Organizational Documents Proposal and the Advisory Organizational Documents Proposal, (3) satisfaction of the Minimum Cash Condition, (4) otherwise limiting the number of public shares electing to redeem and (5) CCAC’s net tangible assets being at least $5,000,001. Entering into any such arrangements may have a depressive effect on the ordinary shares (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination).

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved.

 

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BCA PROPOSAL

CCAC is asking its shareholders to approve by ordinary resolution and adopt the Merger Agreement. CCAC shareholders should read carefully this proxy statement / prospectus in its entirety for more detailed information concerning the Merger Agreement, a copy of which is attached as Annex A and Annex B to this proxy statement / prospectus. Please see the subsection entitled “The Merger Agreement” below for additional information and a summary of certain terms of the Merger Agreement. You are urged to read carefully the Merger Agreement in its entirety before voting on this proposal.

Because CCAC is holding a shareholder vote on the Merger, CCAC may consummate the Merger only if it is approved by the affirmative vote of the holders of a majority of ordinary shares that are voted at the extraordinary general meeting.

The Merger Agreement

This subsection of the proxy statement / prospectus describes the material provisions of the Merger Agreement, but does not purport to describe all of the terms of the Merger Agreement. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A to this proxy statement / prospectus. You are urged to read the Merger Agreement in its entirety because it is the primary legal document that governs the Merger.

The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants 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 the Merger Agreement. The representations, warranties and covenants in the Merger Agreement are also modified in part by the underlying disclosure letters (the “disclosure letters”), which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to shareholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. We do not believe that the disclosure letters contain information that is material to an investment decision. Additionally, the representations and warranties of the parties to the Merger Agreement may or may not have been accurate as of any specific date and do not purport to be accurate as of the date of this proxy statement / prospectus. Accordingly, no person should rely on the representations and warranties in the Merger Agreement or the summaries thereof in this proxy statement / prospectus as characterizations of the actual state of facts about CCAC, Quanergy or any other matter.

Structure of the Merger

On June 21, 2021, CCAC entered into the Merger Agreement, as amended on June 28, 2021, with Merger Sub and Quanergy, pursuant to which, among other things, following the Domestication, (i) Merger Sub will merge with and into Quanergy, the separate corporate existence of Merger Sub will cease and Quanergy will be the surviving corporation and a wholly owned subsidiary of CCAC and (ii) CCAC will change its name to “Quanergy Systems, Inc.”.

Prior to the Effective Time of the Merger, pursuant to the Domestication, CCAC will change its jurisdiction of incorporation by effecting a deregistration under the Cayman Companies Act (As Revised) of the Cayman Islands and a domestication under Section 388 of the DGCL, pursuant to which CCAC’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware.

In connection with the Domestication, (i) each then issued share of CCAC Class B common stock will convert automatically, on a one-for-one basis, into shares of Quanergy PubCo Class A common stock; (ii) immediately following the conversion described in clause (i), each then issued share of Quanergy PubCo

 

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Class A common stock will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001, per share of Quanergy PubCo (after its domestication as a corporation incorporated in the State of Delaware) (the “Domesticated Quanergy PubCo common stock”); (iii) each then issued and outstanding warrant of Quanergy PubCo (“Cayman Quanergy PubCo Warrant”) will convert automatically into a warrant to acquire one share of Domesticated Quanergy PubCo common stock (“Domesticated Quanergy PubCo Warrant”), pursuant to the Warrant Agreement; and (iv) each then issued and outstanding unit of Quanergy PubCo (the “Cayman Quanergy PubCo Units”) will convert automatically into a unit of Quanergy PubCo (after its domestication as a corporation incorporated in the State of Delaware) (the “Domesticated Quanergy PubCo Units”), with each Domesticated Quanergy PubCo Unit representing one share of Domesticated Quanergy PubCo common stock and one-half of one Domesticated Quanergy PubCo Warrant.

At the Effective Time, all shares of Quanergy capital stock, including, for the avoidance of doubt, any share of Quanergy Capital Stock issued pursuant to exercise or conversion of any Quanergy Warrant or 2023 Quanergy Convertible Note, as applicable, and Quanergy Awards will be converted into the right to receive (in the case of Quanergy Awards, if and to the extent earned and subject to their respective terms) the Aggregate Merger Consideration (as defined below).

Consideration

Aggregate Merger Consideration

The Aggregate Merger Consideration means a number of Domesticated Quanergy PubCo common stock equal to the quotient obtained by dividing (i) the base purchase price of $970,000,000, by (ii) $10.00 (the “Aggregate Merger Consideration”), which will be issued or issuable to holders of outstanding Quanergy Capital Stock, including any shares of Quanergy Capital Stock issued or issuable pursuant to exercise or conversion of any warrants or convertible notes, and Quanergy equity awards, calculated using the treasury stock method of accounting. An additional 4,000,000 shares of Quanergy PubCo common stock will be purchased (at a price of $10.00 per share) at the Closing by the PIPE Investors for a total aggregate purchase price of up to $40,000,000. The proceeds of the PIPE Investment, together with the amounts remaining in CITC’s trust account as of immediately following the Effective Time of the Merger, will be retained by Quanergy PubCo following the Closing.

Exchange Ratio

The Exchange Ratio means the quotient obtained by dividing (a) the number of shares constituting the Aggregate Merger Consideration less the number of shares constituting the Aggregate Series B and C Preferred Stock Merger Consideration (each as defined below), by (b)(A) the aggregate number of shares of Quanergy Capital Stock (other than Series B Preferred Stock and Series C Preferred Stock) (including Dissenting Shares) that are (i) issued and outstanding immediately prior to the Effective Time (after giving effect to any exercise of Quanergy Warrants prior to the Effective Time and the 2023 Quanergy Convertible Note Conversion) or (ii) issuable upon, or subject to, the exercise or settlement of Quanergy Options (whether or not then vested or exercisable), Quanergy Warrants, Quanergy Restricted Stock and Quanergy Restricted Stock Unit Awards, in each case, that are outstanding immediately prior to the Effective Time (and, for the avoidance of doubt, not exercised or terminated pursuant to its terms at or immediately prior to the Effective Time) calculated using the treasury stock method of accounting, minus (B) the Treasury Shares outstanding immediately prior to the Effective Time (the “Exchange Ratio”).

Treatment of Quanergy Capital Stock

At the Effective Time, by virtue of the Merger and without any action on the part of any holder of Quanergy Capital Stock, each share of Quanergy Capital Stock, in each case, that is issued and outstanding immediately prior to the Effective Time (other than (i) any shares of Quanergy Capital Stock subject to Quanergy Awards (the

 

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treatment of which is discussed below under the subsection titled “Treatment of Quanergy Awards”), (ii) any shares of Quanergy Capital Stock held in the treasury of Quanergy, which treasury shares will be canceled as part of the Merger and will not constitute “Quanergy Capital Stock” (each such share, a “Treasury Share”), and (iii) any shares of Quanergy Capital Stock held by stockholders of Quanergy who have perfected and not withdrawn a demand for appraisal rights pursuant to the applicable provisions of the DGCL), will be canceled and converted into the right to receive the applicable portion of the Aggregate Merger Consideration as described below.

Each holder of shares of Quanergy Series B Preferred Stock outstanding as of immediately prior to the Effective Time (other than in respect of (i) Treasury Shares and (ii) Dissenting Shares) will be entitled to receive a portion of the Aggregate Merger Consideration equal to: (A) the quotient obtained by dividing (I) the number of shares constituting the product of (a) the aggregate number of shares of Series B Preferred Stock issued and outstanding immediately prior to the Effective Time multiplied by (b) $115.4230 plus, if any, declared and unpaid dividends (the “Aggregate Series B Stock Preference Amount”), by (II) the number of aggregate number of shares of Series B Preferred Stock issued and outstanding immediately prior to the Effective Time, multiplied by (B) the number of shares of Series B Preferred Stock held by such holder as of immediately prior to the Effective Time, with fractional shares rounded down to the nearest whole share.

Each holder of shares of Series C Preferred Stock outstanding as of immediately prior to the Effective Time (other than in respect of (i) Treasury Shares and (ii) Dissenting Shares) will be entitled to receive a portion of the Aggregate Merger Consideration equal to (A) the quotient obtained by dividing (I) the number of shares constituting the product of (a) aggregate number of shares of Series C Preferred Stock issued and outstanding immediately prior to the Effective Time multiplied by (ii) $143.1177 plus, if any, declared and unpaid dividends (the “Aggregate Series C Stock Preference Amount”), by (II) the number of aggregate number of shares of Series C Preferred Stock issued and outstanding immediately prior to the Effective Time, multiplied by (B) the number of shares of Series C Preferred Stock held by such holder as of immediately prior to the Effective Time, with fractional shares rounded down to the nearest whole share.

Each holder of shares of Quanergy Capital Stock (other than in respect of Series B Preferred Stock or Series C Preferred Stock) outstanding as of immediately prior to the Effective Time (other than in respect of (i) Treasury Shares, (ii) Dissenting Shares, and (iii) any shares of Quanergy common stock subject to Quanergy Awards (the treatment of which is discussed below under the subsection titled “Treatment of Quanergy Awards”), will be entitled to receive a portion of the Aggregate Merger Consideration equal to (A) the Exchange Ratio, multiplied by (B) the number of shares of Quanergy Capital Stock (other than in respect of any share of Series B Preferred Stock or Series C Preferred Stock) held by such holder as of immediately prior to the Effective Time, with fractional shares rounded down to the nearest whole share.

Treatment of Quanergy Options

Each Quanergy Option that is outstanding as of immediately prior to the Effective Time will be cancelled as of the Effective Time and will be converted into the right to receive, an option to purchase shares of Domesticated Quanergy PubCo common stock upon substantially the same terms and conditions as are in effect with respect to such option immediately prior to the Effective Time, including with respect to vesting and termination-related provisions (each, an “Quanergy PubCo Option”) except that (i) such Quanergy PubCo Option will provide the right to purchase that whole number of shares of Domesticated Quanergy PubCo common stock (rounded down to the nearest whole share) equal to the number of shares of Quanergy common stock subject to such Quanergy Option, multiplied by the Exchange Ratio, and (ii) the exercise price per share for each such Quanergy PubCo Option will be equal to the exercise price per share of such Quanergy Option in effect immediately prior to the Effective Time, divided by the Exchange Ratio (the exercise price per share, as so determined, being rounded up to the nearest full cent).

 

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Treatment of Quanergy Restricted Stock Unit Awards

Each Quanergy Restricted Stock Unit Award that is outstanding and held by an individual who constitutes an “employee” within the meaning of Form S-8 as of immediately prior to the Effective Time will be cancelled as of the Effective Time and will be converted into an award of restricted stock units covering shares of Domesticated Quanergy PubCo common stock (each, an “Adjusted Restricted Stock Unit Award”) with substantially the same terms and conditions as were applicable to such Quanergy Restricted Stock Unit Award immediately prior to the Effective Time (including with respect to vesting and termination-related provisions), except that such Adjusted Restricted Stock Unit Award will cover a number of shares of Domesticated Quanergy PubCo common stock equal to the product of (i) the number of shares of Quanergy common stock subject to the related Quanergy Restricted Stock Unit Award immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio, with any fractional shares rounded down to the nearest whole share.

Treatment of Quanergy Restricted Stock

Each share of Quanergy Restricted Stock that is outstanding immediately prior to the Effective Time will be cancelled as of the Effective Time and will be converted into the right to receive a number of shares of restricted Domesticated Quanergy PubCo common stock (each, “Adjusted Restricted Stock”) equal to the Exchange Ratio with substantially the same terms and conditions as were applicable to the related share of Quanergy Restricted Stock immediately prior to the Effective Time (including with respect to vesting and terminated related provisions), except that any per share repurchase price of such Adjusted Restricted Stock will be equal to the quotient obtained by dividing (i) the per share repurchase price applicable to Quanergy Restricted Stock by (ii) the Exchange Ratio, rounded up to the nearest cent.

Treatment of Quanergy Warrants

Each Quanergy Warrant that is outstanding as of immediately prior to the Effective Time (and, for the avoidance of doubt, not exercised or terminated pursuant to its terms at or immediately prior to the Effective Time), unless otherwise agreed to in writing between Quanergy and the applicable holder of any Quanergy Warrant, will be converted into a warrant to acquire Domesticated Quanergy PubCo Common Stock in accordance with the terms of the applicable agreement underlying such Quanergy Warrant. Prior to the Closing, Quanergy will satisfy all notification and consent requirements (or obtain waivers in lieu thereof), as applicable, under the terms of Quanergy Warrants.

Treatment of Quanergy Convertible Notes

Each 2022 Quanergy Convertible Note that is outstanding as of immediately prior to the Effective Time will be cancelled and all Liens and other security interests in the assets and properties of Quanergy and its Subsidiaries