DEFM14A 1 d155766ddefm14a.htm DEFM14A DEFM14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

   Preliminary Proxy Statement

   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

   Definitive Proxy Statement

   Definitive Additional Materials

   Soliciting Material Pursuant to §240.14a-12

KENSINGTON CAPITAL ACQUISITION CORP. II

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)  

Title of each class of securities to which transaction applies:

 

     

    (2)  

Aggregate number of securities to which transaction applies:

 

 

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

     

    (4)  

Proposed maximum aggregate value of transaction:

 

     

    (5)  

Total fee paid:

 

 

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
    (1)  

Amount Previously Paid:

 

     

    (2)  

Form, Schedule or Registration Statement No.:

 

     

    (3)  

Filing Party:

 

     

    (4)  

Date Filed:

 

     

 

 

 


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Kensington Capital Acquisition Corp. II

1400 Old Country Road, Suite 301

Westbury, NY 11590

Dear Kensington Capital Acquisition Corp. II Stockholder:

On June 9, 2021, Kensington Capital Acquisition Corp. II , a Delaware corporation (“Kensington”), Orion Merger Sub Corp., a Delaware corporation and a wholly-owned subsidiary of Holdco (“Merger Sub”), Wallbox B.V., a private company with limited liability incorporated under the laws of the Netherlands (besloten vennootschap met beperkte aansprakelijkheid) (which will be converted into a public company with limited liability incorporated under the laws of the Netherlands (naamloze vennootschap) (“Holdco”)), and Wall Box Chargers, S.L., a Spanish limited liability company (sociedad limitada) (“Wallbox”), entered into a Business Combination Agreement (as may be amended from time to time, the “Business Combination Agreement”), pursuant to which, among other things, (a) each holder of Wallbox securities (including each holder of Wallbox’s convertible loans, which will be converted into Wallbox Class A Ordinary Shares prior to the consummation of the Business Combination) will take steps to exchange by means of a contribution in kind its Wallbox securities in exchange for the issuance of Holdco Shares, as a result of which Wallbox will become a wholly-owned subsidiary of Holdco, (b) each holder of Kensington Common Stock will take steps to exchange by means of a contribution in kind its Kensington Common Stock in exchange for the issuance of Holdco Shares and (c) Merger Sub will merge with and into Kensington, with Kensington surviving the merger and becoming a wholly-owned direct subsidiary of Holdco (collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”).

At the closing of the Business Combination (the “Closing”), (i) each outstanding Class A Ordinary Share of Wallbox (including each such share resulting from the conversion of Wallbox’s convertible loans prior to the Closing by the noteholders thereof), and each outstanding Class B Ordinary Share will be exchanged by means of a contribution in kind in exchange for the issuance of a number of Holdco Class A Shares or Holdco Class B Shares, as applicable, determined in each case by reference to an “Exchange Ratio,” calculated in accordance with the Business Combination Agreement (as of the date of the Business Combination Agreement, the Exchange Ratio was 240.990795184659 (the “Illustrative Exchange Ratio”)), and (ii) each share of Kensington Class A Common Stock and Kensington Class B Common Stock outstanding immediately prior to the effective time of the merger (the “Merger Effective Time”) (other than certain customarily excluded shares) will be converted into and become one share of new Kensington common stock, and each such share of new Kensington common stock will immediately thereafter be exchanged by means of a contribution in kind in exchange for the issuance of Holdco Class A Shares, whereby Holdco will issue one Holdco Class A Share for each share of new Kensington common stock exchanged. All Wallbox shareholders, other than Enric Asunción Escorsa and Eduard Castañeda, will receive Holdco Class A Shares in the exchange. Each of Enric Asunción Escorsa and Eduard Castañeda will receive class B ordinary shares in the share capital of Holdco (“Holdco Class B Shares”). Holdco Class B Shares will rank pari passu with Holdco Class A Shares in all respects, provided they will be entitled to super voting rights of ten (10) votes per share, subject to sunset provisions as described herein. Enric Asunción Escorsa and Eduard Castañeda will own all of the Holdco Class B Shares and will collectively control approximately 61.5% of the voting power of Holdco’s capital stock. In connection with the closing of the Business Combination, if Mr. Asuncion holds less than 50% of the voting power of Holdco following such closing, Mr. Castaneda intends to enter into a power of attorney granting Mr. Asuncion voting authority over the Holdco shares beneficially owned by Mr. Castaneda. The power of attorney is expected to have a term that automatically renews following each annual general shareholder meeting unless terminated by Mr. Castaneda following such meeting. Pursuant to Dutch law, Mr. Castaneda nonetheless retains the right to vote such shares notwithstanding the grant of such power of attorney. As a result, Wallbox’s co-founders will collectively be able to control matters submitted to its shareholders for approval, including the election of directors, amendments of its organizational documents and any merger, consolidation, sale of all or substantially all of Holdco’s assets or other major corporate transactions. See “Description of Holdco Securities—Share Capital and Articles of Association—Share Capital—Conversion of Holdco Shares” and “—General Meetings and Voting Rights—Voting Rights and Decision-Making. As a result, Holdco will be a “controlled company” within the meaning of the corporate governance standards of NYSE. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to


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comply with certain corporate governance requirements as discussed in “SummaryCertain Information Relating to Holdco—Emerging Growth Company; Foreign Private Issuer; Controlled CompanyandRisk FactorsHoldco will be a ‘controlled company’ within the meaning of the NYSE rules and will be exempt from certain corporate governance requirements as a result.” Each outstanding Kensington warrant to purchase a share of Kensington Class A Common Stock will, by its terms, convert into a warrant to purchase one Holdco Class A Share (“Holdco Public Warrants”), on substantially the same contractual terms and thereupon be assumed by Holdco pursuant to the warrant assignment, assumption and amendment agreement (the “Holdco Warrant Agreement”).

In connection with the foregoing and concurrently with the execution of the Business Combination Agreement, Kensington and Holdco entered into Subscription Agreements (the “Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to subscribe for, and Holdco agreed to issue to such PIPE Investors, an aggregate of 10,000,000 Holdco Class A Shares at $10.00 per share for gross proceeds of $100,000,000 (the “PIPE Financing”) on the date on which the Closing occurs. The Holdco Class A Shares to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. Holdco has agreed to grant the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the closing of the Business Combination.

Kensington will file with the U.S. Securities and Exchange Commission (the “SEC”) a Current Report on Form 8-K announcing the final Exchange Ratio no later than four business days prior to the special meeting of its stockholders described below. See the section entitled “The Business Combination” on page 109 of the accompanying proxy statement/prospectus for further information.

From and after the Closing, the Holdco Class A Shares will have one vote per share and Holdco Class B Shares will have 10 votes per share. As a result of the Business Combination, the current stockholders of Kensington will own, assuming the Illustrative Exchange Ratio, Holdco Class A Shares representing approximately 17.03% of Holdco’s total shares then outstanding in the aggregate and approximately 7.61% of the vote.

Kensington’s units, Class A common stock and warrants are currently listed on The New York Stock Exchange, under the symbols “KCAC.U,” “KCAC,” and “KCAC WS,” respectively. Holdco intends to apply to list Holdco Class A Shares and Holdco warrants on The New York Stock Exchange under the symbols “WBX” and “WBXWS,” respectively, upon the Closing. At or prior to the Closing, each Kensington unit will separate into its components consisting of one share of Kensington Class A Common Stock and one-fourth of one redeemable warrant and will be exchanged for applicable Holdco securities.

Holdco is an “emerging growth company” and a “foreign private issuer” under applicable United States federal securities laws and will be subject to reduced public company reporting requirements. Investing in Holdco’s securities involves a high degree of risk. See “Risk Factors” beginning on page 48 of the accompanying proxy statement/prospectus for a discussion of information that should be considered in connection with an investment in Holdco’s securities.

Kensington is holding a special meeting of its stockholders in order to obtain the stockholder approvals necessary to consummate the Business Combination. At the Kensington special meeting of stockholders, which will be held on September 30, 2021, at 10:00 a.m., Eastern time, via live webcast at www.virtualshareholdermeeting.com/KCAC2021SM, unless postponed or adjourned to a later date, Kensington will ask its stockholders to adopt the Business Combination Agreement, thereby approving the Business Combination, and approve the other proposals described in the accompanying proxy statement/prospectus.

In addition, concurrently with the execution of the Business Combination Agreement, all of Wallbox’s shareholders entered into a Contribution and Exchange Agreement (the “Exchange Agreement”) with Holdco and Wallbox, pursuant to which each of Wallbox’s shareholders approved and adopted the Business Combination Agreement, the Business Combination and other proposed transactions contemplated by the Business Combination Agreement (together, the “Proposed Transactions”). Other than in connection with the conversion

 

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of Wallbox’s convertible loans to Wallbox Ordinary Shares, no additional approval or vote from any holders of any class or series of shares of Wallbox will be necessary to adopt and approve the Business Combination Agreement, the Business Combination and the Proposed Transactions.

After careful consideration, the respective Kensington and Wallbox boards of directors have unanimously approved the Business Combination Agreement, the Kensington board of directors has approved the other proposals described in the accompanying proxy statement/prospectus, and each of the Kensington and Wallbox boards of directors has determined that it is advisable to consummate the Business Combination. The Kensington board of directors recommends that its stockholders vote “FOR” the proposals described in the accompanying proxy statement/prospectus.

More information about Kensington, Wallbox, the Business Combination Agreement, the Business Combination and the Proposed Transactions is contained in the accompanying proxy statement/prospectus. You should read the accompanying proxy statement/prospectus, including the financial statements and annexes and other documents referred to therein, carefully and in their entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER THE SECTION ENTITLED “RISK FACTORS” BEGINNING ON PAGE 48 OF THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS.

If you have any questions regarding the accompanying proxy statement/prospectus, you may contact D.F. King & Co., Inc., Kensington’s proxy solicitor, toll-free at (888) 542-7446 or collect at (212) 269-5550 or email at KCAC@dfking.com.

On behalf of our board of directors, I thank you for your support and look forward to the successful consummation of the Business Combination.

 

   Sincerely,
  

LOGO

 

Justin Mirro

September 20, 2021    Chairman and Chief 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 September 20, 2021, and is expected to be first mailed or otherwise delivered to Kensington stockholders on or about that date.

 

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ADDITIONAL INFORMATION

No person is authorized to give any information or to make any representation with respect to the matters that the accompanying proxy statement/prospectus describes other than those contained in the accompanying proxy statement/prospectus, and, if given or made, the information or representation must not be relied upon as having been authorized by Holdco, Kensington or Wallbox. The accompanying proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy securities or a solicitation of a proxy in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer or a solicitation. Neither the delivery of the accompanying proxy statement/prospectus nor any distribution of securities made under the accompanying proxy statement/prospectus will, under any circumstances, create an implication that there has been no change in the affairs of Holdco, Kensington or Wallbox since the date of the accompanying proxy statement/prospectus or that any information contained therein is correct as of any time subsequent to such date.

 

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NOTICE OF SPECIAL MEETING

OF KENSINGTON CAPITAL ACQUISITION CORP. II

TO BE HELD SEPTEMBER 30, 2021

To the Stockholders of Kensington Capital Acquisition Corp. II:

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2021 annual meeting of stockholders of Kensington Capital Acquisition Corp. II, a Delaware corporation (“Kensington,” “we,” “our” or “us”), will be held on September 30 , 2021, at 10:00 a.m., Eastern time, via live webcast at www.virtualshareholdermeeting.com/KCAC2021SM. You are cordially invited to attend the special meeting for the following purposes:

 

1.

Proposal No. 1—The “Business Combination Proposal”—to approve and adopt the Business Combination Agreement, dated as of June 9, 2021 (as may be amended from time to time, the “Business Combination Agreement”), by and among Kensington, Wall Box Chargers, S.L., a Spanish limited liability company (sociedad limitada) (“Wallbox”), Wallbox B.V., a private company with limited liability incorporated under the laws of the Netherlands (besloten vennootschap met beperkte aansprakelijkheid) (which will be converted into a public company with limited liability incorporated under the laws of the Netherlands (naamloze vennootschap) (“Holdco”)), and Orion Merger Sub Corp., a Delaware corporation (“Merger Sub”), and the transactions contemplated thereby, pursuant to which, among other things, (a) (i) each holder of Wallbox’s convertible loans will, prior to the effective time of the Exchanges (as defined below), convert its Wallbox convertible loans into Wallbox Ordinary Shares (the “Convert Exchange”) and (ii) following the Convert Exchange, each holder of Wallbox Ordinary Shares will exchange by means of a contribution in kind its Wallbox Ordinary Shares to Holdco in exchange for the issuance of Holdco Shares in accordance with the exchange ratio, calculated in accordance with the Business Combination Agreement, and Wallbox will become a wholly-owned subsidiary of Holdco (the “Ordinary Exchange,” and together with the Convert Exchanges, the “Exchanges”), and (b) Merger Sub will merge with and into Kensington, with Kensington surviving the merger and becoming a wholly-owned direct subsidiary of Holdco (the “Merger,” and collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”);

 

2.

Proposal No. 2—The “Merger Proposal”— to approve and adopt the Merger, pursuant to which Merger Sub will merge with and into Kensington with Kensington as the surviving company and each share of Kensington’s Class A common stock and Class B common stock outstanding immediately prior to the effective time of the Merger (other than certain customarily excluded shares) will be converted into and become one share of new Kensington common stock, and each such share of new Kensington common stock will immediately thereafter be exchanged by means of a contribution in kind in exchange for the issuance of Holdco Class A Shares, whereby Holdco will issue one Holdco Class A Share for each share of new Kensington common stock exchanged; and

 

3.

Proposal No. 3—The “Adjournment Proposal”—to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for a vote.

The closing of the Business Combination is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus. It is important for you to note that in the event the Business Combination Proposal and the Merger Proposal are not approved, Kensington will not consummate the Business Combination.

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the financial statements and annexes attached thereto) for a more complete description of the proposed Business Combination and related transactions and each of our proposals. We encourage you to read the accompanying

 

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proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, D.F. King & Co., Inc., toll-free at (888) 542-7446; banks and brokers can call collect at (212) 269-5550 or email at KCAC@dfking.com.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF KENSINGTON COMMON STOCK YOU OWN. Stockholders are urged to vote their proxies by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. You may also submit a proxy by telephone or via the internet by following the instructions printed on your proxy card. If you hold your shares through a brokerage firm, bank or other nominee, you should direct the vote of your shares in accordance with the voting instruction form provided by the broker, bank or nominee.

 

     

By Order of the Board of Directors,

     

LOGO

 

Justin Mirro

September 20, 2021      

Chairman and Chief Executive Officer

 

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TABLE OF CONTENTS

 

     Page  

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     1  

CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS

     1  

IMMPORTANT INFORMATION ABOUT U.S. GAAP, IFRS AND NON-IFRS FINANCIAL MEASURES

     1  

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

     1  

FREQUENTLY USED TERMS

     2  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE SPECIAL MEETING

     6  

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF WALLBOX

     43  

SELECTED HISTORICAL FINANCIAL DATA OF KENSINGTON

     45  

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     46  

RISK FACTORS

     48  

GENERAL INFORMATION

     99  

THE SPECIAL MEETING OF KENSINGTON STOCKHOLDERS

     102  

THE KENSINGTON BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THESE PROPOSALS

     102  

THE BUSINESS COMBINATION

     109  

CERTAIN TAX CONSIDERATIONS

     126  

THE BUSINESS COMBINATION AGREEMENT AND ANCILLARY DOCUMENTS

     158  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     172  

BUSINESS OF HOLDCO BEFORE THE BUSINESS COMBINATION

     182  

BUSINESS OF WALLBOX AND CERTAIN INFORMATION ABOUT WALLBOX

     184  

WALLBOX’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     200  

BUSINESS OF KENSINGTON

     220  

KENSINGTON’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     232  

MANAGEMENT OF HOLDCO AFTER THE BUSINESS COMBINATION

     237  

DESCRIPTION OF HOLDCO SECURITIES

     253  

COMPARISON OF SHAREHOLDER RIGHTS

     269  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     293  

BENEFICIAL OWNERSHIP OF HOLDCO SECURITIES

     297  

SHARES ELIGIBLE FOR FUTURE RESALE

     301  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     303  

PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSAL

     305  

PROPOSAL NO. 2 — THE MERGER PROPOSAL

     306  

PROPOSAL NO. 3 — THE ADJOURNMENT PROPOSAL

     307  

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission, or SEC, by Holdco (File No. 333-257898), constitutes a prospectus of Holdco under Section 5 of the U.S. Securities Act of 1933, as amended, or the Securities Act, with respect to the Holdco securities to be issued to Kensington stockholders, if the business combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to the special meeting of Kensington stockholders at which Kensington stockholders will be asked to consider and vote upon proposals to adopt and approve the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination, and to adopt and approve the Merger, by the approval and adoption of the Business Combination Proposal and the Merger Proposal, respectively.

CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS

In this proxy statement/prospectus, unless otherwise specified or the context otherwise requires:

 

   

“$,” “USD” and “U.S. dollar” each refer to the United States dollar; and

 

   

“€,” “EUR” and “Euro” each refer to the Euro.

The exchange rate used for conversion between U.S. dollars and Euros is based on the ECB euro reference exchange rate published by the European Central Bank as of the dates specified herein.

IMPORTANT INFORMATION ABOUT GAAP, IFRS AND NON-IFRS FINANCIAL MEASURES

Kensington’s financial statements included in this proxy statement/ prospectus have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial information and pursuant to the rules and regulations of the SEC.

Wallbox’s audited financial statements included in this proxy statement/prospectus are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and referred to in this proxy statement/prospectus as “IFRS.” See “Wallboxs Managements Discussion And Analysis Of Financial Condition And Results Of Operations. This proxy statement/prospectus includes certain references to prospective financial measures that were not prepared in accordance with IFRS, including Unit Sales, EBITDA and Unlevered Free Cash Flow. The presentation of this non-IFRS information is not meant to be considered in isolation or as a substitute for Wallbox’s consolidated financial results prepared in accordance with IFRS. For additional information, see the section entitled “Summary—Wallbox Prospective Financial Information.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

The Wallbox name, logos and other trademarks and service marks of Wallbox appearing in this prospectus are the property of Wallbox. Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this proxy statement/prospectus are presented without the ® and symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This proxy statement/prospectus contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this proxy statement/prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

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FREQUENTLY USED TERMS

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

Adjournment Proposal” means a proposal to adjourn the special meeting of stockholders of Kensington to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote at such special meeting.

broker non-vote” means the failure of a Kensington stockholder, who holds his or her shares in “street name” through a broker or other nominee, to give voting instructions to such broker or other nominee.

Business Combination” means the transactions contemplated by the Business Combination Agreement.

Business Combination Agreement” means the Business Combination Agreement, dated June 9, 2021 and as may be amended from time to time, by and among Holdco, Merger Sub, Kensington and Wallbox.

Business Combination Proposal” means the proposal to approve the adoption of the Business Combination Agreement and the Business Combination.

Closing” means the closing of the transactions contemplated by the Business Combination Agreement.

Closing Date” means the date on which the Closing occurs.

Code” means the U.S. Internal Revenue Code of 1986, as amended.

COVID-19” means the novel coronavirus known as SARS-CoV-2 or COVID-19, and any evolutions, mutations thereof or related or associated epidemics, pandemic or disease outbreaks.

DCGC” means the Dutch Corporate Governance Code.

DGCL” means the General Corporation Law of the State of Delaware.

ESPP” means the Wallbox N.V. 2021 Employee Stock Purchase Plan.

Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

Exchange Agreement” means the Contribution and Exchange Agreement entered into by and among Holdco, Wallbox and each of Wallbox’s shareholders concurrently with the Business Combination Agreement.

Existing Certificate of Incorporation” means Kensington’s current amended and restated certificate of incorporation.

Extension Period” means any extended time that Kensington has to consummate a business combination beyond 24 months as a result of a stockholder vote to amend Kensington’s amended and restated certificate of incorporation, as then in effect.

FCPA” means the U.S. Foreign Corrupt Practices Act.

Founder Shares” means the 5,750,000 shares of Kensington Class B Common Stock purchased by the Sponsor in a private placement prior to the Kensington IPO.

 

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GAAP” means United States generally accepted accounting principles.

GDPR” means the General Data Protection Regulation.

Holdco” means Wallbox B.V., a private company with limited liability incorporated under the laws of the Netherlands (besloten vennootschap met beperkteaansprakelijkheid) (which will be converted into a public company with limited liability incorporated under the laws of the Netherlands (naamloze vennootschap), or N.V., prior to the Closing Date).

Holdco Board” means the board of directors of Holdco.

Holdco Class A Shares” means the Class A ordinary shares, nominal value EUR 0.12 per share of Holdco.

Holdco Class B Shares” means the Class B ordinary shares, nominal value EUR 1.20 per share of Holdco.

Holdco Conversion Shares” means the Class Conversion ordinary shares, nominal value EUR 1.08 per share of Holdco.

Holdco General Meeting” means the general meeting of Holdco.

Holdco Warrants” means warrants to purchase one Holdco Class A Share at a price of $11.50, subject to adjustment.

Holdco Shares” means, collectively, the Holdco Class A Shares, the Holdco Class B Shares and the Holdco Conversion Shares.

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

IAS” means the International Accounting Standard.

IASB” means the International Accounting Standards Board.

IBR” means the incremental borrowing rate.

IFRS” means the International Financial Reporting Standards.

Incentive Plan” means the Wallbox N.V 2021 Equity Incentive Plan.

Investment Company Act” means the Investment Company Act of 1940, as amended.

IPO” means initial public offering.

JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

Kensington” means Kensington Capital Acquisition Corp. II, a Delaware corporation.

Kensington Board” means the board of directors of Kensington.

Kensington Class A Common Stock” means Kensington’s Class A common stock, par value $0.0001 per share.

 

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Kensington Class B Common Stock” means Kensington’s Class B common stock, par value $0.0001 per share.

Kensington Common Stock” means the Kensington Class A Common Stock and Kensington Class B Common Stock.

Kensington Initial Stockholders” means the Sponsor and Kensington’s officers and directors.

Kensington IPO” means Kensington’s initial public offering consummated on March 2, 2021.

Kensington Private Warrants” means the 8,800,000 warrants held by the Sponsor, purchased by the Sponsor in the private placement that occurred concurrently with the closing of Kensington’s IPO, plus warrants received as a result of converting the balance of working capital loans to Kensington of up to $2,000,000.

Kensington Public Warrants” means the 5,750,000 warrants included in the Kensington Units, each of which is a warrant to purchase one share of Kensington Class A Common Stock at a price of $11.50 per share, subject to adjustment in accordance with the Kensington Warrant Agreement.

Kensington Stockholder Redemption” means the redemption rights provided for in Kensington’s Existing Certificate of Incorporation.

Kensington Units” means the units issued in Kensington’s IPO, each unit consisting of one share of Kensington Class A Common Stock and one-fourth of one Kensington Warrant.

Kensington Warrant Agreement” means the Warrant Agreement dated as of February 25, 2021 by and between Kensington and Continental Stock Transfer & Trust Company, governing the Kensington Warrants.

Kensington Warrants” means the warrants to purchase shares of Kensington Class A Common Stock contemplated by the Kensington Warrant Agreement, with each warrant exercisable for one share of Kensington Class A Common Stock at an exercise price of $11.50.

Merger” means the merging of Merger Sub with and into Kensington with Kensington surviving the Merger.

Merger Effective Time” means the time the Merger becomes effective.

Merger Sub” means Orion Merger Sub Corp., a Delaware corporation and wholly-owned direct subsidiary of Holdco.

Merger Sub Common Stock” means Merger Sub’s common stock, par value $0.01 per share.

NYSE” means The New York Stock Exchange.

PCAOB” means the Public Company Accounting Oversight Board.

PCAOB Audited Financials” means the consolidated statement of financial position of Wallbox and its subsidiaries as of January 1, 2019, December 31, 2019 and December 31, 2020, and the related consolidated statements of profit or loss and other comprehensive loss, changes in equity and cashflows of Wallbox and its subsidiaries for each of the two years in the period ended December 31, 2020 audited in accordance with the standards of the PCAOB.

PIPE Financing” means the subscription for and purchase by the PIPE Investors of an aggregate of 10,000,000 Holdco Shares at $10.00 per share for gross proceeds of $100,000,000 pursuant to the Subscription Agreements.

 

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PIPE Investors” means the investors in the PIPE Financing pursuant to the Subscription Agreements.

PIPE Shares” means an aggregate of 10,000,000 Holdco Class A Shares to be issued to Subscribers in the PIPE Financing.     

Public Shares” means the Kensington Class A Common Stock included in the Kensington Units.

Public Stockholders” means the holders of Public Shares.

Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

SEC” means the United States Securities and Exchange Commission.

Sponsor” means Kensington Capital Sponsor II LLC, a Delaware limited liability company.

Subscription Agreements” means the Subscription Agreements, dated June 9, 2021, by and among Holdco, Kensington and each of the PIPE Investors.

Trust Account” means the U.S.-based trust account at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer and Trust Company, acting as trustee, established by Kensington containing the proceeds of the Kensington IPO and from certain private placements occurring simultaneously with the Kensington IPO for the benefit of the Public Stockholders.

Trustee” means Continental Stock Transfer & Trust Company.

Wallbox” means Wall Box Chargers, S.L., a Spanish limited liability company (sociedad limitada).

Wallbox Board” means the board of directors of Wallbox.

Wallbox Class A Ordinary Shares” means Class A shares of Wallbox, par value €0.50 per share.

Wallbox Class B Ordinary Shares” means Class B shares of Wallbox, par value €0.50 per share.

Wallbox Option Plan” means, collectively, the Wall Box Chargers, S.L. Stock Option Plan for Management, the Wall Box Chargers, S.L. Stock Option Plan for Employees and the Wall Box Chargers, S.L. Stock Option Plan for Founders, each as amended from time to time.

Wallbox Options” means all options to purchase outstanding shares of Wallbox Ordinary Shares, whether or not exercisable and whether or not vested, immediately prior to the Closing under the Wallbox Option Plan or otherwise.

Wallbox Ordinary Shares” means Wallbox Class A Ordinary Shares and Wallbox Class B Ordinary Shares.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

AND THE SPECIAL MEETING

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the special meeting and the proposals to be presented at the special meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to Kensington stockholders. Stockholders are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the special meeting.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

Kensington has entered into the Business Combination Agreement with Wallbox, Holdco and Merger Sub pursuant to which, among other things, (a) each holder of Wallbox securities (including each holder of Wallbox’s convertible loans) will take steps to exchange by means of a contribution in kind of its Wallbox securities in exchange for the issuance of Holdco ordinary shares, as a result of which Wallbox will become a wholly-owned subsidiary of Holdco, and (b) Merger Sub will be merged with and into Kensington, with Kensington surviving the Merger as a wholly-owned subsidiary of Holdco. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

At the Closing, as a result of the Business Combination, (i) each outstanding Wallbox Class A Ordinary Share (including each such share resulting from the conversion of Wallbox’s convertible loans prior to the Closing by the noteholders thereof), and each outstanding Class B Ordinary Share will be exchanged by means of a contribution in kind in exchange for the issuance of a number of Holdco Ordinary A Shares or Holdco Ordinary B Shares, as applicable, determined in each case by reference to an “Exchange Ratio”, calculated in accordance with the Business Combination Agreement (as of the date of the Business Combination Agreement, the Exchange Ratio was 240.990795184659 (the “Illustrative Exchange Ratio”)), and (ii) each outstanding share of Kensington’s Class A common stock and Class B common stock will be cancelled and converted into the right to receive one Holdco Ordinary A Share. Kensington will file with the SEC a Current Report on Form 8-K announcing the final Exchange Ratio no later than four business days prior to the special meeting of its stockholders. See the sections entitled “Summary—Consideration to Wallbox Shareholders in the Business Combination—Ownership of Holdco” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

Kensington stockholders are being asked to consider and vote upon the Business Combination Proposal to approve the adoption of the Business Combination Agreement and the Business Combination, among other proposals.

The Kensington Class A Common Stock, Kensington Warrants and Kensington Units are currently listed on the NYSE under the symbols “KCAC,” “KCAC WS” and “KCAC.U,” respectively. At the Closing, as a result of the Business Combination, each outstanding share of Kensington Common Stock will be exchanged by means of a contribution in kind in exchange for the issuance of one Holdco Ordinary A Share. Holdco intends to apply to list Holdco Ordinary A Shares on the NYSE under the symbol “WBX” in connection with the Closing. All outstanding Kensington Units will be separated into their underlying securities prior to the Closing. There will be no Kensington Units, Kensington Common Stock or Kensington Warrants nor any NYSE listing of any such securities following the Closing.

This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the proposals to be acted upon at the special meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety. This document also constitutes a prospectus of Holdco with respect to the Holdco Ordinary A Shares issuable in connection with the Business Combination.

 

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Q:

When and where is the special meeting?

 

A:

The special meeting will be held on September 30, 2021, at 10:00 a.m., Eastern time, via live webcast at www.virtualshareholdermeeting.com/KCAC2021SM.

 

Q:

What are the specific proposals on which I am being asked to vote at the special meeting?

 

A:

Kensington stockholders are being asked to approve the following proposals:

 

  1.

Proposal No. 1—The Business Combination Proposal—a proposal to approve and adopt the Business Combination Agreement and the Business Combination;

 

  2.

Proposal No. 2—The Merger Proposal—a proposal to approve and adopt the Merger, pursuant to which Merger Sub will merge with and into Kensington with Kensington as the surviving company; and

 

  3.

Proposal No. 3—The Adjournment Proposal—a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

 

Q:

Are the proposals conditioned on one another?

 

A:

The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. It is important for you to note that in the event the Business Combination Proposal and the Merger Proposal are not approved, Kensington will not consummate the Business Combination. If Kensington does not consummate the Business Combination and fails to complete an initial business combination by March 2, 2023, Kensington will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such Trust Account to its Public Stockholders.

 

Q:

Why is Kensington proposing the Business Combination?

 

A:

Kensington was organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Kensington is not limited to any particular industry or sector, but intended to focus in the automotive and automotive-related sector.

Kensington received $230,000,000 from its IPO (including net proceeds from the exercise in full by the underwriters of their over-allotment option) and sale of the Private Warrants, which was placed into the Trust Account immediately following the IPO. In accordance with the Existing Certificate of Incorporation, the funds held in the Trust Account will be released upon the Closing. See the question entitled “What happens to the funds held in the Trust Account upon consummation of the Business Combination?

There currently are 28,750,000 shares of Kensington Common Stock outstanding, consisting of 23,000,000 Public Shares and 5,750,000 Sponsor Shares. In addition, there currently are 14,550,000 Kensington Warrants outstanding, consisting of 5,750,000 Public Warrants and 8,800,000 Private Warrants. Each whole Kensington Warrant entitles the holder thereof to purchase one share of Kensington Class A Common Stock at a price of $11.50 per share. The Kensington Warrants will be assumed by Holdco and become exercisable 30 days after the Closing, and expire at 5:00 p.m., New York City time, five years after the Closing or earlier upon redemption or liquidation. The Private Warrants, however, are non-redeemable so long as they are held by the Sponsor or its permitted transferees (except as described in the section entitled “Description of Holdco’s Securities—Warrants—Public Warrants—Redemption of Warrants when the price per share of Holdco Class A Shares equals or exceeds $10.00”).

Under the Existing Certificate of Incorporation, Kensington must generally provide the holders of Public Shares with the opportunity to have their Public Shares redeemed upon the consummation of Kensington’s initial business combination in conjunction with a stockholder vote.

 

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Q:

Why is Kensington providing stockholders with the opportunity to vote on the Business Combination?

 

A:

The approval of the Business Combination is required under the Kensington’s Existing Certificate of Incorporation. In addition, such approval is also a condition to the closing of the Business Combination under the Business Combination Agreement. Additionally, under its Existing Certificate of Incorporation, Kensington must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of its initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, Kensington has elected to provide its stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent (as defined below) in order to validly redeem its shares. Therefore, Kensington is seeking to obtain the approval of its stockholders of the Business Combination and also allow its Public Stockholders to effectuate redemptions of their public shares in connection with the closing of the Business Combination in accordance with the Kensington’s Existing Certificate of Incorporation.

 

Q:

What revenues and profits/losses has Wallbox generated in the last two years?

 

A:

For the fiscal years ended December 31, 2020 and 2019, Wallbox had revenues of €19.7 million and €8.0 million, and loss for the year of €11.4 million and €6.1 million, respectively. At the end of fiscal year 2020, Wallbox’s total assets were €81.8 million and its total liabilities were €69.6 million and at the end of fiscal year 2019, Wallbox’s total assets were €32.5 million and its total liabilities were €23,1 million. For additional information, please see Wallbox’s audited consolidated financial statements for the years ended December 31, 2020 and 2019 included elsewhere in this proxy statement/prospectus.

 

Q:

What impact will the COVID-19 pandemic have on the Business Combination?

 

A:

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 outbreak on the business of Kensington, Wallbox and Holdco, and there is no guarantee that efforts by Kensington, Wallbox and Holdco to address the adverse impacts of COVID-19 will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and actions taken to contain COVID-19 or its impact, among others. If Kensington or Wallbox are unable to recover from a business disruption on a timely basis, the Business Combination and Holdco’s business, financial condition and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by COVID-19 outbreak and become more costly. Each of Kensington, Wallbox and Holdco may also incur additional costs to remedy damages caused by any such disruptions, which could adversely affect its financial condition and results of operations.

 

Q:

What will happen in the Business Combination?

 

A:

Prior to the Closing Date, each holder of Wallbox’s convertible loans will, prior to the Exchange Effective Time (as defined below), convert its Wallbox convertible loans into Wallbox Ordinary Shares (the “Convert Exchange”). On the Closing Date, each holder of Wallbox Ordinary Shares will exchange by means of a contribution in kind its Wallbox Ordinary Shares to Holdco in exchange for the issuance of Holdco Shares in accordance with the Exchange Ratio and Wallbox will become a wholly-owned subsidiary of Holdco (the “Ordinary Exchange,” and together with the Convert Exchanges, the “Exchanges”, and the effective time of the Ordinary Exchange, the “Exchange Effective Time”). Each outstanding Class A Ordinary Share of Wallbox (including each such share resulting from the conversion of Wallbox’s convertible loans prior to the Closing by the noteholders thereof), and each outstanding Class B Ordinary Share of Wallbox will be exchanged by means of a contribution in kind in exchange for a number of Holdco Class A Shares or

 

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  Holdco Class B Shares, as applicable, determined in each case by reference to an “Exchange Ratio,” calculated in accordance with the Business Combination Agreement; provided, however, that Enric Asunción Escorsa and Eduard Castañeda will receive Holdco Class B Shares. Each share of Kensington’s Class A common stock and Class B common stock outstanding immediately prior to the Merger Effective Time (other than certain customarily excluded shares) will be converted into and become one share of new Kensington common stock, and each such share of new Kensington common stock will immediately thereafter be exchanged by means of a contribution in kind in exchange for the issuance of Holdco Class A Shares, whereby Holdco will issue one Holdco Class A Share for each share of new Kensington common stock exchanged. As of the date of the Business Combination Agreement, the Illustrative Exchange Ratio was 240.990795184659. Kensington will file with the SEC a Current Report on Form 8-K announcing the final Exchange Ratio no later than four business days prior to the special meeting of its stockholders. In addition, in connection with the Closing, each share of Kensington Class B Common Stock outstanding will be converted into a share of Holdco Class A Common Stock on a one-for-one basis.

Holdco intends to apply to list the Holdco Class A Shares and Holdco Warrants on the NYSE under the symbols “WBX” and “WBXWS,” respectively, upon the closing of the Business Combination. We cannot assure you that the Holdco Class A Shares or Holdco Warrants will be approved for listing on the NYSE. In addition, Holdco will be a “foreign private issuer” and as a “foreign private issuer,” Holdco will be subject to different U.S. securities laws than domestic U.S. issuers. The rules governing the information that Holdco must disclose differ from those governing U.S. corporations pursuant to the Exchange Act. Holdco will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to stockholders. As a foreign private issuer, Holdco will be exempt from a number of rules under the U.S. securities laws and will be permitted to file less information with the SEC than a U.S. company. This may limit the information available to holders of the Holdco Shares and Holdco Public Warrants. See “Risk Factors—Holdco will be a foreign private issuer and, as a result, Holdco will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

 

Q:

How has the announcement of the Business Combination affected the trading price of Kensington’s Class A Ordinary Shares?

 

A:

On March 8, 2021, the last trading date before the public announcement of the Business Combination, the Kensington Public Units, Kensington Class A Common Stock and Kensington Public Warrants closed at $10.56, $10.20 and $1.51, respectively. On September 17, 2021, the trading date immediately prior to the date of this proxy statement/prospectus, the Kensington Units, Kensington Class A Common Stock and Kensington Public Warrants closed at $10.19, $9.96 and $1.05, respectively.

 

Q:

Following the Business Combination, will Kensington’s securities continue to trade on a stock exchange?

 

A:

No. Kensington anticipates that, following consummation of the Business Combination, the Kensington Class A Common Stock, Kensington Public Units, and Kensington Public Warrants will be delisted from the NYSE and Kensington will be deregistered under the Exchange Act. However, Holdco intends to apply to list the Holdco Class A Shares and Holdco Public Warrants on the NYSE under the symbols “WBX” and “WBXWS,” respectively, upon the closing of the Business Combination.

 

Q:

Is the Business Combination the first step in a “going private” transaction?

 

A:

No. Kensington does not intend for the Business Combination to be the first step in a “going private” transaction. One of the primary purposes of the Business Combination is to provide a platform for Wallbox to access the U.S. public markets.

 

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Q:

Will the management of Wallbox change in the Business Combination?

 

A:

The current executive officers of Wallbox are Enric Asunción Escorsa, the Chief Executive Officer, Jordi Lainz, the Chief Financial Officer and Eduard Castañeda, the Chief Product Officer. These individuals are intended to continue to serve as Holdco’s executive officers upon consummation of the Business Combination.

Pursuant to the Business Combination Agreement, effective immediately upon closing, the Holdco Board will be comprised of seven directors, consisting of the following:

 

   

(1) Enric Asunción Escorsa; (2) Beatriz González Ordóñez; (3) Francisco Riberas; (4) Diego Diaz Pilas; (5) Pol Soler; (6) Anders Pettersson and (7) one additional director expected to be appointed prior to the closing of the Business Combination;

 

   

The management team will consist solely of Wallbox’s current management team immediately prior to the Closing; and

 

   

Enric Asunción Escorsa and Eduard Castañeda will be granted special governance provisions, including a dual class structure with super-voting (i.e., 10:1) shares, subject to sunset provisions as described herein. See “Description of Holdco Securities—Share Capital and Articles of Association—Share Capital—Conversion of Holdco Shares” and “—General Meetings and Voting Rights—Voting Rights and Decision-Making.” In connection with the closing of the Business Combination, if Mr. Asuncion holds less than 50% of the voting power of Holdco following such closing, Mr. Castaneda intends to enter into a power of attorney granting Mr. Asuncion voting authority over the Holdco shares beneficially owned by Mr. Castaneda. The power of attorney is expected to have a term that automatically renews following each annual general shareholder meeting unless terminated by Mr. Castaneda following such meeting. Pursuant to Dutch law, Mr. Castaneda nonetheless retains the right to vote such shares notwithstanding the grant of such power of attorney.

For an explanation of the roles and responsibilities of the Holdco Board, please see the section entitled “Management of Holdco After the Business Combination”.

 

Q:

What will Kensington stockholders receive in the Business Combination?

 

A:

Upon consummation of the Merger, each issued and outstanding share of Kensington Common Stock will be subject to the terms and conditions of the Business Combination Agreement and will be exchanged by means of a contribution in kind in exchange for a Holdco Class A Share.

 

Q:

What will Kensington warrant holders receive in the Business Combination?

 

A:

At Closing, each Kensington Warrant that is outstanding immediately prior to the Merger Effective Time shall automatically cease to represent a right to acquire Kensington Class A Common Stock and shall represent, immediately following the Merger Effective Time, a right to acquire Holdco Class A Shares on substantially the same contractual terms and conditions as were in effect immediately prior to the Merger Effective Time under the terms of the Kensington Warrant Agreement and thereupon be assumed by Holdco pursuant to the warrant assignment, assumption and amendment agreement; provided, that each converted warrant: (a) shall represent the right to acquire the number of Holdco Class A Shares equal to the number of shares of Kensington Class A Common Stock subject to each such Kensington Public Warrant immediately prior to the Merger Effective Time; (b) shall have an exercise price of $11.50 per whole warrant required to purchase one Holdco Class A Share; and (c) shall expire on the five (5) year anniversary of the Closing Date.

 

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Q:

What will Kensington unit holders receive in the Business Combination?

 

A:

In connection with the consummation of the Business Combination, the Kensington Public Units will automatically separate into their component parts and be treated accordingly.

 

Q:

What will Wallbox Shareholders receive in the Business Combination?

 

A:

Upon consummation of the Exchanges, holders of Wallbox Class A Ordinary Shares will receive Holdco Class A Shares, and Enric Asunción Escorsa and Eduard Castañeda will receive Holdco Class B Shares. See “Summary—Consideration to Wallbox Shareholders in the Business Combination” for information on the consideration to be received by Wallbox shareholders, including the assumptions on which this calculation is based.

 

Q:

What is the PIPE Financing?

 

A:

In connection with the Business Combination and concurrently with the execution of the Business Combination Agreement, Kensington and Holdco entered into the Subscription Agreements with the PIPE Investors pursuant to which the PIPE Investors agreed to subscribe for and purchase, and Holdco agreed to issue to such PIPE Investors, an aggregate number of Holdco Shares set forth in the Subscription Agreements in exchange for an aggregate purchase price of $100,000,000.

 

Q:

What equity stake will the current stockholders of Kensington, the PIPE Investors and the current shareholders of Wallbox hold in Holdco after the closing of the Business Combination?

 

A:

It is anticipated that, upon completion of the Business Combination and assuming the Illustrative Exchange Ratio: (i) the Public Stockholders will own approximately 12.87% of Holdco on a fully diluted basis; (ii) the PIPE Investors (excluding shares owned by certain Wallbox equityholders prior to such PIPE Financing) will own approximately 5.59% of Holdco on a fully diluted basis; (iii) the Sponsor will own approximately 3.22% of Holdco on a fully diluted basis; and (iv) the Wallbox equityholders (excluding any portion of the PIPE Financing provided by existing Wallbox equityholders) will own approximately 78.32% of Holdco on a fully diluted basis. These levels of ownership interests assume that (A) no shares of Kensington Class A Common Stock are elected to be redeemed by the Public Stockholders and (B) that 10,000,000 Holdco Shares are issued to the PIPE Investors in connection with the PIPE Financing. If the actual facts are different than these assumptions, the ownership percentages in Holdco will be different.

For more information, please see the sections entitled “The Business Combination—Ownership of Holdco” and “Unaudited Pro Forma Condensed Combined Financial Information.

 

Q:

Will Holdco obtain new financing in connection with the Business Combination and are there any arrangements to help ensure that Kensington will have sufficient funds to consummate the Business Combination?

 

A:

Yes. Holdco will obtain new equity financing through a private placement of Holdco Shares in the PIPE Financing. Holdco will use the proceeds from the PIPE Financing, together with the proceeds received from the Trust Account, for general corporate purposes. The PIPE Financing is contingent upon, among other things, the closing of the Business Combination. Unless waived by Wallbox, the Business Combination Agreement provides that Wallbox’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the any amounts redeemed) together with the proceeds from the PIPE Financing equaling or exceeding $250,000,000.

 

Q:

Will Holdco adopt an equity incentive plan in anticipation of the Business Combination?

 

A:

Holdco intends to adopt an equity incentive plan in anticipation of the Business Combination in order to promote ownership in Holdco by employees, non-employee directors and consultants of Holdco and its

 

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  subsidiaries, and align incentives between these service providers and shareholders of Holdco by permitting these service providers to receive compensation in the form of awards denominated in, or based on the value of, Holdco Class A Shares. See “Management of Holdco After the Business Combination.

 

Q:

Will Holdco adopt an employee stock purchase plan in anticipation of the Business Combination?

 

A:

Holdco intends to adopt an employee stock purchase plan in anticipation of the Business Combination, which will permit eligible employees and/or service providers of Holdco and its subsidiaries the opportunity to purchase Holdco Class A Shares, and promote employee retention and incentives for such persons to exert maximum efforts for the success of the company and its affiliates. “Management of Holdco After the Business Combination.

 

Q:

Why is Kensington proposing the Adjournment Proposal?

 

A:

Kensington is proposing the Adjournment Proposal to allow the Kensington Board to adjourn the special meeting to a later date or dates, (A) in order to solicit additional proxies from Kensington stockholders in favor of the Business Combination Proposal, (B) if as of the time for which the special meeting is scheduled, there are insufficient shares of Kensington Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the special meeting, or (C) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that Kensington has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by Kensington stockholders prior to the special meeting. The Adjournment Proposal will only be presented to Kensington stockholders in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal. Please see the section entitled “Proposal No. 3—The Adjournment Proposal” for additional information.

 

Q:

What happens if I sell my Kensington shares before the special meeting?

 

A:

The record date for the special meeting for Kensington stockholders that hold their shares in “street name” is earlier than the date that the Business Combination is expected to be completed. If you transfer your Kensington shares after the record date for Kensington stockholders that hold their shares in “street name,” but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your Kensington shares because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your Kensington shares prior to the record date for Kensington stockholders that hold their shares in “street name,” you will have no right to vote those shares at the special meeting or redeem those shares for a pro rata portion of the proceeds held in the Trust Account.

 

Q:

What vote is required to approve the proposals presented at the special meeting?

 

A:

The approval of each of the Business Combination Proposal, Merger Proposal and Adjournment Proposal requires the affirmative vote of holders of at least a majority of the shares of Kensington Common Stock that are entitled to vote and are voted at the special meeting. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Business Combination Proposal, the Merger Proposal or the Adjournment Proposal. The Sponsor has agreed to vote their Founder Shares and any public shares purchased by them during or after the Kensington IPO in favor of the Business Combination Proposal and the Merger Proposal.

 

Q:

What happens if the Business Combination Proposal is not approved?

 

A:

If the Business Combination Proposal is not approved and Kensington does not consummate a business combination by March 2, 2023, Kensington will be required to dissolve and liquidate the Trust Account.

 

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Q:

How many votes do I have at the special meeting?

 

A:

Kensington stockholders that hold their shares in “street name” are entitled to one vote on each proposal presented at the special meeting for each share of Kensington Common Stock held of record as of August 30, 2021, the record date for the special meeting. As of the close of business on the record date, there were 28,750,000 outstanding shares of Kensington Common Stock.

 

Q:

What constitutes a quorum at the special meeting?

 

A:

One or more stockholders who together hold 50% of the issued and outstanding shares of Kensington Common Stock entitled to vote at the special meeting must be present, in person or represented by proxy, at the special meeting to constitute a quorum and in order to conduct business at the special meeting. Broker non-votes and abstentions will be counted as present for the purpose of determining a quorum. The Sponsor, who currently owns 20% of the issued and outstanding shares of Kensington Common Stock, will count towards this quorum. In the absence of a quorum, the chairman of the special meeting has power to adjourn the special meeting. As of the record date, 14,375,001 shares of Kensington Common Stock would be required to achieve a quorum.

 

Q:

How will the Kensington Initial Stockholders and Kensington’s other current directors and officers vote?

 

A:

Prior to the Kensington IPO, Kensington entered into agreements with the Sponsor, pursuant to which it has agreed to vote any shares of Kensington Common Stock owned by the Sponsor in favor of a proposed initial business combination. As of the record date, the Sponsor owned 5,750,000 Founder Shares, representing 20% of the shares of Kensington Common Stock and entitled to vote at the special meeting.

 

Q:

What interests do the Sponsor, Kensington Initial Stockholders and Kensington’s other current officers and directors have in the Business Combination?

 

A:

The Sponsor, Kensington Initial Stockholders and Kensington’s other current officers and directors have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Business Combination Proposal. These interests include:

 

   

the fact that the Sponsor has agreed not to redeem any shares of Kensington Common Stock held by it in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at approximately $57,500,000, but, given the transfer restrictions on such shares, Kensington believes such shares have less value;

 

   

the fact that the Kensington Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if Kensington fails to complete an initial business combination by March 2, 2023;

 

   

the fact that the Registration Rights and Lock-Up Agreement will be entered into by the Sponsor;

 

   

the fact that the Sponsor paid an aggregate of $6,600,000 for its 8,800,000 Private Placement Warrants with an aggregate market value of approximately $8,800,000 based on the closing price of the Public Warrants of $1.00 on the NYSE on September 15, 2021, and that such Private Placement Warrants will expire worthless if a business combination is not consummated by March 2, 2023;

 

   

the fact that the Sponsor has made a loan of $100,000 to Kensington and has informed Kensington that the Sponsor intends to convert the loan into 133,333 warrants on the same terms as the Private

 

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Warrants (as contemplated by the Kensington Warrant Agreement pursuant to which the Private Warrants were issued) at the same time the Business Combination is completed and for such warrants to be issued to Robert Remenar, Simon Boag and Daniel Huber, who had advanced such amount to the Sponsor in order for the loan to be made. Such warrants have an aggregate market value of approximately $133,333 based on the closing price of the Public Warrants of $1.00 on the NYSE on September 15, 2021. Additionally, at the option of Sponsor, any other amounts outstanding under certain working capital loans made by Sponsor or any of its affiliates to Kensington in an aggregate amount of up to $2,000,000 (including the foregoing $100,000 loan) may be converted into warrants to purchase shares of Kensington Class A Common Stock which will be identical to the Private Placement Warrants;

 

   

the fact that Justin Mirro, Robert Remenar, Daniel Huber, Simon Boag, Thomas LaSorda, Anders Pettersson, Mitchell Quain, Donald Runkle and Matthew Simoncini, who are officers or directors of Kensington, have directly or indirectly through their affiliates agreed to invest up to an aggregate of $9,900,000 in the PIPE Financing on the same terms as the other PIPE Investors;

 

   

the right of the Sponsor to receive 5,750,000 Holdco Shares with an aggregate market value of approximately $56,752,500 based on the closing price of Kensington Class A Common Stock of $9.87 on the NYSE on September 15, 2021, subject to certain lock-up periods;

 

   

the continued indemnification of Kensington’s existing directors and officers and the continuation of Kensington’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that the Sponsor and Kensington’s officers and directors will lose their entire investment in Kensington and will not be reimbursed for any out-of-pocket expenses to the extent such expenses exceed the amount not required to be retained in the Trust Account if an initial business combination is not consummated by March 2, 2023. Kensington’s officers and directors do not currently have any unreimbursed out-of-pocket expenses and do not expect to incur any out-of-pocket expenses for which they are entitled to reimbursement;

 

   

the fact that if the Trust Account is liquidated, including in the event Kensington is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Kensington to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Kensington has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Kensington, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that the Sponsor has invested an aggregate of $6,725,000 (in respect of the Founder Shares, the Private Placement Warrants and a loan of $100,000) that will have zero value in the event Kensington is not able to complete a business combination; and

 

   

the fact that the Sponsor and its affiliates can earn a positive return on their investment, even if the Public Shareholders have a negative return in their investment in Holdco.

 

Q:

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

 

A:

No. The Kensington Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. Kensington’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Kensington’s advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, Kensington’s officers and directors and its advisors have substantial

 

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  experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of the Kensington Board in valuing Wallbox’s business and assuming the risk that the Kensington Board may not have properly valued such business.

 

Q:

What happens if I vote against the Business Combination Proposal?

 

A:

If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the affirmative vote of holders of at least the majority of the shares of Kensington Common Stock that are entitled to vote and are voted at the special meeting, then the Business Combination Proposal will be approved, and, assuming the satisfaction or waiver of the other conditions to closing, the Business Combination will be consummated in accordance with the terms of the Business Combination Agreement.

If you vote against the Business Combination Proposal and the Business Combination Proposal does not obtain the affirmative vote of holders of the majority of the shares of Kensington Common Stock that are entitled to vote and are voted at the special meeting, then the Business Combination Proposal will fail and Kensington will not consummate the Business Combination. If Kensington does not consummate the Business Combination, it may continue to try to complete a business combination with a different target business until March 2, 2023. If Kensington fails to complete an initial business combination by March 2, 2023, then it will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to its Public Shareholders.

 

Q:

Do I have redemption rights?

 

A:

Pursuant to Kensington’s Existing Certificate of Incorporation, holders of Kensington public shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with Kensington’s Existing Certificate of Incorporation. As of September 15, 2021, this would have amounted to approximately $10.00 per share. If a holder of Kensington public shares exercises its redemption rights, then such holder will be exchanging its shares of Kensington Class A Common Stock for cash and will not own shares of Holdco following the closing of the Business Combination. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to the Transfer Agent in accordance with the procedures described herein. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than fifteen percent (15%) of the shares of Kensington Class A Common Stock included in the Kensington Public Units sold in the Kensington IPO. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a Public Stockholder or group will not be redeemed for cash.

Kensington has no specified maximum redemption threshold under its Existing Certificate of Incorporation, other than the aforementioned 15% threshold. Each redemption of shares of Kensington Class A Common Stock by Public Stockholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $230,026,963 as of September 15, 2021. The Business Combination Agreement provides that Wallbox’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (after giving effect to the Kensington Stockholder Redemption) together with the proceeds actually received from the PIPE Financing being at least $250,000,000. The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. In no event will Kensington redeem its shares of Kensington Class A Common Stock in an amount that would cause its (or Holdco’s after giving effect to the transactions contemplated by the Business Combination Agreement) net tangible assets to be less than $5,000,001, as provided in the Kensington Existing Certificate of Incorporation. Kensington stockholders who wish to redeem their public shares for cash must refer to and follow the procedures set forth in the section entitled “Special Meeting of Kensington Stockholders—Redemption Rights” in order to properly redeem their public shares.

 

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Holders of Kensington Public Warrants will not have redemption rights with respect to such warrants.

 

Q:

Can the Sponsor redeem its Founder Shares in connection with consummation of the Business Combination?

 

A:

No. The Sponsor has agreed to waive its redemption rights with respect to its Founder Shares and any public shares it may hold in connection with the consummation of the Business Combination.

 

Q:

Is there a limit on the number of shares I may redeem?

 

A:

Yes. A Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), may not redeem shares of Kensington Class A Common Stock in excess of an aggregate of 15% of the shares sold in the Kensington IPO without Kensington’s consent. Accordingly, all shares of Kensington Class A Common Stock in excess of 15% of the shares of Kensington Class A Common Stock sold in the Kensington IPO owned by a holder will not be redeemed for cash without Kensington’s consent. On the other hand, a Public Stockholder who holds less than 15% of the public shares may redeem all of the public shares held by such stockholder for cash.

Shares of Kensington Class B Common Stock cannot be redeemed.

In no event is your ability to vote all of your shares (including those shares held by you in excess of 15% of the shares sold in the Kensington IPO) for or against the Business Combination restricted.

Kensington has no specified maximum redemption threshold under its Existing Certificate of Incorporation, other than the aforementioned 15% threshold. Each redemption of shares of Kensington Class A Common Stock by Public Stockholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $230,026,963 as of September 15, 2021. The Business Combination Agreement provides that Wallbox’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of any amounts redeemed) together with the aggregate PIPE proceeds being at least $250,000,000. If, as a result of redemptions of shares of Kensington Class A Common Stock by the Public Stockholders, this condition is not met, then Wallbox may elect not to consummate the Business Combination. In addition, in no event will Kensington redeem its shares of Kensington Class A Common Stock in an amount that would cause its (or Holdco’s after giving effect to the transactions contemplated by the Business Combination Agreement) net tangible assets to be less than $5,000,001, as provided in the Kensington Existing Certificate of Incorporation.

 

Q:

Is there a limit on the total number of Kensington public shares that may be redeemed?

 

A:

Yes. The Kensington Existing Certificate of Incorporation provides that it may not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001 (such that Kensington is not subject to the SEC’s “penny stock” rules). Other than this limitation and the aforementioned 15% threshold, the Kensington Existing Certificate of Incorporation does not provide a specified maximum redemption threshold. In addition, the Business Combination Agreement provides that Wallbox’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account together with the proceeds actually received from the PIPE Financing being at least $250,000,000. If, as a result of redemptions of shares of Kensington Class A Common Stock by the Public Stockholders, this condition is not met, then Wallbox may elect not to consummate the Business Combination.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. You may exercise your redemption rights whether you vote your shares of Kensington Class A Common Stock for or against, or whether you abstain from voting on, the Business Combination Proposal

 

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  or any other proposal described by this proxy statement/prospectus. As a result, the Business Combination Agreement can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of the NYSE.

 

Q:

How do I exercise my redemption rights?

 

A:

In order to exercise your redemption rights, you must (i) if you hold Kensington Public Units, separate the underlying shares of Kensington Class A Common Stock and Kensington Public Warrants, and (ii) prior to 5:00 p.m., New York City time, on September 28, 2021 (two business days before the initial date of the special meeting), tender your shares physically or electronically and identify yourself in writing as a beneficial holder and provide your legal name, phone number and address to the Transfer Agent in order to validly redeem your shares and submit a request in writing that Kensington redeem your shares of Kensington Class A Common Stock for cash to Continental Stock Transfer & Trust Company (the “Transfer Agent”) at the following address:

Continental Stock Transfer & Trust Company

1 State Street

New York, New York 10004

Attention:

Email:

You do not have to be a record date holder in order to exercise your redemption rights. Kensington stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is Kensington’s understanding that Kensington stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, Kensington does not have any control over this process and it may take longer than two weeks. Kensington stockholders who hold their shares in “street name” will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Kensington stockholders seeking to exercise their redemption rights, whether they are registered holders or hold their shares in “street name” are required to either tender their certificates to the Transfer Agent prior to the date set forth in this proxy statement/prospectus, or up to two business days prior to the vote on the Business Combination Proposal at the special meeting, or to deliver their shares to the Transfer Agent electronically using Depository Trust Company’s (DTC) Deposit/Withdrawal At Custodian (DWAC) system, at such stockholder’s option. The requirement for physical or electronic delivery prior to the special meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the Business Combination is approved.

Any demand for redemption, once made, may be withdrawn at any time until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to the Transfer Agent and decide within the required timeframe not to exercise your redemption rights, you may request that the Transfer Agent return the shares (physically or electronically). The redemption rights include the requirement that a holder must identify himself, herself or itself in writing as a beneficial holder and provide his, her or its legal name, phone number and address to the Transfer Agent in order to validly redeem his, her or its shares. You may make such request by contacting the Transfer Agent at the phone number or address listed under the question “Who can help answer my questions?” below.

If you hold Kensington Public Units registered in your own name, you must deliver the certificate for such Kensington Public Units to the Transfer Agent with written instructions to separate such Kensington Public Units into shares of Kensington Class A Common Stock and Kensington Public Warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the public shares from the Kensington Public Units.

 

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If a broker, dealer, commercial bank, trust company or other nominee holds your Kensington Public Units, you must instruct such nominee to separate your Kensington Public Units. Your nominee must send written instructions by facsimile to the Transfer Agent. Such written instructions must include the number of Kensington Public Units to be split and the nominee holding such Kensington Public Units. Your nominee must also initiate electronically, using DTC’s DWAC system, a withdrawal of the relevant units and a deposit of an equal number of shares of Kensington Class A Common Stock and Kensington Public Warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the Kensington Public Units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your Kensington Public Units to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming stockholder. However, this fee would be incurred regardless of whether or not stockholders seeking to exercise redemption rights are required to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.

 

Q:

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

 

A:

Kensington expects that a U.S. holder (as defined below in “Certain Tax Considerations—U.S. Federal Income Tax Considerations”) that exercises its redemption rights to receive cash from the Trust Account in exchange for all of its public shares will generally be treated as selling such shares resulting in the recognition of capital gain or capital loss. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes, or as integrated with the Business Combination. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “Certain Tax Considerations—Certain U.S. Federal Income Tax Consequences of the Redemption to the Holders of Kensington Common Stock” and “Risk Factors—Risks Related to U.S. Federal Income Taxation.

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.

 

Q:

What are the U.S. federal income tax consequences to me of the Business Combination?

 

A:

Subject to the limitations and qualifications described in “Certain Tax Considerations—Certain U.S. Federal Income Tax Consequences of the Business Combination” below (including the discussion of Section 367(a) of the Code), the transfer by U.S. holders of their Kensington Class A Common Stock to Holdco pursuant to the Business Combination Agreement, taken together with the related transactions, should qualify either as a transfer of property to a corporation under Section 351 of the Code or as a reorganization under Section 368 of the Code.

Kensington and Holdco have agreed pursuant to the Business Combination Agreement to report the Merger as a reorganization under Section 368 of the Code. If the Merger is treated as a reorganization under Section 368 of the Code, a U.S. holder of Kensington Public Warrants that are converted to Holdco Public Warrants likely would not recognize gain or loss. However, the qualification of the Merger as a reorganization under Section 368 of the Code is uncertain. If the Merger is not treated as a reorganization under Section 368 of the Code, a U.S. holder that solely owns Kensington Public Warrants generally will be required to recognize gain or loss upon the conversion of those Kensington Public Warrants to Holdco Public Warrants and a U.S. holder that owns Kensington Public Warrants and Kensington Class A Common Stock generally will be required to recognize gain (but may not be permitted to recognize loss) upon receipt of the Holdco Public Warrants.

 

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Section 367(a) of the Code and the Treasury regulations promulgated thereunder, in certain circumstances, may impose additional requirements for certain U.S. holders to qualify for tax-deferred treatment with respect to the exchange of Kensington Class A Common Stock and/or the conversion of the Kensington Public Warrants. If those additional requirements are not met, it could result in holders recognizing a greater amount of gain for U.S. federal income tax purposes than they would have recognized if the Merger and related transactions had not qualified for non-recognition of gain or loss or Section 367(a) of the Code had not applied.

For a more complete discussion of the U.S. federal income tax considerations of the Business Combination, see “Certain Tax Considerations—Certain U.S. Federal Income Tax Consequences of the Business Combination” and “Risk Factors—Risks Related to U.S. Federal Income Taxation.

 

Q:

If I am a Kensington warrant holder, can I exercise redemption rights with respect to my Kensington Public Warrants?

 

A:

No. The holders of Kensington Public Warrants have no redemption rights with respect to such warrants.

 

Q:

Do I have appraisal rights or dissenters’ rights if I object to the proposed Business Combination?

 

A:

No. There are no appraisal rights available to holders of shares of Kensington Common Stock in connection with the Business Combination.

 

Q:

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

A:

If the Business Combination is consummated, the funds held in the Trust Account will be used to: (i) pay Public Stockholders who properly exercise their redemption rights; (ii) pay $8,050,000 in deferred underwriting commissions to the underwriters of the Kensington IPO; and (iii) pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by Kensington and other parties to the Business Combination Agreement in connection with the Business Combination pursuant to the terms of the Business Combination Agreement.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

There are a number of closing conditions in the Business Combination Agreement, including the approval by Kensington stockholders of the Business Combination Proposal and the Kensington Cash Amount (as defined in the Business Combination Agreement). For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “The Business Combination Agreement and Ancillary Documents—Conditions to Closing of the Business Combination.

 

Q:

What happens if the Business Combination Agreement is terminated or the Business Combination is not consummated?

 

A:

There are certain circumstances under which the Business Combination Agreement may be terminated. Please see the section entitled “The Business Combination Agreement and Ancillary Documents” for information regarding the parties’ specific termination rights.

If Kensington does not consummate the Business Combination, it may continue to try to complete a business combination with a different target business until March 2, 2023. If Kensington fails to complete an initial business combination by March 2, 2023, then Kensington 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 Kensington public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable,

 

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and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (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 Kensington’s remaining stockholders and the Kensington Board, dissolve and liquidate, subject in each case to the Kensington’s obligations under Delaware law to provide for claims of creditors and other requirements of applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the Kensington IPO. Please see the section entitled “Risk Factors—Risks Related to Kensington” for additional information.

Holders of Founder Shares have waived any right to any liquidation distribution with respect to such shares. In addition, there will be no redemption rights or liquidating distributions with respect to the Kensington Public Warrants and Private Placement Warrants, which will expire worthless if Kensington fails to complete an initial business combination by March 2, 2023.

 

Q:

When is the Business Combination expected to be completed?

 

A:

It is currently anticipated that the Business Combination will be consummated promptly following the special meeting of stockholders, provided that all other conditions to the Closing have been satisfied or waived. For a description of the conditions to the completion of the Business Combination, see the section entitled “The Business Combination Agreement and Ancillary Documents—Conditions to Closing of the Business Combination.

 

Q:

What do I need to do now?

 

A:

You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the Annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q:

How do I vote?

 

A:

If you hold your shares in “street name” and were a holder of record of shares of Kensington Common Stock on August 30, 2021, the record date for the special meeting, you may vote with respect to the proposals virtually at the special meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

Voting by Mail. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the special meeting in the manner you indicate. You are encouraged to sign and return the proxy card even if you plan to attend the special meeting so that your shares will be voted if you are unable to attend the special meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by 11:59 p.m., New York City time, on September 29, 2021.

Voting Virtually at the Meeting. If you attend the special meeting and plan to vote virtually, you will be provided with a ballot at the virtual special meeting. If your shares are registered directly in your name, you are considered the stockholder of record and you have the right to vote virtually at the special meeting. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by 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 record holder of your shares with instructions on how to vote your shares or, if you wish to attend the special meeting and vote virtually, you must obtain a legal proxy from your broker, bank or nominee authorizing you to vote these shares. For additional information, please see the section entitled “The Special Meeting of Kensington Stockholders.

 

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Q:

What will happen if I abstain from voting or fail to vote at the special meeting?

 

A:

At the special meeting, a properly executed proxy marked “ABSTAIN” with respect to a particular proposal will be counted as present for purposes of determining whether a quorum is present. For purposes of approval, broker non-votes and abstentions will have no effect on the Business Combination Proposal, the Merger Proposal or the Adjournment Proposal.

 

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by Kensington without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the special meeting.

 

Q:

If I am not going to attend the special meeting virtually, should I return my proxy card instead?

 

A:

Yes. Whether you plan to attend the special meeting virtually or not, please read the enclosed proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q:

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

 

A:

No. 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.

Kensington believes that all of the proposals presented to the stockholders at this special meeting will be considered non-discretionary and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the special meeting. If you do not provide instructions with your proxy card, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares. This indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will be counted for the purposes of determining the existence of a quorum but will not be counted for purposes of determining the number of votes cast at the special meeting. Your broker, bank or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker, bank or other nominee to vote your shares in accordance with directions you provide.

 

Q:

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

 

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to Kensington’s Secretary at the address listed below so that it is received by Kensington’s Secretary prior to the special meeting or attend the special meeting virtually and vote. You also may revoke your proxy by sending a notice of revocation to Kensington’s Secretary, which must be received by Kensington’s Secretary prior to the special meeting.

 

Q:

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

 

A:

You 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

 

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  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 your vote with respect to all of your shares.

 

Q:

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

 

A:

Kensington will pay the cost of soliciting proxies for the special meeting. Kensington has engaged D.F. King & Co., Inc. (“D.F. King”) to assist in the solicitation of proxies for the special meeting. Kensington has agreed to pay a fee of $20,000, plus disbursements, and will reimburse D.F. King for its reasonable out-of-pocket expenses and indemnify and its affiliates against certain claims, liabilities, losses, damages and expenses. Kensington will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of Kensington Common Stock for their expenses in forwarding soliciting materials to beneficial owners of shares of Kensington Common Stock and in obtaining voting instructions from those owners. The directors, officers and employees of Kensington may also solicit proxies by telephone, by facsimile, by mail, on the Internet, in person or virtually. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Who can help answer my questions?

 

A:

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

Kensington Capital Acquisition Corp. II

1400 Old Country Road, Suite 301

Westbury, NY 11590

Telephone: (703) 674-6514

Attention: Secretary

You may also contact the proxy solicitor for Kensington at:

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, NY 10005

Call Toll-Free: (888) 542-7446

Banks and Brokers Call: (212) 269-5550

KCAC@dfking.com

To obtain timely delivery, Kensington stockholders must request the materials no later than September 23, 2021, or five business days prior to the special meeting.

You may also obtain additional information about Kensington from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.

 

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If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your public shares (either physically or electronically) to the Transfer Agent prior to the special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your public shares, please contact the Transfer Agent:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

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SUMMARY

This summary highlights selected information contained in this proxy statement/prospectus and does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus, including the Annexes and accompanying financial statements of Kensington and Wallbox, to fully understand the proposed Business Combination (as described below) before voting on the proposals to be considered at the special meeting (as described below). Please see the section entitled “Where You Can Find More Information.”

Parties to the Business Combination

Holdco

Holdco is a private company with limited liability incorporated under the laws of the Netherlands (besloten vennootschap met beperkte aansprakelijkheid) on June 7, 2021. To date, Holdco has not conducted any material activities other than those incident to its formation and the pending Business Combination and only has nominal assets consisting of cash and cash equivalents. Accordingly, no financial statements of Holdco have been included in this proxy statement/prospectus. Prior to consummation of the Business Combination, Holdco’s corporate form will be converted to a public company with limited liability incorporated under the laws of the Netherlands (naamloze vennootschap) and its name will be changed to Wallbox N.V. Holdco intends to apply to list the Holdco Ordinary A Shares and Holdco Warrants under the Exchange Act and on the NYSE under the symbols “WBX” and “WBXWS,” respectively, upon the closing of the Business Combination.

The mailing address of Holdco’s principal executive is Carrer del Foc, 68, Barcelona, Spain 08038 and its phone number is +34 930 181 668. It is expected that Holdco will have its tax residency in Spain, on the basis that its place of effective management will be located therein.

Wallbox

Wallbox is a global leader in smart electric vehicle charging and energy management. Founded in 2015, Wallbox creates smart charging systems that combine innovative technology with outstanding design and that manage the communication between user, vehicle, grid, building and charger.

Wallbox’s mission is to facilitate the adoption of electric vehicles today to make more sustainable use of energy tomorrow. By designing, manufacturing, and distributing charging solutions for residential, business, and public use, Wallbox is laying the infrastructure required to meet the demands of mass electric vehicles (“EV”) ownership everywhere. Wallbox’s customer-centric approach to its holistic hardware, software, and service offering has allowed Wallbox to solve barriers to EV adoption today as well as anticipate opportunities soon to come. Wallbox is creating solutions that will not only allow for faster, simpler EV charging, but that will also change the way the world uses energy.

Its smart charging product portfolio includes Level 2 alternating current (“AC”) chargers (“Pulsar Plus”, “Commander 2” and “Copper SB”) for home and business applications, and direct current (“DC”) fast chargers (“Supernova”) for public applications. Wallbox also offers the world’s first bi-directional DC charger for the home (“Quasar”), which allows users to both charge their electric vehicle and use the energy from the car’s battery to power their home or business, or send stored energy back to the grid. Wallbox’s proprietary residential and business software (“myWallbox”) gives users and charge point owners complete control over their private charging and energy management activities. Meanwhile, Wallbox’s dedicated semi-public and public charging software platform, (“Electromaps”) enables drivers to locate and transact with all public charging stations registered to its brand-agnostic charger database and also allows charge point operators to manage their public charging stations at scale.

As of September 2021, Wallbox has nine offices across three continents and has sold over 138,258 units across 83 countries. Its products are currently manufactured in Spain and China, with plans to add a U.S.

 

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manufacturing facility in Arlington, Texas in 2022. Through its vertically-integrated model, Wallbox keeps development cycles short, enabling an accelerated time to market. Furthermore, Wallbox’s compliance with complex certification requirements paired with its focus on engineering excellence is powering its rapid growth as the global supplier of first-class charging products.

Kensington

Kensington is a Delaware corporation formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses, referred to throughout this proxy statement/prospectus as its initial business combination. Although Kensington may pursue its initial business combination in any business, industry or geographic location, it has focused on opportunities to capitalize on the ability of its management team, particularly its executive officers, to identify, acquire and operate a business in the North America automotive and automotive-related sector.

Kensington Class A Common Stock, Kensington Warrants and Kensington Units, consisting of one share of Kensington Class A Common Stock and one-fourth of a Kensington Warrant, are traded on the NYSE under the ticker symbols “KCAC,” “KCAC WS” and “KCAC.U,” respectively. Upon the closing of the Business Combination, Kensington’s securities will be delisted from the NYSE.

The mailing address of Kensington’s principal executive office is 1400 Old Country Road, Suite 301, Westbury, NY 11590, and its telephone number is (703) 674-6514.

Merger Sub

Merger Sub is a Delaware corporation and wholly-owned subsidiary of Holdco that was incorporated in 2021 to facilitate the consummation of the Business Combination. As part of the Business Combination, Kensington will merge with and into Merger Sub, with Kensington continuing as the surviving entity.

The mailing address of Merger Sub’s registered office is c/o Universal Registered Agent, Inc., 300 Creek View Road, Suite 209, Newark, Delaware 19711.

The Business Combination

General

On June 9, 2021, Kensington, Holdco, Merger Sub and Wallbox entered into the Business Combination Agreement, pursuant to which Kensington, Holdco and Wallbox will consummate the Business Combination. The Business Combination Agreement contains customary representations and warranties, covenants, closing conditions and other terms relating to the Exchanges (as defined below), the Merger and the other transactions contemplated thereby.    

Prior to the Closing Date, each holder of Wallbox’s convertible loans will, prior to the Exchange Effective Time (as defined below), convert its Wallbox convertible loans into Wallbox Ordinary Shares (the “Convert Exchange”). On the Closing Date, each holder of Wallbox Ordinary Shares will exchange by means of a contribution in kind its Wallbox Ordinary Shares to Holdco in exchange for the issuance of Holdco Shares in accordance with the Exchange Ratio and Wallbox will become a wholly-owned subsidiary of Holdco (the “Ordinary Exchange,” and together with the Convert Exchanges, the “Exchanges”, and the effective time of the Ordinary Exchange, the “Exchange Effective Time”). Each outstanding Class A Ordinary Share of Wallbox (including each such share resulting from the conversion of Wallbox’s convertible loans prior to the Closing by the noteholders thereof), and each outstanding Class B Ordinary Share of Wallbox will be exchanged by means of a contribution in kind in exchange for a number of Holdco Class A Shares or Holdco Class B Shares, as

 

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applicable, determined in each case by reference to an “Exchange Ratio,” calculated in accordance with the Business Combination Agreement; provided, however, that Enric Asunción Escorsa and Eduard Castañeda will receive Holdco Class B Shares. Each share of Kensington’s Class A common stock and Class B common stock outstanding immediately prior to the Merger Effective Time (other than certain customarily excluded shares) will be converted into and become one share of new Kensington common stock, and each such share of new Kensington common stock will immediately thereafter be exchanged by means of a contribution in kind in exchange for the issuance of Holdco Class A Shares, whereby Holdco will issue one Holdco Class A Share for each share of new Kensington common stock exchanged. The Merger is to become effective by the filing of a certificate of merger with the Secretary of State of the State of Delaware and will be effective immediately upon such filing or upon such later time as may be agreed by the parties and specified in such certificate of merger (such time, the “Merger Effective Time”). The parties will hold the Closing immediately prior to such filing of a certificate of merger, on the Closing Date to be specified by Kensington and Wallbox, as promptly as practicable following the satisfaction or waiver (to the extent such waiver is permitted by applicable law) of the conditions set forth in the Business Combination Agreement (other than those conditions that by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of those conditions at such time), but in no event later than the third business day after the satisfaction or waiver, if legally permissible, of each of the conditions to the completion of the Business Combination (or on such other date, time or place as Kensington and Wallbox may mutually agree).

For more information about the Business Combination, please see the sections entitled “The Business Combination” and “The Business Combination Agreement and Ancillary Documents.” A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

Effect of the Business Combination on Existing Kensington Equity

Subject to the terms and conditions of the Business Combination Agreement, the Business Combination will result in, among other things, the following:

 

   

each share of Kensington Class A Common Stock will be converted into the right to receive New Kensington Common Stock, which will then be exchanged by means of a contribution in kind in exchange for one fully paid and non-assessable Holdco Class A Share;

 

   

each Founder Share will be converted into the right to receive New Kensington Common Stock, which will then be exchanged by means of a contribution in kind in exchange for one fully paid and non-assessable Holdco Class A Share; and

 

   

each Kensington Public Warrant will be converted into a Holdco Public Warrant, on the same terms and conditions as those applicable to the Kensington Public Warrants.

Consideration to Wallbox Shareholders in the Business Combination

Subject to the terms and conditions of the Business Combination Agreement, the consideration to be received by the Wallbox equityholders in connection with the Business Combination will be 140,000,000 Holdco Shares.

Ownership of Holdco

It is anticipated that, upon completion of the Business Combination and assuming the Illustrative Exchange Ratio: (i) the Public Stockholders will own approximately 12.87% of Holdco on a fully diluted basis; (ii) the PIPE Investors (excluding shares owned by certain Wallbox equityholders prior to such PIPE Financing) will own approximately 5.59% of Holdco on a fully diluted basis; (iii) the Sponsor will own approximately 3.22% of Holdco on a fully diluted basis; and (iv) the Wallbox equityholders (excluding any portion of the PIPE Financing provided thereby) will own approximately 78.32% of Holdco on a fully diluted basis. These levels of

 

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ownership interests assume that (A) no shares of Kensington Class A Common Stock are elected to be redeemed by the Public Stockholders and (B) that 10,000,000 Holdco Shares are issued to the PIPE Investors in connection with the PIPE Financing. If the actual facts are different than these assumptions, the ownership percentages in Holdco will be different. If there are any redemptions by Public Stockholders of shares of Kensington Class A Common Stock in connection with the Business Combination, it would reduce the aggregate ownership of the Public Stockholders and increase the aggregate ownership of the other stockholder groups. If the PIPE Investors do not fund the PIPE Financing in full, it would reduce the aggregate ownership of the PIPE Investors and increase the aggregate ownership of the other stockholder groups. For further information related to the determination of the number of Holdco Shares to be issued to the Wallbox equityholders upon completion of the Business Combination, please see the section entitled “The Business Combination—Consideration to Wallbox Shareholders in the Business Combination.

The ownership percentages with respect to Holdco following the Business Combination do not take into account any awards to be issued under the ESPP or the Incentive Plan to be entered into in connection with the Business Combination or the Holdco Public Warrants, but do include Founder Shares, which will be exchanged for Holdco Class A Shares at the closing of the Business Combination on a one-for-one basis and includes approximately 9,970,719 shares underlying Wallbox options, which are subject to future exercise, service conditions, or a combination thereof. If the actual facts are different than these assumptions, the ownership percentages in Holdco will be different.

For a summary of the financial analysis Kensington conducted when determining the equity valuation of Wallbox, please see “The Business Combination—Kensington’s Board of Directors’ Reasons for the Approval of the Business Combination—Attractive Market Valuation of Comparable Companies.

Conditions to Closing of the Business Combination

Under the Business Combination Agreement, the Closing is subject to customary and other conditions, including:

 

   

our stockholders having approved, among other things, the Proposed Transactions;

 

   

the absence of any governmental order that would prohibit the Business Combination;

 

   

the expiration of the waiting period (or extension thereof) under the HSR Act;

 

   

all required filings under foreign direct investments regulations in Spain having been completed and any authorizations, confirmations or clearances from the competent public authorities reasonably required thereunder having been obtained;

 

   

Kensington having at least $250 million in the aggregate in (A) its Trust Account (after giving effect to the Kensington Stockholder Redemption) plus (B) cash proceeds received in connection with the PIPE;

 

   

the representations and warranties of the parties to the Business Combination Agreement being true and correct, subject to the materiality and material adverse effect standards contained in the Business Combination Agreement; and

 

   

compliance by the parties in all material respects with their respective covenants.

The obligations of the parties to the Business Combination Agreement to consummate the Business Combination are subject to additional conditions, as described more fully below in the section entitled “The Business Combination Agreement and Ancillary Documents—Conditions to Closing of the Business Combination.

 

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Ancillary Documents

Exchange Agreement

Concurrently with the execution of the Business Combination Agreement, Holdco, Wallbox and the holders of Wallbox Ordinary Shares and the holders of Wallbox’s convertible loans entered into a Contribution and Exchange Agreement (the “Exchange Agreement”), under which Kensington is a third-party beneficiary. Pursuant to the Exchange Agreement, (i) each holder of Wallbox’s convertible loans will, prior to the Exchange Effective Time (as defined below), convert its Wallbox convertible loans into Wallbox Ordinary Shares (the “Convert Exchange”) and (ii) following the Convert Exchange, each holder of Wallbox Ordinary Shares will exchange by means of a contribution in kind its Wallbox Ordinary Shares to Holdco in exchange for the issuance of Holdco Shares in accordance with the Exchange Ratio and Wallbox will become a wholly-owned subsidiary of Holdco (the “Ordinary Exchange,” and together with the Convert Exchanges, the “Exchanges”, and the effective time of the Ordinary Exchange, the “Exchange Effective Time”).

Sponsor Support Agreement

In connection with their entry into the Business Combination Agreement, the Sponsor, Kensington, Holdco and Wallbox entered into the Sponsor Support Agreement, pursuant to which (a) the Sponsor reaffirmed its obligations in existing arrangements with Kensington to vote in favor of each of the proposals to be voted upon at the meeting of Kensington stockholders in connection with the business combination, including approval of the Business Combination Agreement and the transactions contemplated thereby; and (b) the Sponsor has waived any adjustment to the conversion ratio set forth in the governing documents of Kensington or any other anti-dilution or similar protection with respect to the shares of Kensington Class B Common Stock that may result from the transactions contemplated by the Business Combination.

Registration Rights and Lock-Up Agreement

Pursuant to the Business Combination Agreement, at the Closing, Kensington, Holdco, Kensington Capital Sponsor II LLC (the “Original Holder”) and the shareholders of Wallbox (the “New Holders” and, collectively with the Original Holder, the “Holders”) will enter into a Registration Rights and Lock-Up Agreement (the “Registration Rights and Lock-Up Agreement”) substantially in the form set forth in the Business Combination Agreement. Pursuant to the terms of the Registration Rights and Lock-Up Agreement, Holdco will be obligated to file a registration statement to register the resale of certain securities of Holdco held by the Holders. In addition, pursuant to the terms of the Registration Rights and Lock-Up Agreement and subject to certain requirements and customary conditions, including with regard to the number of demand rights that may be exercised, the Holders may demand at any time or from time to time, that Kensington file a registration statement on Form F-3 (or on Form F-1 if Form F-3 is not available) to register the securities of Holdco held by such Holders. The Registration Rights and Lock-Up Agreement also provides the Holders with “piggy-back” registration rights, subject to certain requirements and customary conditions.

The securities held by each of the New Holders and the Original Holder will be locked-up for one year following the Closing, subject to earlier release if (i) the reported last sale price of Holdco’s ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing or (ii) if Holdco consummates a liquidation, merger, stock exchange or other similar transaction after the Closing which results in all of Holdco’s shareholders having the right to exchange their ordinary shares for cash, securities or other property. After 180 days following the Closing, New Holders will have the right to transfer securities to the extent required to cover tax obligations of such New Holder or its direct and indirect shareholders.

Employee Lock-Up Agreements

On June 9, 2021, Kensington entered into separate Employee Lock-Up Agreements with certain employees of Wallbox (the “Employees”), including Wallbox’s executive officers. The Employee Lock-Up

 

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Agreements provide that the securities of Holdco owned of record or beneficially by the Employees (including certain securities that may be granted or issued to an Employee after the Closing) (collectively, the “Lock-Up Shares”) may generally not be transferred for one year after the Closing (the “Lock-Up Period”), subject to certain exceptions including after 180 days following the Closing, Employees will have the right to transfer securities to the extent required to cover tax obligations of such Employee.

Subscription Agreements

In connection with the execution of the Business Combination Agreement, Kensington and Holdco entered into subscription agreements with PIPE Investors, pursuant to which the PIPE Investors agreed to subscribe for and purchase and Holdco agreed to issue to such PIPE Investors, 10,000,000 Holdco Class A Shares (the “PIPE Shares”), for an aggregate of $100,000,000 in proceeds. The PIPE Shares to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act or Regulation S promulgated thereunder without any form of general solicitation or general advertising.

The closing of the Subscription Agreements is contingent upon, among other things, the substantially concurrent consummation of the Business Combination and related transactions.

Certain of the officers and directors of Kensington agreed to invest in the PIPE Financing on the same terms as the other PIPE Investors (see “The Business Combination—Interests of Certain Persons in the Business Combination”).

Kensington’s Board of Directors’ Reasons for the Approval of the Business Combination

After careful consideration, the Kensington Board recommends that Kensington stockholders vote “FOR” each Kensington Proposal at the Kensington special meeting of stockholders.

For a description of Kensington’s reasons for the approval of the Business Combination and the recommendation of our board of directors, see the section entitled “The Business Combination—Kensington’s Board of Directors’ Reasons for the Approval of the Business Combination.

Wallbox Prospective Financial Information

Wallbox provided Kensington with its internally prepared forecasts for each of the years in the seven-year period ending December 31, 2027. Kensington’s management reviewed the forecasts and presented key elements of the forecasts to the Kensington Board as part of the Kensington Board’s review and subsequent approval of the Business Combination. Wallbox and Kensington do not, as a matter of general practice, publicly disclose long-term forecasts or internal projections of future performance, revenue, financial condition or other results. However, in connection with the proposed Business Combination, Kensington’s management used the financial forecasts set forth below as part of its comprehensive analysis. The forecasts were prepared solely for internal use and not with a view toward public disclosure, the published guidelines of the SEC regarding projections or any guidelines established by the American Institute of Certified Public Accountants or the International Accounting Standards Board for preparation and presentation of prospective financial information but, in the view of Wallbox’s management, was prepared on a reasonable basis.

The inclusion of financial projections in this proxy statement/prospectus should not be regarded as an indication that Kensington, Wallbox, their respective directors, officers, advisors or other representatives considered, or now considers, such financial projections necessarily to be predictive of actual future results or to support or fail to support your decision whether to vote for or against the Business Combination Proposal. The financial projections are not fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement/prospectus, including investors or stockholders, are cautioned not to place

 

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undue reliance on this information. You are cautioned not to rely on the projections in making a decision regarding the Business Combination, as the projections may be materially different than actual results. You are urged to review the sections of this proxy statement/prospectus entitled “Wallbox’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Cautionary Note Regarding Forward-Looking Statements,” and “Risk Factors.” We will not refer back to the financial projections in Holdco’s future periodic reports filed under the Exchange Act.

The financial projections reflect numerous estimates and assumptions with respect to general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to Wallbox’s business, all of which are difficult to predict and many of which are beyond Wallbox’s and Kensington’s control. The financial projections are forward-looking statements that are inherently subject to significant uncertainties and contingencies, many of which are beyond Wallbox’s control, including those described or incorporated by reference in the sections entitled “Risk Factors,” “Wallbox Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Cautionary Note Regarding Forward-Looking Statements.” As a result, there can be no assurance that the projected results will be realized or that actual results will not be significantly higher or lower than projected. Since the financial projections cover multiple years, such information by its nature becomes less reliable with each successive year. These financial projections are subjective in many respects and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments.

Furthermore, the financial projections do not take into account any circumstances or events occurring after the date they were prepared. The prospective financial information has been provided by management of Wallbox. BDO Bedrijfsrevisoren BV has not compiled or examined this information and accordingly does not express an opinion or any other form of assurance on the prospective financial information included herein. Kensington’s independent registered public auditor or any other independent accountants, have compiled, examined or performed any procedures with respect to the financial projections included below, nor have they expressed any opinion or any other form of assurance on such information or their accuracy or achievability, and they assume no responsibility for, and disclaim any association with, the financial projections. Nonetheless, a summary of the financial projections is provided in this proxy statement/prospectus because they were made available to Kensington and the Kensington Board in connection with their review of the proposed Business Combination.

Wallbox had revenues for the years ended December 31, 2020 and 2019 of €19,677 and €8,020, respectively, and loss for the year of €(11,402) and €(6,136), respectively. The financial projections below were not prepared solely on the basis of Wallbox’s historic trends; rather, such projections assume growth of the business in excess of such historic operating trends. In order to attain the projected results for the forecasted periods, particularly in outer years, Wallbox’s projections assume a global acceleration in the trends of EV adoption, which is subject to a high degree of risk and uncertainty due to a variety of factors that could cause actual results to differ from those expressed in such estimates.

Wallbox’s projections were prepared assuming industry-wide market opportunity for EV charging infrastructure based on a projected TAM (as defined below) of $102 billion by 2030. The projected TAM, which was based on the 2020 version of the BNEF Electric Vehicle Outlook, consists of charging hardware, installations, software, and energy management solutions.

Wallbox’s revenue growth is directly tied to the continued acceptance of passenger and commercial EVs sold, which it believes drives the demand for charging products and infrastructure. Wallbox believes the EV market is at an inflection point and is experiencing substantial growth. We believe Wallbox is positioned to capture market share as a result of its smart charging technology, fast time to market, robust supply chain, global operations, local certifications, strong sales pipeline and the potential of its sales partners, which include world class utilities, OEMs, car dealerships and tag distributors. In addition, Wallbox expects to expand its product offering through the introduction of its first public charging station, Supernova, with expected commercialization

 

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of in the fourth quarter of 2021, and to expand its margins with an increasing percentage of revenues coming from software.

Nonetheless, the market for EVs is still rapidly evolving and although demand for EVs has grown in recent years, there is no guarantee such demand will continue into the future. Factors impacting the adoption of EVs include but are not limited to: perceptions about EV features, quality, safety, performance and cost; perceptions about the limited range over which EVs may be driven on a single battery charge; volatility in the cost of oil and gasoline; availability of services for EVs; consumers’ perception about the convenience and cost of charging EVs; government subsidies for EVs and electricity; the development, prevalence and market adoption of EV fleets; and increases in fuel efficiency of non-EV transportation. In addition, macroeconomic factors could impact demand for EVs, particularly since EVs can be more expensive than traditional gasoline-powered vehicles and the automotive industry globally has been experiencing a recent decline in sales. If the market for EVs does not develop as expected or if there is any slow-down or delay in overall EV adoption rates, this would impact Wallbox’s ability to increase its revenue or grow its business. See “Wallbox’s Management’s Discussion And Analysis Of Financial Condition And Results Of Operations—Key Factors Affecting Operating Results—Growth in EV Adoption” and “Risk Factors—Wallbox’s growth and success is highly correlated with and thus dependent upon the continuing rapid adoption of, and demand for EVs.

Additionally, Wallbox’s projections assume it will have sufficient liquidity to satisfy its cash requirements in the financial projections below. To the extent the proceeds from the Business Combination and the PIPE will not satisfy such requirements, Wallbox will need to obtain working capital financial lines from additional financing sources, including in a no redemption scenario. There are currently no commitments in place for such financing and there can be no guarantee that such financing will be available, or that Wallbox will be able to obtain such financing on attractive terms.

Management of Wallbox believes the assumed growth is reasonable given Wallbox’s historical actual increase in revenue of approximately 145% from the year ended December 31, 2019 to the year ended December 31, 2020. Furthermore, Wallbox’s estimates represent only approximately 1% of the total TAM for the EV charging market. Finally, according to the 2021 edition of the BNEF Electric Vehicle Outlook, on June 9, 2021, BNEF increased its projections of the EV fleet size by 2030 significantly from 116 million vehicles to 169 million vehicles; more than 14 times the current EV fleet size. Key drivers for this increase are various stakeholders’ responses to COVID-19, additional government support, further improvements of unit economics related to batteries, and more and more commitments from carmakers. The forecasts below do not take into account these revised industry projections.

The key elements of the Wallbox forecasts provided to the Kensington Board, are summarized in the tables below:

 

     Prospective Year Ending December 31,  
     2021E     2022E     2023E     2024E     2025E     2026E     2027E  
    

(unaudited)

(U.S. dollars in millions)(4)

 

Unit Sales (in thousands)

     119       232       383       581       807       1,041       1,307  

Cumulative Unit Sales (in thousands)

     186       417       801       1,381       2,188       3,229       4,536  

Total Revenue

   $ 79     $ 224     $ 463     $ 776     $ 1,173     $ 1,605     $ 2,115  

Total Cost of Goods Sold

     48       135       276       455       672       897       1,153  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Gross Profit

   $ 31     $ 89     $ 188     $ 321     $ 501     $ 708     $ 962  

Total Gross Margin

     39     40     40     41     43     44     45

Total Opex(1)

     (68     (141     (218     (295     (378     (460     (544

As a percentage of Sales

     86     63     47     38     32     29     26
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA(2)

   $ (37   $ (52   $ (31   $ 26     $ 122     $ 248     $ 417  

EBITDA Margin

     (47 )%      (23 )%      (7 )%      3     10     15     20

CAPEX

   $ (25   $ (20   $ (8   $ (18   $ (23   $ (50   $ (25

Unlevered Free Cash Flow(3)

   $ (88   $ (117   $ (104   $ (75   $ 2     $ 36     $ 161  

 

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  (1)

We calculate Total Opex as the sum of personnel costs and overhead costs.

  (2)

We calculate EBITDA as income (loss) of the year before (i) amortization and depreciation, (ii) net finance income (costs), and (iii) income tax credit.

  (3)

We calculate Unlevered Free Cash Flow as EBITDA, less Capex, less Cash Taxes, less change in Deferred Tax Assets, less change in Working Capital.

  (4)

The Wallbox prospective financial information provided to Kensington had been translated from Euros into U.S. Dollars using an exchange rate of €1.00 to $1.2082, which was the exchange rate published by the European Central Bank as of April 30, 2021.

Because these forecasts were prepared for use by the parties in connection with the Business Combination and not for financial reporting purposes, they were not prepared and are not presented in the same manner as Wallbox’s audited consolidated financial information included elsewhere in this proxy statement/prospectus. Specifically, the forecasts utilize line items that are different from and are not directly comparable to the presentation of Wallbox’s audited historical consolidated financial information presented under IFRS under “Wallbox’s Management’s Discussion and Analysis of Financial Condition and Results of Operation” and its audited consolidated financial statements included elsewhere in this proxy statement/prospectus. Additionally, such forecasts are presented in U.S. Dollars; whereas, Wallbox’s historical financial information is presented in Euros. As a result of the above, such forecasts are not directly comparable to the historical financial information presented elsewhere in this proxy statement/prospectus. The forecasts also include certain financial measures not presented in accordance with IFRS, including but not limited to, Unit Sales, Unlevered Free Cash Flow, EBITDA and certain ratios and other metrics derived therefrom. Wallbox defines EBITDA as income (loss) of the year before (i) amortization and depreciation, (ii) net finance income (costs), and (iii) income tax credit. Wallbox defines Unlevered Free Cash Flow as EBITDA, less Capex, less Cash Taxes, less change in Deferred Tax Assets, less change in Working Capital. These non-IFRS financial measures are not measures of financial performance in accordance with IFRS and may exclude items that are significant in understanding and assessing Wallbox’s financial results. Additionally, due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, Wallbox is unable to quantify certain amounts that would be required to be included in the most directly comparable IFRS financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable IFRS measures is included and no reconciliation of the forward-looking non-IFRS financial measures is included. Therefore, these measures should not be considered in isolation or as an alternative to net loss, cash flows from operations or other measures of profitability, liquidity or performance under IFRS. You should be aware that Wallbox’s presentation of these measures may not be comparable to similarly-titled measures used by other companies. Wallbox believes these non-IFRS measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Wallbox’s financial condition and results of operations. Wallbox believes that the use of these non-IFRS financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing Wallbox’s financial measures with other similar companies, many of which present similar non-IFRS financial measures to investors. These non-IFRS financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-IFRS financial measures.

The Special Meeting of Kensington Stockholders

Date, Time and Place of Special Meeting

The special meeting of stockholders of Kensington will be held at 10:00 a.m., Eastern time, on September 30, 2021, via live webcast at www.virtualshareholdermeeting.com/KCAC2021SM, or such other date, time and place to which such meeting may be adjourned or postponed, for the purpose of considering and voting upon the proposals.

Stockholders are urged to vote their proxies by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope, or to direct their brokers or other agents on how to vote the shares in their accounts, as applicable.

 

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Proposals

At the special meeting, Kensington stockholders will be asked to consider and vote on:

 

  1.

Proposal No. 1—The Business Combination Proposal—a proposal to approve and adopt the Business Combination Agreement and the Business Combination;

 

  2.

Proposal No. 2—The Merger Proposal—a proposal to approve and adopt the Merger, pursuant to which Merger Sub will merge with and into Kensington with Kensington as the surviving company; and

 

  3.

Proposal No. 3—The Adjournment Proposal—a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

Please see the sections entitled “Proposal No. 1—The Business Combination Proposal,” “Proposal No. 2—The Merger Proposal,” and “Proposal No. 3—The Adjournment Proposal.

Voting Power; Record Date

For Kensington stockholders holding their shares in “street name,” only holders of record at the close of business on August 30, 2021, the record date for the special meeting, will be entitled to vote at the special meeting. Each Kensington stockholder that holds its shares in “street name” is entitled to one vote for each share that such stockholder owned as of the close of business on the record date. If a Kensington stockholder’s shares are held in “street name” or are in a margin or similar account, such stockholder should contact its broker, bank or other nominee to ensure that votes related to the shares beneficially owned by such stockholder are properly counted. On the record date, there were 28,7500,000 shares of Kensington Common Stock outstanding, of which 23,000,000 are public shares and 5,750,000 are shares held by the Sponsor and the Kensington Initial Stockholders.

Vote of the Kensington Initial Stockholders and Kensington’s Other Directors and Officers

Prior to the Kensington IPO, Kensington entered into agreements with the Kensington Initial Stockholders and the other current directors and officers of Kensington, pursuant to which each agreed to vote any shares of Kensington Common Stock owned by them in favor of an initial business combination. These agreements apply to the Kensington Initial Stockholders, including Sponsor, as it relates to the Founder Shares and the requirement to vote all of the Founder Shares in favor of the Business Combination Proposal and for all other proposals presented to Kensington stockholders in this proxy statement/prospectus. As of the record date, the Kensington Initial Stockholders that hold their shares in “street name,” the Sponsor and the other current directors and officers own 5,750,000 Founder Shares, representing 20% of the shares of Kensington Common Stock then outstanding and entitled to vote at the special meeting.

The Sponsor has waived any redemption rights, including with respect to shares of Kensington Class A Common Stock purchased in the Kensington IPO or in the aftermarket, in connection with the Business Combination. The Founder Shares held by the Sponsor have no redemption rights upon the liquidation of Kensington and will be worthless if no business combination is effected by Kensington by March 2, 2023. However, the Sponsor and the current directors and officers are entitled to liquidating distributions with respect to any public shares they may own if Kensington fails to complete its initial business combination by March 2, 2023.

Quorum and Required Vote for Proposals at the Special Meeting

A quorum of Kensington stockholders is necessary to hold a valid meeting. A quorum will be present if one or more stockholders who together hold a majority of the issued and outstanding shares of Kensington Common Stock are present, virtually or represented by proxy, at the special meeting. Broker non-votes and abstentions will be counted as present for the purpose of determining a quorum. The 20% of the issued and outstanding shares of Kensington Common Stock held by the Sponsor will be counted towards determining the presence of a quorum. In the absence of a quorum, the chairman of the special meeting has power to adjourn the special meeting. As of the record date for the special meeting, 14,375,001 shares of Kensington Common Stock would be required to achieve a quorum.

 

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The approval of each of the Business Combination Proposal, Merger Proposal and Adjournment Proposal requires the affirmative vote of holders of at least a majority of the shares of Kensington Common Stock that are entitled to vote and are voted at the special meeting. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Business Combination Proposal, the Merger Proposal or the Adjournment Proposal. The Sponsor has agreed to vote their Founder Shares and any public shares purchased by them during or after the Kensington IPO in favor of the Business Combination Proposal and Merger Proposal.

The closing of the Business Combination is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal, if presented, is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that, in the event that the Business Combination Proposal does not receive the requisite vote for approval, Kensington will not consummate the Business Combination. If Kensington does not consummate the Business Combination and fails to complete an initial business combination by March 2, 2023, Kensington will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the Public Stockholders.

Recommendation to Kensington Stockholders

The Kensington Board believes that each of the Business Combination Proposal, the Merger Proposal, and the Adjournment Proposal to be presented at the special meeting is in the best interests of Kensington and its stockholders and recommends that its stockholders vote “FOR” each of the proposals.

Interests of Certain Persons in the Business Combination

In considering the recommendation of the Kensington Board to vote in favor of the Business Combination, Kensington stockholders should be aware that aside from their interests as stockholders, the Sponsor, Kensington Initial Stockholders and Kensington’s other current officers and directors have interests in the Business Combination that are different from, or in addition to, those of other Kensington stockholders generally. The Kensington Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to Kensington stockholders that they approve the Business Combination Proposal. Kensington stockholders should take these interests into account in deciding whether to approve the Business Combination Proposal.

These interests include:

 

   

the fact that the Sponsor has agreed not to redeem any shares of Kensington Common Stock held by it in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at approximately $57,500,000, but, given the transfer restrictions on such shares, Kensington believes such shares have less value;

 

   

the fact that the Kensington Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if Kensington fails to complete an initial business combination by March 2, 2023;

 

   

the fact that the Registration Rights and Lock-Up Agreement will be entered into by the Sponsor;

 

   

the fact that the Sponsor paid an aggregate of $6,600,000 for its 8,800,000 Private Placement Warrants with an aggregate market value of approximately $8,800,000 based on the closing price of the Public Warrants of $1.00 on the NYSE on September 15, 2021, and that such Private Placement Warrants will expire worthless if a business combination is not consummated by March 2, 2023;

 

   

the fact that the Sponsor has made a loan of $100,000 to Kensington and has informed Kensington that the Sponsor intends to convert the loan into 133,333 warrants on the same terms as the Private

 

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Warrants (as contemplated by the Kensington Warrant Agreement pursuant to which the Private Warrants were issued) at the same time the Business Combination is completed and for such warrants to be issued to Robert Remenar, Simon Boag and Daniel Huber, who had advanced such amount to the Sponsor in order for the loan to be made. Such warrants have an aggregate market value of approximately $133,333 based on the closing price of the Public Warrants of $1.00 on the NYSE on September 15, 2021. Additionally, at the option of Sponsor, any other amounts outstanding under certain working capital loans made by Sponsor or any of its affiliates to Kensington in an aggregate amount of up to $2,000,000 (including the foregoing $100,000 loan) may be converted into warrants to purchase shares of Kensington Class A Common Stock which will be identical to the Private Placement Warrants;

 

   

the fact that Justin Mirro, Robert Remenar, Daniel Huber, Simon Boag, Thomas LaSorda, Anders Pettersson, Mitchell Quain, Donald Runkle and Matthew Simoncini, who are officers or directors of Kensington, have directly or indirectly through their affiliates agreed to invest up to an aggregate of $9,900,000 in the PIPE Financing on the same terms as the other PIPE Investors;

 

   

the right of the Sponsor to receive 5,750,000 Holdco Shares with an aggregate market value of approximately $56,752,500 based on the closing price of Kensington Class A Common Stock of $9.87 on the NYSE on September 15, 2021, subject to certain lock-up periods;

 

   

the continued indemnification of Kensington’s existing directors and officers and the continuation of Kensington’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that the Sponsor and Kensington’s officers and directors will lose their entire investment in Kensington and will not be reimbursed for any out-of-pocket expenses to the extent such expenses exceed the amount not required to be retained in the Trust Account if an initial business combination is not consummated by March 2, 2023. Kensington’s officers and directors do not currently have any unreimbursed out-of-pocket expenses and do not expect to incur any out-of-pocket expenses for which they are entitled to reimbursement;

 

   

the fact that if the Trust Account is liquidated, including in the event Kensington is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Kensington to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Kensington has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Kensington, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that the Sponsor has invested an aggregate of $6,725,000 (in respect of the Founder Shares, the Private Placement Warrants and a loan of $100,000) that will have zero value in the event Kensington is not able to complete a business combination; and

 

   

the fact that the Sponsor and its affiliates can earn a positive return on their investment, even if the Public Shareholders have a negative return in their investment in Holdco.

Redemption Rights

Pursuant to Kensington’s Existing Certificate of Incorporation, holders of Kensington public shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with Kensington’s Existing Certificate of Incorporation. As of September 15, 2021, this would have amounted to approximately $10.00 per share. If a holder of Kensington public shares exercises its redemption rights, then such holder will be exchanging its shares of Kensington Class A Common Stock for cash and will not own shares of Holdco following the closing of the Business Combination. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either

 

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physically or electronically) to the Transfer Agent in accordance with the procedures described herein. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than fifteen percent (15%) of the shares of Kensington Class A Common Stock included in the Kensington Public Units sold in the Kensington IPO. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public stockholder or group will not be redeemed for cash.

Kensington has no specified maximum redemption threshold under its Existing Certificate of Incorporation, other than the aforementioned 15% threshold. Each redemption of shares of Kensington Class A Common Stock by Public Stockholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $230,026,963 as of September 15, 2021. The Business Combination Agreement provides that Wallbox’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (after giving effect to the Kensington Stockholder Redemption) together with the proceeds actually received from the PIPE Financing being at least $250,000,000. The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. In no event will Kensington redeem its shares of Kensington Class A Common Stock in an amount that would cause its (or Holdco’s after giving effect to the transactions contemplated by the Business Combination Agreement) net tangible assets to be less than $5,000,001, as provided in the Kensington Existing Certificate of Incorporation. Kensington stockholders who wish to redeem their public shares for cash must refer to and follow the procedures set forth in the section entitled “The Special Meeting of Kensington Stockholders—Redemption Rights” in order to properly redeem their public shares.

Holders of Kensington Public Warrants will not have redemption rights with respect to such warrants.

Kensington public shares that are owned by holders who do not elect to have their shares redeemed for cash are subject to dilution by other securities being issued in the Business Combination.

The amount of dilution incurred by Kensington public shares that are owned by holders who do not elect to have their shares redeemed for cash will depend on the number of shares that are redeemed. See “Unaudited Condensed Combined Financial InformationBasis of Pro Forma Presentation” for a table that summarizes the number of Holdco Shares outstanding under the two redemption scenarios – a scenario assuming no redemptions and a scenario assuming that 8,001,344 shares are redeemed for their pro rata share of the cash in the Trust Account (this is the maximum amount that can be redeemed and the closing condition for the Kensington Cash Amount of $250 million can be satisfied). The table includes a description of the dilution as a result of warrants retained by the holders of Kensington public shares that elect to have their shares redeemed.

Included in the amounts held in trust are approximately $8.1 million of deferred underwriting commissions that will be released to the underwriters in Kensington’s initial public offering in the event the Business Combination is consummated. Assuming no redemptions, these deferred underwriting commissions were approximately $0.35 (or 3.5%) for each of the 23,000,000 Kensington public shares. Assuming the maximum number of redemptions, these deferred underwriting commissions were in the amount of approximately $0.54 (or 5.4%) of the total for each of the 14,998,656 Kensington public shares remaining after such redemptions.

Certain Information Relating to Holdco

Listing of Holdco Shares and Holdco Warrants on the NYSE

Holdco Shares and Holdco Warrants currently are not traded on a stock exchange. Holdco intends to apply to list the Holdco Class A Shares and Holdco Warrants on the NYSE under the symbols “WBX” and “WBXWS,” respectively, upon the closing of the Business Combination. We cannot assure you that the Holdco Shares or Holdco Warrants will be approved for listing on the NYSE.

 

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Delisting of Kensington Class A Common Stock and Deregistration of Kensington

Kensington and Wallbox anticipate that, following consummation of the Business Combination, the shares of Kensington Class A Common Stock, Kensington Public Units and Kensington Public Warrants will be delisted from the NYSE, and Kensington will be deregistered under the Exchange Act.

Emerging Growth Company; Foreign Private Issuer; Controlled Company

Holdco is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Holdco will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Business Combination, (b) in which Holdco has total annual gross revenue of at least $1.07 billion or (c) in which Holdco is deemed to be a large accelerated filer, which means the market value of Holdco Shares held by non-affiliates exceeds $700 million as of the last business day of Holdco’s prior second fiscal quarter, and (ii) the date on which Holdco issued more than $1.0 billion in non-convertible debt during the prior three-year period. Holdco intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as “emerging growth companies,” including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that Holdco’s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting and reduced disclosure obligations regarding executive compensation.

As a “foreign private issuer,” Holdco will be subject to different U.S. securities laws than domestic U.S. issuers. The rules governing the information that Holdco must disclose differ from those governing U.S. corporations pursuant to the Exchange Act. Holdco will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. Those proxy statements are not expected to conform to Schedule 14A of the proxy rules promulgated under the Exchange Act. As a foreign private issuer, Holdco will be exempt from a number of rules under the U.S. securities laws and will be permitted to file less information with the SEC than a U.S. company. In addition, as a “foreign private issuer,” Holdco’s officers and directors and holders of more than 10% of the issued and outstanding Holdco Shares, will be exempt from the rules under the Exchange Act requiring insiders to report purchases and sales of ordinary shares as well as from Section 16 short swing profit reporting and liability.

Immediately following the completion of the Business Combination, Enric Asunción Escorsa and Eduard Castañeda will control a majority of the voting power of Holdco’s outstanding common stock. As a result, Holdco will be a “controlled company” within the meaning of the corporate governance standards of NYSE. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

 

   

the requirement that a majority of Holdco’s board of directors consist of “independent directors” as defined under the rules of NYSE;

 

   

the requirement that Holdco have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

 

   

the requirement that Holdco have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

 

   

the requirement for an annual performance evaluation of the compensation and nominating and corporate governance committees.

Following the Business Combination, Holdco intends to utilize some or all of these exemptions. As a result, Holdco’s nominating and corporate governance committee and compensation committee may not consist entirely of

 

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independent directors and such committees will not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of NYSE.

Comparison of Shareholder Rights

Until consummation of the Business Combination, Delaware law and Kensington’s Existing Certificate of Incorporation will continue to govern the rights of Kensington stockholders. After consummation of the Business Combination, Dutch law and the Holdco Articles of Association will govern the rights of Holdco shareholders.

There are certain differences in the rights of Kensington stockholders prior to the Business Combination and the rights of Holdco shareholders after the Business Combination. Please see the section entitled “Comparison of Shareholder Rights.”

Material U.S. Federal Income Tax Considerations to the Business Combination

Subject to the limitations and qualifications described in “Certain Tax Considerations—Certain U.S. Federal Income Tax Consequences of the Business Combination” below (including the discussion of Section 367(a) of the Code), the transfer by U.S. holders of their Kensington Class A Common Stock to Holdco pursuant to the Business Combination Agreement, taken together with the related transactions, should qualify either as a transfer of property to a corporation under Section 351 of the Code or as a reorganization under Section 368 of the Code.

Kensington and Holdco have agreed pursuant to the Business Combination Agreement to report the Merger as a reorganization under Section 368 of the Code. If the Merger is treated as a reorganization under Section 368 of the Code, a U.S. holder of Kensington Public Warrants that are converted to Holdco Public Warrants likely would not recognize gain or loss. However, the qualification of the Merger as a reorganization under Section 368 of the Code is uncertain. If the Merger is not treated as a reorganization under Section 368 of the Code, a U.S. holder that solely owns Kensington Public Warrants generally will be required to recognize gain or loss upon the conversion of those Kensington Public Warrants to Holdco Public Warrants and a U.S. holder that owns Kensington Public Warrants and Kensington Class A Common Stock generally will be required to recognize gain (but may not be permitted to recognize loss) upon receipt of the Holdco Public Warrants.

Section 367(a) of the Code and the Treasury regulations promulgated thereunder, in certain circumstances, may impose additional requirements for certain U.S. holders to qualify for tax-deferred treatment with respect to the exchange of Kensington Class A Common Stock and/or the conversion of the Kensington Public Warrants. If those additional requirements are not met, it could result in holders recognizing a greater amount of gain for U.S. federal income tax purposes than they would have recognized if the Merger and related transactions had not qualified for non-recognition of gain or loss or Section 367(a) of the Code had not applied.

For a more complete discussion of the U.S. federal income tax considerations of the Business Combination, see “Certain Tax ConsiderationsCertain U.S. Federal Income Tax Consequences of the Business Combination” and “Risk Factors—Risks Related to U.S. Federal Income Taxation.

Holders of shares of Kensington Class A Common Stock and Kensington Public Warrants should read carefully the information included under “Certain Tax Considerations” for a detailed discussion of material U.S. federal income tax consequences of the Business Combination, including the receipt of cash pursuant to the exercise of redemption rights with respect to the shares of Kensington Class A Common Stock, and the material U.S. federal and Spanish and Dutch tax consequences of the ownership and disposition of Holdco Class A Shares and Holdco Public Warrants after the Business Combination. Holders of shares of Kensington Class A Common Stock and Kensington Public Warrants are urged to

 

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consult their tax advisors to determine the tax consequences to them (including the application and effect of any state, local or other income and other tax laws) of the Business Combination, including the U.S. federal income tax consequences and the Spanish and Dutch tax consequences of the acquisition, holding, redemption and disposal of Holdco Class A Shares or acquisition, holding, exercise or disposal of Holdco Public Warrants.

Accounting Treatment of the Business Combination

The Business Combination will be accounted for as a capital reorganization. Under this method of accounting, Kensington will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of Wallbox issuing shares at the closing of the Business Combination for the net assets of Kensington as of the closing date, accompanied by a recapitalization. The net assets of Kensington will be stated at historical cost, with no goodwill or other intangible assets recorded.

Wallbox has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

   

Wallbox’s shareholders will have the largest voting interest in Holdco under both the no redemption and maximum redemption scenarios;

 

   

The board of directors of the post-combination company has seven members, and Wallbox shareholders have the ability to nominate at least the majority of the members of the board of directors;

 

   

Wallbox’s senior management is the senior management of the post-combination company;

 

   

The business of Wallbox will comprise the ongoing operations of Holdco; and

 

   

Wallbox is the larger entity, in terms of substantive operations and employee base.

The Business Combination, which is not within the scope of IFRS 3 - Business Combinations (“IFRS 3”) since Kensington does not meet the definition of a business in accordance with IFRS 3, is accounted for within the scope of IFRS 2 - Share-based payment (“IFRS 2”). Any excess of fair value of Holdco’s Shares issued over the fair value of Kensington’s identifiable net assets acquired represents compensation for the service of a stock exchange listing for its shares and is expensed as incurred.

Appraisal Rights

Appraisal rights are not available to holders of Kensington shares in connection with the Business Combination.

Proxy Solicitation

Proxies may be solicited by mail, via telephone or via e-mail or other electronic correspondence. Kensington has engaged D.F. King & Co., Inc. to assist in the solicitation of proxies.

If a Kensington stockholder grants a proxy, such stockholder may still vote its shares virtually if it revokes its proxy before the special meeting. A Kensington stockholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “The Special Meeting of Kensington Stockholders—Revoking Your Proxy.”

Risk Factor Summary

In evaluating the Business Combination and the proposals to be considered and voted on at the special meeting, you should carefully review and consider the matters addressed under the heading “Cautionary Note

 

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Regarding Forward-Looking Statements” and the risk factors set forth under “Risk Factors,” a summary of which is set forth below:

Risks Related to Wallbox’s Business

 

   

Wallbox is an early stage company with a history of operating losses, and expects to incur significant expenses and continuing losses at least for the near and medium-term.

 

   

Wallbox’s growth and success is highly correlated with and thus dependent upon the continuing rapid adoption of, and demand for, Electric Vehicles (“EVs”). Among other things, changes to fuel economy standards or the success of alternative fuels, or changes to rebates, tax credits and other financial incentives from governments, utilities and others to offset the purchase or operating cost of EVs and EV charging technology, may negatively impact the EV market and thus the demand for Wallbox’s products and services.

 

   

Wallbox has experienced rapid growth and expects to invest in its growth for the foreseeable future. If Wallbox fails to manage growth effectively, its business, operating results and financial condition would be adversely affected.

 

   

Wallbox currently faces competition from a number of companies and expects to continue to face significant competition in each of its markets in the future.

 

   

A loss or disruption with respect to Wallbox’s supply or manufacturing partners could negatively affect Wallbox’s business.

 

   

Wallbox is dependent upon the efforts of certain key personnel. The loss of such key personnel could negatively impact the operations and financial results of Wallbox’s business.

 

   

Wallbox expects to expend resources to maintain consumer awareness of its brands, build brand loyalty and generate interest in its products. Failure to effectively expand Wallbox’s sales and marketing capabilities could harm its ability to increase or maintain its customer base and achieve broader market acceptance of its products.

 

   

Wallbox is dependent on consumer adoption of its products. If Wallbox does not continue to offer a high quality product and user experience, its business, brand and reputation will suffer.

 

   

Wallbox is dependent on Electromaps for a portion of its revenues and to build consumer awareness of its brand and products. Widespread adoption of charging payment mobile platforms or other charging solutions as a competitor with, or an alternative to, Electromaps may negatively impact its business, operating results and financial condition.

 

   

Wallbox may have to initiate product recalls or withdrawals or may be subject to litigation or regulatory enforcement actions and/or incur material product liability claims, which could increase its costs and harm Wallbox’s brand, reputation and adversely affect its business.

 

   

Wallbox has a significant presence in international markets and plans to continue to expand its international operations, which exposes it to a number of risks that could affect its future growth.

 

   

Joint ventures that Wallbox is party to or that Wallbox enters into, including its joint venture in China, present a number of challenges that could have a material adverse effect on its business, operating results and financial condition.

 

   

Wallbox has acquired businesses and may acquire other businesses and/or companies, which could require significant management attention, disrupt its business, dilute shareholder value, and adversely affect its results of operations.

 

   

The additional risks described under “Risk Factors.

 

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Other Risks

 

   

Kensington does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for Kensington to complete a business combination with which a substantial majority of its stockholders do not agree.

 

   

A stockholder or “group” of stockholders deemed to hold an aggregate of more than 15% of the shares of Kensington Class A Common Stock issued in the Kensington IPO will lose the ability to redeem all such shares in excess of 15% of the shares of Kensington Class A Common Stock issued in the Kensington IPO.

 

   

There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

 

   

Stockholders of Kensington who wish to redeem their shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption, which may make it difficult for them to exercise their redemption rights prior to the deadline. If stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their shares of Kensington Class A Common Stock for a pro rata portion of the funds held in the Trust Account.

 

   

If a public stockholder fails to receive notice of Kensington’s offer to redeem its 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.

Recent Developments

Unaudited Revenues for the Six Months Ended June 30, 2021.

On August 5, 2021, Wallbox announced revenues for the six months ended June 30, 2021 of $32 million, or €27 million. We are only presenting these selected unaudited financial results at this time and we are not presenting complete financial results for the six months ended June 30, 2021 because we are a “foreign private issuer” for SEC reporting purposes and are not required to present all of the information that would be required to be included in a Form 10-Q filed with the SEC. Neither Wallbox’s independent auditors, nor any other independent accountants, have audited, reviewed, compiled, examined, or performed any procedures with respect to the selected unaudited financial results, nor have they expressed any opinion or any other form of assurance on such information, and assume no responsibility for, and disclaim any association with such results.

Option to Acquire Interest in Wallbox AS

On August 13, 2021, Wallbox exercised its option, pursuant to the stock purchase agreement entered into between the Company and Lilland AS dated 19 February 2020, to acquire the remaining 33.334% interest that is owned by Lilland AS in Wallbox AS, which was formerly called Intelligent Solutions AS. Pursuant to this option, Wallbox paid €1 million on August 19 for 13.33% of such interest and will pay equal installments of €750,000 for each of the remaining 10% interests by the earlier of (a) December 31, 2021 and June 30, 2022, respectively and (b) 30 days from the closing of the Business Combination.

On August 31, 2021, Wallbox exercised its option, pursuant to the stock purchase agreement entered into between the Company and RAYMOND AS dated August 31, 2020, to acquire the 5% interest that is owned by RAYMOND AS in Wallbox AS, which was formerly called Intelligent Solutions AS. Pursuant to this option, Wallbox paid €125,000 on September 9, 2021 for 1.67% of such interest and will pay equal installments of €125,000 for each of the remaining 1.67% interests by the earlier of (a) December 31, 2021 and June 30, 2022, respectively and (b) 30 days from the closing of the Business Combination.

Arlington, Texas Selected as U.S. Manufacturing Facility

On September 1, 2021, Wallbox announced it had selected Arlington, Texas as the location of its first U.S. manufacturing facility. The facility is expected to be a 130,000 square foot high-tech plant with enough

 

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capacity to fully support Wallbox’s expansion plans in North America for the next decade. Production is expected to start as early as June 2022 with production lines for Wallbox’s Pulsar Plus AC chargers, lines for Quasar, its DC bidirectional charger, and Supernova, its DC fast charger for public use, are anticipated to follow in the first half of 2023. Wallbox expects to manufacture a total of 290,000 units annually in this facility by 2027 and reach its full capacity of 500,000 units by 2030.

 

 

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF WALLBOX

The following table shows summary historical financial information of Wallbox for the periods and as of the dates indicated.

The summary historical financial information of Wallbox as of and for the years ended December 31, 2020 and 2019 was derived from the audited historical financial statements of Wallbox included elsewhere in this proxy statement/prospectus.

The following summary historical financial information should be read together with the consolidated financial statements and accompanying notes and “Wallbox’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this proxy statement/prospectus. The financial summary historical financial information in this section is not intended to replace Wallbox’s consolidated financial statements and the related notes. Wallbox’s historical results are not necessarily indicative of Wallbox’s future results.

As explained elsewhere in this proxy statement/prospectus, the financial information contained in this section relates to Wallbox, prior to and without giving pro-forma effect to the impact of the Business Combination and, as a result, the results reflected in this section may not be indicative of the results of the combined entity going forward. See the sections entitled, “Summary—Parties to the Business Combination—Wallbox” and “Unaudited Pro Forma Condensed Combined Financial Information” included elsewhere in this proxy statement/prospectus.

 

     For the Year
Ended
December 31,
2020
     For the Year
Ended
December 31,
2019
 
     (in thousands, except per share data)  

Consolidated Statement of Profit or Loss Data

     

Revenue

   19,677      8,020  

Change in inventories and raw materials and consumables used

     (10,574      (3,664

Employee benefits

     (9,805      (3,916

Other operating expenses

     (8,192      (5,125

Amortization and depreciation

     (2,379      (763

Other income

     289        80  
  

 

 

    

 

 

 

Operating loss

     (10,984      (5,368

Finance income

     6        10  

Finance costs

     (1,011      (267

Foreign exchange losses

     (70      (103
  

 

 

    

 

 

 

Net finance costs

     (1,075      (360

Share of loss of equity-accounted investees

     (253      (408
  

 

 

    

 

 

 

Loss before tax

     (12,312      (6,136

Income tax credit

     910        —    
  

 

 

    

 

 

 

Loss for the year

   (11,402    (6,136

Basic and diluted losses per share

   (29.95    (20.82

 

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     For the Year
Ended
December 31,
2020
     For the Year
Ended
December 31,
2019
 
     (in thousands, except per share data)  

Consolidated Statement of Financial Position Data

     

Cash and cash equivalents

   22,338      6,447  

Net working capital(1)

   17,836      2,464  

Total assets

   81,803      32,455  

Total liabilities

   69,570      23,071  

Total equity

   12,233      9,384  

Consolidated Statement of Cash Flows Data

     

Net cash used in operating activities

   (11,588    (5,421

Net cash used in investing activities

   (19,359    (7,904

Net cash from financing activities

   46,745      17,505  

 

  (1)

Net working capital is comprised of Total Current Assets less Total Current Liabilities.

 

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SELECTED HISTORICAL FINANCIAL DATA OF KENSINGTON

The following table shows selected historical financial information of Kensington for the periods and as of the dates indicated. The selected historical financial information of Kensington as of June 30, 2021 and for the period from January 4, 2021 (inception) through June 30, 2021 was derived from the audited historical financial statements of Kensington included elsewhere in this proxy statement/prospectus. The selected historical interim financial information of Kensington as of June 30, 2021 and three months ended June 30, 2021 was derived from the unaudited interim consolidated financial statements of Kensington included elsewhere in this proxy statement/prospectus. The following table should be read in conjunction with “Kensington’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical financial statements and the notes and schedules related thereto, included elsewhere in this proxy statement/prospectus. The historical results presented below are not necessarily indicative of financial results to be achieved by Holdco following the Business Combination.

 

     As of and for
the three
months ended
June 30, 2021
     As of and for
the period from
January 4, 2021
(inception) to
June 30, 2021
 

Statement of Operations Data:

     

General and administrative expenses

   $ 173,060      $ 213,602  

Administrative expenses—related party

     60,000        100,000  

Franchise tax expense

     49,863        97,584  
  

 

 

    

 

 

 

Loss from operations

     (282,923      (411,186

Other income (expenses)

     

Change in fair value of derivative warrant liabilities

     (11,406,500      (14,404,500

Change in fair value for working capital loan – related party

     (129,330      (129,330

Financing costs – derivative warrant liabilities

            (252,440

Net gain from investments held in Trust Account

     8,665        22,109  
  

 

 

    

 

 

 

Net loss

   $ (11,810,088    $ (15,175,347
  

 

 

    

 

 

 

Basic and diluted weighted average shares outstanding of Class A common stock subject to possible redemption

     20,464,464        20,541,637  
  

 

 

    

 

 

 

Basic and diluted net income per share, Class A common stock subject to possible redemption

   $ 0.00      $ 0.00  
  

 

 

    

 

 

 

Basic and diluted weighted average shares outstanding of non-redeemable common stock

     8,285,536        7,231,103  
  

 

 

    

 

 

 

Basic and diluted net loss per share, non-redeemable common stock

   $ (1.43    $ (2.10
  

 

 

    

 

 

 

Balance Sheet Data:

     

Cash

   $ 1,228,467      $    

Prepaid expenses

     262,449     

Total assets

     231,513,025     

Total liabilities

     33,522,582     

 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary of unaudited pro forma condensed combined financial information (the “Summary Pro Forma Information”) gives effect to the Business Combination and related transactions contemplated in the Business Combination Agreement. The Business Combination will be accounted for as a capital reorganization in accordance with IFRS as issued by the IASB. Under this method of accounting, Kensington will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of Wallbox issuing shares at the closing of the Business Combination for the net assets of Kensington as of the closing date, accompanied by a recapitalization. The net assets of Kensington will be stated at historical cost, with no goodwill or other intangible assets recorded.

The summary unaudited pro forma condensed combined statement of financial position data as of December 31, 2020 gives pro forma effect to the Business Combination and related transactions as if they had occurred on December 31, 2020. The summary unaudited pro forma condensed combined statement of profit or loss data for the year ended December 31, 2020 gives pro forma effect to the Business Combination and related transactions as if they had been consummated on January 1, 2020.

The summary pro forma information have been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information of the combined company appearing elsewhere in this proxy statement/prospectus and the accompanying notes thereto. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements of Kensington and related notes and the historical consolidated financial statements of Wallbox and related notes included in this proxy statement/prospectus.

Because Kensington reports its historical financial information in U.S. Dollars and Wallbox reports its historical financial information in Euros, for purposes of preparing this presentation, all U.S. Dollar amounts have been translated into Euros using an exchange rate of $1.00 to €0.81407, which was the exchange rate published by the European Central Bank as of December 31, 2020. Additionally, for purposes of calculating the ownership of Wallbox shareholders following the Business Combination, this presentation assumes the Illustrative Exchange Ratio of 240.990795184659.

The summary pro forma information have been presented for informational purposes only and are not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the Business Combination and related transactions been completed as of the dates indicated. In addition, the summary pro forma information do not purport to project the future financial position or operating results of the combined company.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption by Kensington stockholders of Kensington Class A Shares for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account:

 

   

Assuming No Redemptions: This presentation assumes that no public shareholders of Kensington exercise redemption rights with respect to their public shares for a pro rata share of cash in the Trust Account.

 

   

Assuming Maximum Redemptions: This presentation assumes that 8,001,344 shares of Kensington Class A Common Stock are redeemed for their pro rata share of the cash in the Trust Account, which is the maximum amount that can be redeemed the closing condition for the Kensington Cash Amount of $250 million described below can still be satisfied. This scenario gives effect to Kensington share redemptions of 8,001,344 shares for aggregate redemption payments of $80.0 million (€65.1 million) at a redemption price of approximately $10.00 per shares (€8.14 per share) based on the investments held in the Trust Account as of December 31, 2020. The Business Combination Agreement includes as a condition to closing the Business Combination that, at Closing, Holdco will receive aggregate

 

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transaction proceeds of $250.0 million comprising (i) the cash held in the Trust Account after giving effect to the Kensington shareholder redemption and (ii) aggregate proceeds from the PIPE Financing.

The foregoing scenarios are for illustrative purposes only as the actual number of redemptions by Kensington’s public shareholders is unknowable prior to the Kensington shareholder vote with respect to the Business Combination. Additionally, even if the condition relating to the Kensington Cash amount is not met, Wallbox has the right, in its sole discretion, to waive such condition pursuant to the Business Combination Agreement, which could result in the Business Combination being consummated with redemptions even greater than those presented in this “Maximum Redemption Scenario.” Accordingly, the actual financial position and results of operations may differ significantly from the pro forma amounts presented herein.

 

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

Summary Unaudited Pro Forma Condensed Combined

     

Statement of Profit or Loss Data Year Ended December 31, 2020

     

Revenues

   19,677      19,677  

Operating loss

   (102,843    (103,169

Basic and diluted loss per share

   0.61      0.64  

Basic and diluted weighted average shares outstanding

     168,779,281        160,777,937  

Selected Unaudited Pro Forma Condensed Combined

     

Balance Sheet Data as of December 31, 2020

     

Total assets

   319,324      254,187  

Total liabilities

   54,778      54,778  

Total stockholders’ equity

   264,546      199,409  

 

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RISK FACTORS

Holdco will face a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement/prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of stock. You should read and consider the other information in this proxy statement/prospectus. The references to Wallbox in the below section entitled Risk Factors—Risks Related to Wallbox’s Business will apply to Holdco upon Closing.

Risks Related to Wallbox’s Business

Wallbox is an early stage company with a history of operating losses, and expects to incur significant expenses and continuing losses at least for the near and medium-term.

Wallbox has a history of operating losses and negative operating cash flows. Wallbox incurred a net loss of €11.4 million for the year ended December 31, 2020 and, as of December 31, 2020, had an accumulated deficit of €20.1 million. Wallbox believes it will continue to incur operating and net losses at least for the medium term. A significant portion of Wallbox’s operating expenses are fixed. Wallbox anticipates, due to increased administrative expenses associated with Wallbox’s US listing and related regulations, it will again operate at a loss. Additional losses would impair Wallbox’s liquidity and may require us to raise additional capital or to curtail certain of Wallbox’s operations in an effort to preserve capital. Incurring additional losses could also erode investor confidence in Wallbox’s ability to manage Wallbox’s business effectively and result in a decline in the price of Holdco Shares. Even if Wallbox achieves profitability, there can be no assurance that it will be able to maintain profitability in the future. Wallbox may need to raise additional financing through loans, securities offerings or additional investments in order to fund its ongoing operations. There is no assurance that Wallbox will be able to obtain such additional financing or that it will be able to obtain such additional financing on favorable terms.

Wallbox’s growth and success is highly correlated with and thus dependent upon the continuing rapid adoption of, and demand for EVs. Among other things, changes to fuel economy standards or the success of alternative fuels, or changes to rebates, tax credits and other financial incentives from governments, utilities and others to offset the purchase or operating cost of EVs and EV charging technology, may negatively impact the EV market and thus the demand for Wallbox’s products and services.

Wallbox’s potential profitability and growth is highly dependent upon the continued adoption of Electric Vehicles (“EVs”) by businesses, consumers and fleet operators continued support from regulatory programs and in each case, the use of Wallbox’s chargers and charging stations, any of which may not occur at the levels Wallbox currently anticipates or at all. The market for EVs is still rapidly evolving, characterized by rapidly changing technologies, increasing consumer choice as it relates to available EV models, their pricing and performance, evolving government regulation and industry standards, changing consumer preferences and behaviors, intensifying levels of concern related to environmental issues, and governmental initiatives related to climate change and the environment generally. Although demand for EVs has grown in recent years, there is no guarantee of continuing future demand. Residential, commercial and public charging may not develop as expected and may fail to attract projected market share of total EV charging. If the market for EVs develops more slowly than expected, or if demand for EVs decreases, Wallbox’s growth would be reduced and its business, prospects, financial condition and operating results would be harmed. The market for EVs could be affected by numerous factors, such as:

 

   

perceptions about EV features, quality, driver experience, safety, performance and cost;

 

   

perceptions about the limited range over which EVs may be driven on a single battery charge and about availability and access to sufficient public EV charging stations;

 

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competition, including from other types of alternative fuel vehicles (such as hydrogen fuel cell vehicles), plug-in hybrid EVs and high fuel-economy internal combustion engine (“ICE”) vehicles;

 

   

increases in fuel efficiency in legacy ICE and hybrid vehicles;

 

   

volatility in the price of gasoline and diesel at the pump;

 

   

EV supply chain disruptions including but not limited to availability of certain components (e.g. semiconductors), ability of EV OEMs to ramp-up EV production, availability of batteries, and battery materials;

 

   

concerns regarding the stability of the electrical grid;

 

   

the decline of an EV battery’s ability to hold a charge over time;

 

   

availability of service for EVs;

 

   

consumers’ perception about the convenience, speed, and cost of EV charging;

 

   

government regulations and economic incentives, including adverse changes in, or expiration of, favorable tax incentives related to EVs, EV charging stations or decarbonization generally;

 

   

relaxation of government mandates or quotas regarding the sale of EVs;

 

   

the number, price and variety of EV models available for purchase; and

 

   

concerns about the future viability of EV manufacturers.

In addition, sales of vehicles in the automotive industry can be cyclical, which may affect growth in acceptance of EVs. It is uncertain how macroeconomic factors will impact demand for EVs, particularly since they can be more expensive than traditional gasoline-powered vehicles, when the automotive industry globally has been experiencing a recent decline in sales. Furthermore, because fleet operators often make large purchases of EVs, this cyclicality and volatility in the automotive industry may be more pronounced with commercial purchasers, and any significant decline in demand from these customers could reduce demand for EV charging and Wallbox’s products and services in particular.

While many global OEMs and several new market entrants have announced plans for new EV models, the lineup of EV models with increasing charging needs expected to come to market over the next several years may not materialize in that timeframe or may fail to attract sufficient customer demand. Demand for EVs may also be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles, such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes. Volatility in demand may lead to lower vehicle unit sales, which may result in reduced demand for EV charging solutions and therefore adversely affect Wallbox’s business, financial condition and operating results.

As regulatory initiatives have required an increase in the mileage capabilities of cars and consumption of renewable transportation fuels, such as ethanol and biodiesel, consumer acceptance of EVs and other alternative vehicles has been increasing. However, the EV fueling model is different from gasoline and other fuel models, requiring behavior changes and education of businesses, consumers, regulatory bodies, local utilities, and other stakeholders. Further developments in, and improvements in affordability of, alternative technologies, such as renewable diesel, biodiesel, ethanol, hydrogen fuel cells or compressed natural gas, proliferation of hybrid powertrains involving such alternative fuels, or improvements in the fuel economy of the ICE vehicles, whether as the result of regulation or otherwise, may materially and adversely affect demand for EVs and EV charging stations in some market verticals. Regulatory bodies may also adopt rules that substantially favor certain alternatives to petroleum-based propulsion over others, which may not necessarily be EVs. Local jurisdictions may also impose restrictions on urban driving due to congestion, which may prioritize and accelerate micromobility trends and slow EV adoption growth. If any of the above cause or contribute to automakers reducing the availability of EV models or cause or contribute to consumers or businesses to no longer purchase EVs or purchase fewer of them, it would materially and adversely affect Wallbox’s business, operating results, financial condition and prospects.

 

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The U.S. federal government, European states and some state and local governments provide incentives to end users and purchasers of EVs and EV charging stations in the form of rebates, tax credits, and other financial and behavioral incentives, such as payments for regulatory credits. The EV market relies on these governmental rebates, tax credits, and other financial incentives to significantly lower the effective price of EVs and EV charging stations. However, these incentives may expire on a particular date, end when the allocated funding is exhausted, or be reduced or terminated as a matter of regulatory or legislative policy. Any reduction in rebates, tax credits or other financial incentives could negatively affect the EV market and adversely impact Wallbox’s business operations and expansion potential. Furthermore, new tariffs and policy incentives could be put in place by the Biden Administration that favor equipment manufactured by or assembled at American factories, which may put Wallbox at a competitive disadvantage if it is not able to develop its U.S. manufacturing capacity on the timelines it currently expects or at all, including by increasing the cost or delaying the availability of charging equipment, by challenging or eliminating Wallbox’s ability to apply or qualify for grants and other government incentives, or by disqualifying Wallbox from the ability to compete for certain charging infrastructure buildout solicitations and programs, including those initiated by federal government agencies.

Similarly, even if new legislation incentivizes EV adoption, Wallbox cannot predict what form such incentives may take at this time. If Wallbox is not eligible for grants or other incentives under such programs, while Wallbox’s competitors are, it may adversely affect Wallbox’s competitiveness or results of operation.

Wallbox has experienced rapid growth and expects to invest in its growth for the foreseeable future. If Wallbox fails to manage growth effectively, its business, operating results and financial condition would be adversely affected.

Wallbox has experienced rapid growth in recent periods. For example, Wallbox’s revenues for the year ended December 31, 2020 have grown 145% as compared to the year ended December 31, 2019. The expected continued growth and expansion of Wallbox’s business may place a significant strain on management, business operations, financial condition and infrastructure and corporate culture.

With continued growth, Wallbox’s information technology systems and Wallbox’s internal control over financial reporting and procedures may not be adequate to support its operations and may allow data security incidents that may interrupt business operations and allow third parties to obtain unauthorized access to business information or misappropriate funds. Wallbox may also face risks to the extent such third parties infiltrate the information technology infrastructure of its contractors.

To manage growth in operations and personnel, Wallbox will need to continue to improve its operational, financial and management controls and reporting systems and procedures. Failure to manage growth effectively could result in difficulty or delays in attracting new customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new products and services or enhancing existing products and services, loss of customers, information security vulnerabilities or other operational difficulties, any of which could adversely affect Wallbox’s business performance and operating results. Wallbox’s strategy is based on a combination of growth and maintenance of strong performance, and any inability to scale, maintain customer experience related to its charging products or charging stations may impact Wallbox’s growth trajectory and results of operations.

 

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Wallbox’s forecasts and projections are based upon assumptions, analyses and internal estimates developed by Wallbox’s management, including sales estimates on the basis of non-binding letters of intent. If these assumptions, analyses or estimates prove to be incorrect or inaccurate, Wallbox’s actual operating results may differ materially and adversely from those forecasted or projected.

Wallbox’s forecasts and projections are subject to significant uncertainty and are based on assumptions, analyses and internal estimates developed by Wallbox’s management, any or all of which may not prove to be correct or accurate. If these assumptions, analyses or estimates prove to be incorrect or inaccurate, Wallbox’s actual operating results may differ materially and adversely from those forecasted or projected. Realization of the results forecasted will depend on the successful implementation by the combined company of Wallbox’s proposed business plan, and policies and procedures consistent with the assumptions. Future results will also be affected by events and circumstances beyond the combined company’s control, for example, the competitive environment, the combined company’s executive team, rapid technological change, economic and other conditions in the markets in which Wallbox proposes to operate, governmental regulation and, uncertainties inherent in product development and testing, Wallbox’s future financing needs and its ability to grow and to manage growth effectively. In particular, Wallbox’s forecasts and projections include forecasts and estimates relating to the expected size and growth of the markets in which Wallbox operates or seeks to enter. In addition, many of Wallbox’s orders for Supernova charging stations which form the basis for much of Wallbox’s projected future growth, are estimated on the basis of letters of intent, which are non-binding and may not provide the same level of certainty as if such orders were under binding contracts. For all the reasons described above, it is likely that the actual results of Wallbox’s operations will be different from the results forecasted and those differences may be material and adverse. The forecasts were prepared by Wallbox’s management and have not been certified or examined by any public auditor or independent accountants. Neither Holdco nor Wallbox has any duty to update the financial projections included in this proxy statement/prospectus.

Wallbox’s estimates of market opportunity and forecasts of market growth may prove to be inaccurate.

Estimates of future EV adoption and the total addressable market for Wallbox’s products and services are included in this proxy statement/prospectus. Market opportunity estimates and growth forecasts, whether obtained from third-party sources or developed internally, are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate. This is especially so at the present time due to the uncertain and rapidly changing projections of the severity, magnitude and duration of the COVID-19 pandemic. The estimates and forecasts included in this proxy statement/prospectus relating to the size and expected growth of the target market, market demand and EV adoption may also prove to be inaccurate. In particular, estimates regarding the current and projected market opportunity for public and residential charging or Wallbox’s market share related to that opportunity are difficult to predict. The estimated addressable market may not materialize in the timeframe of the projections included herein, if ever, and even if the markets meet the size estimates and growth estimates presented in this proxy statement/prospectus, Wallbox’s business could fail to grow at similar rates.

Wallbox currently faces competition from a number of companies and expects to continue to face significant competition in each of its markets in the future.

The EV charging market is relatively new and Wallbox currently faces competition from a number of EV charging companies and may face increasing competition from other competitors that may enter the space including but not limited to OEMs, utilities, tech companies, solar companies that branch into EV charging, other new entrants. The principal competitive factors in the industry include consumer awareness and brand recognition of Wallbox’s residential charging products; technical features of chargers in respect of both hardware and software; relationships with localities and utilities; charger connectivity to EVs and ability to charge all standards; software-enabled services offering and overall customer experience; brand, track record and reputation; access to component vendors and OEMs, service providers, installation professionals; and policy incentives and pricing.

 

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Wallbox has varying levels of penetration in its markets and those markets are characterized by unique competitive dynamics. For example, the European EV charging market can be characterized as fragmented. There are many small and local players, with only a limited number of parties having sufficient scale and funding to be competitive in the long term. Especially due to the strong government incentives currently in place, EV sales are expected to increase rapidly in Europe. From a competitive perspective, the North American market has high barriers to entry due to strict certification and validation requirements. Therefore, this market differs from Europe as the market is less fragmented with only a few large players. Similar to the European market, the APAC market can be characterized as a highly fragmented market with less than a handful of players that have gained significant scale in the industry. From a technology and pricing perspective, EV charging solutions in APAC are cost-competitive as they can be manufactured at a lower cost point. Wallbox’s growth in each of its markets requires differentiating itself as compared to its competition. If Wallbox is unable to penetrate, or further penetrate, the market in each of the geographies in which it operates or intends to operate, its future revenue growth and profits may be impacted. In addition, there are competitors, in particular those with limited funding, experience or commitment to quality assurance, which could cause poor experiences, hampering overall EV adoption or trust in any particular provider. Further, Wallbox’s current or potential competitors may be acquired by third parties with different commercial objectives and imperatives and greater available resources.

Additionally, future changes in charging preferences; the development of inductive EV charging capabilities; battery chemistries, ultralong-range batteries or energy storage technologies, industry standards or applications; driver behavior or battery EV efficiency may develop in ways that limit Wallbox’s future share gains in certain high promising markets or slow the growth of Wallbox’s addressable market. Wallbox may face competition from other EV charging technologies, such as battery swapping technology or wireless / inductive charging, or technologies which may be developed in the future. Competitors may be able to respond more quickly and effectively than Wallbox to new or changing opportunities, technologies, standards or customer requirements, and may be better equipped to initiate or withstand substantial price competition.

The EV charging business may become more competitive, pressuring future increases in utilization and margins. Competition is still developing and is expected to increase as the number of EVs sold increases. New competitors or alliances may emerge in the future that secure greater market share, have proprietary technologies that drivers prefer, more effective marketing abilities and/or face different financial hurdles, which could put Wallbox at a competitive disadvantage.

Further, Wallbox’s current strategic initiatives may fail to result in a sustainable competitive advantage for Wallbox. Future competitors could also be better positioned to serve certain segments of Wallbox’s current or future target markets, which could create price pressure or erode Wallbox’s market share. In light of these factors, current or potential customers may utilize charging services of competitors. If Wallbox fails to adapt to changing market conditions or continue to compete successfully with current charging product providers or new competitors, its growth will be inhibited, adversely affecting its business and results of operations.

Wallbox faces risks related to health pandemics, including the COVID-19 pandemic, which could have a material adverse effect on its business, operating results and financial condition.

On March 11, 2020, the World Health Organization upgraded the emergency public healthcare situation triggered by the outbreak of Coronavirus disease 2019 (COVID-19) to an international pandemic. The unfolding of events in Spain and worldwide, has led to an unprecedented health crisis, which has had an impact on the macroeconomic climate and on business performance. In order to confront this situation, a series of measures were adopted in 2020 to address the economic and social impacts of COVID-19 which have led to mobility restrictions on the population. In particular, amongst other measures, governments worldwide have declared states of emergency or similar measures that have imposed restrictions on the movement of people and on the opening hours of businesses, severely impacting local economies. These kinds of restrictions continue to be applied in the majority of the countries in which Wallbox operates.

 

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The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns and restrictions on business and individual activities, has created significant volatility in the global and domestic economies and led to reduced economic activity. Additionally, the spread of COVID-19 has created charging equipment supply chain and shipping constraints. COVID-19 has also disrupted the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers and has led to a decrease in vehicle sales, including EV sales, in markets around the world, and the accompanying demand for Wallbox charging products and services. Any sustained downturn in demand for EVs would harm Wallbox’s business and negatively impact growth.

The pandemic has resulted in government authorities implementing numerous measures to try to contain COVID-19, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns. These measures adversely impact Wallbox’s employees and operations and the operations of its customers, suppliers, vendors and business partners and negatively impact demand for EV charging. These measures by government authorities may remain in place for a significant period of time and may adversely affect manufacturing and building plans, sales and marketing activities, business and results of operations.

Wallbox may take further actions as may be required by government authorities or that it determines are in the best interests of its employees, customers, suppliers, vendors and business partners. There is no certainty that such actions will be sufficient to mitigate the risks posed by COVID-19 or otherwise be satisfactory to government authorities. If significant portions of Wallbox’s workforce are unable to work effectively, including due to illness, quarantines, social distancing, government actions or other restrictions in connection with the COVID-19 pandemic, its operations will be negatively impacted. Furthermore, if significant portions of its customers are subject to stay at home orders or otherwise work remotely or are not travelling via EV for sustained periods of time, user demand for charging and services will decline.

The extent to which the COVID-19 pandemic impacts Wallbox’s business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration, spread and severity of the pandemic, the actions to contain COVID-19 or treat its impact, and when and to what extent normal economic and operating activities can resume. The COVID-19 pandemic could limit the ability of customers, suppliers, vendors, OEMs, utilities and business partners to perform, including third party suppliers’ ability to provide components and materials used in charging products and stations or in providing installation or maintenance services. Even after the COVID-19 pandemic has subsided, Wallbox may continue to experience an adverse impact to its business as a result of the pandemic’s global economic impact, including any recession that has occurred or may occur in the future. Specifically, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment or a decline in consumer confidence as a result of the COVID-19 pandemic, as well as reduced spending by businesses, could each have a material adverse effect on the demand for Wallbox’s products and services.

A loss or disruption with respect to Wallbox’s supply or manufacturing partners could negatively affect Wallbox’s business.

Wallbox relies on a limited number of vendors and OEMs for manufacturing of components of its charging products which at this stage of the industry is unique to each supplier and thus singularly sourced with respect to components. This reliance on a limited number of vendors and OEMs increases Wallbox’s risks, since, for a select number of its components, it does not currently have proven reliable alternative or replacement vendors beyond these key parties. In the event of production interruptions or supply chain disruptions including but not limited to availability of certain key components such as semiconductors, which have recently experienced supply shortages that have significantly affected the overall automotive industry, Wallbox may not be able to take advantage of increased production from other sources or develop alternate or secondary vendors without incurring material additional costs and substantial delays. Thus, Wallbox’s business would be adversely affected if one or more of its vendors or OEMs is impacted by any interruption at a particular location.

 

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As the demand for EV charging increases, vendors and OEMs may not be able to dedicate sufficient supply chain, production, or sales channel capacity to keep up with the required pace of charging product and infrastructure expansion. In addition, as the EV market grows, the industry may be exposed to deteriorating design requirements, undetected faults or the erosion of testing standards by charging equipment and component suppliers, which may adversely impact the performance, reliability and lifecycle cost of the chargers. If Wallbox or its suppliers experience a significant increase in demand, or if Wallbox needs to replace an existing supplier, it may not be possible to supplement service or replace them on acceptable terms, which may undermine its ability to make sales and timely deliveries of chargers. For example, it may take a significant amount of time to identify a vendor that has the capability and resources to supply components in sufficient volume. Identifying and approving suitable vendors could be an extensive process that requires Wallbox to become satisfied with their quality control, technical capabilities, responsiveness and service, financial stability, regulatory compliance, and labor and other ethical practices. Accordingly, a loss of any significant vendor or OEM would have an adverse effect on Wallbox’s business, financial condition and operating results.

Further, should the Biden Administration and Congress require that charging equipment be manufactured in the U.S. in order to access federal financial support or secure contracts with the federal government, Wallbox will have to source components from alternative vendors or OEMs or work with current vendors and OEMs to develop additional manufacturing capacity in the U.S. to participate in the covered federal programs.

Wallbox is dependent upon the efforts of certain key personnel. If Wallbox is unable to attract and retain key employees and hire qualified management, technical, engineering and sales and business development personnel, its ability to compete and successfully grow its business would be harmed. Furthermore, the loss of such key personnel could negatively impact the operations and financial results of Wallbox’s business.

Wallbox’s success is dependent on the continued services of certain key personnel, particularly Wallbox’s co-founders, Enric Asunción Escorsa and Eduard Castañeda, Jordi Lainz, Wallbox’s Chief Financial Officer and Oriol Riba, Wallbox’s Chief Operations Officer. From time to time, there may be changes in Wallbox’s executive management team resulting from the hiring or departure of executives, which could disrupt Wallbox’s business. The replacement of one or more of Wallbox’s executive officers or other key employees would likely involve significant time and costs and may significantly delay or prevent the achievement of Wallbox’s business objectives. Wallbox also does not maintain any key person life insurance policies.

To continue to execute Wallbox’s growth strategy, it also must attract and retain highly skilled personnel. Competition is intense for qualified professionals. Wallbox may experience difficulty in hiring and retaining highly skilled personnel with appropriate qualifications. The pool of qualified personnel with experience working in Wallbox’s market is limited overall. In addition, many of the companies with which Wallbox competes for experienced personnel have greater resources.

Volatility in the price of Holdco’s shares may, therefore, negatively impact Wallbox’s ability to attract or retain highly skilled personnel. Further, the requirement to expense stock options and other equity-based compensation may discourage Holdco from granting the size or type of stock option or equity awards that job candidates require to join Wallbox. Failure to attract new personnel or failure to retain and motivate Wallbox’s current personnel, could harm Wallbox’s business.

Additionally, Wallbox’s future success depends on its ability to continue to attract, retain and motivate highly skilled employees, software engineers and other employees with the technical skills in design and engineering that will enable us to deliver quality EV charging products and energy management solutions. Competition for highly skilled employees in Wallbox’s industry is intense, and it expects certain of its key competitors, who generally are larger than Wallbox and have access to more substantial resources, to pursue top talent even more aggressively.

Wallbox’s success depends, in part, on its continuing ability to identify, hire, attract, train and develop and retain highly qualified personnel. The inability to do so effectively would adversely affect its business.

 

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Competition for employees can be intense and the ability to attract, hire and retain them depends on Wallbox’s ability to provide meaningful work at competitive compensation. Wallbox may not be able to attract, assimilate, develop or retain qualified personnel in the future, and failure to do so would adversely affect its business, including the execution of its global business strategy.

Wallbox’s customers are not under long-term contract and its customer orders may fluctuate.

Wallbox does not have commitments greater than one year from any of its customers, and it may not be able to retain customers or attract new customers that provide it with revenue that is comparable to the revenue generated by any customers it may lose. The duration of the contracts Wallbox does have with its distribution partners is typically one year and such contracts may contain termination clauses and do not provide for minimum volumes or other commitments to purchase Wallbox’s chargers. Additionally, many of the orders for future deliveries of Wallbox’s Supernova charging station are currently under non-binding letters of intent and may not provide the same level of certainty as if such orders were under binding contracts. Wallbox’s distributor, reseller, and installer customers, which account for approximately 40% of its sales, place orders with it on an ad hoc basis and direct sales made directly through Wallbox’s website or via Amazon account for approximately 20% of its sales. Because Wallbox’s customers do not have long-term contracts, it may be difficult for Wallbox to accurately predict future revenue streams. Wallbox cannot provide assurance that current customers will continue to use its products or services or that it will be able to replace departing customers with new customers that provide it with comparable revenue. Wallbox also has in the past experienced customer concentration, with Iberdrola representing greater than 10% of its revenues in the year ended December 31, 2019. The loss of a key customer, including but not limited to Iberdrola, could have a material impact on Wallbox’s business.

Wallbox expects to expend resources to maintain consumer awareness of its brands, build brand loyalty and generate interest in its products. Failure to effectively expand Wallbox’s sales and marketing capabilities could harm its ability to increase or maintain its customer base and achieve broader market acceptance of its products.

Wallbox’s ability to grow its customer base, achieve broader market acceptance, grow revenue, and achieve and sustain profitability will depend, to a significant extent, on its ability to effectively expand its sales and marketing operations and activities, which will require significant investment. Wallbox had approximately €1.3 million and €1.4 million, respectively, in marketing expenses in each of the years ended December 31, 2019 and 2020 and expects to expend more resources in the future in order to maintain consumer awareness of its brands. Wallbox relies on its business development, sales and marketing teams to obtain new customers and grow its retail business. Wallbox plans to continue to expand in these functional areas but it may not be able to recruit and hire a sufficient number of competent personnel with requisite skills, technical expertise and experience, which may adversely affect its ability to expand its sales capabilities. The hiring process can be costly and time-consuming, and new employees may require significant training and time before they achieve full productivity. Recent hires and planned hires may not become as productive as quickly as anticipated, and Wallbox may be unable to hire or retain sufficient numbers of qualified individuals. Wallbox’s ability to achieve significant revenue growth in the future will depend, in large part, on its success in recruiting, training, incentivizing and retaining a sufficient number of qualified personnel attaining desired productivity levels within a reasonable time. Wallbox’s business will be harmed if investment in personnel related to business development and related company activities does not generate a significant increase in revenue.

 

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Wallbox relies on third-parties that Wallbox does not control for many aspects of its business, marketing and distribution channels, and its failure to manage and maintain relationships with such third-parties, or any failure by such third-parties to promote or maintain the brand and quality of Wallbox products, could harm its brand, reputation and adversely affect its business. Furthermore, Wallbox is dependent on third parties for installations, which installations are subject to risks associated with cost overruns and delays. Third parties may improperly install its products, which may result in additional costs to Wallbox and may adversely affect Wallbox’s brand, reputation and business.

Wallbox sells its EV charging solutions through various channels. Wallbox has built and maintains an ecosystem of partner channels including, installers, resellers and value-add distributors. Wallbox provides marketing materials, training and support to its partners to improve sales and enters into contracts with such parties governing certain aspects of their conduct; however, Wallbox does not ultimately control such parties. Wallbox’s failure to manage and maintain relationships with such third-parties, or any failure by such third-parties to promote or maintain the brand and quality of Wallbox products, could harm its brand, reputation and adversely affect its business.

Additionally, Wallbox does not typically install its charging products or charging stations. Wallbox offers installation service through its certified installer network that is intended to ensure installation according to local governmental and industrial standards; however, these installation services are often offered through third parties that Wallbox does not control. The installation of charging products, particularly its charging stations, is generally subject to oversight and regulation in accordance with state and local laws and ordinances. Installations are subject to risks associated with cost overruns and delays. Third parties may improperly install Wallbox’s products, which may damage or break Wallbox products and give the end-user the perception the product is faulty and may adversely affect Wallbox’s brand, reputation and business.

Wallbox’s business model is predicated on the presence of qualified and capable installation professionals in the new markets it intends to enter. There is no guarantee that there will be an adequate supply of such partners. A shortage in the number of qualified contractors may impact the viability of the business plan, increase risks around the quality of works performed and increase costs if outside contractors are brought into a new market.

Negative publicity or product quality issues, whether real or perceived, could tarnish Wallbox’s reputation and its brand image. Failure to maintain, enhance and protect Wallbox’s brand image could have a material adverse effect on its results of operations. In addition, any failure to meet customer specifications could result in reduced net sales and income.

Wallbox is dependent on consumer adoption of its products. If Wallbox does not continue to offer a high quality product and user experience, its business, brand and reputation will suffer.

A failure or inability by Wallbox to meet customer specifications or consumer expectations could damage its reputation and adversely affect its ability to attract new business and result in delayed or lost sales. Wallbox’s ability to create, maintain, enhance and protect its brand image and reputation and consumers’ connection to its brand depends in part on its design and marketing efforts. Negative publicity or product quality issues, whether real or perceived, could tarnish Wallbox’s reputation and brand image. Failure to maintain, enhance and protect Wallbox’s brand image could have a material adverse effect on its results of operations. In addition, any failure to meet customer specifications could result in reduced revenues and increased net losses.

Computer malware, viruses, ransomware, hacking, phishing attacks and other network disruptions could result in security and privacy breaches, loss of proprietary information and interruption in service, which would harm Wallbox’s business.

Computer malware, viruses, physical or electronic break-ins and similar disruptions could lead to interruption and delays in Wallbox’s services and operations and loss, misuse or theft of data. Computer

 

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malware, viruses, ransomware, hacking, phishing attacks or denial of service, against online networks have become more prevalent and may occur on Wallbox’s systems. Any attempts by cyber attackers to disrupt Wallbox’s services or systems, if successful, could harm its business, introduce liability to data subjects, result in the misappropriation of funds, be expensive to remedy and damage its reputation or brand. Insurance may not be sufficient to cover significant expenses and losses related to cyber-attacks. Even with the security measures implemented by Wallbox, Wallbox’s facilities and systems, and those of Wallbox’s third-party service providers, could be vulnerable to security breaches, computer viruses, lost or misplaced data, programming errors, scams, burglary, human errors, acts of vandalism, or other events. Efforts to prevent cyber attackers from entering computer systems are expensive to implement, and Wallbox may not be able to cause the implementation or enforcement of such preventions with respect to its third-party vendors. Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security and availability of systems and technical infrastructure may, in addition to other losses, harm Wallbox’s reputation, brand and ability to attract customers, even if such actions do not result in any actual security breach or loss of data. For example, in August certain media outlets reported potential vulnerabilities in our hardware. Although we believe such potential vulnerabilities have been remediated and did not result in any security breaches, we cannot assure that other vulnerabilities will not be identified or that we will not suffer reputational harm as a result of such media reports.

There are several factors ranging from human error to data corruption that could materially impact the efficacy of any processes and procedures designed to enable Wallbox to recover from a disaster or catastrophe, including by lengthening the time services are partially or fully unavailable to customers and users. It may be difficult or impossible to perform some or all recovery steps and continue normal business operations due to the nature of a particular cyber-attack, disaster or catastrophe or other disruption, especially during peak periods, which could cause additional reputational damages, or loss of revenues, any of which would adversely affect its business and financial results.

Growing Wallbox’s customer base depends upon the effective operation of Wallbox’s mobile applications with mobile operating systems, networks and standards that are beyond its control.

Wallbox is dependent on the interoperability of its mobile applications with popular mobile operating systems that Wallbox does not control, such as Google’s Android and Apple’s iOS, and any changes in such systems that degrade Wallbox’s products’ functionality or give preferential treatment to competitive products could adversely affect the usage of Wallbox’s applications on mobile devices. Additionally, in order to deliver high quality mobile products, it is important that Wallbox’s products work well with a range of mobile technologies, systems, networks and standards that Wallbox does not control. Wallbox may not be successful in developing relationships with key participants in the mobile industry or in developing products that operate effectively with these technologies, systems, networks or standards.

In addition, a significant portion of Wallbox’s software platform depends on its interest in and partnership with Electromaps, an electromobility and EV charging management platform. Wallbox is dependent on Electromaps for a portion of its revenues and to build consumer awareness of its brand and products. Widespread adoption of charging payment mobile platforms or other charging solutions as a competitor with, or an alternative to, Electromaps may negatively impact its business, operating results and financial condition. In order to execute on its business model, Electromaps will need to develop a network of operators of charging stations with integrated payment infrastructure and generate sufficient downloads of its mobile application to take advantage of network effects.

Disruption of operations, including as a result of natural disasters, at Wallbox’s manufacturing sites or those of third-party suppliers could prevent Wallbox from filling customer orders on a timely basis and adversely affect its reputation and results of operations.

Events beyond Wallbox’s control could have an adverse effect on its business, financial condition, results of operations and cash flows. Disruption to Wallbox’s platform resulting from natural disasters,

 

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political events, war, terrorism, pandemics or other reasons could impair its ability to continue to provide its products and services. Similarly, disruptions in the operations of its key third-parties, such as data centers, servers or other technology providers, could have a material adverse effect on its business. If any of these events were to occur, Wallbox’s business, results of operations, or financial condition could be adversely affected.

Wallbox’s business is significantly dependent on its ability to meet labor needs, and Wallbox may be subject to work stoppages at its facilities or at the facilities of its supply and manufacturing partners, which could negatively impact the profitability of Wallbox’s business.

The success of Wallbox’s business depends significantly on its ability to hire and retain quality employees, including at its manufacturing and distribution facilities, many of whom are skilled. Wallbox may be unable to meet its labor needs and control its costs due to external factors such as the availability of a sufficient number of qualified persons in the work force of the markets in which it operates, unemployment levels, demand for certain labor expertise, prevailing wage rates, wage inflation, changing demographics, health and other insurance costs, adoption of new or revised employment and labor laws and regulations, and the impacts of man-made or natural disasters, such as tornadoes, hurricanes, and the COVID-19 pandemic. Should Wallbox fail to increase its wages competitively in response to increasing wage rates, the quality of its workforce could decline. Any increase in the cost of labor could have an adverse effect on Wallbox’s operating costs, financial condition and results of operations. If Wallbox is unable to hire and retain skilled employees, its business could be materially adversely affected.

If Wallbox’s employees or the employees of its manufacturing and supply partners were to engage in a strike, work stoppage or other slowdown in the future, it could experience a significant disruption of its operations, which could interfere with its ability to deliver products on a timely basis and could have other negative effects, such as decreased productivity and increased labor costs. Any interruption in the delivery of Wallbox’s products could reduce demand for its products and could have a material adverse effect on Wallbox.

Wallbox may have to initiate product recalls or withdrawals or may be subject to litigation or regulatory enforcement actions and/or incur material product liability claims, which could increase its costs and harm Wallbox’s brand, reputation and adversely affect its business.

As a manufacturer, marketer and retailer, Wallbox may initiate product recalls or withdrawals, or may be subject to seizures, product liability or other litigation claims and adverse public relations if its products are defective or alleged to cause injury, or if Wallbox is alleged to have violated governmental regulations in the manufacture, sale or distribution of any products, whether caused by it or someone in its manufacturing or supply chain. Wallbox also offers warranties on many of its products which may result in additional payments in the future if its products prove to be defective.

A product recall, withdrawal or seizure could result in destruction of product inventory and inventory write-off, negative publicity, temporary facility closings for Wallbox or its contract manufacturers or OEMs, supply chain interruption, fines, substantial and unexpected expenditures, which would reduce operating profit and cash flow. In addition, a product recall, withdrawal or seizure may require significant management attention. Product recalls may materially and adversely affect consumer confidence in Wallbox’s brands, hurt the value of its brands and lead to decreased demand for its products and decline in price charged for its products. Product recalls, withdrawals or seizures also may lead to increased scrutiny by federal, state or international regulatory agencies of Wallbox’s operations and increased litigation and could have a material adverse effect on its business, results of operations, financial condition and cash flows.

Wallbox may be subject to various product liability claims, particularly as it expands in the United States. Any such product liability claims may also include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, or a breach of warranties. Claims could also be asserted under state consumer protection laws. If Wallbox cannot successfully defend itself against product liability claims, it may incur substantial liabilities or be required to limit commercialization of its

 

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existing products. Even successful defense would require significant financial and management resources. In addition, Wallbox’s inability to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims could prevent or inhibit the development and commercial production and sale of its products, which could adversely affect its business, financial condition, results of operations, and prospects.

Wallbox is subject to extensive environmental, health and safety laws and regulations which, if not met, could have a material adverse effect on its business, financial condition and results of operations.

Wallbox and its operations, as well as those of Wallbox’s contractors, suppliers, and customers, are subject to certain environmental laws and regulations, including laws related to the use, handling, storage, transportation, and disposal of hazardous substances and wastes as well as electronic wastes and hardware, whether hazardous or not. These laws may require Wallbox or others in Wallbox’s value chain to obtain permits and comply with procedures that impose various restrictions and obligations that may have material effects on Wallbox’s operations. If key permits and approvals cannot be obtained on acceptable terms, or if other operational requirements cannot be met in a manner satisfactory for Wallbox’s operations or on a timeline that meets Wallbox’s commercial obligations, it may adversely impact its business.

Throughout the world, electrical appliances are subject to various mandatory and voluntary standards, including requirements in some jurisdictions, including the United States, that products be listed by Underwriters’ Laboratories, Inc. or other similar recognized laboratories. In the United States, Wallbox is required to undergo certification and testing of compliance with UL standards, as well as other national and industry specific standards. Wallbox endeavors to have its products designed to meet the certification requirements of, and to be certified in, each of the jurisdictions in which they are sold. Compliance with such certifications could be costly and if Wallbox or its products were to fail to comply with any such certifications, it could be limited in its ability to sell and market its products, which would have a material adverse effect on its business financial condition and results of operations.

Environmental and health and safety laws and regulations can be complex and may be subject to change, such as through new requirements enacted at the supranational, national, sub-national, and/or local level or new or modified regulations that may be implemented under existing law. The nature and extent of any changes in these laws, rules, regulations and permits may be unpredictable and may have material effects on Wallbox’s business. Future legislation and regulations or changes in existing legislation and regulations, or interpretations thereof, including those relating to hardware manufacturing, electronic waste, or batteries, could cause additional expenditures, restrictions and delays in connection with Wallbox’s operations as well as other future projects, the extent of which cannot be predicted. California may adopt more stringent regulation for DC fast charging by 2024.

Further, Wallbox currently relies on third parties to ensure compliance with certain environmental laws, including those related to the disposal of hazardous and non-hazardous wastes. Wallbox generally does not manufacture the components of its charging products. Rather, its employees and contractors engage in assembly of charging products at its facilities primarily using components manufactured by OEMs. Nonetheless, any failure to properly handle or dispose of wastes, regardless of whether such failure is Wallbox’s or its contractors, may result in liability under environmental laws in the United States, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and state analogs, under which liability may be imposed without regard to fault or degree of contribution for the investigation and clean-up of contaminated sites, as well as impacts to human health and damages to natural resources. Wallbox may also generate or dispose of solid wastes, which may include hazardous wastes that are subject to the requirements of the Resource Conservation and Recovery Act (“RCRA”), and comparable state statutes. While RCRA regulates both solid and hazardous wastes, it imposes strict requirements on the generation, storage, treatment, transportation and disposal of hazardous wastes. Certain components of Wallbox’s chargers may be excluded from RCRA’s hazardous waste regulations, provided certain requirements are met. However, if these components do not meet all of the established requirements for the exclusion, or if the requirements for the

 

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exclusion change, Wallbox may be required to treat such products as hazardous waste, which are subject to more rigorous and costly disposal requirements. Any such changes in the laws and regulations, or Wallbox’s ability to qualify the materials it uses for exclusions under such laws and regulations, could adversely affect Wallbox’s operating expenses. Additionally, Wallbox may not be able to secure contracts with third parties to continue their key supply chain and disposal services for its business, which may result in increased costs for compliance with environmental laws and regulations.

Wallbox has a significant presence in international markets and plans to continue to expand its international operations, which exposes it to a number of risks that could affect its future growth.

Expansion into new international markets requires additional management attention and resources in order to tailor Wallbox’s solutions to the unique aspects of each country. In addition, Wallbox faces the following additional risks associated with Wallbox’s expansion into international locations:

 

   

challenges caused by distance, language and cultural differences;

 

   

longer payment cycles in some countries;

 

   

credit risk and higher levels of payment fraud;

 

   

compliance with applicable foreign laws and regulations, including laws and regulations with respect to privacy, consumer protection, spam and content, and the risk of penalties to Wallbox’s customers and individual members of management if its practices are deemed to be out of compliance;

 

   

compliance with changing energy, electrical, and power regulations;

 

   

unique or different market dynamics or business practices;

 

   

currency exchange rate fluctuations;

 

   

foreign exchange controls;

 

   

political and economic instability and export restrictions;

 

   

potentially adverse tax consequences; and

 

   

higher costs associated with doing business internationally.

These risks could harm Wallbox’s international expansion efforts, which could have a materially adverse effect on its business, financial condition or results of operations.

Joint ventures that Wallbox is party to or that Wallbox enters into, including its joint venture in China, present a number of challenges that could have a material adverse effect on its business, operating results and financial condition.

Wallbox has entered into joint ventures, including Wallbox’s FAWSN JV in China. These transactions typically involve a number of risks and present financial, managerial and operational challenges, including the existence of unknown potential disputes, liabilities or contingencies that arise after entering into the joint venture related to the counterparties to such joint ventures, with whom it shares control. Wallbox could experience financial or other setbacks if transactions encounter unanticipated problems due to challenges, including problems related to execution or integration. In some cases, Wallbox’s joint venture partner may have a contractual commitment to provide funding to the joint venture, although Wallbox does not have assurances that they will satisfy such obligations. With respect to Wallbox’s JV in China, economic uncertainty in China could also cause delays or make financing of operations more difficult. Any of these risks could reduce Wallbox’s revenues or increase Wallbox’s expenses, which could adversely affect Wallbox’s results of operations and cash flows.

Sustained uncertainty about, or worsening of, current global economic conditions and further escalation of trade tensions between the U.S. and its trading partners, especially China, could result in a global economic

 

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slowdown and long-term changes to global trade, including retaliatory trade restrictions that could further restrict Wallbox’s ability to operate in China. The Chinese economic, legal, and political landscape also differs from other countries in many respects, including the level of government involvement and regulation, control of foreign exchange and allocation of resources and uncertainty regarding the enforceability and scope of protection for intellectual property rights. The laws, regulations and legal requirements in China are also subject to frequent changes and the exact obligations under and enforcement of laws and regulations are often subject to unpublished internal government interpretations and policies which makes it challenging to ascertain compliance with such laws.

Wallbox has acquired businesses and may acquire other businesses and/or companies, which could require significant management attention, disrupt its business, dilute shareholder value, and adversely affect its results of operations.

As part of Wallbox’s business strategy, it has made and may make future investments in or acquisitions of complementary companies, products or technologies. These activities involve significant risks to its business. Wallbox may not be able to find suitable acquisition candidates, and it may not be able to complete such acquisitions on favorable terms, if at all. If Wallbox does complete acquisitions, they may not ultimately strengthen its competitive position. Any acquisitions Wallbox completes could be viewed negatively by its partners and clients, which could have an adverse impact on its business. In addition, if Wallbox is unsuccessful at integrating employees or technologies acquired, its financial condition and results of operations, including revenue growth, could be adversely affected. Any acquisition and subsequent integration will require significant time and resources. Wallbox may not be able to successfully evaluate and use the acquired technology or employees, or otherwise manage the acquisition and integration processes successfully. Wallbox will be required to pay cash, incur debt and/or issue equity securities to pay for any such acquisition, each of which could adversely affect its financial condition. Wallbox’s use of cash to pay for acquisitions would limit other potential uses of its cash, including investments in sales and marketing and product development organizations, and in infrastructure to support scalability. The issuance or sale of equity or convertible debt securities to finance any such acquisitions would result in dilution to shareholders. If Wallbox incurs debt, it would result in increased fixed obligations and could also impose covenants or other restrictions that could impede its ability to manage its operations.

Wallbox’s results of operations may fluctuate due to variability in its revenues.

Wallbox’s results may fluctuate in the future due to a variety of factors, many of which are beyond its control.

In addition to the other risks described herein, the following factors could also cause Wallbox’s results of operations to fluctuate:

 

   

the timing and volume of new sales;

 

   

fluctuations in costs;

 

   

the timing of new product rollouts;

 

   

weaker than anticipated demand for charging products and stations, whether due to changes in government incentives and policies or due to other conditions;

 

   

fluctuations in sales and marketing, business development or research and development expenses;

 

   

supply chain interruptions and manufacturing or delivery delays;

 

   

the timing and availability of new products relative to customers’ and investors’ expectations;

 

   

the impact of COVID-19 on Wallbox’s workforce, or those of its customers, suppliers, vendors or business partners;

 

   

disruptions in sales, production, service or other business activities or Wallbox’s inability to attract and retain qualified personnel;

 

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unanticipated changes in federal, state, local, or foreign government incentive programs, which can affect demand for EVs; and

 

   

seasonal fluctuations in EV purchases.

Fluctuations in operating results and cash flow could, among other things, give rise to short-term liquidity issues. In addition, revenue, and other operating results may fall short of the expectations of investors and financial analysts, which could have an adverse effect on the price of Holdco Class A Shares.

Exchange rate fluctuations between the Euro and other currencies may negatively affect Wallbox’s earnings.

Wallbox currently has sales denominated in currencies other than the Euro. Any fluctuation in the exchange rates of these foreign currencies could negatively impact its business, financial condition and results of operations. Wallbox has not previously engaged in foreign currency hedging. If Wallbox decides to hedge its foreign currency exposure, it may not be able to hedge effectively due to lack of experience, unreasonable costs or illiquid markets. In addition, those activities may be limited in the protection they provide Wallbox from foreign currency fluctuations and can themselves result in losses.

Holdco and other group companies may be significantly impacted by changes in tax laws and regulations or their interpretation.

Governments in the various jurisdictions in which Holdco and other group companies are established and/ or operate continue to review, reform and modify tax laws, regulations, treaties, interpretations, policy initiatives and tax authority practices, and how we are treated for tax purposes is subject to changes. We are unable to predict whether a tax reform may be proposed or enacted in the future (including with retroactive effect) or whether such changes would have a significant impact on our business, but such changes could result in material changes to the taxes that we are required to provide for and pay in various jurisdictions.

When tax laws and regulations change, or when new tax laws and regulations are introduced and implemented, such changes or new laws and regulations may be unclear in certain respects and could be subject to further potential amendments and technical corrections, and may be subject to interpretations and implementing regulations by the relevant governmental authorities, any of which could mitigate or increase certain adverse effects of the tax changes or of the new tax laws and regulations. Existing tax laws and regulations could also be interpreted or applied in a manner adverse to Holdco or other group companies.

We have incurred and are likely to continue incurring significant tax losses, the use of which may be limited under Spanish and other tax laws, and may be further limited in the future in case of changes in the applicable tax laws or their interpretation by the competent tax authorities. Similarly, we expect to obtain future tax savings from tax credits generated in Spain and in other jurisdictions we operate, and such tax losses and credits may eventually be rendered unavailable should a change in tax laws (or in their interpretation) take place. In particular, we are entitled to a significant amount of tax credits with respect to R&D costs under Spanish tax laws. We expect to be able to use such R&D tax credits in future fiscal years to reduce our cash tax liabilities. If the Spanish tax laws and regulations with respect to such R&D credits change in a manner that is detrimental to our position (e.g. by limiting the amount of tax credits that may be applied in a given fiscal year, by amending the criteria currently used to assess the amount of tax credits that may be claimed, or even by derogating the current tax regime), our overall tax expenses may increase. Any increase in our tax expenses due to a forfeiture, limitation or non-availability of tax losses and credits could have a material and adverse effect on our financial condition and results of operations.

We may also be subject to reviews or audits by tax authorities in the various jurisdictions in which we operate, and although we believe our tax estimates are reasonable, if the applicable taxing authorities disagree with the positions taken on our tax returns or if they deem us not be otherwise compliant with all applicable tax laws and regulations, tax authorities may carry out enforcement actions against us. Enforcement actions may be administrative, civil or criminal in nature, and could result in litigation, payments of additional taxes, penalties, interest or other sanctions. Any such non-compliance with applicable tax laws and regulations and their

consequences to us may impact our operations, or even our ability to operate in such jurisdictions, and may adversely affect our business, prospects, financial condition and results of operations.

 

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Risks Related to Wallbox’s Technology, Intellectual Property and Infrastructure

Wallbox may need to defend against intellectual property infringement or misappropriation claims, which may be time-consuming and expensive, and its business could be adversely affected.

From time to time, the holders of intellectual property rights may assert their rights and urge Wallbox to take licenses, and/or may bring suits alleging infringement or misappropriation of such rights. There can be no assurance that Wallbox will be able to mitigate the risk of potential suits or other legal demands by competitors or other third parties. Accordingly, Wallbox may consider entering into licensing agreements with respect to such rights, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur, and such licenses and associated litigation could significantly increase Wallbox’s operating expenses. In addition, if Wallbox is determined to have or believes there is a high likelihood that it has infringed upon or misappropriated a third party’s intellectual property rights, it may be required to cease making, selling or incorporating certain key components or intellectual property into the products and services it offers, to pay substantial damages and/or royalties, to redesign its products and services, and/or to establish and maintain alternative branding. In addition, to the extent that Wallbox’s customers and business partners become the subject of any allegation or claim regarding the infringement or misappropriation of intellectual property rights related to Wallbox’s products and services, Wallbox may be required to indemnify such customers and business partners. The scope of these indemnity obligations varies, but may, in some instances, include indemnification for damages and expenses, including attorneys’ fees. Even if Wallbox is not a party to any litigation between a customer or business partner and a third party relating to infringement by its products, an adverse outcome in any such litigation could make it more difficult for Wallbox to defend its products against intellectual property infringement claims in any subsequent litigation in which it is a named party. If Wallbox were required to take one or more such actions, its business, prospects, brand, operating results and financial condition could be materially and adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity, reputational harm and diversion of resources and management attention.

Wallbox’s business may be adversely affected if it is unable to obtain patents or otherwise protect its technology and intellectual property from unauthorized use by third parties.

Wallbox’s success depends, at least in part, on Wallbox’s ability to protect its core technology and intellectual property. To accomplish this, Wallbox relies on, and plans to continue relying on, a combination of trade secrets (including know-how), employee and third-party nondisclosure agreements, copyright, trademarks, intellectual property licenses and other contractual rights to retain ownership of, and protect, its technology. As of June 30, 2021, Wallbox had two European patents and two pending international patent applications. Failure to adequately protect its technology and intellectual property could result in competitors offering similar products, potentially resulting in the loss of some of Wallbox’s competitive advantage and a decrease in revenue which would adversely affect its business, prospects, financial condition and operating results.

The measures Wallbox takes to protect its technology intellectual property from unauthorized use by others may not be effective for various reasons, including the following:

 

   

the scope of any issued patents that may result from the pending patent application may not be broad enough to protect proprietary rights;

 

   

the costs associated with enforcing patents, trademarks, confidentiality and invention agreements or other intellectual property rights may make enforcement impracticable;

 

   

current and future competitors may circumvent patents or independently develop similar inventions, trade secrets or works of authorship, such as software;

 

   

know-how and other proprietary information Wallbox purports to hold as a trade secret may not qualify as a trade secret under applicable laws; and

 

   

proprietary designs and technology embodied in Wallbox’s products may be discoverable by third parties through means that do not constitute violations of applicable laws.

 

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Intellectual property and trade secret laws vary significantly throughout the world. Some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Further, policing the unauthorized use of its intellectual property in foreign jurisdictions may be costly, difficult or even impossible. Therefore, Wallbox’s intellectual property rights may not be as strong or as easily enforced outside of the United States.

Any issued patent which may result from the pending patent application may come to be considered “standards essential.” If this is the case, it may be required to license certain technology on “fair, reasonable and non-discriminatory” terms, decreasing revenue. Further, competitors, vendors, or customers may, in certain instances, be free to create variations or derivative works of Wallbox technology and intellectual property, and those derivative works may become directly competitive with Wallbox’s offerings. Finally, Wallbox may not be able to leverage, or obtain ownership of, all technology and intellectual property developed by Wallbox’s vendors in connection with design and manufacture of Wallbox’s products, thereby jeopardizing Wallbox’s ability to obtain a competitive advantage over its competitors.

The EV industry is new and evolving as are the standards governing EV charging and the current lack of industry standards could result in future incompatibilities and issues that could require significant resources and or time to remedy.

The EV industry is new and evolving as are the standards governing EV charging which have not had the benefit of time-tested use cases. These immature industry standards could result in future incompatibilities and issues that could require significant resources and or time to remedy. Utilities and other large market participants also mandate their own adoption of specifications that have not become widely adopted in the industry, may hinder innovation or slow new product or new feature introduction.

In addition, automobile manufacturers may choose to develop and promulgate their own proprietary charging standards and systems, which could lock out competition for EV chargers, or may produce proprietary chargers that compete with our chargers. Such automobile manufacturers may use their size and market position to influence the market, which could limit Wallbox’s market and reach to customers, negatively impacting its business.

Further, should regulatory bodies later impose a standard that is not compatible with Wallbox’s infrastructure or products, it may incur significant costs to adapt its business model to the new regulatory standard, which may require significant time and expense and, as a result, may have a material adverse effect on its revenues or results of operations.

Wallbox’s technology, or the technology of Electromaps, could have undetected defects, errors or bugs in hardware or software which could reduce market adoption, damage its reputation with current or prospective customers, and/or expose it to product liability and other claims that could materially and adversely affect its business.

Wallbox may be subject to claims that chargers have malfunctioned and persons were injured or purported to be injured due to latent defects. Any insurance that Wallbox carries may not be sufficient or it may not apply to all situations. Similarly, to the extent that such malfunctions are related to components obtained from third-party vendors, such vendors may not assume responsibility for such malfunctions. Any of these events could adversely affect Wallbox’s brand, reputation, operating results or financial condition.

Wallbox’s software platform is complex and includes a number of licensed third-party commercial and open-source software libraries. Wallbox’s software may contain latent defects or errors that may be difficult to detect and remediate. Wallbox is continuing to evolve the features and functionality of its platform through updates and enhancements, and as it does, it may introduce additional defects or errors that may not be detected until after deployment to customers. In addition, if Wallbox’s products and services, including any updates or

 

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patches, are not implemented or used correctly or as intended, inadequate performance and disruptions in service may result.

Any defects or errors in product or services offerings, or the perception of such defects or errors, or other performance problems could result in any of the following, each of which could adversely affect Wallbox’s business and results of its operations:

 

   

expenditure of significant financial and product development resources, including recalls, in efforts to analyze, correct, eliminate or work around errors or defects;

 

   

loss of existing or potential customers or partners;

 

   

interruptions or delays in sales;

 

   

equipment replacements;

 

   

delayed or lost revenue;

 

   

delay or failure to attain market acceptance;

 

   

delay in the development or release of new functionality or improvements;

 

   

negative publicity and reputational harm;

 

   

warranties, sales credits or refunds;

 

   

exposure of confidential or proprietary information;

 

   

diversion of development and customer service resources;

 

   

breach of warranty claims;

 

   

legal claims under applicable laws, rules and regulations; and

 

   

the expense and risk of litigation.

Wallbox also faces the risk that any contractual protections it seeks to include in its agreements with customers are rejected, not implemented uniformly or may not fully or effectively protect from claims by customers, reseller, business partners or other third parties. In addition, any insurance coverage or indemnification obligations of suppliers for the benefit of Wallbox may not adequately cover all such claims, or cover only a portion of such claims. A successful product liability, warranty, or other similar claim could have an adverse effect on Wallbox’s business, operating results, and financial condition. In addition, even claims that ultimately are unsuccessful could result in expenditure of funds in litigation, divert management’s time and other resources and cause reputational harm.

Interruptions, delays in service, communications outages or inability to increase capacity at third-party data center facilities could impair the use or functionality of Wallbox’s subscription services, harm its business and subject it to liability.

Wallbox currently serves customers from third-party data center facilities operated by Amazon Web Services as well as others. Wallbox services are housed in third-party data. Any outage or failure of such data centers could negatively affect Wallbox’s product connectivity and performance. Wallbox’s primary environments are operated by Amazon, and any interruptions of these primary and backup data centers could negatively affect Wallbox’s product connectivity and performance. Any incident affecting a data center facility’s infrastructure or operations, whether caused by fire, flood, storm, earthquake, power loss, telecommunications failures, breach of security protocols, computer viruses and disabling devices, failure of access control mechanisms, natural disasters, war, criminal act, military actions, terrorist attacks and other similar events could negatively affect the use, functionality or availability of Wallbox’s services.

 

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Any damage to, or failure of, Wallbox’s systems, or those of its third-party providers, could interrupt or hinder the use or functionality of its services. Impairment of or interruptions in Wallbox’s services may reduce revenue, subject it to claims and litigation, cause customers to terminate their subscriptions, and adversely affect renewal rates and its ability to attract new customers. Wallbox’s business will also be harmed if customers and potential customers believe its products and services are unreliable.

The EV charging market is characterized by rapid technological change, which requires Wallbox to continue to develop new products and product innovations. Any delays in such development could adversely affect market adoption of its products and Wallbox’s financial results.

Continuing technological changes in battery and other EV technologies could adversely affect adoption of current EV charging technology, continuing and increasing reliance on EV charging infrastructure and/or the use of Wallbox’s products and services. Wallbox’s future success will depend in part upon its ability to develop and introduce a variety of new capabilities and innovations to its existing product offerings, as well as introduce a variety of new product offerings to address the changing needs of the EV charging market.

As EV technologies change, Wallbox may need to upgrade or adapt its charger technology and introduce new products and services in order to serve vehicles that have the latest technology, in particular battery technology, which could involve substantial costs. Even if Wallbox is able to keep pace with changes in technology and develop new products and services, its research and development expenses could increase, its gross margins could be adversely affected in some periods and its prior products could become obsolete more quickly than expected.

Wallbox cannot guarantee that any new products will be released in a timely manner, or at all, or achieve market acceptance. Delays in delivering new products that meet customer requirements could damage Wallbox’s relationships with customers and lead them to seek alternative products or services. Delays in introducing products and innovations or the failure to offer innovative products or services at competitive prices may cause existing and potential customers to use Wallbox’s competitors’ products or services.

If Wallbox is unable to devote adequate resources to develop products or cannot otherwise successfully develop products or services that meet customer requirements on a timely basis or that remain competitive with technological alternatives, its products and services could lose market share, its revenue will decline, it may experience higher operating losses and its business and prospects will be adversely affected.

Wallbox expects to incur research and development costs and devote significant resources to developing new products, which could significantly reduce its profitability.

Wallbox’s future growth depends on penetrating new markets, adapting existing products to new applications and customer requirements, and introducing new products that achieve market acceptance. Wallbox plans to incur significant research and development costs in the future as part of its efforts to design, develop, manufacture and introduce new products and enhance existing products. Further, Wallbox’s research and development program may not produce successful results, and its new products may not achieve market acceptance, create additional revenue or become profitable.

Wallbox may be unable to leverage customer data in all geographic locations, and this limitation may impact research and development operations.

Wallbox relies on data collected through its mobile application. Wallbox uses this data in connection with, among other things, determining the placement for its charging stations. Wallbox’s inability to obtain necessary rights to use this data or freely transfer this data could result in delays or otherwise negatively impact Wallbox’s research and development and expansion efforts and limit Wallbox’s ability to derive revenues from value-add customer products and services.

 

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Wallbox is subject to governmental regulation and other legal obligations related to privacy, data protection and information security and may be subject to governmental enforcement actions, litigation, fines and penalties or adverse publicity if it is unable to comply with such obligations.

State and local governments and agencies in the jurisdictions in which Wallbox operates, and in which customers operate, have adopted, are considering adopting, or may adopt laws and regulations regarding the collection, use, storage, processing, and disclosure of information regarding consumers and other individuals, which could impact its ability to offer services in certain jurisdictions. Laws and regulations relating to the collection, use, disclosure, security, and other processing of individuals’ information can vary significantly from jurisdiction to jurisdiction. The costs of compliance with, and other burdens imposed by, laws, regulations, standards, and other obligations relating to privacy, data protection, and information security are significant. In addition, some companies, particularly larger enterprises, often will not contract with vendors that do not meet these rigorous standards. Accordingly, the failure, or perceived inability, to comply with these laws, regulations, standards, and other obligations may limit the use and adoption of Wallbox’s products and services, reduce overall demand, lead to regulatory investigations, litigation, and significant fines, penalties, or liabilities for actual or alleged noncompliance, or slow the pace at which Wallbox closes sales transactions, any of which could harm its business. Moreover, if Wallbox or any of its employees or contractors fail or are believed to fail to adhere to appropriate practices regarding customers’ data, it may damage its reputation and brand.

Additionally, existing laws, regulations, standards, and other obligations may be interpreted in new and differing manners in the future, and may be inconsistent among jurisdictions. Future laws, regulations, standards, and other obligations, and changes in the interpretation of existing laws, regulations, standards, and other obligations could result in increased regulation, increased costs of compliance and penalties for non-compliance, and limitations on data collection, use, disclosure, and transfer for Wallbox and its customers. Further, California adopted the California Consumer Privacy Protection Act (“CCPA”) and the California State Attorney General has begun enforcement actions. Further, on November 3, 2020, California voters approved the California Privacy Rights Act (“CPRA”). The costs of compliance with, and other burdens imposed by, laws and regulations relating to privacy, data protection, and information security that are applicable to the businesses of customers may adversely affect ability and willingness to process, handle, store, use, and transmit certain types of information, such as demographic and other personal information.

In addition to government activity, privacy advocacy groups, the technology industry, and other industries have established or may establish various new, additional, or different self-regulatory standards that may place additional burdens on technology companies. Customers may expect that Wallbox will meet voluntary certifications or adhere to other standards established by them or third parties. If Wallbox is unable to maintain these certifications or meet these standards, it could reduce demand for its solutions and adversely affect its business.

Wallbox relies on the Apple App Store and the Google Play Store to offer and promote its apps. If such platform providers change their terms and conditions to Wallbox’s detriment, Wallbox’s business may be adversely affected.

The Apple App Store and the Google Play Store are the primary distribution, marketing, promotion and payment platforms for Wallbox’s apps, including myWallbox and Electromaps. Any deterioration in Wallbox’s relationship with Google or Apple could harm its business and adversely affect the value of Holdco’s shares.

Wallbox is subject to these platforms’ standard terms and conditions for app developers, which govern the promotion, distribution and operation of apps. These platforms have policies governing, for example, treatment of virtual credits and gifts, use of user data, personal and sensitive information and advertising identifiers, as well as ones relating to advertising (including deceptive, disruptive and inappropriate ads) and interference with app and device functionality. Each platform has broad discretion to change and interpret its terms of service and other policies with respect to Wallbox and those changes may be unfavorable to Wallbox. A

 

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platform provider may also change its fee structure, add fees associated with access to and use of its platform, alter how Wallbox is able to advertise on the platform, change how the personal information of its users is made available to app developers on the platform or limit the use of personal information for advertising purposes. Wallbox’s business could be harmed if a platform provider modifies its current terms of service or other policies, including fees, in a manner adverse to it.

If Wallbox violates, or if a platform provider believes it has violated, these terms and conditions (or if there is any change or deterioration in its relationship with these platform providers), the particular platform provider may discontinue or limit Wallbox’s access to that platform, which could prevent Wallbox from making its apps available to or otherwise from serving its mobile customers. Any limit or discontinuation of Wallbox’s access to any platform could adversely affect its business, financial condition or results of operations.

Risks Related to Being a Public Company

Wallbox’s management team has limited experience managing a public company.

Most members of Wallbox’s management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws, rules and regulations that govern public companies. As a public company, we are subject to significant obligations relating to reporting, procedures and internal controls, and Wallbox’s management team may not successfully or efficiently manage such obligations. These obligations and scrutiny will require significant attention from Wallbox’s management and could divert their attention away from the day-to-day management of Wallbox’s business, which could adversely affect Wallbox’s business, financial condition and results of operations.

Wallbox will incur increased costs as a result of operating as a public company, and Wallbox’s management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the NYSE and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel continue to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and could also make it more difficult for us to attract and retain qualified members of our board.

We continue to evaluate these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which will require management to certify financial and other information in our annual reports and provide an annual management report on the effectiveness of control over financial reporting. Though we will be required to disclose material changes in internal control over financial reporting on an annual basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and

 

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evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.

We currently have limited accounting personnel and we have begun the process of evaluating the adequacy of our accounting personnel staffing level and other matters related to our internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. We have identified material weaknesses in the past and if we identify one or more material weaknesses in the future, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. As a result, the market price of Holdco shares could be negatively affected, and we could become subject to litigation including shareholder suits or investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

Wallbox identified material weaknesses in connection with its internal control over financial reporting. Although Wallbox is taking steps to remediate these material weaknesses, Wallbox may not be successful in doing so in a timely manner, or at all, and Wallbox may identify other material weaknesses.

In connection with the audits of Wallbox’s consolidated financial statements for each of the years ended December 31, 2019 and 2020 and included elsewhere in this proxy statement/prospectus, Wallbox’s management and independent registered public accounting firm identified material weaknesses in Wallbox’s internal control over financial reporting. The material weaknesses related to: (i) insufficient personnel in the finance team with an appropriate level of knowledge and experience in the application of International Financial Reporting Standards as issued by the IASB, including goodwill impairment testing and purchase price allocation; (ii) IT general controls have not been sufficiently designed or were not operating effectively, and (iii) policies and procedures with respect to the review, supervision and monitoring of the accounting and reporting functions were not operating effectively in some areas. As a result, a number of adjustments to Wallbox’s consolidated financial statements for each of the years ended December 31, 2019 and 2020 were identified and made during the course of the audit process.

Wallbox is currently not required to comply with Section 404 of the Sarbanes-Oxley Act, and are therefore not required to make an assessment of the effectiveness of its internal control over financial reporting. Further, Wallbox’s independent registered public accounting firm has not been engaged to express, nor have they expressed, an opinion on the effectiveness of Wallbox’s internal control over financial reporting. To remediate the material weaknesses, in the course of 2021, Wallbox has strengthened its compliance functions with additional experienced hires and external advisors to assist in its risk assessment process and the design and implementation of controls responsive to those risks.

Assessing Wallbox’s procedures to improve its internal control over financial reporting is an ongoing process. Any material weaknesses Wallbox identifies will be assessed and remediated by implementing the proper operating control. Detective and preventive internal controls are being designed by external advisors and implemented by Wallbox’s experienced new hires. Wallbox can provide no assurance that its remediation efforts described herein will be successful and that Wallbox will not have material weaknesses in the future. Any material weaknesses Wallbox identifies could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of Wallbox’s consolidated financial statements.

 

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It is possible that Wallbox’s internal control over financial reporting is not effective because it cannot detect or prevent material errors at a reasonable level of assurance. Wallbox’s past or future financial statements may not be accurate and Holdco may not be able to timely report its financial condition or results of operations, which may adversely affect investor confidence in Holdco and the price of Holdco Class A Shares.

As a private company, Wallbox has not been required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes Oxley Act, or Section 404. As a public company, Holdco will have significant requirements for enhanced financial reporting and internal controls. The process of designing, implementing, testing and maintaining effective internal controls is a continuous effort that will require us to anticipate and react to changes in our business and the economic and regulatory environments. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing whether such controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting.

It is possible that our internal control over financial reporting is not effective because it cannot detect or prevent material errors at a reasonable level of assurance. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and adversely affect our operating results. In addition, we will be required, pursuant to Section 404, to furnish a report by our management on, among other things, the effectiveness of our internal control over financial reporting in the second annual report filed with the SEC. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation and testing. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business. In addition, pursuant to Section 404, we will be required to include in the annual reports that we file with the SEC an attestation report on our internal control over financial reporting issued by our independent registered public accounting firm.

Furthermore, as a public company, we may, during the course of our testing of our internal controls over financial reporting, or during the subsequent testing by our independent registered public accounting firm, identify deficiencies which would have to be remediated to satisfy the SEC rules for certification of our internal controls over financial reporting. As a consequence, we may have to disclose in periodic reports we file with the SEC significant deficiencies or material weaknesses in our system of internal controls. The existence of a material weakness would preclude management from concluding that our internal controls over financial reporting are effective, and would preclude our independent auditors from issuing an unqualified opinion that our internal controls over financial reporting are effective. In addition, disclosures of this type in our SEC reports could cause investors to lose confidence in the accuracy and completeness of our financial reporting and may negatively affect the trading price of Holdco Class A Shares, and we could be subject to sanctions or investigations by regulatory authorities. Moreover, effective internal controls are necessary to produce reliable financial reports and to prevent fraud. If we have deficiencies in our disclosure controls and procedures or internal controls over financial reporting, it could negatively impact our business, results of operations and reputation.

Holdco’s failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act that will be applicable to it after the closing of the Business Combination could have a material adverse effect on its business.

Wallbox is currently not subject to Section 404 of the SOX. However, following the consummation of the business combination, Holdco will be required to provide management’s attestation on internal controls. The standards required for a public company under Section 404(a) of the SOX are significantly more stringent than

 

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those required of Wallbox as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable after the business combination. If Holdco is not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, it may not be able to assess whether its internal controls over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and the market price of its securities.

Risks Related to Holdco’s Class A Shares

The market price of Holdco’s Class A Shares may be volatile, and you may lose all or part of your investment.

The market price of Holdco’s Class A Shares could be highly volatile and may fluctuate substantially as a result of many factors, including:

 

   

actual or anticipated fluctuations in Holdco’s results of operations;

 

   

variance in Holdco’s financial performance from the expectations of market analysts or others;

 

   

announcements by Holdco or Holdco’s competitors of significant business developments, changes in significant customers, acquisitions or expansion plans;

 

   

Holdco’s involvement in litigation;

 

   

Holdco’s sale of Holdco Shares or other securities in the future;

 

   

market conditions in Holdco’s industry;

 

   

changes in key personnel;

 

   

the trading volume of Holdco’s Class A Shares;

 

   

changes in the estimation of the future size and growth rate of Holdco’s markets; and

 

   

general economic and market conditions.

In addition, the stock markets have experienced extreme price and volume fluctuations. Broad market and industry factors may materially harm the market price of Holdco’s Class A Shares, regardless of Holdco’s operating performance. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted against that company. If Holdco was involved in any similar litigation, Holdco could incur substantial costs and Holdco’s management’s attention and resources could be diverted.

An active trading market for Holdco’s Class A Shares may not be sustained to provide adequate liquidity.

An active trading market may not be sustained for Holdco’s Class A Shares. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. An inactive market may also impair Holdco’s ability to raise capital by selling Holdco Shares and may impair Holdco’s ability to acquire other companies by using Holdco’s shares as consideration.

The market price of Holdco’s Class A Shares could be negatively affected by future sales of Holdco Shares.

Immediately following completion of the Business Combination and the other Transactions, Holdco will have 145,528,441 Holdco Class A Shares and 23,250,791 Holdco Class B Shares outstanding, assuming no redemptions of which only Holdco’s Class A Shares will be listed on the NYSE. Sales by Holdco or Holdco’s shareholders of a substantial number of Holdco Shares, the issuance of Holdco Shares as consideration for acquisitions, or the perception that these sales might occur, could cause the market price of Holdco’s Class A Shares to decline or could impair Holdco’s ability to raise capital through a future sale of, or pay for acquisitions using, Holdco’s equity securities.

 

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As of December 31, 2020, giving pro forma effect to the Business Combination and the other Transactions at such date, Holdco would have had 8,880,029 Holdco Class A Shares that were subject to share options. Of this amount, after giving pro forma effect to the Business Combination and the other Transactions, rights to 2,920,326 Holdco Class A Shares and no Holdco Class B Shares would have been vested and exercisable as of December 31, 2020. Subsequent to December 31, 2020, Wallbox approved the Legacy Stock Option Program for founders as more fully described in “Unaudited Pro Forma Condensed Combined Financial Information” and “Management of Holdco After the Business Combination”, which authorized options that will convert into 1,033,609 additional Holdco Class B Shares.

Holdco does not expect to pay any dividends in the foreseeable future.

Holdco has never declared or paid any dividends on the Holdco Shares. Holdco does not anticipate paying any dividends in the foreseeable future. Holdco currently intends to retain future earnings, if any, to finance operations and expand their business.

The Holdco Board may determine which part of the profits shall be reserved, with due observance of Holdco’s policy on reserves and dividends. The general meeting of Holdco may resolve to distribute any part of the profits remaining after reservation. If the Holdco Board decides to make a part of the profits available for distribution of dividends, the form, frequency and amount will depend upon Holdco’s future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that Holdco’s directors may deem relevant. In addition, the Dutch law imposes restrictions on Holdco’s ability to declare and pay dividends. Payment of dividends may also be subject to Dutch withholding taxes.

Please see the section entitled Price range of securities and dividends” for a description of Holdco’s dividend policy.

The number of issued Holdco Shares, additional issues of Holdco Shares and outstanding Holdco Warrants may fluctuate substantially, which could lead to adverse tax consequences for the holders thereof.

It may be that the number of issued and outstanding Holdco Shares and outstanding Holdco Warrants fluctuates substantially. This may have an impact on interests and certain thresholds that are relevant for investors’ tax purposes and positions, also dependent on their respective circumstances. The potential tax consequences in this regard could potentially be material, and therefore, investors should seek their own tax advice with respect to the tax consequences in connection with the acquisition, ownership and disposal of the Holdco Shares and/or Holdco Warrants.

If securities or industry analysts do not publish research or reports about Holdco’s business, or if they issue an adverse or misleading opinion regarding Holdco’s Class A Shares, the market price and trading volume of Holdco’s Class A Shares could decline.

The trading market for Holdco’s Class A Shares will be influenced by the research and reports that industry or securities analysts publish about Holdco or Holdco’s business. Holdco does not currently have and may never obtain research coverage by securities and industry analysts. If no or few securities or industry analysts commence coverage of Holdco, the trading price for Holdco’s Class A Shares would be negatively impacted. In the event Holdco obtains securities or industry analyst coverage, if any of the analysts who cover Holdco issue an adverse or misleading opinion regarding Holdco, Holdco’s business model, Holdco’s intellectual property or Holdco’s stock performance, or if Holdco’s results of operations fail to meet the expectations of analysts, Holdco’s stock price would likely decline. If one or more of these analysts cease coverage of Holdco or fail to publish reports on Holdco regularly, Holdco could lose visibility in the financial markets, which in turn could cause Holdco’s stock price or trading volume to decline.

 

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If you invest in Holdco’s Class A Shares, you will experience immediate and substantial dilution in the net tangible book value of your investment as you will pay more for your Holdco Shares than the amounts paid by Holdco’s existing owners, including the owners of Holdco’s convertible loans.

The initial public offering price of $10.00 per share of Kensington’s common stock will be substantially higher than Holdco’s as adjusted net tangible book (deficit) per share immediately after this the consummation of the Business Combination. Assuming you paid the Kensington initial public offering price of $10 per share, you would incur immediate and substantial dilution in an amount of $9.52 per Holdco Class A Share. In addition, pursuant to the terms of such loans, the holders of the April 2021 Wallbox convertible loans will convert their loans to Wallbox Class A Shares at a valuation that is 50% of the valuation implied by the Business Combination.

The dual class structure of Holdco Shares has the effect of concentrating voting control with certain shareholders of Holdco and limiting its other shareholders’ ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of Holdco Class A Shares may view as beneficial.

Holdco Class B Shares will have ten (10) votes per share, while Holdco Class A Shares have one (1) vote per share. Wallbox’s co-founders, Enric Asunción Escorsa and Eduard Castañeda, will own all of the Holdco Class B Shares and will collectively control approximately 61.5% of the voting power of Holdco’s capital stock. In connection with the closing of the Business Combination, if Mr. Asuncion holds less than 50% of the voting power of Holdco following such closing, Mr. Castaneda intends to enter into a power of attorney granting Mr. Asuncion voting authority over the Holdco shares beneficially owned by Mr. Castaneda. The power of attorney is expected to have a term that automatically renews following each annual general shareholder meeting unless terminated by Mr. Castaneda following such meeting. Pursuant to Dutch law, Mr. Castaneda nonetheless retains the right to vote such shares notwithstanding the grant of such power of attorney. As a result, Wallbox’s co-founders will collectively be able to control matters submitted to its shareholders for approval, including the election of directors, amendments of its organizational documents and any merger, consolidation, sale of all or substantially all of Holdco’s assets or other major corporate transactions. Even though Wallbox’s co-founders are not party to any agreement that requires them to vote together, they may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of Holdco, could deprive its shareholders of an opportunity to receive a premium for their capital stock as part of a sale of Holdco, and might ultimately affect the market price of shares of Holdco Class A Shares. For information about Holdco’s dual class structure, see the section entitled “Description of Holdco’s Securities.

We cannot predict whether Holdco’s dual class structure will result in a lower or more volatile market price of Holdco Class A Shares or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. S&P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, pursuant to which companies with multiple classes of shares of common stock are excluded. In addition, several stockholder advisory firms have announced their opposition to the use of multiple class structures. As a result, Holdco’s dual class structure may cause stockholder advisory firms to publish negative commentary about Holdco’s corporate governance practices or otherwise seek to cause Holdco to change its capital structure. Any such exclusion from indices or any actions or publications by stockholder advisory firms critical of Holdco’s corporate governance practices or capital structure could adversely affect the value and trading market of Holdco Class A Shares.

Holdco will be a “controlled company” within the meaning of the NYSE rules and will be exempt from certain corporate governance requirements as a result.

Immediately following the completion of the Business Combination, Enric Asunción Escorsa and Eduard Castañeda will together control a majority of the voting power of Holdco’s outstanding common stock.

 

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As a result, Holdco will be a “controlled company” within the meaning of the corporate governance standards of NYSE. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

 

   

the requirement that a majority of Holdco’s board of directors consist of “independent directors” as defined under the rules of NYSE;

 

   

the requirement that Holdco have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

 

   

the requirement that Holdco have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

 

   

the requirement for an annual performance evaluation of the compensation and nominating and corporate governance committees.

Following the Business Combination, Holdco intends to utilize some or all of these exemptions. As a result, Holdco’s nominating and corporate governance committee and compensation committee may not consist entirely of independent directors and such committees will not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of NYSE.

Holdco will be a foreign private issuer and, as a result, Holdco will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

Because Holdco will qualify as a foreign private issuer under the Exchange Act, Holdco will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (2) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time and (3) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation FD, which is intended to prevent issuers from making selective disclosures of material information. As a result of all of the above, you may not have the same protections afforded to shareholders of a company that is not a foreign private issuer.

As a foreign private issuer, and as permitted by the listing requirements of the NYSE, Holdco will follow certain home country governance practices rather than the corporate governance requirements of the NYSE.

As a foreign private issuer, Holdco will have the option to follow certain home country corporate governance practices rather than those of the NYSE, provided that Holdco discloses the requirements it is not following and describe the home country practices it is following. Holdco intends to rely on this “foreign private issuer exemption” with respect to NYSE rules requiring shareholder approval. Holdco may in the future elect to follow home country practices with regard to other matters. As a result, Holdco’s shareholders may not have the same protections afforded to shareholders of companies that are subject to all NYSE corporate governance requirements.

 

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Holdco may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.

As discussed above, Holdco will be a foreign private issuer, and therefore, Holdco will not be required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to Holdco on June 30, 2021. In the future, Holdco would lose its foreign private issuer status if (1) more than 50% of Holdco’s outstanding voting securities are owned by U.S. residents and (2) a majority of Holdco’s directors or executive officers are U.S. citizens or residents, or Holdco fails to meet additional requirements necessary to avoid loss of foreign private issuer status. If Holdco loses its foreign private issuer status, Holdco will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. Holdco will also have to mandatorily comply with U.S. federal proxy requirements, and Holdco’s officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, Holdco will lose its ability to rely upon exemptions from certain corporate governance requirements under the listing rules of the NYSE. As a U.S. listed public company that is not a foreign private issuer, Holdco will incur significant additional legal, accounting and other expenses that Holdco will not incur as a foreign private issuer.

Holdco is an “emerging growth company” and you cannot be certain whether the reduced disclosure requirements applicable to emerging growth companies will make Holdco’s Class A Shares less attractive to investors.

Holdco will be an emerging growth company (“EGC”) as defined in the JOBS Act, and it intends to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Investors may find the common stock less attractive because Holdco will continue to rely on these exemptions. If some investors find the common stock less attractive as a result, there may be a less active trading market for their common stock, and the stock price may be more volatile.

An EGC may elect to delay the adoption of new or revised accounting standards. With Holdco making this election, Section 102(b)(2) of the JOBS Act allows Holdco to delay adoption of new or revised accounting standards until those standards apply to non-public business entities. As a result, the financial statements contained herein and those that Holdco will file in the future may not be comparable to companies that comply with public business entities revised accounting standards effective dates.

As Holdco is a holding company with no operations it relies on operating subsidiaries to provide it with funds necessary to meet its financial obligations.

Holdco is a holding company that does not conduct any business operations of its own. As a result, Holdco will be largely dependent upon cash dividends and distributions and other transfers, including for dividends or payments in respect of any indebtedness Holdco may incur, from our subsidiaries to meet its obligations. Any agreements governing the indebtedness of Holdco’s subsidiaries may impose restrictions on its subsidiaries’ ability to pay dividends or other distributions to Holdco. Each of Holdco’s subsidiaries is a distinct legal entity, and under certain circumstances legal and contractual restrictions may limit Holdco’s ability to obtain cash from such subsidiaries and Holdco may be limited in its ability to cause any joint ventures to distribute their earnings to it. The deterioration of the earnings from, or other available assets of, Holdco’s subsidiaries for any reason could also limit or impair their ability to pay dividends or other distributions to Holdco.

 

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Investors may suffer adverse tax consequences in connection with the acquisition, ownership and disposal of the Holdco Shares and/or Holdco Public Warrants.

The tax consequences in connection with the acquisition, ownership and disposal of the Holdco Shares and/or Holdco Warrants may differ from the tax consequences in connection with the acquisition, ownership and disposal of securities in another entity and may also differ depending on such an investor’s respective circumstances including, without limitation, where such an investor is a tax resident. Any such tax consequences could be materially adverse to such an investor and also therefore, such an investor should seek its own tax advice in respect of the tax consequences in connection with acquisition, ownership and disposal of the Holdco Shares and/or Holdco Warrants.

Risks Relating to Holdco’s Incorporation in the Netherlands

Upon the consummation of this offering, Holdco will be a public company with limited liability (naamloze vennootschap) incorporated under the laws of the Netherlands. The rights of Holdco shareholders may be different from the rights of stockholders in companies governed by the laws of U.S. jurisdictions and may not protect investors in a similar fashion afforded by incorporation in a U.S. jurisdiction.

Upon the consummation of this offering, we will be a public limited liability company incorporated under Dutch law. Holdco’s corporate affairs will be governed by our articles of association, internal rules and policies and by the laws governing companies incorporated in the Netherlands. The rights of shareholders may be different from the rights and obligations of shareholders in companies governed by the laws of U.S. jurisdictions. The role of the management board in a Dutch company is also materially different, and cannot be compared to, the role of a board of directors in a corporation incorporated in the United States. In the performance of their duties, our management board is required by Dutch law to consider the interests of our company and the sustainable success of its business, with an aim to creating long-term value, taking into account the interests of its shareholders, its employees and other stakeholders of the company, in all cases with due observation of the principles of reasonableness and fairness. It is possible that some of these parties will have interests that are different from, or in addition to, your interests as a shareholder.

Provisions of Dutch law and Holdco’s amended and restated articles of association may delay, prevent or make undesirable an acquisition of all or a significant portion of Holdco’s shares or assets.

Under Dutch law, various protective measures are possible and permissible within the boundaries set by Dutch law and Dutch case law, among which, in accordance with the DCGC, shareholders having the right to put an item on the agenda under the rules described above shall exercise such right only after consulting the Holdco Board in that respect. If one or more shareholders intend to request that an item be put on the agenda that may result in a change in Holdco’s strategy (for example, the dismissal of Holdco Directors), the Holdco Board must be given the opportunity to invoke a reasonable period to respond to such intention. Such period shall not exceed 180 (hundred eighty) days (or such other period as may be stipulated for such purpose by Dutch law and/or the DCGC from time to time). If invoked, the Holdco Board must use such response period for further deliberation and constructive consultation, in any event with the shareholders(s) concerned, and must explore the alternatives. At the end of the response time, the Holdco Board must report on this consultation and the exploration of alternatives to the general meeting. The response period may be invoked only once for any given general meeting and shall not apply: (a) in respect of a matter for which a response period has been previously invoked; or (b) if a shareholder holds at least 75% of Holdco’s issued share capital as a consequence of a successful public bid. The response period may also be invoked in response to shareholders or others with meeting rights under Dutch law requesting that a Holdco General Meeting be convened, as described above.

Pursuant to Dutch law, one or more shareholders and/or other persons with meeting rights under Dutch law who individually or jointly represent at least 10% (ten percent) of Holdco’s issued share capital, may request the Holdco Board to convene a Holdco General Meeting setting out in detail the matters to be discussed. If the Holdco Board has not taken the steps necessary to ensure that such meeting can be held within 6 (six) weeks after

 

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the request, the requesting shareholder(s) and or other persons with meeting rights may at their request be authorized by the competent Dutch court in preliminary relief proceedings to convene a Holdco General Meeting. The court shall refuse the application if it does not appear that the applicant(s) has/have previously requested the Holdco Board to convene a Holdco General Meeting and the Holdco Board has not taken the necessary steps so that the Holdco General Meeting could be held within 6 (six) weeks after the request. Such a request to the Holdco Board is subject to certain additional requirements. Additionally, the applicant must have a reasonable interest in the meeting being held.

Further thereto, on 1 May 2021, a bill came into force that introduces a statutory cooling-off period of up to 250 days during which the Holdco General Meeting would not be able to dismiss, suspend or appoint members of the Holdco Board (or amend the provisions in the Holdco Articles of Association governing these matters) unless these matters were proposed by the Holdco Board. This cooling-off period could be invoked by the Holdco Board in the event:

 

  a.

shareholders, using either their shareholder proposal right or their right to request a Holdco General Meeting, propose an agenda item for the Holdco General Meeting to dismiss, suspend or appoint a Holdco Director (or to amend any provision in the Holdco Articles of Association dealing with those matters); or

 

  b.

a public offer for Holdco has been announced or made without agreement having been reached with Holdco on such offer,

provided, in each case, that in the opinion of the Holdco Board such proposal or offer materially conflicts with the interests of Holdco and its business.

The cooling-off period, if invoked, ends upon the earliest of the following events:

 

  a.

the expiration of 250 days from:

 

  i.

in case of shareholders using their shareholder proposal right, the day after the deadline for making such proposal for the next Holdco General Meeting has expired;

 

  ii.

in case of Shareholders using their right to request a Holdco General Meeting, the day when they obtain court authorization to do so; or

 

  iii.

in case of a public offer as described above being made without agreement having been reached with Holdco on such offer, the first following day;

 

  b.

the day after a public offer without agreement having been reached with Holdco on such offer, having been declared unconditional; or

 

  c.

the Holdco Board deciding to end the cooling-off period earlier.

In addition, one or more shareholders that may (jointly) exercise the shareholder proposal right at the time that the cooling-off period is invoked, may request the Enterprise Chamber (Ondernemingskamer) of the Amsterdam Court of Appeals (Gerechtshof Amsterdam) for early termination of the cooling-off period. The Enterprise Chamber must rule in favor of the request if the shareholders can demonstrate that:

 

  a.

the Holdco Board, in light of the circumstances at hand when the cooling-off period was invoked, could not reasonably have come to the conclusion that the relevant shareholder proposal or hostile offer constituted a material conflict with the interests of Holdco and its business;

 

  b.

the Holdco Board cannot reasonably believe that a continuation of the cooling-off period would contribute to careful policy-making;

 

  c.

if other defensive measures, having the same purpose, nature and scope as the cooling-off period, have been activated during the cooling-off period and are not terminated or suspended at the relevant shareholders’ written request within a reasonable period following the request (i.e., no ‘stacking’ of defensive measures).

 

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During the cooling-off period, if invoked, the Holdco Board must gather all relevant information necessary for a careful decision-making process. In this context, the Holdco Board must at least consult with shareholders representing at least 3% of Holdco’s issued share capital at the time the cooling-off period was invoked and with the Holdco’s works council (if applicable). Formal statements expressed by these stakeholders during such consultations must be published on Holdco’s website to the extent these stakeholders have approved that publication.

Ultimately one week following the last day of the cooling-off period, the Holdco Board must publish a report in respect of its policy and conduct of affairs during the cooling-off period on the Holdco website. This report must also remain available for inspection by Holdco’s shareholders and others with meeting rights under Dutch law at Holdco’s office and must be tabled for discussion at the next general meeting.

Finally, in this respect, certain provisions of the Holdco Articles of Association may also make it more difficult for a third-party to acquire control of Holdco or effect a change in the composition of the Holdco Board, including that suspension or dismissal of directors other than at the proposal of the Holdco Board will require a two-thirds majority of the votes cast, representing more than one half of the issued capital of Holdco.

Shareholders may not be able to participate in future issues of Holdco Shares.

Under Dutch law, the Holdco General Meeting is authorized to issue Holdco Shares or to grant rights to subscribe for Holdco Shares and to restrict and/or exclude statutory pre-emptive rights in relation to the issuance of Holdco Shares or the granting of rights to subscribe for Holdco Shares. The Holdco General Meeting may designate the Holdco Board competent to issue Holdco Shares (or grant rights to subscribe for Holdco Shares) and to determine the issue price and other conditions of the issue for a specified period not exceeding five years (which period can be extended from time to time for further periods not exceeding five years) and it is envisaged that, for a period of 5 years commencing on the date of completion of the Business Combination the Holdco Board shall be irrevocably authorized to issue Holdco Shares (and to grant rights to subscribe for Holdco Shares).

Further thereto, each shareholder has a pre-emptive right in proportion to the aggregate amount of its Holdco Shares upon the issuance of Holdco Shares (or the granting of rights to subscribe for Holdco Shares). This pre-emptive right does not apply to: (i) Holdco Shares issued to employees of Holdco or a group company of Holdco as referred to in Section 2:24b Dutch Civil Code, (ii) Holdco Shares that are issued against payment other than in cash; and (iii) Holdco Shares issued to a person exercising a previously granted right to subscribe for Holdco Shares.

The pre-emptive rights in respect of newly issued Holdco Shares or the granting of rights to subscribe for Holdco Shares may be restricted or excluded by a resolution of the general meeting of Holdco. Pre-emptive rights may also be limited or excluded by a resolution of the Holdco Board if the Holdco Board has been designated thereto by the general meeting of Holdco for a specific period and with due observance of applicable statutory provisions, and the Holdco Board has also been designated to issue Holdco Shares. A resolution of the general meeting of Holdco to limit or exclude pre-emptive rights or a resolution to designate the Holdco Board thereto, can only be adopted at the proposal of the Holdco Board, and requires a majority of at least two-thirds of the votes cast, if less than half of the issued share capital of Holdco is present or represented at the general meeting. Unless otherwise stipulated at its grant the designation may not be withdrawn.

If the resolution of the general meeting of Holdco to issue Holdco Shares or to designate the authority to issue Holdco Shares to the Holdco Board is detrimental to the rights of holders of a specific class of Holdco Shares, the validity of such resolution of the general meeting of Holdco requires a prior or simultaneous approval by the group of holders of such class of Holdco Shares.

It is envisaged that, for a period of 5 years commencing on the date of completion of the Business Combination the Holdco Board shall be irrevocably authorized to limit or exclude pre-emptive rights in respect of Holdco Shares.

 

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Holdco is not obligated to and may not comply (but will then explain such non-compliance) with all the best practice provisions of the Dutch Corporate Governance Code. This may affect your rights as a shareholder.

Holdco will be subject to the DGCG. The DCGC contains both principles and best practice provisions on corporate governance that regulate relations between the management board and the general meeting of shareholders and matters in respect of financial reporting, auditors, disclosure, compliance and enforcement standards. The DCGC is based on a “comply or explain” principle. Accordingly, companies are required to disclose in their annual reports (which are filed in the Netherlands) whether they comply with the provisions of the DCGC. If they do not comply with those provisions (for example, because of a conflicting NYSE requirement), the company is required to give the reasons for such noncompliance. The DCGC applies to Dutch companies listed on a regulated Market in the EU or a comparable other system, such as the NYSE.

Holdco acknowledges the importance of good corporate governance. However, Holdco does not comply with all the provisions of the DCGC, to a large extent because such provisions conflict with or are inconsistent with the corporate governance rules of the NYSE and U.S. securities laws, or because Holdco believes such provisions do not reflect customary practices of global companies listed on the NYSE. Any such noncompliance may affect your rights as a shareholder, and you may not have the same level of protection as a shareholder in a Dutch company that fully complies with the DCGC.

Holdco will be organized and existing under the laws of the Netherlands, and, as such, the rights of shareholders and the civil liability of Holdco’s directors and executive officers will be governed in certain respects by the laws of the Netherlands. The ability of shareholders to bring actions or enforce judgments against Holdco or its directors and executive officers may be limited. Claims of U.S. civil liabilities may not be enforceable against Holdco.

Holdco is organized and existing under the laws of the Netherlands, and, as such, the rights of Holdco’s shareholders and the civil liability of Holdco’s directors and executive officers will be governed in certain respects by the laws of the Netherlands. The ability of Holdco’s shareholders in certain countries other than the Netherlands to bring an action against Holdco, its directors and executive officers may be limited under applicable law. In addition, substantially all of Holdco’s assets are located outside the United States. As a result, it may not be possible for shareholders to effect service of process within the United States upon Holdco or its directors and executive officers or to enforce judgments against Holdco or them in U.S. courts, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States. In addition, it is not clear whether a Dutch court would impose civil liability on Holdco or any of its directors and executive officers in an original action based solely upon the federal securities laws of the United States brought in a court of competent jurisdiction in the Netherlands.

As of the date of this proxy statement/prospectus, the United States and the Netherlands do not have a treaty providing for the reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. Accordingly, a judgment rendered by any federal or state court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized and enforced by the competent Dutch courts. However, if a person has obtained a final and conclusive judgment for the payment of money rendered by a court in the United States that is enforceable in the United States and files a claim with the competent Dutch court, the Dutch court will generally give binding effect to such foreign judgment insofar as it finds that (i) the jurisdiction of the U.S. court has been based on a ground of jurisdiction that is generally acceptable according to international standards, (ii) the judgment by the U.S. court was rendered in legal proceedings that comply with the Dutch standards of proper administration of justice including sufficient safeguards (behoorlijke rechtspleging) and (iii) the judgment by the U.S. court is not incompatible with a decision rendered between the same parties by a Dutch court, or with a previous decision rendered between the same parties by a foreign court in a dispute that concerns the same subject and is based on the same cause, provided that the previous decision qualifies for acknowledgment in the Netherlands and except to the extent that the foreign judgment contravenes Dutch public policy (openbare orde).

 

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Based on the lack of a treaty as described above, U.S. investors may not be able to enforce against Holdco or its directors, representatives or certain experts named herein who are residents of the Netherlands or countries other than the United States any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws.

Under the Holdco Articles of Association, and certain other contractual arrangements between Holdco and its directors, Holdco indemnifies and holds its directors harmless against all claims and suits brought against them, subject to limited exceptions. There is doubt, however, as to whether U.S. courts would enforce such indemnity provisions in an action brought against one of Holdco’s Directors in the United States under U.S. securities laws.

Dutch, Spanish and European insolvency laws are substantially different from U.S. insolvency laws and may offer Holdco shareholders less protection than they would have under U.S. insolvency laws.

Pursuant to European Regulation (EU) 2015/848 of the European Parliament and of the Council, of 20 May 2015, on insolvency proceedings, which forms part of both Dutch and Spanish insolvency laws, Spanish courts will have jurisdiction to entertain the main insolvency proceeding of a Dutch public limited liability company that, such as Holdco, has its “centre of main interest” located in Spain. If Spanish courts declare the opening of the main insolvency proceeding of a Dutch public limited liability company, Dutch courts will have to recognize such declaration and Spanish insolvency law will apply, subject to the exceptions set forth under the European Regulation (EU) 2015/848, as interpreted by the Court of Justice of the European Union. Dutch courts could have jurisdiction to try a non-main insolvency proceeding following Holdco’s operations in The Netherlands. Depending on the status of the declaration on insolvency in Spain, the Dutch insolvency proceeding would be secondary or autonomous. Under Spanish law, substantive consolidation is exceptional. As a result, if Holdco and Wallbox were both declared insolvent, they would likely not consolidate their assets and liabilities, subject to the coordination of both insolvency proceedings and the rules established for insolvency proceedings of members of a group of companies under the European Regulation (EU) 2015/848.

Holdco’s tax residency might change if the tax residency of dual resident entities is, in the new Dutch-Spanish Tax Treaty, determined by way of reaching mutual agreement.

Holdco intends to be managed and operate so as to be treated exclusively as a resident of Spain for tax purposes as from its date of incorporation, on the basis that Holdco has its place of effective management in Spain. As a result of its incorporation under Dutch law, Holdco will however also remain a tax resident of the Netherlands for Dutch corporate income tax and dividend withholding tax purposes and, thus, will be considered tax resident in both the Netherlands and Spain (i.e. a so-called ‘dual resident entity’). By virtue of the current convention between the government of the Kingdom of the Netherlands and the government of the Kingdom of Spain for the avoidance of double taxation with respect to taxes on income and on capital (the “Dutch-Spanish Tax Treaty”), in such case Holdco will be considered a resident for purposes of the Dutch-Spanish Tax Treaty in the country where Holdco is effectively managed. As noted above, Holdco expects to have its tax residency since its incorporation (and to maintain it afterwards) in Spain. The Dutch-Spanish Tax Treaty is currently being renegotiated and may include a provision pursuant to which the tax residency of dual resident entities is determined by way of the Netherlands and Spain reaching mutual agreement, in line with the criterion applied in the OECD-sponsored Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”). The current Dutch-Spanish Tax Treaty is not a “Covered Tax Agreement” (as defined under the MLI) and it is therefore uncertain whether the Dutch and Spanish Tax Authorities may favor such an approach under the new Dutch-Spanish Tax Treaty. Such outcome can nevertheless not be ruled out. In such case, the competent authorities of the Netherlands and Spain would endeavor to determine by mutual agreement the sole tax residency of Holdco. During the period in which a mutual agreement between both states is absent, Holdco may not be entitled to any relief or exemption from tax provided by the new Dutch-Spanish Tax Treaty. During such period, there would also be a risk that both Spain and the Netherlands would levy dividend withholding tax on distributions by Holdco, in addition to the risk of double taxation on the profits of Holdco.

 

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Both Spanish and Dutch dividend withholding tax may have to be withheld in case of distributions to unidentified Holdco Shareholders.

As noted above under “Risk Factors—Risks Related to Holdco’s Class A Shares—Holdco does not expect to pay any dividends in the foreseeable future,” Holdco does not expect to distribute dividends in the foreseeable future. However, should that happen, the Netherlands will not – regardless of the fact that Holdco is intended to be a tax resident of Spain on the grounds of its place of effective management – be prevented from levying Dutch dividend withholding tax if Holdco distributes profits to Dutch resident shareholders and to non-Dutch resident shareholders that have a permanent establishment in the Netherlands to which their respective shareholding is attributable. In order to avoid levying Dutch dividend withholding tax on such future dividend distributions, Holdco may set up procedures to identify its shareholders, in order to assess whether there are Holdco Shareholders in respect of which Dutch dividend withholding tax may have to be withheld. If the identification cannot be assessed upon the payment of a distribution, both Spanish and Dutch dividend withholding tax may have to be withheld on payments made to Holdco Shareholders that fail to provide Holdco, on a timely basis, with the information that may be required in order to prevent the applicability of Dutch dividend withholding taxes. Likewise, there is no guarantee that the procedure that Holdco may put in place to identify its shareholders (which shall be required in order to assess the applicability of both Spanish and Dutch withholding taxes) will be fully effective.

Risks Related to Kensington

Holdco may redeem your unexpired Holdco Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your Holdco Warrants worthless.

Holdco will have the ability to redeem outstanding Holdco Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of Holdco Ordinary A Shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date Holdco sends the notice of redemption to Holdco Warrant holders and provided certain other conditions are met. If and when the Holdco Warrants become redeemable by Holdco, Holdco may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, Holdco may redeem the Holdco Warrants as set forth above even if the holders are otherwise unable to exercise the Holdco Warrants. Redemption of the outstanding Holdco Warrants could force you (i) to exercise your Holdco Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Holdco Warrants at the then-current market price when you might otherwise wish to hold your Holdco Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Holdco Warrants are called for redemption, Holdco expects would be substantially less than the market value of your Holdco Warrants. None of the Private Warrants will be redeemable by Holdco so long as they are held by the Sponsor or its permitted transferees.    

In addition, Holdco has the ability to redeem outstanding Holdco Warrants after they become exercisable for $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their Holdco Warrants prior to redemption for a number of Holdco Ordinary A Shares determined based on the redemption date and the fair market value of Holdco Ordinary A Shares and provided certain other conditions are met. Holdco would redeem the Holdco Warrants in this manner when Holdco believes it is in Holdco’s best interest to update its capital structure to remove the Holdco Warrants and pay fair market value to the Holdco Warrant holders. Holdco can also redeem the Holdco Warrants for Holdco Ordinary A Shares when the Holdco Ordinary A Shares are trading at a price starting at $10, which is below the exercise price of $11.50, because it will provide certainty with respect to Holdco’s capital structure and cash position while providing Holdco Warrant holders with fair market value in the form of Holdco Ordinary A Shares. If Holdco chooses to redeem the Holdco Warrants when the Holdco Ordinary A Shares are trading at a price below the exercise price of the Holdco Warrants, this could result in the Holdco Warrant holders receiving fewer Holdco Ordinary A Shares than they would have received if they had chosen to wait to exercise their Holdco Warrants for Holdco Ordinary A Shares if and when the Holdco Ordinary A Shares trade at a price

 

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higher than the exercise price of $11.50. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the Holdco Warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the Holdco Ordinary A Shares had your Holdco Warrants remained outstanding. Finally, this redemption feature provides a ceiling to the value of your Kensington Warrants since it locks in the redemption price in the number of Holdco Ordinary A Shares to be received if Holdco chooses to redeem the Holdco Warrants for Holdco Ordinary A Shares.

The holders of Kensington Public Units who elect to have their shares redeemed may nevertheless keep their Kensington Public Warrants.

The redemption of shares by holders of Kensington Public Units does not require that such holders also redeem Public Warrants they hold. As a result, such holders may retain the option value embedded in such Public Warrants even if they do not retain the risk of holding HoldCo’s ordinary shares. Exercises of such Public Warrants will result in dilution to shareholders of Holdco even though Holdco did not receive the benefit of the trust funds associated with the corresponding Kensington Common Stock. Assuming, as discussed under “Unaudited Condensed Combined Financial InformationBasis of Pro Forma Presentation,” that 8,001,344 shares of Kensington Class A Common Stock are redeemed for their pro rata share of the cash in the Trust Account, which is the maximum amount that can be redeemed and the closing condition under the Business Combination Agreement for the “Kensington Cash Amount” of $250 million can be satisfied, the warrants held by persons whose shares were redeemed (assuming the holder of such share also held one-quarter of a Public Warrant) would have had an aggregate market value of approximately $2,000,336 based on the closing price of the Public Warrants of $1.00 on the NYSE on September 15, 2021.

Kensington will require Public Stockholders who wish to redeem their shares of Kensington Class A Common Stock in connection with the Business Combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.

Kensington will require the Public Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to Kensington’s transfer agent prior to the expiration date set forth in the tender offer documents mailed to such holders, or in the event Kensington distributes proxy materials, up to two business days prior to the vote on the proposal to approve the Business Combination, or to deliver their shares to the transfer agent electronically using DTC’s Deposit/Withdrawal At Custodian System (“DWAC System”), at the holder’s option. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and Kensington’s transfer agent will need to act to facilitate this request. It is Kensington’s understanding that stockholders should generally allot at least one week to obtain physical certificates from the transfer agent. However, because Kensington does not have any control over this process or over the brokers or DTC, it may take significantly longer than one week to obtain a physical stock certificate. While Kensington has been advised that it takes a short time to deliver shares through the DWAC System, this may not be the case. Under Kensington’s bylaws, Kensington is required to provide at least 10 days advance notice of any stockholder meeting, which would be the minimum amount of time a stockholder would have to determine whether to exercise redemption rights. Accordingly, if it takes longer than Kensington anticipates for stockholders to deliver their shares, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their shares. In the event that a stockholder fails to comply with the various procedures that must be complied with in order to validly tender or redeem Public Shares, its shares may not be redeemed.

Additionally, despite Kensington’s compliance with the proxy rules, stockholders may not become aware of the opportunity to redeem their shares.

 

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If a Public Stockholder fails to receive notice of Kensington’s offer to redeem their shares of Kensington Class A Common Stock in connection with the Business Combination, or fails to comply with the procedures for tendering its share of Kensington Class A Common Stock, such shares may not be redeemed.

Kensington will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with the initial business combination. Despite Kensington’s compliance with these rules, if a stockholder fails to receive Kensington’s tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that Kensington will furnish to holders of its Public Shares in connection with the initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem Public Shares. For example, Kensington may require the Public Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to Kensington’s transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve the Business Combination in the event Kensington distributes proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures, its shares may not be redeemed.

Kensington does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for Kensington to complete the Business Combination even if a substantial majority of Kensington’s stockholders do not agree.

The Existing Certificate of Incorporation does not provide a specified maximum redemption threshold, except that Kensington will only redeem its Public Shares so long as (after such redemption) Kensington’s net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of its initial business combination and after payment of underwriters’ fees and commissions (so that Kensington does not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to the Business Combination. As a result, Kensington may be able to complete the Business Combination even if a substantial majority of the Public Stockholders do not agree with the Business Combination and have redeemed their shares. In the event the aggregate cash consideration Kensington would be required to pay for all shares of Kensington Class A Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Business Combination exceed the aggregate amount of cash available to Kensington, Kensington will not complete the Business Combination or redeem any shares, all shares of Kensington Class A Common Stock submitted for redemption will be returned to the holders thereof, and Kensington instead may search for an alternate business combination. However, the closing of the Business Combination will be subject to the satisfaction or waiver by Wallbox of the Kensington Cash Amount of $250 million as set forth in the Business Combination Agreement. See “ The consummation of the Business Combination is subject to a number of conditions and, if those conditions are not satisfied or waived, the Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed.

If a stockholder or a “group” of stockholders are deemed to hold in excess of 15% of the Kensington Class A Common Stock, such stockholder or group will lose the ability to redeem all such shares in excess of 15% of the Kensington Class A Common Stock.

The Existing Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in the IPO, which Kensington refers to as the “Excess Shares,” without Kensington’s prior written consent. However, the Existing Certificate of Incorporation does not restrict Kensington stockholders’ ability to vote all of their shares (including Excess Shares) for or against Kensington’s initial business combination. The inability of a stockholder to redeem the Excess Shares will reduce its influence

 

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over Kensington’s ability to complete its initial business combination and such stockholder could suffer a material loss on its investment in Kensington if it sells such Excess Shares in open market transactions. Additionally, a stockholder will not receive redemption distributions with respect to the Excess Shares if Kensington completes its initial business combination. And as a result, such stockholder will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell its stock in open market transactions, potentially at a loss.

Kensington’s ability to successfully effect the Business Combination and Holdco’s ability to successfully operate the business thereafter will be largely dependent upon the efforts of certain key personnel of Wallbox. The loss of such key personnel could negatively impact the operations and financial results of the combined business.

Kensington’s ability to successfully effect the Business Combination and Holdco’s ability to successfully operate the business following the Closing is dependent upon the efforts of certain key personnel of Wallbox. Although Kensington expect key personnel to remain with Holdco following the Business Combination, there can be no assurance that they will do so. It is possible that Wallbox will lose some key personnel, the loss of which could negatively impact the operations and profitability of Holdco. Furthermore, following the Closing, certain of the key personnel of Wallbox may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause Holdco to have to expend time and resources helping them become familiar with such requirements.

Kensington’s Sponsor, directors, officers, advisors or their affiliates may enter into certain transactions, including purchasing shares or warrants from the public, which may influence the outcome of the Business Combination and reduce the public “float” of the Kensington Class A Common Stock.

Kensington’s Sponsor, directors, officers, advisors or their affiliates may purchase Public Shares or Public Warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the Closing, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of Kensington’s shares is no longer the beneficial owner thereof and therefore agrees not to exercise his, her or its redemption rights. In the event that Kensington’s Sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Additionally, at any time at or prior to the Business Combination, subject to applicable securities laws (including with respect to material nonpublic information), Kensington’s Sponsor, directors, officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire Public Shares, vote their Public Shares in favor of the Business Combination or not redeem their Public Shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. The purpose of any such transaction could be to (a) vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination, or (b) reduce the number of Kensington Warrants outstanding or to vote such Kensington Warrants on any matters submitted to the Kensington Warrant holders for approval in connection with the Business Combination, where it appears that such requirement would otherwise not be met. This may result in the Closing that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of Kensington Class A Common Stock or Kensington Warrants and the number of beneficial holders of Kensington’s securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of Kensington’s securities on a national securities exchange.

 

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The Existing Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in Kensington’s name, actions against Kensington’s directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against Kensington’s directors, officers, other employees or stockholders.

The Existing Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in Kensington’s name, actions against Kensington’s directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of Kensington’s capital stock is deemed to have notice of and consented to the forum provisions in the Existing Certificate of Incorporation. This choice of forum provision may make it more costly for a stockholder to bring a claim, and it may also limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Kensington or any of its directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although Kensington’s stockholders cannot waive Kensington’s compliance with federal securities laws and the rules and regulations thereunder. Alternatively, if a court were to find the choice of forum provision contained in the Existing Certificate of Incorporation invalid, Kensington may incur additional costs associated with resolving such action in other jurisdictions, which could harm Kensington’s business, operating results and financial condition.

The Existing Certificate of Incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. 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. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

If third parties bring claims against Kensington, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.

Kensington’s placing of funds in the Trust Account may not protect those funds from third-party claims against Kensington. Although Kensington has sought to have all vendors, service providers, prospective target businesses and other entities with which it does business execute agreements with Kensington waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of the Public Stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not 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 an advantage with respect to a claim against Kensington’s 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, Kensington’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to Kensington than any alternative. Making such a request of potential target businesses may make

 

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Kensington’s acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that Kensington might pursue. Marcum LLP, Kensington’s independent registered public accounting firm, will not execute agreements with Kensington waiving such claims to the monies held in the Trust Account.

Examples of possible instances where Kensington 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 Kensington and will not seek recourse against the Trust Account for any reason. Upon redemption of the Public Shares, if Kensington has not completed its initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with its initial business combination, Kensington will be required to provide for payment of claims of creditors that were not waived that may be brought against Kensington within the 10 years following redemption. Accordingly, the per share redemption amount received by Public Stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors.

The Sponsor has agreed that it will be liable to Kensington if and to the extent any claims by a third party (except for Kensington’s independent registered public accounting firm) for services rendered or products sold to us, or by a prospective target business with which Kensington has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under Kensington’s indemnity of the underwriters of the IPO 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, then the Sponsor will not be responsible to the extent of any liability for such third-party claims. Kensington has not independently verified whether the Sponsor, which is a newly formed entity, has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of Kensington. Kensington has not asked the Sponsor to reserve for such indemnification obligations. Therefore, Kensington cannot assure you that the Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for Kensington’s initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, Kensington may not be able to complete its initial business combination, and its stockholders would receive such lesser amount per Public Share in connection with any redemption of their Public Shares. None of Kensington’s officers will indemnify Kensington for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Public Stockholders will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate their investment, therefore, Public Stockholders may be forced to sell their Public Shares or Public Warrants, potentially at a loss.

Public Stockholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of: (a) the consummation of Kensington’s initial business combination, and then only in connection with those shares of Kensington Class A Common Stock that such Public Stockholder elected to redeem, subject to the limitations described herein, (b) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend Kensington’s amended and restated certificate of incorporation (i) to modify the substance or timing of Kensington’s obligation to allow redemption in connection with its initial business combination or to redeem 100% of the Public Shares if Kensington does not complete its initial business combination within 24 months from the closing of the IPO or (ii) with respect to any other provisions relating to stockholders’ rights or pre-initial business combination activity and (c) the redemption of the Public Shares if Kensington has not completed its initial business combination

 

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within 24 months from the closing of the IPO, subject to applicable law and as further described herein. In addition, if Kensington has not completed an initial business combination within the allocated time period for any reason, compliance with Delaware law may require that Kensington submit a plan of dissolution to its then-existing stockholders for approval prior to the distribution of the proceeds held in the Trust Account. In that case, Public Stockholders may be forced to wait beyond the end of such period before they receive funds from the Trust Account. In no other circumstances will a stockholder have any right or interest of any kind to the funds in the Trust Account. Holders of Kensington Warrants will not have any right to the proceeds held in the Trust Account with respect to the Kensington Warrants. Accordingly, to liquidate their investment, the Public Stockholders may be forced to sell their Public Shares or Public Warrants, potentially at a loss.

Kensington’s independent directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the Public Stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the amount of 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, Kensington’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While Kensington currently expects that its independent directors would take legal action on Kensington’s behalf against the Sponsor to enforce its indemnification obligations to Kensington, it is possible that Kensington’s independent directors in exercising their business judgment may choose not to do so 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 Kensington’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to the Public Stockholders may be reduced below $10.00 per share.

Kensington’s stockholders may be held liable for claims by third parties against Kensington to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of the Trust Account distributed to the Public Stockholders upon the redemption of the Public Shares in the event Kensington does not complete the initial business combination within the required time period may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is Kensington’s intention to redeem the Public Shares as soon as reasonably possible following the 24th month from the closing of the IPO (or the end of any Extension Period) in the event Kensington does not complete the initial business combination and, therefore, Kensington does not intend to comply with the foregoing procedures.

Because Kensington will not be complying with Section 280, Section 281(b) of the DGCL requires Kensington to adopt a plan, based on facts known to Kensington at such time that will provide for Kensington’s payment of all existing and pending claims or claims that may be potentially brought against Kensington within the 10 years following its dissolution. However, because Kensington is a blank check company, rather than an operating company, and Kensington’s operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from Kensington’s vendors (such as lawyers, investment

 

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bankers, etc.) or prospective target businesses. If Kensington’s plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. Kensington cannot assure you that it will properly assess all claims that may be potentially brought against us. As such, Kensington’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of Kensington’s stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of the Trust Account distributed to the Public Stockholders upon the redemption of the Public Shares in the event Kensington does not complete the initial business combination within the required time period is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

If, after Kensington distributes the proceeds in the Trust Account to the Public Stockholders, Kensington files a bankruptcy petition or an involuntary bankruptcy petition is filed against Kensington that is not dismissed, a bankruptcy court may seek to recover such proceeds, and Kensington and the Kensington Board may be exposed to claims of punitive damages.

If, after Kensington distributes the proceeds in the Trust Account to the Public Stockholders, Kensington files a bankruptcy petition or an involuntary bankruptcy petition is filed against Kensington that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by Kensington’s stockholders. In addition, the Kensington Board may be viewed as having breached its fiduciary duty to Kensington’s creditors and/or having acted in bad faith, by paying Public Stockholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and Kensington to claims of punitive damages. If, before distributing the proceeds in the Trust Account to the Public Stockholders, Kensington files a bankruptcy petition or an involuntary bankruptcy petition is filed against Kensington that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of Kensington’s stockholders and the per-share amount that would otherwise be received by Kensington’s stockholders in connection with Kensington’s liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to the Public Stockholders, Kensington files a bankruptcy petition or an involuntary bankruptcy petition is filed against it that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in Kensington’s bankruptcy estate and subject to the claims of third parties with priority over the claims of Kensington’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by Kensington’s stockholders in connection with Kensington’s liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to the Public Stockholders, Kensington files a bankruptcy petition or an involuntary bankruptcy petition is filed against Kensington that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in Kensington’s bankruptcy estate and subject to the claims of third parties with priority over the claims of Kensington’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by Kensington’s stockholders in connection with Kensington’s liquidation may be reduced.

 

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Kensington (or Holdco after the Business Combination) may amend the terms of the Kensington Warrants (or Holdco Warrants after the Business Combination) in a manner that may be adverse to holders of such warrants (“Public Warrants”) with the approval by the holders of at least 50% of the then outstanding Public Warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of Kensington Class A Common Stock (or Holdco Class A Shares after the Business Combination) purchasable upon exercise of a warrant could be decreased, all without your approval.

The Kensington Warrants were issued in registered form under the Kensington Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The Kensington Warrant Agreement provides that the terms of the Kensington 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 50% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants and, solely with respect to any amendment to the terms of the Private Warrants or working capital warrants or any provision of the Kensington Warrant Agreement with respect to the Private Warrants or working capital warrants, 50% of the number of the then outstanding Private Warrants or working capital warrants, as applicable. The Holdco Warrants will have substantially the same terms as the Kensington Warrants. Accordingly, Kensington (or, after the Business Combination, Holdco) may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment. Although Kensington’s (or, after the Business Combination, Holdco’s) ability to amend the terms of the Public Warrants with the consent of at least 50% 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 Public Warrants, convert the Public Warrants into cash or stock, shorten the exercise period or decrease the number of shares of Kensington Class A Common Stock (or, after the Business Combination, Holdco Class A Shares) issuable upon exercise of a Public Warrant.

Holdco’s failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act that will be applicable to it after the Closing could have a material adverse effect on its business.

Wallbox is currently not subject to Section 404 of the Sarbanes-Oxley Act. However, following the Closing, Holdco will be required to provide management’s attestation on internal controls. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of Wallbox as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable after the Business Combination. If Holdco is not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, it may not be able to assess whether its internal controls over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and the market price of its securities.

Kensington Public Warrants and Kensington Private Warrants are accounted for as liabilities and the changes in value of its warrants could have a material effect on its 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” (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 Kensington Warrant Agreement. As a result of the SEC Statement, Kensington evaluated the accounting treatment of the 5,750,000 Kensington Public Warrants and 8,800,000 Kensington Private Warrants and classified the Warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.

 

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As a result, included on Kensington’s balance sheet as of March 31, 2021 contained elsewhere in this proxy statement/prospectus are derivative liabilities related to embedded features contained within its 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 statements of operations. As a result of the recurring fair value measurement, Kensington’s financial statements and results of operations may fluctuate quarterly based on factors which are outside of its control. Due to the recurring fair value measurement, Kensington expects that it will recognize non-cash gains or losses on its warrants each reporting period and that the amount of such gains or losses could be material.

Risks Related to the Business Combination

Both Kensington and Wallbox will incur significant transaction costs in connection with the Business Combination.

Each of Kensington and Wallbox has incurred and expects that it will incur significant, non-recurring costs in connection with consummating the Business Combination. Kensington and Wallbox may also incur additional costs to retain key employees. Kensington and Wallbox will also incur significant legal, financial advisor, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and mailing fees and other costs associated with the transactions. Some of these costs are payable regardless of whether the Business Combination is completed.

The consummation of the Business Combination is subject to a number of conditions and, if those conditions are not satisfied or waived, the Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed.

The Business Combination Agreement is subject to a number of conditions which must be fulfilled in order to complete the Business Combination. Those conditions include but are not limited to: approval of the proposals required to effect the Business Combination by Kensington stockholders, as well as receipt of requisite regulatory approval; absence of orders prohibiting completion of the Business Combination; effectiveness of the registration statement of which this proxy statement/prospectus is a part; approval of the Holdco Class A Shares to be issued in connection with the Merger for listing on the NYSE; the Kensington Cash Amount being at least $250,000,000; the accuracy of the representations and warranties by both parties; and the performance by both parties of their covenants and agreements related to the Business Combination. These conditions to the closing of the Business Combination may not be fulfilled in a timely manner or at all, and, accordingly, the Business Combination may not be completed. In addition, the parties can mutually decide to terminate the Business Combination Agreement at any time, before or after stockholder approval, or Kensington or Wallbox may elect to terminate the Business Combination Agreement in certain other circumstances. See “The Business Combination Agreement and Ancillary Documents—Termination.

There can be no assurance that Holdco Ordinary A Shares will be approved for listing on the NYSE or that Holdco will be able to comply with the continued listing standards of the NYSE.

In connection with the Closing, Holdco intends to list the Holdco Ordinary A Shares and Holdco Warrants on the NYSE under the symbols “WBX” and “WBXWS,” respectively. Holdco’s continued eligibility for listing may depend on the number of Kensington’s shares that are redeemed. If, after the Business Combination, the NYSE delists Holdco’s shares from trading on its exchange for failure to meet the listing standards and Holdco is not able to list such securities on another national securities exchange, Holdco expects such securities could be quoted on an over-the-counter market. If this were to occur, Holdco and its stockholders could face significant material adverse consequences including:

 

   

a limited availability of market quotations for Holdco’s securities;

 

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reduced liquidity for Holdco’s securities;

 

   

a determination that the Holdco Ordinary A Shares are “penny stock” which will require brokers trading the Holdco Ordinary A Shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for Holdco Ordinary A Shares;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

Legal proceedings in connection with the Business Combination, the outcome of which are uncertain, could delay or prevent the completion of the Business Combination.

Lawsuits may be filed against Kensington or its directors and officers in connection with the Business Combination. Defending such lawsuits could require Kensington to incur significant costs and draw the attention of Kensington’s management team away from the Business Combination. Further, the defense or settlement of any lawsuit or claim that remains unresolved at the time the Business Combination is consummated may adversely affect the combined company’s business, financial condition, results of operations and cash flows. Such legal proceedings could delay or prevent the Business Combination from becoming effective within the agreed upon timeframe.

Kensington’s Sponsor, officers, directors and independent directors have agreed to vote in favor of the Business Combination, regardless of how the Public Stockholders vote.

The Sponsor and Kensington’s officers, directors and independent directors have agreed to vote any shares of Kensington Common Stock held by them in favor of the Business Combination. Kensington expects that Kensington’s Sponsor, officers, directors and independent directors (and their permitted transferees) will own at least approximately 20% of the outstanding shares of Kensington Common Stock at the time of any such stockholder vote. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if such persons agreed to vote their Sponsor Shares in accordance with the majority of the votes cast by the Public Stockholders.

The Kensington Board did not obtain a fairness opinion in determining whether or not to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the Public Stockholders.

In analyzing the Business Combination, the Kensington Board conducted significant due diligence on Wallbox. For a complete discussion of the factors utilized by the Kensington Board in approving the Business Combination, see the section entitled, “The Business Combination—Kensington’s Board of Directors’ Reasons for the Approval of the Business Combination.” The Kensington Board believes because of the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders and that Wallbox’s fair market value was at least 80% of the value of the Trust Account (excluding any taxes payable on interest earned).

Notwithstanding the foregoing, the Kensington Board did not obtain a fairness opinion to assist it in its determination. Accordingly, the Kensington Board may be incorrect in its assessment of the Business Combination.

If the Business Combination’s benefits do not meet the expectations of investors or securities analysts, the market price of Kensington’s securities may decline.

If the perceived benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of Kensington’s securities prior to the Closing may decline. The market

 

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values of Kensington’s securities at the time of the Business Combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement/prospectus, or the date on which Kensington’s stockholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of Holdco’s securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for Wallbox’s capital stock. Accordingly, the valuation Kensington has ascribed to Wallbox in the Business Combination may not be indicative of the price that will be implied in the trading market for Holdco’s securities following the Business Combination. If an active market for Holdco’s securities develops and continues after the Business Combination, the trading price of such securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond Holdco’s control. Any of the factors listed below could have a material adverse effect on your investment in Holdco’s securities and Holdco’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of Holdco’s securities may not recover and may experience a further decline.

Factors affecting the trading price of Holdco’s securities may include:

 

   

actual or anticipated fluctuations in Holdco’s quarterly financial results or the quarterly financial results of companies perceived to be similar to it;

 

   

changes in the market’s expectations about Holdco’s operating results;

 

   

success of competitors;

 

   

Holdco’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 Holdco or the battery industry in general;

 

   

operating and share price performance of other companies that investors deem comparable to Holdco;

 

   

Holdco’s ability to bring its products and technologies to market on a timely basis, or at all;

 

   

changes in laws and regulations affecting Holdco’s business;

 

   

Holdco’s ability to meet compliance requirements;

 

   

commencement of, or involvement in, litigation involving Holdco;

 

   

changes in Holdco’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of Holdco’s shares of common stock available for public sale;

 

   

any major change in the Holdco Board or management;

 

   

sales of substantial amounts of Holdco’s shares of common stock by Holdco’s directors, executive 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 and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of Holdco’s securities irrespective of Holdco’s operating performance. The stock market in general, and the NYSE in particular, 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

 

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Holdco’s securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to Holdco could depress Holdco’s share price regardless of Holdco’s business, prospects, financial conditions or results of operations. A decline in the market price of Holdco’s securities also could adversely affect Holdco’s ability to issue additional securities and Holdco’s ability to obtain additional financing in the future.

Subsequent to the Closing, Holdco may be required to take write-downs or write-offs, restructuring, impairment or other charges that could have a significant negative effect on Holdco’s financial condition, results of operations and the price of Holdco Ordinary A Shares, which could cause you to lose some or all of your investment.

Although Kensington has conducted due diligence on Wallbox, Kensington cannot assure you that this diligence will surface all material issues that may be present with Wallbox’s business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of Wallbox’s and outside of Kensington’s control will not later arise. As a result of these factors, Holdco may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in Holdco reporting losses. Even if Kensington’s due diligence successfully identified certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with Kensington’s preliminary risk analysis. Even though these charges may be non-cash items and therefore not have an immediate impact on Holdco’s liquidity, the fact that Holdco reports charges of this nature could contribute to negative market perceptions about Holdco or its securities. In addition, charges of this nature may cause Holdco to be unable to obtain future financing on favorable terms or at all. Accordingly, any stockholders or Kensington Warrant holders who choose to remain a stockholder or Kensington Warrant holder following the initial business combination could suffer a reduction in the value of their securities. Such security holders are unlikely to have a remedy for such reduction in value.

The unaudited pro forma financial information included herein may not be indicative of what Holdco’s actual financial position or results of operations would have been.

The unaudited pro forma financial information included herein is presented for illustrative purposes only and is not necessarily indicative of what Holdco’s actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated.

The issuance of Holdco shares in the Business Combination will dilute the interest of Kensington’s stockholders.

As disclosed in the section entitled “Summary—Consideration to Wallbox Shareholders in the Business Combination—Ownership of Holdco,” it is anticipated that, upon the Closing and subject to the assumptions disclosed in that section, there will be approximately 145,498,320 Holdco Ordinary A Shares and 23,251,680 Holdco Ordinary B Shares outstanding. Of these shares:

 

   

the Public Stockholders will own 23,000,000 Holdco Ordinary A Shares, representing approximately 12.87% of the total shares then outstanding in the aggregate and approximately 5.93% of the vote; and

 

   

the holder of Sponsor Shares will own 5,750,000 Holdco Ordinary A Shares, representing approximately 3.22% of the total shares then outstanding in the aggregate and approximately 1.48% of the vote.

Accordingly, the issuance of shares in the Business Combination will dilute the interest of Kensington’s stockholders. If the actual facts differ from the assumptions set forth in the section entitled “Summary—Consideration to Wallbox Shareholders in the Business Combination—Ownership of Holdco,” the numbers of shares and percentage interests set forth above will be different.

 

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The Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate.

The Sponsor has invested in Kensington an aggregate of $6,725,000, comprised of the $25,000 purchase price for 5,750,000 Founder Shares, the $6,600,000 purchase price for the Kensington Private Warrants and a $100,000 loan to Kensington. Assuming a trading price of $10.00 per share upon consummation of the Business Combination, the 5,750,000 founder shares would have an aggregate implied value of $57,500,000. Even if the trading price of the shares of Holdco Ordinary A Shares were as low as $1.00 per share, and the Kensington Private Warrants are worthless, the value of the Founder Shares would be almost equal to the Sponsor’s initial investment in Kensington. As a result, the Sponsor is likely to be able to make a substantial profit on its investment in Kensington at a time when its public shares have lost significant value. On the other hand, if Kensington liquidates without completing a business combination, the Sponsor will likely lose its entire investment in Kensington. Accordingly, the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate.

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 underwritten offering and may create risks for our unaffiliated investors.

An underwritten 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 the company’s business, financial condition and results of operations. Going public via a business combination with a SPAC does not involve any underwriters and does not generally necessitate the level of review required to establish a “due diligence” defense as would be customary on an underwritten offering.

In addition, going public via a business combination with a SPAC does not involve a book-building process as is the case in an underwritten public offering. In any underwritten 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 SPAC transaction, the value of the company is established by means of negotiations between the target company, the SPAC and, in some 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 SPAC business combination may be less effective than the bookbuilding process in an underwritten public offering 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, underwritten public offerings are frequently oversubscribed resulting in additional potential demand for shares in the aftermarket following the underwritten public offering. There is no such book of demand built up in connection with SPAC transaction and no underwriters with the responsibility of stabilizing the share price which may result in the share price being harder to sustain after the transaction.

Risks Related to U.S. Federal Income Taxation

The IRS may not agree that Holdco (i) should be treated as a non-U.S. corporation for U.S. federal income tax purposes and (ii) should not be treated as a “surrogate foreign corporation” for U.S. federal income tax purposes.

Under current U.S. federal income tax law, a corporation generally will be considered to be a U.S. corporation for U.S. federal income tax purposes only if it is created or organized in the United States or under the law of the United States or of any State or the District of Columbia. Accordingly, under generally applicable U.S. federal income tax rules, Holdco, which is not created or organized in the United States or under the law of

 

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the United States or of any State but is instead a Dutch incorporated entity and a tax resident of Spain, would generally be classified as a non-U.S. corporation. Section 7874 of the Code, and the Treasury regulations promulgated thereunder, however, contain specific rules that may cause a non-U.S. corporation to be treated as a U.S. corporation for U.S. federal income tax purposes. If it were determined that Holdco is treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code and the Treasury regulations promulgated thereunder, Holdco would be liable for U.S. federal income tax on its income just like any other U.S. corporation and certain distributions made by Holdco to Non-U.S. holders (as defined in “Certain Tax Considerations—U.S. Federal Income Tax Considerations”) of Holdco would be subject to U.S. withholding tax. In addition, even if Holdco is not treated as a U.S. corporation, it may be subject to unfavorable treatment as a “surrogate foreign corporation” in the event that ownership attributable to former Kensington stockholders exceeds a threshold amount. If it were determined that Holdco is treated as a surrogate foreign corporation for U.S. federal income tax purposes under Section 7874 of the Code and the Treasury regulations promulgated thereunder, dividends paid by Holdco would not qualify for “qualified dividend income” treatment, and U.S. affiliates of Holdco after the completion of the Business Combination, including Kensington, could be subject to increased taxation under the inversion gain rules and Section 59A of the Code (See “Certain Tax Considerations—Treatment of Holdco—Treatment of Holdco as a Surrogate Foreign Corporation for U.S. Federal Income Tax Purposes”).

As more fully described in “Certain Tax Considerations—Treatment of Holdco,” Holdco believes it should not be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code or as a surrogate foreign corporation. However, whether the requirements for such treatment have been satisfied must be finally determined after the completion of the Business Combination, by which time there could be adverse changes to the relevant facts and circumstances. Furthermore, the interpretation of Treasury regulations relating to the required ownership of Holdco is subject to uncertainty and there is limited guidance regarding their application. Accordingly, there can be no assurance that the IRS will not take a contrary position to those described above or that a court will not agree with a contrary position of the IRS in the event of litigation. You are urged to consult your tax advisor to determine the tax consequences if the classification of Holdco as a non-U.S. corporation is not respected or if Holdco is treated as a surrogate foreign corporation.

If the Business Combination does not qualify as a reorganization under Section 368 of the Code, holders of Kensington Public Warrants may recognize taxable gain as a result of the Business Combination, and may be required to pay additional U.S. federal income taxes, in the taxable year in which the transactions occur.

The Merger is intended to qualify as a reorganization under Section 368 of the Code, and Kensington and Holdco have agreed pursuant to the Business Combination Agreement to report the Merger as such. However, the qualification of the Merger as a reorganization under Section 368 of the Code is uncertain as a result, among other things, of the lack of authority as to whether the acquisition of stock of a blank check company such as Kensington that is formed solely for the purpose of effecting a business combination can qualify for such reorganization treatment. Hughes Hubbard & Reed LLP is unable to provide an opinion regarding whether the Merger will qualify as a reorganization under Section 368 of the Code. Furthermore, the position of Kensington and Holdco is not binding on the IRS or the courts, and the parties do not intend to request a ruling from the IRS with respect to the Business Combination.

If the IRS were to be successful in taking the position that the Merger is not treated as a reorganization under Section 368 of the Code, the conversion of Kensington Public Warrants into Holdco Public Warrants likely would be treated as a taxable exchange and holders of Kensington Public Warrants may be required to pay additional U.S. federal income taxes with respect to the taxable year in which the Merger occurs. For additional discussion of certain U.S. federal income tax considerations of the Business Combination, please see the section entitled “Certain Tax Considerations—Certain U.S. Federal Income Tax Consequences of the Business Combination.

 

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If the Business Combination and related transactions do not qualify as a transfer of property to a corporation under Section 351 of the Code or as a reorganization under Section 368 of the Code, holders of the Kensington Class A Common Stock may recognize taxable gain as a result of the exchange of Kensington Class A Common Stock for Holdco Class A Shares, and may be required to pay additional U.S. federal income taxes, in the taxable year in which the transactions occur.

Kensington has received an opinion from Hughes Hubbard & Reed LLP (the “Tax Opinion”) to the effect that, subject to the limitations and qualifications set forth therein, in the F-4 Registration Statement, and Section 367(a) of the Code, the transfer by a U.S. holder of their shares of Kensington Class A Common Stock to Holdco pursuant to the Business Combination Agreement, taken together with related transactions, should qualify as a transaction governed by Section 351 of the Code. The Tax Opinion is based upon representations, warranties and covenants provided by Kensington, Wallbox and other relevant parties and certain assumptions (including those related to Section 367(a) of the Code), all of which must continue to be true and accurate as of the effective time of the Merger. In addition, the Tax Opinion is subject to certain qualifications and limitations as set forth in the Tax Opinion. If any of the assumptions, representations, warranties or covenants upon which the Tax Opinion is based are inconsistent with the actual facts, the Tax Opinion could be invalid. Also, given the complex nature of the tax rules applicable to the Business Combination and the related transactions and the absence of authorities directly on point or an advance ruling from the IRS, the conclusions stated in the Tax Opinion are not free from doubt, and there is a risk that the IRS could take a contrary position to those described in the Tax Opinion and that a court will agree with such contrary position in the event of litigation.

If the IRS were to be successful in taking the position that the Merger and related transactions are not treated as a transfer of property to a corporation under Section 351 of the Code or as a reorganization under Section 368 of the Code, the exchange of shares of Kensington Class A Common Stock for Holdco Class A Shares will generally be treated as a taxable exchange and holders of Kensington Class A Common Stock may be required to pay additional U.S. federal income taxes with respect to the taxable year in which the Merger occurs. For additional discussion of certain U.S. federal income tax considerations of the Business Combination, please see the section entitled “Certain Tax Considerations—Certain U.S. Federal Income Tax Consequences of the Business Combination.

The IRS may not agree with the position that Section 367(a) of the Code should not apply to cause Holdco to be treated as an entity other than a corporation for purposes of the Business Combination.

Section 367(a) of the Code and the Treasury regulations promulgated thereunder impose certain additional requirements for qualifying for nonrecognition treatment under Section 351 of the Code or Section 368 of the Code with respect to transactions where a U.S. person transfers stock or securities (or is deemed to transfer stock or securities) in a U.S. corporation to a foreign corporation in exchange for stock or securities in a foreign corporation, such as in the Business Combination.

While it is expected that the Business Combination will satisfy the applicable requirements under Section 367 of the Code in order for Holdco to continue to be treated as a corporation for purposes of those rules, U.S. holders are cautioned that the potential application of Section 367(a) of the Code to the Business Combination is complex and depends on factors that cannot be determined until the closing of the Business Combination. There can be no assurance that the IRS will not take a position contrary to those described above or that a court will not agree with a contrary position of the IRS in the event of litigation. Accordingly, U.S. holders should consult with their tax advisors regarding the potential application of Section 367(a) of the Code in their particular situation. If Section 367(a) of the Code applies to the Business Combination, it could result in holders recognizing a greater amount of gain for U.S. federal income tax purposes than they would have recognized if the Merger and related transactions had not qualified for non-recognition of gain or loss or Section 367(a) of the Code had not applied.

 

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For additional discussion of certain U.S. federal income tax considerations of the Merger, please see the section entitled “Certain Tax Considerations—Certain U.S. Federal Income Tax Consequences of the Business Combination—Additional Requirements for Tax Deferral.

If Holdco is a passive foreign investment company for United States federal income tax purposes for any taxable year, U.S. holders of Holdco Class A Shares could be subject to adverse United States federal income tax consequences.

If Holdco is or becomes a “passive foreign investment company,” or a PFIC, within the meaning of Section 1297 of the Code for any taxable year during which a U.S. holder holds Holdco Class A Shares or Holdco Public Warrants, certain adverse U.S. federal income tax consequences may apply to such U.S. holder. A non-U.S. corporation, such as Holdco, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year in which, after applying certain look-through rules, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. Wallbox does not believe that Holdco will be treated as a PFIC for its current taxable year and does not expect to become one in the near future. However, PFIC status depends on the composition of a company’s income and assets and the fair market value of its assets from time to time, as well as on the application of complex statutory and regulatory rules that are subject to potentially varying or changing interpretations.

If Holdco determines that it is a PFIC for any taxable year, Holdco will endeavor to provide, and will endeavor to cause its non-U.S. subsidiaries that are PFICs, to provide, U.S. holders with tax information necessary to enable a U.S. holder to make a qualified electing fund (QEF) election with respect to Holdco and its non-U.S. subsidiaries.

If Holdco is treated as a PFIC, a U.S. holder of Holdco Class A Shares or Holdco Public Warrants may be subject to adverse U.S. federal income tax consequences, such as taxation at the highest marginal ordinary income tax rates on capital gains and on certain actual or deemed distributions, interest charges on certain taxes treated as deferred, and additional reporting requirements. See “Certain Tax Considerations—Tax Consequences to Ownership and Disposition of Holdco Class A Shares and Holdco Public Warrants—U.S. Holders—Passive Foreign Investment Company Rules.” U.S. holders of Holdco Class A Shares and Holdco Public Warrants should consult with their tax advisors regarding the potential application of these rules.

There is uncertainty regarding the federal income tax consequences of the redemption to the holders of Kensington Class A Common Stock.

There is some uncertainty regarding the federal income tax consequences to holders of Kensington Class A Common Stock who exercise their redemption rights. This uncertainty relates primarily to the individual circumstances of the taxpayer and includes whether the redemption results in a dividend, taxable as ordinary income, or a sale, taxable as capital gain. Whether the redemption qualifies for sale treatment, resulting in taxation as capital gain rather than ordinary income, will depend largely on whether the holder owns (or is deemed to own) any shares of Kensington Class A Common Stock following the redemption, and if so, the total number of shares of Kensington Class A Common Stock held by the holder both before and after the redemption relative to all shares of Kensington Class A Common Stock outstanding both before and after the redemption. The redemption generally will be treated as a sale, rather than a dividend, if the redemption (i) is “substantially disproportionate” with respect to the holder, (ii) results in a “complete termination” of the holder’s interest in Kensington or (iii) is “not essentially equivalent to a dividend” with respect to the holder. Due to the personal and subjective nature of certain of such tests and the absence of clear guidance from the Internal Revenue Service (“IRS”), there is uncertainty as to whether a holder who elects to exercise its redemption rights will be taxed on

 

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any gain from the redemption as ordinary income or capital gain. In addition, the redemption may be integrated with the Business Combination if a U.S. holder exercises its redemption rights with respect to all or a portion of its Kensington Class A Common Stock and also participates in the Business Combination by exchanging Kensington Class A Common Stock for Holdco Class A Shares or Warrants for Holdco Public Warrants. In such a case, a U.S. holder may be required to recognize more gain or income than if the redemption of Kensington Class A Common Stock was treated as a separate transaction. See the section entitled “U.S. Federal Income Tax Considerations.

 

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GENERAL INFORMATION

Presentation of Financial Information

This proxy statement/prospectus contains:

 

   

the audited consolidated financial statements of Wallbox as of December 31, 2020, 2019 and January 1, 2019 and for the years ended December 31, 2020 and 2019, prepared in accordance with IFRS as issued by the IASB and in its presentation and functional currency of Euros (€);

 

   

the audited consolidated financial statements of Kensington as of January 8, 2021 and for the period from January 4, 2021 (inception) to January 8, 2021, prepared in accordance with U.S. GAAP in its presentation and reporting currency of United States dollars ($); and

 

   

the unaudited pro forma condensed combined financial statements of Holdco as of and for the year ended December 31, 2020, prepared in accordance with the measurement principles of IFRS and in accordance with Article 11 of Regulation S-X.

Unless indicated otherwise, financial data presented in this document has been taken from the audited consolidated financial statements of Kensington included in this document, and the audited consolidated financial statements of Wallbox included in this document. Where information is identified as “unaudited,” it has not been derived from the audited consolidated financial statements of Kensington or Wallbox.

Holdco was incorporated on June 7, 2021 for the purpose of effectuating the Business Combination described herein. Holdco has no material assets and does not operate any businesses. Accordingly, no financial statements of Holdco have been included in this proxy statement/prospectus.

Cautionary Note Regarding Forward-Looking Statements

This proxy statement/prospectus contains forward-looking statements. Forward-looking statements provide Holdco’s current expectations or forecasts of future events. Forward-looking statements include statements about Holdco’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will” and “would,” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this proxy statement/prospectus include, but are not limited to, statements regarding Holdco’s disclosure concerning Wallbox’s operations, cash flows, financial position and dividend policy.

Forward-looking statements appear in a number of places in this proxy statement/prospectus including, without limitation, in the sections titled “Wallbox’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Kensington’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business of Kensington and Certain Information About Kensington” and “Business of Wallbox and Certain Information About Wallbox.” The risks and uncertainties include, but are not limited to:

 

   

The consummation of the Business Combination is subject to a number of conditions, including but not limited to the approval of the stockholders of Kensington, if those conditions are not satisfied or waived, the Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed;

 

   

The Kensington Board did not obtain a fairness opinion in determining whether or not to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the Public Stockholders;

 

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Wallbox’s ability to realize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of Wallbox to grow and manage growth profitably following the Business Combination;

 

   

risks relating to the outcome and timing of Wallbox’s development of its charging and energy management technology and related manufacturing processes;

 

   

the possibility that the expected timeframe for, and other expectations regarding the development and performance of, Wallbox products will differ from current assumptions;

 

   

intense competition in the electric vehicle charging space;

 

   

Wallbox faces risks related to health pandemics, including the COVID-19 pandemic, which could have a material adverse effect on its business, operating results and financial condition;

 

   

If Wallbox is unable to attract and retain key employees and hire qualified management, technical, engineering and sales and business development personnel, its ability to compete and successfully grow its business would be harmed;

 

   

Legal proceedings in connection with the Business Combination, the outcome of which are uncertain, could delay or prevent the completion of the Business Combination;

 

   

There can be no assurance that Holdco Ordinary A Shares will be approved for listing on the NYSE or that Holdco will be able to comply with the continued listing standards of the NYSE;

 

   

The market price of Holdco’s ordinary shares may be volatile, and you may lose all or part of your investment;

 

   

Wallbox’s forecasts and projections are based upon assumptions, analyses and internal estimates developed by Wallbox’s management, including sales estimates on the basis of non-binding letters of intent. If these assumptions, analyses or estimates prove to be incorrect or inaccurate, Wallbox’s actual operating results may differ materially and adversely from those forecasted or projected;

 

   

A loss or disruption with respect to Wallbox’s supply or manufacturing partners could negatively affect Wallbox’s business;

 

   

Wallbox has experienced rapid growth and expects to invest in its growth for the foreseeable future. If Wallbox fails to manage growth effectively, its business, operating results and financial condition would be adversely affected;

 

   

The EV charging market is characterized by rapid technological change, which requires Wallbox to continue to develop new products and product innovations. Any delays in such development could adversely affect market adoption of its products and Wallbox’s financial results;

 

   

It is possible that Wallbox’s internal control over financial reporting is not effective because it cannot detect or prevent material errors at a reasonable level of assurance. Wallbox’s past or future financial statements may not be accurate and Holdco may not be able to timely report its financial condition or results of operations, which may adversely affect investor confidence in Holdco and the price of its ordinary shares;

 

   

Wallbox may have to initiate product recalls or withdrawals or may be subject to litigation or regulatory enforcement actions and/or incur material product liability claims, which could increase its costs and harm Wallbox’s brand, reputation and adversely affect its business;

 

   

Wallbox’s business may be adversely affected if it is unable to obtain patents or otherwise protect its technology and intellectual property from unauthorized use by third parties;

 

   

Wallbox is subject to governmental regulation and other legal obligations related to privacy, data protection and information security and may be subject to governmental enforcement actions, litigation, fines and penalties or adverse publicity if it is unable to comply with such obligations;

 

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changes to the proposed structure of the business combination that may be required or appropriate as a result of applicable laws or regulations;

 

   

the risk that the Business Combination disrupts current plans and operations of Kensington or Wallbox as a result of the announcement and consummation of the Business Combination;

 

   

underlying assumptions with respect to Public Stockholder redemptions; and

 

   

the possibility that Wallbox may be adversely affected by other economic, business, and/or competitive factors.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in “Risk Factors” in this proxy statement/prospectus. Accordingly, you should not rely on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus. Holdco undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks Holdco describes in the reports it will file from time to time with the SEC after the date of this proxy statement/prospectus.

In addition, statements that “Holdco believes” and similar statements reflect Holdco’s beliefs and opinions on the relevant subject. These statements are based on information available to Holdco as of the date of this proxy statement/prospectus. And while Holdco believes that information provides a reasonable basis for these statements, that information may be limited or incomplete. Holdco’s statements should not be read to indicate that it has conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely on these statements.

Although Holdco believes the expectations reflected in the forward-looking statements were reasonable at the time made, it cannot guarantee future results, level of activity, performance or achievements. Moreover, neither Holdco nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should carefully consider the cautionary statements contained or referred to in this section in connection with the forward looking statements contained in this proxy statement/prospectus and any subsequent written or oral forward-looking statements that may be issued by Holdco or persons acting on its behalf.

 

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THE SPECIAL MEETING OF KENSINGTON STOCKHOLDERS

This proxy statement/prospectus is being provided to Kensington stockholders as part of a solicitation of proxies by the Kensington Board for use at the special meeting of Kensington stockholders to be held on September 30, 2021, and at any adjournment or postponement thereof. This proxy statement/prospectus contains important information regarding the special meeting, the proposals on which you are being asked to vote and information you may find useful in determining how to vote and voting procedures.

This proxy statement/prospectus is being first mailed on or about September 20, 2021 to all stockholders of record of Kensington as of August 30, 2021, the record date for the special meeting for Kensington stockholders. On the record date, there were 28,750,000 shares of Kensington Common Stock outstanding.

Date, Time and Place of the Special Meeting

The special meeting will be held at 10:00 a.m., New York City time, on September 30, 2021 via live webcast at www.virtualshareholdermeeting.com/KCAC2021SM, or such other date, time and place to which such meeting may be adjourned or postponed, for the purpose of considering and voting upon the proposals.

Proposals at the Special Meeting

At the special meeting, Kensington stockholders will vote on the following proposals:

 

   

Proposal No. 1—The Business Combination Proposal—a proposal to approve and adopt the Business Combination Agreement and the Business Combination;

 

   

Proposal No. 2—The Merger Proposal—a proposal to approve and adopt the Merger, pursuant to which Merger Sub will merge with and into Kensington with Kensington as the surviving company; and

 

   

Proposal No. 3—The Adjournment Proposal—a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

THE KENSINGTON BOARD RECOMMENDS THAT

YOU VOTE “FOR” EACH OF THESE PROPOSALS.

Voting Power; Record Date

As a stockholder of Kensington, you have a right to vote on certain matters affecting Kensington. The proposals that will be presented at the special meeting and upon which you are being asked to vote are summarized above and fully set forth in this proxy statement/prospectus. If you will be entitled to vote or direct votes to be cast at the special meeting if you owned shares of Kensington Common Stock at the close of business on August 30, 2021, which is the record date for the special meeting. You are entitled to one vote for each share of Kensington Common Stock that you owned as of 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, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 28,750,000 shares of Kensington Common Stock, of which 23,000,000 are public shares and 5,750,000 are Founder Shares.

Vote of the Kensington Initial Stockholders and Kensington’s Other Directors and Officers

Prior to the Kensington IPO, Kensington entered into agreements with the Sponsor and the current directors and officers of Kensington, pursuant to which each agreed to vote any shares of Kensington Common

 

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Stock owned by them in favor of an initial business combination. These agreements apply to such holders, including the Sponsor, as it relates to the Founder Shares and the requirement to vote all of the Founder Shares in favor of the Business Combination Proposal and for all other proposals presented to Kensington stockholders in this proxy statement/prospectus. As of the record date, the Sponsor owned 5,750,000 Founder Shares, representing 20% of the shares of Kensington Common Stock then outstanding and entitled to vote at the special meeting.

The Sponsor has waived any redemption rights, including with respect to shares of Kensington Class A Common Stock purchased in the Kensington IPO or in the aftermarket, in connection with Business Combination. The Founder Shares held by the Sponsor have no redemption rights or rights to liquidating distributions from the Trust Account and will be worthless if no business combination is effected by Kensington by March 2, 2023. However, the Kensington Initial Stockholders and the other current directors and officers of Kensington are entitled to liquidating distributions upon the liquidation of Kensington with respect to any public shares they may own.    

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of Kensington stockholders is necessary to hold a valid meeting. A quorum will be present if one or more stockholders who together hold a majority of the issued and outstanding shares of Kensington Common Stock are present, virtually or represented by proxy, at the special meeting. Broker non-votes and abstentions will be counted as present for the purpose of determining a quorum. The 20% of the issued and outstanding shares of Kensington Common Stock held by the Sponsor will be counted towards determining the presence of a quorum. In the absence of a quorum, the chairman of the special meeting has power to adjourn the special meeting. As of the record date for the special meeting, 14,375,001 shares of Kensington Common Stock would be required to achieve a quorum.

The approval of each of the Business Combination Proposal, Merger Proposal and Adjournment Proposal requires the affirmative vote of holders of at least a majority of the shares of Kensington Common Stock that are entitled to vote and are voted at the special meeting. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Business Combination Proposal, the Merger Proposal or the Adjournment Proposal. The Sponsor has agreed to vote their Founder Shares and any public shares purchased by them during or after the Kensington IPO in favor of the Business Combination Proposal and the Merger Proposal.

The closing of the Business Combination is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal, if presented, is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that, in the event that the Business Combination Proposal does not receive the requisite vote for approval, Kensington will not consummate the Business Combination. If Kensington does not consummate the Business Combination and fails to complete an initial business combination by March 2, 2023, Kensington will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the Public Stockholders.

Recommendation to Kensington Stockholders

The Kensington Board believes that each of the Business Combination Proposal, the Merger Proposal and the Adjournment Proposal to be presented at the Special Meeting is in the best interests of Kensington and its stockholders and recommends that its stockholders vote “FOR” each of the proposals.

When you consider the recommendation of the Kensington Board in favor of approval of the Business Combination Proposal, you should keep in mind that the Sponsor and certain members of the Kensington Board and officers of Kensington have interests in the Business Combination and the Merger that are different from or in addition to (or which may conflict with) your interests as a stockholder. Stockholders should take these

 

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interests into account in deciding whether to approve the proposals presented at the special meeting, including the Business Combination Proposal and the Merger Proposal. These interests include, among other things:

 

   

the fact that the Sponsor has agreed not to redeem any shares of Kensington Common Stock held by it in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at approximately $57,500,000, but, given the transfer restrictions on such shares, Kensington believes such shares have less value;

 

   

the fact that the Kensington Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if Kensington fails to complete an initial business combination by March 2, 2023;

 

   

the fact that the Registration Rights and Lock-Up Agreement will be entered into by the Sponsor;

 

   

the fact that the Sponsor paid an aggregate of $6,600,000 for its 8,800,000 Private Placement Warrants with an aggregate market value of approximately $8,800,000 based on the closing price of the Public Warrants of $1.00 on the NYSE on September 15, 2021, and that such Private Placement Warrants will expire worthless if a business combination is not consummated by March 2, 2023;

 

   

the fact that the Sponsor has made a loan of $100,000 to Kensington and has informed Kensington that the Sponsor intends to convert the loan into 133,333 warrants on the same terms as the Private Warrants (as contemplated by the Kensington Warrant Agreement pursuant to which the Private Warrants were issued) at the same time the Business Combination is completed and for such warrants to be issued to Robert Remenar, Simon Boag and Daniel Huber, who had advanced such amount to the Sponsor in order for the loan to be made. Such warrants have an aggregate market value of approximately $133,333 based on the closing price of the Public Warrants of $1.00 on the NYSE on September 15, 2021. Additionally, at the option of Sponsor, any other amounts outstanding under certain working capital loans made by Sponsor or any of its affiliates to Kensington in an aggregate amount of up to $2,000,000 (including the foregoing $100,000 loan) may be converted into warrants to purchase shares of Kensington Class A Common Stock which will be identical to the Private Placement Warrants;

 

   

the fact that Justin Mirro, Robert Remenar, Daniel Huber, Simon Boag, Thomas LaSorda, Anders Pettersson, Mitchell Quain, Donald Runkle and Matthew Simoncini, who are officers or directors of Kensington, have directly or indirectly through their affiliates agreed to invest up to an aggregate of $9,900,000 in the PIPE Financing on the same terms as the other PIPE Investors;

 

   

the right of the Sponsor to receive 5,750,000 Holdco Shares with an aggregate market value of approximately $56,752,500 based on the closing price of Kensington Class A Common Stock of $9.87 on the NYSE on September 15, 2021, subject to certain lock-up periods;

 

   

the continued indemnification of Kensington’s existing directors and officers and the continuation of Kensington’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that the Sponsor and Kensington’s officers and directors will lose their entire investment in Kensington and will not be reimbursed for any out-of-pocket expenses to the extent such expenses exceed the amount not required to be retained in the Trust Account if an initial business combination is not consummated by March 2, 2023. Kensington’s officers and directors do not currently have any unreimbursed out-of-pocket expenses and do not expect to incur any out-of-pocket expenses for which they are entitled to reimbursement;

 

   

the fact that if the Trust Account is liquidated, including in the event Kensington is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Kensington to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public

 

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share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Kensington has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Kensington, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that the Sponsor has invested an aggregate of $6,725,000 (in respect of the Founder Shares, the Private Placement Warrants and a loan of $100,000) that will have zero value in the event Kensington is not able to complete a business combination; and

 

   

the fact that the Sponsor and its affiliates can earn a positive return on their investment, even if the Public Shareholders have a negative return in their investment in Holdco.

Broker Non-Votes and Abstentions

Broker non-votes and abstentions are considered present for the purposes of establishing a quorum, but will have no effect on the Business Combination Proposal, the Merger Proposal or the Adjournment Proposal.

In general, if your shares are held in “street name” and you do not instruct your broker, bank or other nominee on a timely basis on how to vote your shares, your broker, bank or other nominee, in its sole discretion, may either leave your shares unvoted or vote your shares on routine matters, but not on any non-routine matters.

None of the proposals at the special meeting are routine matters. As such, without your voting instructions, your brokerage firm cannot vote your shares on any proposal to be voted on at the special meeting.

Voting Your Shares — Stockholders of Record

If you hold your shares in “street name” and are a Kensington stockholder of record, you may vote by mail or virtually at the special meeting. Each share of Kensington Common Stock that you own in your name entitles you to one vote on each of the proposals for the special meeting. Your one or more proxy cards show the number of shares of Kensington Common Stock that you own.

Voting by Mail. You can vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the special meeting in the manner you indicate. You are encouraged to sign and return the proxy card even if you plan to attend the special meeting so that your shares will be voted if you are unable to attend the special meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. 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 special meeting. 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 the Kensington Board. The Kensington Board recommends voting “FOR” the Business Combination Proposal, “FOR” the Merger Proposal and “FOR” the Adjournment Proposal. Votes submitted by mail must be received by 11:59 p.m., New York City time, on September 29, 2021.

Voting Virtually at the Meeting. If you attend the special meeting and plan to vote virtually, you will be provided with a ballot at the special meeting. If your shares are registered directly in your name, you are considered the stockholder of record and you have the right to vote virtually at the special meeting. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by 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 record holder of your

 

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shares with instructions on how to vote your shares or, if you wish to attend the special meeting and vote virtually, you must obtain a legal proxy from your broker, bank or nominee authorizing you to vote these shares. That is the only way Kensington can be sure that the broker, bank or nominee has not already voted your shares.

Voting Your Shares — Beneficial Owners

If your shares are held in an account at a brokerage firm, bank or other nominee, then you are the beneficial owner of shares held in “street name” and this proxy statement/prospectus is being sent to you by that broker, bank or other nominee. The broker, bank or other nominee holding your account is considered to be the stockholder of record for purposes of voting at the special meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares in your account by following the instructions that the broker, bank or other nominee provides you along with this proxy statement/prospectus. As a beneficial owner, if you wish to vote at the special meeting, you must obtain a legal proxy from your broker, bank or other nominee authorizing you to vote those shares. Please see “Attending the Special Meeting” below for more details.

Attending the Special Meeting Virtually

Only Kensington stockholders on the record date (if the shares are held in “street name”) or their legal proxy holders may attend the special meeting virtually. To be admitted to the special meeting virtually, you will need a form of photo identification and valid proof of ownership of Kensington shares or a valid legal proxy. If you have a legal proxy from a stockholder of record, you must bring a form of photo identification and the legal proxy to the special meeting. If you have a legal proxy from a “street name” stockholder, you must bring a form of photo identification, a legal proxy from the record holder (that is, the bank, broker or other holder of record) to the “street name” stockholder that is assignable, and the legal proxy from the “street name” stockholder to you. Stockholders may appoint only one proxy holder to attend on their behalf.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before the special meeting or at the special meeting by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

   

you may notify Kensington’s Secretary in writing to Kensington Capital Acquisition Corp. II, 1400 Old Country Road, Suite 301, Westbury, NY 11590, before the special meeting that you have revoked your proxy; or

 

   

you may attend the special meeting virtually, revoke your proxy, and vote virtually, as indicated above.

Who Can Answer Your Questions About Voting

If you have any questions about how to vote or direct a vote in respect of your Kensington shares, you may call D.F. King & Co., Inc., Kensington’s proxy solicitor, toll-free at (888) 542-7446 (banks and brokerage firms, please call (212) 269-5550 or email at KCAC@dfking.com.

Redemption Rights

Pursuant to Kensington’s Existing Certificate of Incorporation, any holders of Kensington public shares may demand that such shares be redeemed in exchange for a pro rata share of the aggregate amount on deposit in the Trust Account, less taxes payable, calculated as of two business days prior to the consummation of the Business Combination. If demand is properly made and the Business Combination is consummated, these shares, immediately prior to the Business Combination, will cease to be outstanding and will represent only the right to

 

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receive a pro rata share of the aggregate amount on deposit in the Trust Account (calculated as of two business days prior to the consummation of the Business Combination, less taxes payable). For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $230,026,963 as of September 15, 2021, the estimated per share redemption price would have been approximately $10.00.

In order to exercise your redemption rights, you must:

 

   

if you hold Kensington Public Units, separate the underlying shares of Kensington Class A Common Stock and Kensington Public Warrants;

 

   

prior to 5:00 p.m., New York City time, on September 28, 2021 (two business days before the initially scheduled special meeting), identify yourself in writing as a beneficial holder and provide your legal name, phone number and address to the Transfer Agent in order to validly redeem your shares and tender your shares physically or electronically and submit a request in writing that Kensington redeem your public shares for cash to Continental Stock Transfer & Trust Company, the Transfer Agent, at the following address:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com; and

 

   

deliver your public shares either physically or electronically through DTC’s DWAC system to the Transfer Agent at least two business days before the initially scheduled special meeting. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. Stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically. If you do not submit a written request and deliver your public shares as described above, your shares will not be redeemed.

You do not have to be a record date holder in order to exercise your redemption rights. Stockholders seeking to exercise their redemption rights, whether they are registered holders or hold their shares in “street name” are required to either tender their certificates to the Transfer Agent prior to the date set forth in this proxy statement/prospectus, or up to two business days prior to the initially scheduled vote on the Business Combination Proposal at the special meeting, or to deliver their shares to the Transfer Agent electronically using DTC’s DWAC system, at such stockholder’s option. The requirement for physical or electronic delivery prior to the special meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the Business Combination is approved.

Holders of outstanding Kensington Public Units must separate the underlying shares of Kensington Class A Common Stock and Kensington Public Warrants prior to exercising redemption rights with respect to the public shares.

If you hold Kensington Public Units registered in your own name, you must deliver the certificate for such units to the Transfer Agent with written instructions to separate such units into shares of Kensington Class A Common Stock and Kensington Public Warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the shares of Kensington Class A Common Stock from the Kensington Public Units.

If a broker, dealer, commercial bank, trust company or other nominee holds your Kensington Public Units, you must instruct such nominee to separate your units. Your nominee must send written instructions by

 

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facsimile to the Transfer Agent. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using DTC’s DWAC system, a withdrawal of the relevant units and a deposit of an equal number of shares of Kensington Class A Common Stock and Kensington Public Warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the Kensington Public Units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your Kensington Public Units to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

Each redemption of shares of Kensington Class A Common Stock by the Public Stockholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $230,026,963 as of September 15, 2021.

Prior to exercising redemption rights, Kensington stockholders should verify the market price of the Kensington Class A Common Stock, as stockholders may receive higher proceeds from the sale of their shares of Kensington Class A Common Stock in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. There is no assurance that you will be able to sell your shares of Kensington Class A Common Stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in the shares of Kensington Class A Common Stock when you wish to sell your shares.

If you exercise your redemption rights, your shares of Kensington Class A Common Stock will cease to be outstanding immediately prior to the Business Combination and will only represent the right to receive a pro rata share of the aggregate amount then on deposit in the Trust Account. You will no longer own those shares and you will not receive any Holdco Shares in the Business Combination. You will have no right to participate in, or have any interest in, the future growth of Holdco, if any. You will be entitled to receive cash for your shares of Kensington Class A Common Stock only if you properly and timely demand redemption.

If the Business Combination is not approved and Kensington does not consummate an initial business combination by March 2, 2023, Kensington will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the Public Stockholders and all of Kensington’s warrants will expire worthless.

Appraisal rights are not available to holders of Kensington Class A Common Stock in connection with the Business Combination.    

Proxy Solicitation Costs

Kensington is soliciting proxies on behalf of the Kensington Board. This proxy solicitation is being made by mail, but also may be made by telephone or in person. Kensington has engaged D.F. King to assist in the solicitation of proxies for the special meeting. Kensington and its directors, officers and employees may also solicit proxies in person. Kensington will ask banks, brokers and other institutions, nominees and fiduciaries to forward this proxy statement/prospectus and the related proxy materials to their principals and to obtain their authority to execute proxies and voting instructions.

Kensington will bear the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing and distribution of this proxy statement/prospectus and the related proxy materials. Kensington will pay D.F. King a fee of $20,000, plus disbursements, reimburse D.F. King for its reasonable out-of-pocket expenses and indemnify D.F. King and its affiliates against certain claims, liabilities, losses, damages and expenses for their services as Kensington’s proxy solicitor. Kensington will reimburse brokerage firms and other custodians for their reasonable out-of-pocket expenses for forwarding this proxy statement/prospectus and the related proxy materials to Kensington stockholders. Directors, officers and employees of Kensington who solicit proxies will not be paid any additional compensation for soliciting.

 

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THE BUSINESS COMBINATION

General

On June 9, 2021, Kensington, Holdco, Merger Sub and Wallbox entered into the Business Combination Agreement, pursuant to which Kensington, Holdco and Wallbox will consummate the Business Combination. The Business Combination Agreement contains customary representations and warranties, covenants, closing conditions and other terms relating to the Exchanges (as defined below), the Merger and the other transactions contemplated thereby.

Prior to the Closing Date, each holder of Wallbox’s convertible loans will, prior to the Exchange Effective Time (as defined below), convert its Wallbox convertible loans into Wallbox Ordinary Shares (the “Convert Exchange”). On the Closing Date, each holder of Wallbox Ordinary Shares will exchange by means of a contribution in kind its Wallbox Ordinary Shares to Holdco in exchange for the issuance of Holdco Shares in accordance with the Exchange Ratio and Wallbox will become a wholly-owned subsidiary of Holdco (the “Ordinary Exchange,” and together with the Convert Exchanges, the “Exchanges”, and the effective time of the Ordinary Exchange, the “Exchange Effective Time”). Each outstanding Class A Ordinary Share of Wallbox (including each such share resulting from the conversion of Wallbox’s convertible loans prior to the Closing by the noteholders thereof), and each outstanding Class B Ordinary Share of Wallbox will be exchanged by means of a contribution in kind in exchange for a number of Holdco Class A Shares or Holdco Class B Shares, as applicable, determined in each case by reference to an “Exchange Ratio,” calculated in accordance with the Business Combination Agreement; provided, however, that Enric Asunción Escorsa and Eduard Castañeda will receive Holdco Class B Shares. Each share of Kensington’s Class A common stock and Class B common stock outstanding immediately prior to the Merger Effective Time (other than certain customarily excluded shares) will be converted into and become one share of new Kensington common stock, and each such share of new Kensington common stock will immediately thereafter be exchanged by means of a contribution in kind in exchange for the issuance of Holdco Class A Shares, whereby Holdco will issue one Holdco Class A Share for each share of new Kensington common stock exchanged. The Merger is to become effective by the filing of a certificate of merger with the Secretary of State of the State of Delaware and will be effective immediately upon such filing or upon such later time as may be agreed by the parties and specified in such certificate of merger (such time, the “Merger Effective Time”). The parties will hold the Closing immediately prior to such filing of a certificate of merger, on the Closing Date to be specified by Kensington and Wallbox, as promptly as practicable following the satisfaction or waiver (to the extent such waiver is permitted by applicable law) of the conditions set forth in the Business Combination Agreement (other than those conditions that by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of those conditions at such time), but in no event later than the third business day after the satisfaction or waiver, if legally permissible, of each of the conditions to the completion of the Business Combination (or on such other date, time or place as Kensington and Wallbox may mutually agree).

For more information about the transactions contemplated in the Business Combination Agreement, please see the section entitled “The Business Combination Agreement and Ancillary Documents.” The Business Combination Agreement is incorporated by reference into this proxy statement/prospectus, a copy of which is attached to this proxy statement/prospectus as Annex A.

Effect of the Business Combination on Existing Kensington Equity

Subject to the terms and conditions of the Business Combination Agreement, the Business Combination will result in, among other things, the following:

 

   

each share of Kensington Class A Common Stock will be converted into the right to receive New Kensington Common Stock, which will then be converted into one fully paid and non-assessable Holdco Class A Share;

 

   

each Founder Share will be converted into the right to receive New Kensington Common Stock, which will then be converted into one fully paid and non-assessable Holdco Class A Share; and

 

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each Kensington Public Warrant will be converted into a Holdco Public Warrant, on the same terms and conditions as those applicable to the Kensington Public Warrants and thereupon be assumed by Holdco.

Consideration to Wallbox Equityholders in the Business Combination

Subject to the terms and conditions of the Business Combination Agreement, the consideration to be received by the Wallbox equityholders in connection with the Business Combination will be 140,000,000 Holdco Shares. Options of Wallbox employees convertible into Wallbox Ordinary Shares will be assumed by Holdco on the same terms and conditions as those applicable to the existing options (subject to adjustments as a result of the Exchange Ratio).

Aggregate Holdco Proceeds

The aggregate proceeds received by Holdco through the Business Combination and PIPE Financing will be used for general corporate purposes after the Business Combination, including but not limited to global expansion efforts, product development and increasing manufacturing capacity.

Conditions to Closing of the Business Combination

Mutual

The obligations of Wallbox, Kensington, Holdco and Merger Sub to consummate the Transactions, including the Merger, are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of the following conditions:

 

   

the Kensington Proposals have been approved and adopted by the requisite affirmative vote of the Kensington Stockholders in accordance with the Proxy Statement, the DGCL, the Kensington Organizational Documents and the rules and regulations of The New York Stock Exchange;

 

   

no Governmental Authority has enacted, issued, promulgated, enforced or entered any Law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the Transactions illegal or otherwise prohibiting consummation of the Transactions, including the Merger;

 

   

all required filings under the HSR Act have been completed and any applicable waiting period (and any extension thereof) applicable to the consummation of the Transactions under the HSR Act has expired or been terminated, and any pre-Closing approvals or clearances reasonably required thereunder have been obtained;

 

   

all consents, approvals and authorizations set forth in the Business Combination Agreement have been obtained from and made with all Governmental Authorities;

 

   

the F-4 Registration Statement has been declared effective under the Securities Act. No stop order suspending the effectiveness of the F-4 Registration Statement is in effect, and no proceedings for purposes of suspending the effectiveness of the F-4 Registration Statement have been initiated or be threatened by the SEC; and

 

   

Holdco’s initial listing application with The New York Stock Exchange, in connection with the Transactions has been conditionally approved and, immediately following the Closing, Holdco satisfies any applicable initial and continuing listing requirements of The New York Stock Exchange, and Holdco has not received any notice of non-compliance therewith, and (ii) the Holdco Ordinary A Shares to be issued in connection with the Merger have been approved for listing on The New York Stock Exchange, subject to any requirement to have a sufficient number of round lot holders of the Holdco Ordinary A Shares, and the outstanding Holdco Ordinary A Shares are listed on The New York Stock Exchange on the Closing Date.

 

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Kensington

The obligations of Kensington to consummate the Transactions are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of the following additional conditions:

 

   

the representations and warranties of Wallbox contained in the sections titled (i) Organization and Qualification; Subsidiaries, (ii) Capitalization, (iii) Authority Relative to the Business Combination Agreement and (iv) Brokers in the Business Combination Agreement are each true and correct in all material respects as of the Closing Date as though made on the Closing Date (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth therein), except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty will be true and correct as of such earlier date. All other representations and warranties of Wallbox contained in the Business Combination Agreement will be true and correct (without giving any effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth therein) in all respects as of the Closing Date, as though made on and as of the Closing Date, except (A) to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty will be true and correct as of such earlier date and (B) where the failure of such representations and warranties to be true and correct (whether as of the Closing Date or such earlier date), taken as a whole, does not result in a Company Material Adverse Effect;

 

   

Wallbox, Holdco and Merger Sub have performed or complied in all material respects with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Effective Time;

 

   

Wallbox has delivered to Kensington a customary officer’s certificate, dated the date of the Closing, certifying as to the satisfaction of certain conditions;

 

   

no Company Material Adverse Effect has occurred between the date of the Business Combination Agreement and the Closing Date; and

 

   

Wallbox has delivered to Kensington the PCAOB Audited Financials.

Wallbox

The obligations of Wallbox to consummate the Transactions are subject to the satisfaction or waiver (where permissible) at or prior to Closing of the following additional conditions:

 

   

the representations and warranties of Kensington contained in the sections titled (i) Corporation Organization (ii) Capitalization, (iii) Authority Relative to the Business Combination Agreement and (iv) Brokers in the Business Combination Agreement are each true and correct in all material respects as of the Closing Date as though made on the Closing Date (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth therein), except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty will be true and correct as of such earlier date. All other representations and warranties of Kensington and Merger Sub contained in the Business Combination Agreement are true and correct (without giving any effect to any limitation as to “materiality” or “Kensington Material Adverse Effect” or any similar limitation set forth therein) in all respects as of the Closing Date, as though made on and as of the Closing Date, except (A) to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty will be true and correct as of such earlier date and (B) where the failure of such representations and warranties to be true and correct (whether as of the Closing Date or such earlier date), taken as a whole, does not result in a Kensington Material Adverse Effect;

 

 

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Kensington has performed or complied in all material respects with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Effective Time;

 

   

Kensington has delivered to Wallbox a customary officer’s certificate (signed by the President of Kensington), dated the date of the Closing, certifying as to the satisfaction of certain conditions;

 

   

other than those persons identified as continuing directors in accordance with the Business Combination Agreement, all members of the Kensington Board have executed written resignations effective as of the Merger Effective Time;

 

   

no Kensington Material Adverse Effect has occurred between the date of the Business Combination Agreement and the Closing Date; and

 

   

the Kensington Cash Amount will be at least two hundred and fifty million dollars ($250,000,000) in the aggregate.

Ownership of Holdco

It is anticipated that, upon completion of the Business Combination: (i) the Public Stockholders (other than the PIPE Investors) will own approximately 12.87% of Holdco on a fully diluted basis; (ii) the PIPE Investors (including certain Wallbox equityholders) will own approximately 5.59% of Holdco on a fully diluted basis; (iii) the Sponsor will own approximately 3.22% of Holdco on a fully diluted basis; and (iv) the Wallbox equityholders (excluding any portion of the PIPE Financing provided thereby) will own approximately 78.32% of Holdco on a fully diluted basis. These levels of ownership interests assume that (A) no shares of Kensington Class A Common Stock are elected to be redeemed by the Public Stockholders and (B) that 10,000,000 Holdco Shares are issued to the PIPE Investors in connection with the PIPE Financing. If the actual facts are different than these assumptions, the ownership percentages in Holdco will be different. The ownership percentages with respect to Holdco following the Business Combination do not take into account any awards to be issued under the ESPP or the Incentive Plan to be entered into in connection with the Business Combination or the Holdco Public Warrants, but do include Founder Shares, which will be exchanged for Holdco Class A Shares at the closing of the Business Combination on a one-for-one basis and includes approximately 9,970,719 shares underlying Wallbox options, which are subject to future exercise, service conditions, or a combination thereof. If the actual facts are different than these assumptions, the ownership percentages in Holdco will be different.

For further information related to the determination of the number of Holdco Shares to be issued to the Wallbox equityholders upon completion of the Business Combination, please see the section entitled “The Business Combination—Consideration to Wallbox Equityholders in the Business Combination.

 

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The following table illustrates varying ownership levels in Holdco immediately following the consummation of the Business Combination, assuming (i) no redemptions by the Public Stockholders, (ii) the maximum number of redemptions by the Public Stockholders (assuming that 10,000,000 Holdco Shares are issued in connection with the PIPE Financing), (iii) that the amount in the Trust Account is $230,026,963 (which was the approximate value of the Trust Account as of September 15, 2021, not taking into account $8,050,000 of deferred underwriting fees to be paid), and (iv) that PIPE Investors fund the PIPE Financing in full in accordance with the Subscription Agreements. For more information on the “Maximum Redemption” scenario, see “Unaudited Pro Forma Condensed Combined Financial Information—Basis of Pro Forma Presentation.

 

     Share Ownership in Holdco(1)  
     No Redemptions     Maximum Redemptions(2)  
     Number of
Shares
     Percentage of
Outstanding
Shares
    Number of
Shares
     Percentage of
Outstanding
Shares
 

Kensington’s Public Stockholders

     23,000,000        12.87     14,998,656        8.78

PIPE Investors

     10,000,000        5.59     10,000,000      5.86

Kensington Initial Stockholders

     5,750,000        3.22     5,750,000      3.37

Wallbox equityholders(3)

     140,000,000        78.32     140,000,000      81.99

Total

     178,750,000        100.00     170,748,656      100.00

 

(1)

Does not include 5,750,000 Kensington Public Warrants or 8,800,000 Private Placement Warrants held by the Sponsor. Additionally, as discussed below under “The Business Combination—Interests of Certain Persons in the Business Combination,” certain officers and directors of Kensington have directly or indirectly through their affiliates agreed to invest up to an aggregate of $9,900,000 in the PIPE Financing on the same terms as the other PIPE Investors. Assuming no redemptions, the Sponsor and Kensington’s officers and directors will own 8.0% of the total 193,300,000 Holdco Shares outstanding on a fully-diluted basis. Assuming maximum redemptions, the Sponsor and Kensington’s officers and directors will own 8.4% of the total 185,298,656 Holdco Shares outstanding on a fully-diluted basis.

(2)

See “Unaudited Pro Forma Condensed Combined Financial Information—Basis of Pro Forma Presentation.

(3)

Wallbox equityholders includes approximately 9,970,719 shares underlying Wallbox options, which are subject to future exercise, service conditions, or a combination thereof.

Background of the Business Combination

The terms of the Business Combination Agreement are the result of arm’s-length negotiations between representatives of Kensington and Wallbox. The following is a brief discussion of the background of these negotiations, the Business Combination Agreement and related transactions.

Kensington was formed for the purpose of effecting a combination, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses.

On March 2, 2021, Kensington completed its IPO of 23,000,000 Kensington Units (including 3,000,000 Kensington Units sold upon the exercise in full of the underwriters’ over-allotment option), each Kensington Unit consisting of one share of Kensington Class A Common Stock and one-quarter of one redeemable Kensington Warrant, generating gross proceeds of $230 million (before underwriting discounts and commissions and offering expenses). Simultaneously with the closing of the IPO (including the exercise in full of the underwriters’ over-allotment option), Kensington completed a private placement of 8,800,000 Private Warrants issued to the Sponsor, generating total proceeds of $6.6 million. A total of $230 million of the net proceeds from the IPO and the private placement were placed in the Trust Account.

Except for a portion of the interest earned on the funds held in the Trust Account that may be released to Kensington to pay taxes, none of the funds held in the Trust Account will be released until the earlier of the

 

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consummation of Kensington’s initial business combination and the redemption of 100% of its Public Shares if it is unable to consummate a business combination by February 25, 2023 or obtain the approval of Kensington stockholders to extend the deadline for Kensington to consummate an initial business combination.

Prior to the consummation of the IPO, neither Kensington, nor anyone on its behalf, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a transaction with Kensington.

After the IPO was consummated on March 2, 2021, Kensington began contacting its prioritized targets.

Although Kensington was entitled to pursue a business combination in any industry or geographic region, it intended to focus its search for a target business operating in the automotive and automotive-related sector. At the time its IPO was completed, Kensington believed there were 495 companies that met its criteria. By April 15, 2021, this number had increased to 520. Of these 520 companies, Kensington began contacting the companies that it believed could be publicly-traded and received feedback on 86 of them.

The entry into the Business Combination Agreement with Wallbox is a result of an extensive search for a potential transaction from these 520 companies using the global network and automotive, investing and transaction experience of the Kensington Board and management team.

On March 5, 2021, Kensington held its first post-IPO weekly meeting via videoconference with its management team and the Kensington Board to provide an update on the acquisition process.

Between March 5, 2021 and April 16, 2021, Kensington had high-level discussions with the management team or owners (or their respresentatives) of 27 of the 86 companies from which it had received feedback. With respect to 10 of these companies, Kensington received data room access and engaged in discussions about the company’s operations and a possible transaction with Kensington.

On each of March 12, 2021, March 19, 2021, and March 26, 2021, Kensington held its regularly-scheduled weekly videoconference with its management team and the Kensington Board, and the management team provided an update on the acquisition process.

On March 29, 2021, a representative of Barclays Capital Inc. (“Barclays”), which was a financial advisor to Wallbox, reached out to Kensington to see if Kensington could be interested in a business combination with Wallbox. Kensington entered into a non-disclosure agreement with Wallbox on April 15, 2021; and on April 15, 2021, Kensington’s management team held an initial videoconference with Wallbox’s management team to introduce the Kensington team to Wallbox and to learn more about Wallbox.

On April 16, 2021, Kensington held its regularly scheduled Board meeting, and management provided the Board with an update of its search for acquisition targets, including Wallbox.

During the week of April 19, 2021, Kensington’s Chairman and Chief Executive Officer, Justin Mirro, met by videoconference with Wallbox’s Chief Executive Officer, Enric Asunción, to discuss a potential business combination, during which Mr. Mirro walked through the framework of a proposal for a business combination with Kensington. The original proposal ascribed an enterprise value of $1.5 billion to Wallbox. The enterprise valuation was initially determined by reviewing Wallbox’s summary financials and performing a comparable company analysis with Blink Charging Co., ChargePoint Holdings, Inc. and Tesla, Inc. Kensington ultimately validated this valuation upon completion of further due diligence of Wallbox’s technical, commercial and financial results. Kensington also determined that Wallbox could benefit from raising at least an additional $250 million of capital to fully fund the future working capital needs of the business.

On April 21, 2021, Kensington sent Wallbox a draft letter of intent that reflected the above terms.

 

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On April 23, 2020, Kensington held its regularly scheduled weekly videoconference with its management team and the Kensington Board. At the meeting, the management team and the Kensington Board discussed the status of the potential acquisition targets, including the recent meetings with Wallbox and the terms of the proposed letter of intent with Wallbox.

On April 27, 2021, the Wallbox Board held a special board meeting via teleconference, with all members of the board present and representatives of its financial advisors, Barclays and Drake Star Partners (“Drake Star”) in their roles as financial advisors to Wallbox. At this meeting, the Wallbox Board discussed the possibility of a business combination with Kensington. As part of this discussion, the Wallbox Board discussed alternatives to a business combination with Kensington with members of management . The Wallbox Board and members of management, Barclays and Drake Star also discussed the potential strategic fit with Kensington. Finally, the Wallbox Board discussed the details of Kensington’s non-binding letter of intent, including the proposed valuation, timing and risks associated with a potential transaction. After this board meeting Wallbox notified Kensington that they would enter into a letter of intent with Kensington on Kensington’s proposed terms, subject to additional clarifications on the terms of exclusivity. After Kensington and Wallbox reached agreement on the foregoing terms, the Wallbox Board voted in favor of entering into the letter of intent with Kensington and further pursuing discussions with Kensington.

On April 27, 2021, Kensington and Wallbox signed a non-binding letter of intent. The letter of intent provided Kensington with exclusivity for 45 days. The exchange ratio was not further negotiated after the letter of intent was signed.

On April 30, 2021, lawyers from Kensington’s lawyers at Hughes Hubbard & Reed LLP (“Hughes Hubbard”) and Wallbox’s lawyers at Latham & Watkins LLP (“Latham”) had a call to discuss the timeline to complete the documentation required for the transaction and Kensington’s due diligence.

During the weeks from the execution of the letter of intent until the approval of the Business Combination Agreement, the management teams of Kensington and Wallbox met on a regular basis in order to review Wallbox’s technology and business and discuss the contemplated business combination transaction. During this period, the parties also met with potential PIPE investors to review Wallbox’s business and address questions from potential investors. After execution of the letter of intent and prior to the date that Hughes Hubbard sent an initial draft of the Business Combination Agreement to Wallbox, the parties discussed whether the publicy-traded company resulting from the business combination should be organized in the United States or Europe and the precise structure of the transaction. The parties determined that a the proposed structure would afford the pro forma company the benefits of foreign private issuer status and that incorporation of Holdco in th Netherlands would provide a corporate structure that would be familiar to investors in the United States based on the number of Dutch-incorporated entities already listed on U.S. exchanges.

Additionally, following execution of the letter of intent, the attorneys for Kensington, which in addition to Hughes Hubbard included Cuatrecasas, Gonçalves Pereira, S.L.P. in Spain (“Cuatrecasas”) and Houthoff in The Netherlands, and the attorneys for Wallbox, which in addition to Latham, included Loyens & Loeff in The Netherlands, had several calls to discuss transaction structure and the documentation required for the transaction. Ultimately, Kensington and Wallbox mutually agreed that the listed company resulting from the business combination should be an entity incorporated under Dutch law, given the familiarity of institutional investors with Dutch corporate law and the existence of recent similar market precedents involving the listing of Dutch holding vehicles.

Also on April 30, 2021, Kensington also held a meeting of its board, and the management team provided an update on the status of discussions with Wallbox and next steps in its diligence efforts. At the meeting, management discussed engaging UBS and Barclays to assist with the PIPE and engaging UBS to serve as a financial advisor to Kensington. Additionally, Simon Boag, a member of Kensington’s management team, traveled to Mountain View, CA to visit with the Wallbox team and conduct product and technical due diligence.

 

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On May 3, 2021 and May 4, 2021, members of Kensington’s management team and the Kensington Board and members of Hughes Hubbard met by teleconference to conduct diligence and receive tours of the Wallbox facilities.

On May 6, 2021, Kensington engaged UBS and Barclays as placement agents on the PIPE and engaged UBS to serve as a financial advisor.

Due to the successful initial public offering, Kensington engaged UBS to be placement agent in its PIPE transaction given its knowledge of Kensington and its investor base. Kensington agreed to pay UBS a fee of 2.1% of the amount raised in the PIPE and to reimburse it for reasonable out-of-pocket expenses in exchange for performing such services. Kensington also agreed to pay UBS a fee of $3.5 million upon closing of the Business Combination with Wallbox. UBS had been engaged as Kensington’s lead advisor on its initial public offering due to its strong equity capital markets capabilities, dedicated SPAC effort and highly-ranked automotive industry coverage team. UBS has also served as the underwriter in the initial public offering of Kensington Capital Acquisition Corp. and Kensington Capital Acquisition Corp. V and was a financial advisor to Kensington Capital Acquisition Corp. in its business combination transaction with QuantumScape Corporation. UBS is also owed $5,232,500 of the $8,050,000 of deferred underwriting fees from Kensington’s initial public offering that are payable upon closing of the Business Combination with Wallbox.

Due to Barclays’ knowledge of Wallbox, Kensington hired Barclays to be placement agent with UBS on its PIPE. Kensington agreed to pay Barclays a fee of 1.4% of the amount raised in the PIPE and to reimburse it for reasonable out-of-pocket expenses in exchange for performing such services. Barclays had been hired by Wallbox to provide advice to its board in connection with the Business Combination. Barclays did not provide any advice to Kensington regarding the valuation or business combination terms with Wallbox. However, Barclays did advise Wallbox in connection with the Business Combination. Wallbox and Kensington each also acknowledged Barclays’ role as placement agent in connection with the PIPE, and as an advisor to Wallbox and waived any related conflicts. During the same week that Kensington engaged UBS and Barclays, Kensington began negotiating confidentiality agreements with potential investors in the PIPE and conducting preliminary meetings with them.

In their roles as financial advisors to Wallbox, Barclays and Drake Star assisted Wallbox in identifying and engaging with potential SPAC counterparties and advising Wallbox with respect to negotiation and strategy with respect to the Business Combination with Kensington. Additionally, Barclays acts as capital markets advisor to Wallbox and in such role, Barclays advises Wallbox with respect to equity capital markets and engagement with the equity investor community. Barclays and UBS each acted as placement agent to Kensington, and in such capacities, Barclays and UBS held discussions with prospective investors in the PIPE and coordinated the entry into the Subscription Agreements.

On May 10, 2021 and May 11, 2021, Anders Pettersson, a member of the Kensington Board, traveled to Barcelona, Spain to meet with Enric Asuncion and the Wallbox management team. Additionally, Mr. Pettersson visited the production facilities, reviewed production processes and received demonstrations of Wallbox’s product portfolio.

On May 14, 2021, Kensington held its regularly-scheduled weekly videoconference with its management team and the Kensington Board, and the management team provided an update on the status of discussion with, and diligence of, Wallbox and discussed engaging financial advisors in the proposed PIPE transaction.

On May 24, 2021, Hughes Hubbard sent an initial draft of the proposed Business Combination Agreement to Wallbox. Prior to signing the Business Combination Agreement and related documents (including the Exchange Agreement, the Registration Rights and Lock-Up Agreement and the form of Subscription Agreement), several drafts of those documents were negotiated by the parties. The initial draft of the Business

 

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Combination Agreement included a requirement for Wallbox to deliver its PCAOB audited financial statements by June 15, 2021 and contemplated that the Wallbox shareholders would approve the Business Combination substantially concurrently with the execution of the Business Combination Agreement. The parties also discussed whether there would be closing conditions for any required approval under Spanish “foreign direct investment” laws. Wallbox initially proposed that the Business Combination Agreement contain no specific deadline for the PCAOB audited financials, since the parties were aligned in filing the registration statement as soon as possible and Kensington would have the protection of the outside date in the Business Combination Agreement. The parties ultimately agreed on a 30 day period from singing of the Business Combination Agreement for delivery of the PCAOB financial statements, so as to give Kensington assurances that the timeline for the registration statement would not be delayed and to give Wallbox sufficient time to prepare such financials. Wallbox also proposed that it would have a shareholder meeting to approve the Business Combination Agreement within 20 days of signing the Business Combination Agreement; however, because the shareholders of Wallbox will exchange their shares for Holdco shares directly rather than by way of a merger, the parties agreed that such shareholders should enter into the Exchange Agreement concurrently with the signing of the Business Combination Agreement and a subsequent shareholder meeting would not be required as a result. Finally, Wallbox initially proposed that Kensington would have 7 business days to make any relevant filings with the foreign direct investment authorities in Spain and Kensington proposed 15 business days. Because of the potential delays that could be caused by such approvals, the parties ultimately agreed that such filings would be made within 11 business days following the signing of the Business Combination Agreement.

On May 24, 2021, the Wallbox Board met via teleconference, with all members present to review with its management the status of the contemplated business combination transaction with Kensington. As part of this meeting, the Wallbox Board reviewed and approved the signing of an engagement letter with Barclays to act as an advisor to Wallbox in connection with the proposed business combination transaction. In connection with such approval, the Wallbox Board considered Barclays’ role as placement agent to Kensington in connection with the PIPE and waived any related conflicts.

On each of May 21, 2021, May 28, 2021, and June 4, 2021, Kensington held its regularly-scheduled weekly videoconference with its management team and the Kensington Board, and the management team provided an update on the status of discussions with, and diligence of, Wallbox and the status of the PIPE and diligence-related matters.

On June 7, 2021, an independent director met with a representative of Hughes Hubbard and approved the participation of the officers and other directors of Kensington in the PIPE transaction after discussion the terms of the PIPE.

On June 8, 2021, the Kensington Board met via videoconference, with all board members present. Also present were representatives of Hughes Hubbard, who reviewed the terms of the Business Combination Agreement, Subscription Agreement and related documents with the Kensington Board. The Kensington Board also discussed the valuation ascribed to Wallbox in the proposed transaction. UBS was not present at the meeting. For a summary of the financial analysis Kensington conducted when determining the equity valuation of Wallbox, please see “The Business Combination–Kensington’s Board of Directors’ Reasons for the Approval of the Business Combination–Attractive Market Valuation of Comparable Companies.” Other than the agreement by Wallbox for Anders Pettersson, who is currently a director of Kensington, to be offered an outside directorship of Holdco, there were no discussions between Wallbox and representatives of Kensington about post-closing employment, directorships or benefits.

The Kensington Board concluded that the fair market value of Wallbox was equal to at least 80% of the funds held in the Trust Account. In making such determination, the Kensington Board considered, among other things, the implied valuation of Wallbox based on the market valuation of comparable companies (as discussed below under “—Kensington’s Board of Directors’ Reasons for the Approval of the Business Combination—Attractive Market Valuation of Comparable Companies”) and the price to be paid by purchasers in the PIPE. The Kensington Board

 

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unanimously approved the Business Combination Agreement, the Subscription Agreement and related documents and agreements and recommended approval of the Business Combination Agreement to Kensington’s stockholders.

Also on June 8, 2021, the Wallbox Board met via videoconference, with all board members present, to consider and discuss the proposed transaction with Kensington. Following a thorough review and discussion, the Business Combination Agreement and related documents and agreements were unanimously approved by all Wallbox Board members who voted on the matters, and the Wallbox Board determined to recommend the approval of the Business Combination Agreement to Wallbox’s shareholders.

The Business Combination Agreement and related documents and agreements were executed on June 9, 2021. Prior to the market open on June 9, 2021, Kensington and Wallbox issued a joint press release announcing the execution of the Business Combination Agreement and Kensington filed with the SEC a Current Report on Form 8-K announcing the execution of the Business Combination Agreement. On June 9, 2021, representatives of Kensington and Wallbox also conducted an investor conference call to announce the proposed Business Combination.

Kensington’s Board of Directors’ Reasons for the Approval of the Business Combination

As described under “The Background of the Business Combination” above, the Kensington Board, in evaluating the Business Combination, consulted with Kensington’s management and financial and legal advisors. In reaching its unanimous decision to approve the Business Combination Agreement and the Proposed Transactions, the Kensington Board considered a range of factors, including, but not limited to, the factors discussed below. In light of the number and wide variety of factors considered in connection with its evaluation of the Business Combination, the Kensington Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. The Kensington Board viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors.

This explanation of Kensington’s reasons for the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the section entitled “Cautionary Note Regarding Forward-Looking Statements.

In approving the Business Combination, the Kensington Board determined not to obtain a fairness opinion. The officers and directors of Kensington have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries, including the automotive sector, and concluded that their experience and background enabled them to make the necessary analyses and determinations regarding the Business Combination.

The Kensington Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Business Combination Agreement and the transactions contemplated thereby, including, but not limited to, the following:

 

   

Due Diligence. Kensington’s management and the Kensington Board conducted due diligence examinations of Wallbox and discussions with Wallbox’s management and Kensington’s financial and legal advisors concerning Kensington’s due diligence examination of Wallbox;

 

   

Financial Condition. Kensington’s management and the Kensington Board considered factors such as Wallbox’s outlook, financial plan, cash position, absence of indebtedness and capital expenditure plan (see the section entitled “Wallbox Prospective Financial Information”);

 

   

Attractive Market Valuation of Comparable Companies. The public trading market valuation of $1.5 billion, which we refer to collectively as the “Comparable Companies”) have projected 2025 enterprise value/revenue multiples and enterprise value/EBITDA multiples (in each case based on

 

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market data as of June 4, 2021) ranging from 5.4x to 10.9x (and a median of 6.2x) and 32.7x to 49.8x (and a median of 41.6x), respectively. The Kensington Board believes that these multiples compare favorably to an initial market valuation of the post-Business Combination company reflected in the terms of the Business Combination corresponding to projected 2025 enterprise value/revenue multiples and enterprise value/EBITDA multiples of 1.3x and 12.1x, respectively;

 

   

Experienced and Proven Management Team. Kensington’s management and the Kensington Board believe that Wallbox has a strong management team which is expected to remain with Holdco to seek to execute the strategic and growth goals of the combined business;

 

   

Other Alternatives. The Kensington Board believes, after a thorough review of other business combination opportunities reasonably available to Kensington, that the proposed Business Combination represents the best potential business combination for Kensington and the most attractive opportunity for Kensington based upon the process utilized to evaluate and assess other potential combination targets, and the Kensington Board’s belief that such process has not presented a better alternative; and

 

   

Negotiated Transaction. The financial and other terms of the Business Combination Agreement and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between Kensington and Wallbox.

The Kensington Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination including, but not limited to, the following:

 

   

Macroeconomic Risks. Macroeconomic uncertainty and the effects it could have on the revenues of the combined business;

 

   

Redemption Risk. The potential that a significant number of Kensington stockholders elect to redeem their shares prior to the consummation of the combination and pursuant to Kensington’s existing charter, which would potentially make the combination more difficult or impossible to complete, and/or reduce the amount of cash available to the combined business following the Closing;

 

   

Stockholder Vote and Written Consent. The risk that Kensington’s stockholders may fail to provide the respective votes and written consents, respectively, necessary to effect the Business Combination;

 

   

Closing Conditions. The fact that the Closing is conditioned on the satisfaction of certain closing conditions that are not within Kensington’s control;

 

   

Litigation. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin the Closing;

 

   

Benefits May Not Be Achieved. The risks that the potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe;

 

   

No Third-Party Valuation. The risk that Kensington did not obtain a third-party valuation or fairness opinion in connection with the Business Combination;

 

   

Kensington Stockholders Receiving a Minority Position. The fact that Kensington stockholders will hold a minority position in Holdco;

 

   

Interests of Kensington’s Directors and Officers. The interests of the Kensington Board and officers in the Business Combination (see “Interests of Kensington’s Directors and Officers in the Business Combination”); and

 

   

Other Risk Factors. Various other risk factors associated with Wallbox’s business, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus/information statement.

In connection with analyzing the Business Combination, Kensington’s management, based on its experience and judgment, selected the Comparable Companies. Kensington’s management selected these companies because they are publicly traded companies with certain operations, results, business mixes or size

 

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and scale that, for the purposes of analysis, may be considered similar to certain operations, results, business mixes or size and scale of Wallbox. None of the Comparable Companies is identical or directly comparable to Wallbox.

In connection with its analysis of the Business Combination, Kensington’s management reviewed and compared, using publicly available information, certain current, projected and historical financial information for Wallbox corresponding to current and historical financial information, ratios and public market multiples for the Comparable Companies, as described above.

The Kensington Board also considered the Business Combination in light of the investment criteria set forth in Kensington’s final prospectus for its IPO including, without limitation, that based upon Kensington’s analyses and due diligence, Wallbox has the potential to be a market leader and has substantial future growth opportunities, all of which the Kensington Board believed have a strong potential to create meaningful stockholder value following the Closing.

The above discussion of the material factors considered by the Kensington Board is not intended to be exhaustive but does set forth the principal factors considered by the Kensington Board.

Interests of Certain Persons in the Business Combination

In considering the recommendation of the Kensington Board to vote in favor of the Business Combination, Kensington stockholders should be aware that aside from their interests as stockholders, the Sponsor, Kensington Initial Stockholders and Kensington’s other current officers and directors have interests in the Business Combination that are different from, or in addition to, those of other Kensington stockholders generally. The Kensington Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to Kensington stockholders that they approve the Business Combination Proposal. Kensington stockholders should take these interests into account in deciding whether to approve the Business Combination Proposal.

These interests include:

 

   

the fact that the Sponsor has agreed not to redeem any shares of Kensington Common Stock held by it in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at approximately $57,500,000, but, given the transfer restrictions on such shares, Kensington believes such shares have less value;

 

   

the fact that the Kensington Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if Kensington fails to complete an initial business combination by March 2, 2023;

 

   

the fact that the Registration Rights and Lock-Up Agreement will be entered into by the Sponsor;

 

   

the fact that the Sponsor paid an aggregate of $6,600,000 for its 8,800,000 Private Placement Warrants with an aggregate market value of approximately $8,800,000 based on the closing price of the Public Warrants of $1.00 on the NYSE on September 15, 2021, and that such Private Placement Warrants will expire worthless if a business combination is not consummated by March 2, 2023;

 

   

the fact that the Sponsor has made a loan of $100,000 to Kensington and has informed Kensington that the Sponsor intends to convert the loan into 133,333 warrants on the same terms as the Private Warrants (as contemplated by the Kensington Warrant Agreement pursuant to which the Private Warrants were issued) at the same time the Business Combination is completed and for such warrants to be issued to Robert Remenar, Simon Boag and Daniel Huber, who had advanced such

 

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amount to the Sponsor in order for the loan to be made. Such warrants have an aggregate market value of approximately $133,333 based on the closing price of the Public Warrants of $1.00 on the NYSE on September 15, 2021. Additionally, at the option of Sponsor, any other amounts outstanding under certain working capital loans made by Sponsor or any of its affiliates to Kensington in an aggregate amount of up to $2,000,000 (including the foregoing $100,000 loan) may be converted into warrants to purchase shares of Kensington Class A Common Stock which will be identical to the Private Placement Warrants;

 

   

the fact that Justin Mirro, Robert Remenar, Daniel Huber, Simon Boag, Thomas LaSorda, Anders Pettersson, Mitchell Quain, Donald Runkle and Matthew Simoncini, who are officers or directors of Kensington, have directly or indirectly through their affiliates agreed to invest up to an aggregate of $9,900,000 in the PIPE Financing on the same terms as the other PIPE Investors;

 

   

the right of the Sponsor to receive 5,750,000 Holdco Shares with an aggregate market value of approximately $56,752,500 based on the closing price of Kensington Class A Common Stock of $9.87 on the NYSE on September 15, 2021, subject to certain lock-up periods;

 

   

the continued indemnification of Kensington’s existing directors and officers and the continuation of Kensington’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that the Sponsor and Kensington’s officers and directors will lose their entire investment in Kensington and will not be reimbursed for any out-of-pocket expenses to the extent such expenses exceed the amount not required to be retained in the Trust Account if an initial business combination is not consummated by March 2, 2023. Kensington’s officers and directors do not currently have any unreimbursed out-of-pocket expenses and do not expect to incur any out-of-pocket expenses for which they are entitled to reimbursement;

 

   

the fact that if the Trust Account is liquidated, including in the event Kensington is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Kensington to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Kensington has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Kensington, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that the Sponsor has invested an aggregate of $6,725,000 (in respect of the Founder Shares, the Private Placement Warrants and a loan of $100,000) that will have zero value in the event Kensington is not able to complete a business combination; and

 

   

the fact that the Sponsor and its affiliates can earn a positive return on their investment, even if the Public Shareholders have a negative return in their investment in Holdco.

Redemption Rights

Pursuant to Kensington’s Existing Certificate of Incorporation, holders of Kensington public shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with Kensington’s Existing Certificate of Incorporation. As of September 15, 2021, this would have amounted to approximately $10.00 per share. If a holder of Kensington public shares exercises its redemption rights, then such holder will be exchanging its shares of Kensington Class A Common Stock for cash and will not own shares of Holdco following the closing of the Business Combination. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to the Transfer Agent in accordance with the procedures described herein. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act)

 

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will be restricted from seeking redemption rights with respect to more than fifteen percent (15%) of the shares of Kensington Class A Common Stock included in the Kensington Public Units sold in the Kensington IPO. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public stockholder or group will not be redeemed for cash.

Kensington has no specified maximum redemption threshold under its Existing Certificate of Incorporation, other than the aforementioned 15% threshold. Each redemption of shares of Kensington Class A Common Stock by Public Stockholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $230,026,963 as of September 15, 2021. The Business Combination Agreement provides that Wallbox’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (after giving effect to the Kensington Stockholder Redemption) together with the proceeds actually received from the PIPE Financing being at least $250,000,000. The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. In no event will Kensington redeem its shares of Kensington Class A Common Stock in an amount that would cause its (or Holdco’s after giving effect to the transactions contemplated by the Business Combination Agreement) net tangible assets to be less than $5,000,001, as provided in the Kensington Existing Certificate of Incorporation. Kensington stockholders who wish to redeem their public shares for cash must refer to and follow the procedures set forth in the section entitled “The Special Meeting of Kensington Stockholders—Redemption Rights” in order to properly redeem their public shares.

Holders of Kensington Public Warrants will not have redemption rights with respect to such warrants.

Kensington public shares that are owned by holders who do not elect to have their shares redeemed for cash are subject to dilution by other securities being issued in the Business Combination.

The amount of dilution incurred by Kensington public shares that are owned by holders who do not elect to have their shares redeemed for cash will depend on the number of shares that are redeemed. See “Unaudited Condensed Combined Financial Information—Basis of Pro Forma Presentation” for a table that summarizes the number of Holdco Shares outstanding under the two redemption scenarios – a scenario assuming no redemptions and a scenario assuming that 8,001,344 shares are redeemed for their pro rata share of the cash in the Trust Account (this is the maximum amount that can be redeemed and the closing condition for the Kensington Cash Amount of $250 million can be satisfied). The table includes a description of the dilution as a result of warrants retained by the holders of Kensington public shares that elect to have their shares redeemed.

Included in the amounts held in trust are approximately $8.1 million of deferred underwriting commissions that will be released to the underwriters in Kensington’s initial public offering in the event the Business Combination is consummated. Assuming no redemptions, these deferred underwriting commissions were approximately $0.35 (or 3.5%) for each of the 23,000,000 Kensington public shares. Assuming the maximum number of redemptions, these deferred underwriting commissions were in the amount of approximately $0.54 (or 5.4%) of the total for each of the 14,998,656 Kensington public shares remaining after such redemptions.

 

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Sources and Uses for the Business Combination

The following tables summarize the sources and uses for funding the Business Combination:

Sources & Uses

(No Redemption Scenario — Assuming No Redemptions of the Outstanding Class A Shares

by Kensington Stockholders)

 

Sources

    

Uses

 
(USD, in millions)  

Kensington Trust Account(1)

   $ 230      Transaction Expenses    $ 40  

PIPE Financing

   $ 100      Additional Cash on Balance Sheet    $ 290  

Wallbox Equity Rollover

   $ 1,400      Wallbox Equity Rollover    $ 1,400  

Kensington Founder Shares

   $ 58      Kensington Founder Shares    $ 58  
  

 

 

       

 

 

 

Total Sources

   $ 1,788     

Total Uses

   $ 1,788  
  

 

 

       

 

 

 

Sources & Uses

(Maximum Redemption Scenario — Assuming Redemptions of 8,001,344(1) of the Outstanding Class A Shares by Kensington Stockholders)

 

Sources

    

Uses

 
(USD, in millions)  

Kensington Trust Account

   $ 230      Transaction Expenses    $ 40  

PIPE Financing

   $ 100      Additional Cash on Balance Sheet    $ 210  

Wallbox Equity Rollover

   $ 1,400      Wallbox Equity Rollover    $ 1,400  

Kensington Founder Shares

   $ 58      Kensington Founder Shares    $ 58  
      Redemption of Class A Shares(1)    $ 80  
  

 

 

       

 

 

 

Total Sources

   $ 1,788      Total Uses    $ 1,788  
  

 

 

       

 

 

 

 

(1)

See “Unaudited Pro Forma Condensed Combined Financial Information—Basis of Pro Forma Presentation” for the assumptions relating to the “Maximum Redemption” scenario.

Certain Information Relating to Holdco

Listing of Holdco Class A Shares and Holdco Public Warrants on the NYSE

Holdco Class A Shares and Holdco Warrants currently are not traded on a stock exchange. Holdco intends to apply to list the Holdco Class A Shares and the Holdco Warrants on the NYSE under the symbols “WBX” and “WBXWS”, respectively, upon the closing of the Business Combination.

Restrictions on Resales

All Holdco Class A Shares and Holdco Public Warrants received by Public Stockholders of Kensington in the Business Combination are expected to be freely tradable, except that Holdco Class A Shares and Holdco Public Warrants received in the Business Combination by persons who become affiliates of Holdco for purposes of Rule 144 under the Securities Act may be resold by them only in transactions permitted by Rule 144, or as otherwise permitted under the Securities Act. Persons who may be deemed affiliates of Holdco generally include individuals or entities that control, are controlled by or are under common control with, Holdco and may include the directors and executive officers of Holdco, as well as its principal shareholders.

 

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Delisting of Shares of Kensington Class A Common Stock and Deregistration of Kensington

Kensington and Wallbox anticipate that, following consummation of the Business Combination, the shares of Kensington Class A Common Stock, Kensington Public Units and Kensington Public Warrants will be delisted from the NYSE, and Kensington will be deregistered under the Exchange Act.

Emerging Growth Company; Foreign Private Issuer; Controlled Company

Holdco is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Holdco will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Business Combination, (b) in which Holdco has total annual gross revenue of at least $1.07 billion or (c) in which Holdco is deemed to be a large accelerated filer, which means the market value of Holdco Shares held by non-affiliates exceeds $700 million as of the last business day of Holdco’s prior second fiscal quarter, and (ii) the date on which Holdco issued more than $1.0 billion in non-convertible debt during the prior three-year period. Holdco intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as “emerging growth companies,” including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that Holdco’s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting and reduced disclosure obligations regarding executive compensation.

As a “foreign private issuer,” Holdco will be subject to different U.S. securities laws than domestic U.S. issuers. The rules governing the information that Holdco must disclose differ from those governing U.S. corporations pursuant to the Exchange Act. Holdco will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. Those proxy statements are not expected to conform to Schedule 14A of the proxy rules promulgated under the Exchange Act. As a foreign private issuer, Holdco will be exempt from a number of rules under the U.S. securities laws and will be permitted to file less information with the SEC than a U.S. company. In addition, as a “foreign private issuer,” Holdco’s officers and directors and holders of more than 10% of the issued and outstanding Holdco Shares, will be exempt from the rules under the Exchange Act requiring insiders to report purchases and sales of ordinary shares as well as from Section 16 short swing profit reporting and liability.

Immediately following the completion of the Business Combination, Enric Asunción Escorsa and Eduard Castañeda will together control a majority of the voting power of Holdco’s outstanding common stock. As a result, Holdco will be a “controlled company” within the meaning of the corporate governance standards of NYSE. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

 

   

the requirement that a majority of Holdco’s board of directors consist of “independent directors” as defined under the rules of NYSE;

 

   

the requirement that Holdco have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

 

   

the requirement that Holdco have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

 

   

the requirement for an annual performance evaluation of the compensation and nominating and corporate governance committees.

Following the Business Combination, Holdco intends to utilize some or all of these exemptions. As a result, Holdco’s nominating and corporate governance committee and compensation committee may not consist

 

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entirely of independent directors and such committees will not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of NYSE.

Comparison of Shareholder Rights

Until consummation of the Merger, Delaware law and Kensington’s Existing Certificate of Incorporation will continue to govern the rights of Kensington stockholders. After consummation of the Merger, Dutch law and the Holdco amended and restated Articles of Association will govern the rights of Holdco shareholders.

There are certain differences in the rights of Kensington stockholders prior to the Business Combination and the rights of Holdco shareholders after the Business Combination. Please see the section entitled “Comparison of Shareholder Rights.

Certain Tax Consequences of the Business Combination

Please see the section entitled “Certain Tax Considerations—Certain U.S. Federal Income Tax Consequences of the Business Combination.

Accounting Treatment of the Business Combination

The Business Combination will be accounted for as a capital reorganization. Under this method of accounting, Kensington will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of Wallbox issuing shares at the closing of the Business Combination for the net assets of Kensington as of the closing date, accompanied by a recapitalization. The net assets of Kensington will be stated at historical cost, with no goodwill or other intangible assets recorded.

Wallbox has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

   

Wallbox’s shareholders will have the largest voting interest in Holdco under both the no redemption and maximum redemption scenarios;

 

   

The board of directors of the post-combination company has seven members, and Wallbox shareholders have the ability to nominate at least the majority of the members of the board of directors;

 

   

Wallbox’s senior management is the senior management of the post-combination company;

 

   

The business of Wallbox will comprise the ongoing operations of Holdco; and

 

   

Wallbox is the larger entity, in terms of substantive operations and employee base.

The Business Combination, which is not within the scope of IFRS 3 since Kensington does not meet the definition of a business in accordance with IFRS 3, is accounted for within the scope of IFRS 2. Any excess of fair value of Holdco’s Shares issued over the fair value of Kensington’s identifiable net assets acquired represents compensation for the service of a stock exchange listing for its shares and is expensed as incurred.

Appraisal Rights

Appraisal rights are not available to holders of Kensington shares in connection with the Business Combination.

 

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CERTAIN TAX CONSIDERATIONS

U.S. Federal Income Tax Considerations

The following is a discussion of certain U.S. federal income tax consequences for holders of shares of Kensington Class A Common Stock and Kensington Public Warrants that either (a) participate in the Business Combination, or (b) elect to have their shares of Kensington Class A Common Stock redeemed for cash. This discussion also addresses certain U.S. federal income tax consequences of owning and disposing of the Holdco Class A Shares and Holdco Public Warrants. This discussion addresses only those Kensington security holders that hold their securities, and, if they participate in the Merger, will hold Holdco’s securities, as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment).

This discussion does not address all U.S. federal income tax consequences that may be relevant to a holder’s particular circumstances, including the impact of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to holders subject to special rules, including, without limitation:

 

   

U.S. expatriates and former citizens or long-term residents of the United States;

 

   

persons subject to the alternative minimum tax;

 

   

persons holding shares of Kensington Class A Common Stock or Kensington Public Warrants as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated transaction;

 

   

banks, insurance companies and other financial institutions;

 

   

brokers, dealers or traders in securities;

 

   

“controlled foreign corporations,” “passive foreign investment companies” and corporations that accumulate earnings to avoid U.S. federal income tax;

 

   

tax-exempt organizations or governmental organizations;

 

   

persons subject to special tax accounting rules as a result of any item of gross income with respect to shares of Kensington Class A Common Stock or Kensington Public Warrants being taken into account in an applicable financial statement;

 

   

U.S. holders (as defined below) whose functional currency is not the U.S. dollar;

 

   

holders actually, or through attribution, owning 5% or more (by vote or value) of the Kensington Common Stock or, following the Business Combination, the Holdco Class A Shares;

 

   

regulated investment companies (RICs) or real estate investment trusts (REITs);

 

   

tax-qualified retirement plans; and

 

   

“qualified foreign pension funds”, as defined in Section 897(l)(2) of the Code, and entities all of the interests of which are held by qualified foreign pension funds.

If an entity or arrangement is treated as a partnership (or other pass-through entity or arrangement) for U.S. federal income tax purposes, the tax treatment of the persons treated as partners (or other owners) will generally depend on the status of the partners, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships (or other pass-through entities or arrangements) and the partners (or other owners) in such partnerships (or such other pass-through entities or arrangements) should consult their own tax advisors regarding the U.S. federal income tax consequences to them relating to the matters discussed below.

For purposes of this discussion, a “U.S. holder” is a beneficial owner of shares of Kensington Class A Common Stock and Kensington Public Warrants that is, for U.S. federal income tax purposes:

 

   

an individual who is a citizen or resident of the United States,

 

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a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof or the District of Columbia,

 

   

an estate, the income of which is subject to U.S. federal income tax regardless of its source, or

 

   

an entity treated as a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) or (2) was in existence on August 20, 1996 and has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Also, for purposes of this discussion, a “Non-U.S. holder” is any beneficial owner of shares of Kensington Class A Common Stock and Kensington Public Warrants, as the case may be, who or that is neither a U.S. holder nor an entity or arrangement classified as a partnership for U.S. federal income tax purposes.