DEF 14A 1 e5324_def14a.htm FORM DEF 14A

 

 

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 under §240.14a-12

 

TG VENTURE ACQUISITION CORP.

 

(Name of Registrant as Specified in Its Charter)

 

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

 

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11

 

 
 

 

Letter to Stockholders of TG Venture Acquisition Corp.

 

TG VENTURE ACQUISITION CORP.

 

1390 Market Street, Suite 200
San Francisco, CA 94102

 

To the stockholders of TG Venture Acquisition Corp.:

 

You are cordially invited to attend a special meeting of stockholders (the “Special Meeting”) of TG Venture Acquisition Corp. (“TGVC”) on February 8, 2024 at 11:00 a.m. Eastern Time. The meeting will be held virtually over the internet by means of a live audio webcast. You will be able to attend and vote your shares during the Special Meeting via a live webcast available at www.virtualshareholdermeeting.com/TGVC2024SM.

 

At the Special Meeting, our stockholders will be asked to consider and vote upon the following proposals:

 

  a proposal to approve and adopt the Business Combination Agreement dated December 5, 2022 (as it may be amended, supplemented, or otherwise modified from time to time, the “Business Combination Agreement”), by and among TGVC, The Flexi Group Limited, a business company with limited liability incorporated under the laws of the British Virgin Islands (“Flexi”), The Flexi Group Holdings Ltd, a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct, wholly owned subsidiary of Flexi (“PubCo”), The Flexi Merger Co. Ltd, a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct, wholly owned subsidiary of PubCo (“Target Merger Sub”), and Flexi Merger Co. LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of PubCo (“SPAC Merger Sub”), and the transactions contemplated by the Business Combination Agreement and certain related agreements. The Business Combination Agreement provides for, among other things, (i) the merger of Flexi with and into Target Merger Sub (the “Initial Merger”), upon which the separate existence of Target Merger Sub will cease and Flexi will be the surviving corporation and a direct, wholly owned subsidiary of PubCo, and (ii) the merger of TGVC with and into SPAC Merger Sub (the “TGVC Merger” and together with the Initial Merger, the “Mergers” and the transactions contemplated by the Business Combination Agreement, including the Mergers, the “Business Combination”), upon which the separate existence of SPAC Merger Sub will cease and TGVC will be the surviving corporation and a direct, wholly owned subsidiary of PubCo. We refer to this proposal as the “Business Combination Proposal” in the accompanying proxy statement.

 

a proposal to approve an amendment to TGVC’s amended and restated certificate of incorporation, as amended (the “TGVC Charter”), to eliminate from the TGVC Charter the limitation that in connection with a business combination, TGVC may not redeem TGVC Public Shares if, after such redemption, TGVC’s net tangible assets, or of any entity that succeeds TGVC as a public company, will be less than $5,000,001 (the “Charter Limitation”), which amendment will be effective immediately prior to or upon consummation of a business combination, in order to allow TGVC to consummate the Business Combination irrespective of whether TGVC would be in compliance with the Charter Limitation (the “Charter Limitation Amendment”). We refer to this proposal as the “Charter Limitation Amendment Proposal” in the accompanying proxy statement.

 

PubCo is offering up to (i) 26,542,634 ordinary shares, par value $0.0001 per share (“PubCo Ordinary Shares”) and (ii) 17,057,500 warrants to purchase PubCo Ordinary Shares (“PubCo Warrants”) in the Business Combination. PubCo has applied to list the PubCo Ordinary Shares and will apply to list the PubCo Warrants on The Nasdaq Stock Market LLC with the ticker symbols “FLXG” and “FLXGW” respectively.

 

As a result of the Mergers, (i) all outstanding shares of Flexi will be automatically cancelled in exchange for the right to receive a number of PubCo Ordinary Shares determined by reference to the “Flexi Exchange Ratio” calculated in accordance with the Business Combination Agreement, which as of the date hereof was 74.7584, (ii) each outstanding TGVC Unit, comprised of one share of TGVC Class A Common Stock and one warrant to purchase one share of TGVC Class A Common Stock for $11.50 per share (each whole warrant, a “TGVC Warrant”), will be automatically detached and the holder thereof will be deemed to hold one share of TGVC Class A Common Stock and one TGVC Warrant, (iii) each outstanding share of TGVC Class B Common Stock will automatically convert into one share of TGVC Class A Common Stock, (iv) each outstanding share of TGVC Class A Common Stock will be cancelled in exchange for the right to receive one PubCo Ordinary Share, and (v) each outstanding TGVC Warrant will be converted into a PubCo Warrant. Following the Mergers, the Flexi Shareholders will have the right to receive up to an additional 2,900,000 PubCo Ordinary Shares based on PubCo’s achievement of certain revenue thresholds during the two-year period following the closing of the Business Combination.

 

i

 

  

Upon Closing, we anticipate that (i) existing TGVC Stockholders (other than the Initial Holders (as defined in the accompanying proxy statement)) will own approximately 3.7% of the outstanding PubCo Ordinary Shares, (ii) the Flexi Shareholders will own approximately 80.4% of the outstanding PubCo Ordinary Shares, (iii) TGVC’s directors and officers and the Sponsor Related Parties (as defined in the accompanying proxy statement) will own approximately 12.2% of the outstanding PubCo Ordinary Shares, (iv) ARC Group Limited, an advisor to Flexi, will own 3.5% of the outstanding PubCo Ordinary Shares and (v) ThinkEquity, LLC will own approximately 0.2% of the outstanding PubCo Ordinary Shares.

 

The ownership percentages with respect to PubCo following the Business Combination are based upon the number of Flexi Shares and shares of TGVC Common Stock issued and outstanding as of December 29, 2023 and are subject to a number of assumptions. These relative percentages assume (i) no exercise of TGVC Warrants, (ii) no Flexi Shareholder exercises his, her or its rights of appraisal, and (iii) after the 2023 Redemptions (as defined in the accompanying proxy statement), no TGVC Public Stockholder exercises redemption rights in connection with his, her or its TGVC Public Shares. If TGVC Public Stockholders exercise any redemption rights in respect of TGVC Public Shares, or any of the other assumptions are not correct, these percentages will be different.

 

At the Special Meeting, the TGVC Stockholders will also be asked to consider and vote to approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and voting of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposal or the Charter Limitation Amendment Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal and the Charter Limitation Amendment Proposal, the “Proposals”).

 

When TGVC completed its initial public offering on November 5, 2021, TGVC had until May 5, 2023 (or such later date as may be approved by the TGVC Stockholders) to complete its initial business combination. On May 4, 2023, TGVC held a special meeting of stockholders (the “Initial Extension Meeting”), at which the TGVC Stockholders approved amending (i) TGVC’s then existing amended and restated certificate of incorporation and (ii) the Investment Management Trust Agreement, dated November 2, 2021, by and between Continental Stock Transfer & Trust Company and TGVC (the “Trust Agreement”), to extend the date by which TGVC must complete a business combination for an additional six months, from May 5, 2023 to November 5, 2023 (the “Initial Extension”). In connection with the Initial Extension, 10,164,304 TGVC Public Shares were tendered for redemption, which represented approximately 88.4% of the total TGVC Public Shares outstanding at the time of redemption, and approximately $105.6 million was released from the Trust Account (as defined in the accompanying proxy statement) to pay such redeeming TGVC Public Stockholders. As a result of this redemption, as of the date thereof, there were 1,335,696 TGVC Public Shares issued and outstanding.

 

In connection with the Initial Extension, (i) in order to induce certain TGVC Public Stockholders not to redeem their TGVC Public Shares, TGVC and TGVC’s sponsor (the “Sponsor”) entered into an agreement with Bulldog Investors, LLP (“Bulldog”) and Phillip Goldstein (together with Bulldog, the “Non-Redemption Investors”) whereby, among other things, the Sponsor or its designee paid $105,000 (the “Initial Extension Non-Redemption Payment”) to the Non-Redemption Investors in exchange for the Non-Redemption Investors agreeing to hold and not redeem their TGVC Public Shares, (ii) TGVC amended its advisory agreement with ThinkEquity and agreed to pay ThinkEquity an advisory fee of $50,000, and (iii) a director of TGVC made a short-term loan of $105,000 to the Sponsor, which is expected to be repaid on or before February 28, 2024. In addition, in order to induce TGVC Public Stockholders to not redeem their TGVC Public Shares and in connection with the Initial Extension, the Sponsor, or its designee, has deposited an additional cash contribution of $0.04 per TGVC Public Share per month to the Trust Account (each, a “Monthly Initial Extension Payment”). A total of $320,567 from six Monthly Initial Extension Payments has been deposited in the Trust Account as of the date hereof. Each Monthly Initial Extension Payment is evidenced by an unsecured promissory note (an “Initial Extension Note”) issued by TGVC to the Sponsor, each in the principal amount equal to the Monthly Initial Extension Payment. The Initial Extension Notes bear no interest and are payable in full upon TGVC’s consummation of a business combination. If TGVC does not consummate a business combination by May 5, 2024 (or a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), the Initial Extension Notes will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.

 

On November 1, 2023, TGVC held a second special meeting of stockholders (the “Second Extension Meeting”), at which the TGVC Stockholders approved further amending (i) TGVC’s then existing amended and restated certificate of incorporation and (ii) the Trust Agreement, to extend the date by which TGVC must complete a business combination for up to an additional six months, from November 5, 2023 to up until May 5, 2024 (the “Second Extension”). In connection with the Second Extension, 467,026 TGVC Public Shares were tendered for redemption, which represented approximately 35.0% of the total TGVC Public Shares outstanding at the time of redemption, and approximately $5.2 million was released from the Trust Account to pay such redeeming TGVC Public Stockholders. As a result of this redemption, as of the date hereof, there are 868,670 TGVC Public Shares issued and outstanding, and there is approximately $9.66 million remaining in the Trust Account that is available for a business combination.

 

In connection with the Second Extension, (i) in order to induce the Non-Redemption Investors not to redeem their TGVC Public Shares, TGVC and the Sponsor entered into an agreement with the Non-Redemption Investors (the “Second Extension Non-Redemption Agreement”), whereby, among other things, the Sponsor, or its designee, agreed to pay up to an aggregate of $369,002 (the “Second Extension Non-Redemption Payment”) to the Non-Redemption Investors in exchange for the Non-Redemption Investors agreeing to hold and not redeem their TGVC Public Shares, and (ii) TGVC amended its advisory agreement with ThinkEquity and agreed to pay ThinkEquity an advisory fee of $40,000. As of the date hereof, the Sponsor or its designee has paid a total of $87,749 of the Second Extension Non-Redemption Payment to the Non-Redemption Investors and such amount is considered to be a Working Capital Loan evidenced by the 2023 Promissory Note. Pursuant to the terms of the Second Extension Non-Redemption Agreement, (x) if the Sponsor or its designee fails to make a payment to the Non-Redemption Investors by the applicable payment date (subject to a two-day grace period) (such date, inclusive of the grace period, the “Liquidation Trigger Date”), then TGVC will liquidate and dissolve as soon as practicable (and not later than three days) after the Liquidation Trigger Date; and (y) TGVC has agreed not to use the funds held in the Trust Account to pay its taxes or any dissolution expenses.

 

The Board of Directors of TGVC (the “TGVC Board”) has fixed the close of business on January 4, 2024 as the record date (the “Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the Special Meeting or any postponement or adjournment thereof. Stockholders should carefully read the accompanying Notice of Special Meeting and proxy statement for a more complete statement of the Proposals to be considered at the Special Meeting.

 

ii

 

 

The TGVC Board has unanimously approved and adopted the Business Combination Agreement and the Charter Limitation Amendment and unanimously recommends that the TGVC Stockholders vote “FOR” each of the Proposals. When you consider the TGVC Board’s recommendation of these Proposals, you should keep in mind that the directors and officers of TGVC have interests in the Business Combination that may conflict with your interests as a stockholder. See the section titled “The Business Combination Proposal; Terms of the Business Combination—Interests of the Initial Holders in the Business Combination” in the accompanying proxy statement.

 

Pursuant to the TGVC Charter, TGVC Public Stockholders have redemption rights in connection with the Business Combination. TGVC Public Stockholders are not required to affirmatively vote for or against the Business Combination in order to redeem their TGVC Public Shares for cash. This means that TGVC Public Stockholders who hold shares of TGVC Class A Common Stock on or before February 6, 2024 (two business days before the Special Meeting) will be eligible to elect to have their shares of TGVC Class A Common Stock redeemed for cash in connection with the Special Meeting, whether or not they are holders as of the Record Date, and whether or not such shares are voted at the Special Meeting.

  

  By Order of the TGVC Board,
   
  Sincerely,  
  Pui Lan Patrick Tsang
  Chief Executive Officer and Chairman

January 9, 2024

 

 

This proxy statement is dated January 9, 2024 and is first being mailed to TGVC Stockholders on or about January 9, 2024.

 

THE ACCOMPANYING PROXY STATEMENT PROVIDES THE TGVC STOCKHOLDERS WITH DETAILED INFORMATION ABOUT THE BUSINESS COMBINATION, THE CHARTER LIMITATION AMENDMENT AND OTHER MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING. WE ENCOURAGE YOU TO READ THIS ENTIRE DOCUMENT, INCLUDING THE ANNEXES AND OTHER DOCUMENTS REFERRED TO THEREIN, CAREFULLY AND IN THEIR ENTIRETY. YOU SHOULD ALSO CAREFULLY CONSIDER THE RISK FACTORS DESCRIBED IN “RISK FACTORS” BEGINNING ON PAGE 61 OF THE ACCOMPANYING PROXY STATEMENT.

 

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, 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. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

iii

 

  

TG Venture Acquisition Corp.
1390 Market Street, Suite 200
San Francisco, CA 94102
(628) 251-1369

 

Notice of Special Meeting of Stockholders of TG Venture Acquisition Corp.

 

TO BE HELD ON FEBURARY 8, 2024

 

TO THE STOCKHOLDERS OF TG VENTURE ACQUISITION CORP.:

 

NOTICE IS HEREBY GIVEN that a special meeting of the stockholders (the “Special Meeting”) of TG Venture Acquisition Corp., a Delaware corporation (“TGVC”) will be held at 11:00 a.m. Eastern Time, on February 8, 2024. The meeting will be held virtually over the internet by means of a live audio webcast. You will be able to attend and vote your shares during the Special Meeting via a live webcast available at www.virtualshareholdermeeting.com/TGVC2024SM. At the Special Meeting, TGVC Stockholders will be asked to consider and vote upon the following proposals:

  

  1.

Proposal No. 1 — The Business Combination Proposal — to adopt and approve the Business Combination Agreement dated December 5, 2022 (as it may be amended, supplemented, or otherwise modified from time to time, the “Business Combination Agreement”), by and among TGVC, The Flexi Group Limited, a business company with limited liability incorporated under the laws of the British Virgin Islands (“Flexi”), Flexi Group Holdings Ltd, a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct, wholly owned subsidiary of Flexi (“PubCo”), The Flexi Merger Co. Ltd, a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct, wholly owned subsidiary of PubCo (“Target Merger Sub”), and Flexi Merger Co. LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of PubCo (“SPAC Merger Sub”), and to approve the transactions contemplated thereby (the “Business Combination”);

 

  2. Proposal No. 2 — The Charter Limitation Amendment Proposal — to adopt and approve an amendment to the TGVC Charter to eliminate from the TGVC Charter the limitation that in connection with a business combination, TGVC may not redeem TGVC Public Shares if, after such redemption, TGVC’s net tangible assets, or of any entity that succeeds TGVC as a public company, will be less than $5,000,001 (the “Charter Limitation”), which amendment will be effective immediately prior to or upon consummation of a business combination, in order to allow TGVC to consummate the Business Combination irrespective of whether TGVC would be in compliance with the Charter Limitation (the “Charter Limitation Amendment”); and
     
  3. Proposal No. 3 — The Adjournment Proposal — to approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and voting of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposal or the Charter Limitation Amendment Proposal. This proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Business Combination Proposal or the Charter Limitation Amendment Proposal.

 

Only holders of record of TGVC Common Stock at the close of business on January 4, 2024 (the “Record Date”) are entitled to notice of the Special Meeting and to vote at the Special Meeting and any adjournments or postponements of the Special Meeting. The Special Meeting will be conducted via live audio webcast. You will be able to attend the Special Meeting by visiting www.virtualshareholdermeeting.com/TGVC2024SM. We are pleased to utilize virtual stockholder meeting technology to provide enhanced access and cost savings for TGVC Stockholders and TGVC. The virtual meeting format allows attendance from any location in the world, but please note that you will not be able to attend the Special Meeting in person. TGVC recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the meeting starts.

 

Pursuant to the TGVC Charter, TGVC is providing the TGVC Public Stockholders with the opportunity to redeem, upon the Closing, shares of TGVC Class A Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the Trust Account that holds the proceeds (including interest but less taxes payable) of TGVC’s initial public offering (the “IPO”). For illustrative purposes, based on funds in the Trust Account, which was approximately $9.66 million on December 29, 2023, the estimated redemption price per TGVC Public Share would have been approximately $11.12. TGVC Public Stockholders are not required to affirmatively vote for or against the Business Combination Proposal in order to redeem their shares of TGVC Class A Common Stock for cash. This means that TGVC Public Stockholders who hold shares of TGVC Class A Common Stock on or before February 6, 2024 (two business days before the Special Meeting) will be eligible to elect to have their shares of TGVC Class A Common Stock redeemed for cash in connection with the Special Meeting, whether or not they are holders as of the Record Date, and whether or not such shares are voted at the Special Meeting. A TGVC Public Stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, with respect to more than 15% of the shares of TGVC Class A Common Stock included in the TGVC Public Units sold in the IPO. Holders of the outstanding TGVC Public Warrants and TGVC Public Units do not have redemption rights with respect to such securities in connection with the Business Combination. Holders of outstanding TGVC Public Units must separate the underlying TGVC Public Shares and TGVC Public Warrants prior to exercising redemption rights with respect to the TGVC Public Shares. In connection with the IPO, the Initial Holders (as defined in the accompanying proxy statement) agreed to waive any redemption rights with respect to shares of the TGVC Common Stock held by them in connection with the completion of the Business Combination. Currently, the Sponsor owns approximately 44.84% of the issued and outstanding shares of TGVC Common Stock. The Initial Holders have agreed to vote any shares of TGVC Common Stock owned by them in favor of the Proposals.

 

iv

 

  

A majority of the voting power of all outstanding shares of capital stock of TGVC entitled to vote must be present via the virtual meeting platform or by proxy to constitute a quorum for the transaction of business at the Special Meeting. Approval of the Business Combination Proposal and the Adjournment Proposal, if presented, requires the affirmative vote of a majority of the votes cast by the TGVC Stockholders as of the Record Date who attend or are represented by proxy at the Special Meeting, as determined in accordance with TGVC’s Governing Documents. Approval of the Charter Limitation Amendment Proposal requires the affirmative vote of holders of at least 65% of the issued and outstanding shares of TGVC Common Stock on the Record Date. The TGVC Board unanimously recommends that you vote “FOR” the Business Combination Proposal, “FOR” the Charter Limitation Amendment Proposal, and “FOR” the Adjournment Proposal, if presented.

 

As of December 29, 2023, there was approximately $9.66 million in the Trust Account. Each share of TGVC Class A Common Stock redeemed by TGVC will decrease the amount in the Trust Account. The TGVC Charter prohibits redemption of TGVC Class A Common Stock in connection with a business combination if, after such redemption, TGVC would not be in compliance with the Charter Limitation, unless the Charter Limitation Amendment Proposal is approved and the Charter Limitation Amendment is implemented.

 

We direct your attention to the proxy statement accompanying this notice (including the annexes thereto) for a more complete description of the proposed Business Combination and related transactions and each of the Proposals. We encourage you to read the accompanying proxy statement carefully. If you have any questions or need assistance voting your shares, please call (855) 208-8903.

     
  By Order of the TGVC Board,
   
 

/s/ Pui Lan Patrick Tsang

  Pui Lan Patrick Tsang
  Chief Executive Officer and Chairman

 

v

 

  

PROXY STATEMENT FOR SPECIAL MEETING OF

TG VENTURE ACQUISITION CORP.

PROSPECTUS FOR UP TO 26,542,634 ORDINARY SHARES

AND 17,057,500 WARRANTS OF

THE FLEXI GROUP HOLDINGS LTD

 

The board of directors of TG Venture Acquisition Corp., a Delaware corporation (“TGVC”), has unanimously approved an amendment (the “Charter Limitation Amendment”) to TGVC’s amended and restated certificate of incorporation, as amended (the “TGVC Charter”), and the Business Combination Agreement dated as of December 5, 2022 (as it may be amended, supplemented, or otherwise modified from time to time, the “Business Combination Agreement”), by and among (i) The Flexi Group Limited, a business company with limited liability incorporated under the laws of the British Virgin Islands (“Flexi”), (ii) The Flexi Group Holdings Ltd, a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct, wholly owned subsidiary of Flexi (“PubCo”), (iii) The Flexi Merger Co. Ltd., a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct, wholly owned subsidiary of PubCo (“Target Merger Sub”), and (iv) Flexi Merger Co. LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of PubCo (“SPAC Merger Sub”). If the Business Combination Agreement and the Charter Limitation Amendment are approved by the TGVC Stockholders and the transactions contemplated by the Business Combination Agreement are consummated, Flexi will merge with and into Target Merger Sub (the “Initial Merger”), upon which the separate existence of Target Merger Sub will cease and Flexi will be the surviving corporation and a direct, wholly owned subsidiary of PubCo, and TGVC will merge with and into SPAC Merger Sub (the “TGVC Merger” and, together with the Initial Merger, the “Mergers” and the transactions contemplated by the Business Combination Agreement, including the Mergers, the “Business Combination”), upon which the separate existence of SPAC Merger Sub will cease and TGVC will be the surviving corporation and a direct, wholly owned subsidiary of PubCo.

 

As a result of the Mergers, (i) all outstanding shares of Flexi will be automatically cancelled in exchange for the right to receive a number of PubCo Ordinary Shares determined by reference to the “Flexi Exchange Ratio” calculated in accordance with the Business Combination Agreement, which as of the date hereof was 74.7584, (ii) each outstanding TGVC Unit, comprised of one share of TGVC Class A Common Stock and one warrant to purchase one share of TGVC Class A Common Stock for $11.50 per share (each whole warrant, a “TGVC Warrant”), will be automatically detached and the holder thereof will be deemed to hold one share of TGVC Class A Common Stock and one TGVC Warrant, (iii) each outstanding share of TGVC Class B Common Stock will automatically convert into one share of TGVC Class A Common Stock, (iv) each outstanding share of TGVC Class A Common Stock will be cancelled in exchange for the right to receive one PubCo Ordinary Share, and (v) each outstanding TGVC Warrant will be converted into a PubCo Warrant. Following the Mergers, the Flexi Shareholders will have the right to receive up to an additional 2,900,000 PubCo Ordinary Shares based on PubCo’s achievement of certain revenue thresholds during the two-year period following the closing of the Business Combination.

 

Upon closing of the Business Combination, we anticipate that (i) existing TGVC Stockholders (other than the Initial Holders (as defined in this proxy statement)) will own approximately 3.7% of the outstanding PubCo Ordinary Shares, (ii) the Flexi Shareholders will own approximately 80.4% of the outstanding PubCo Ordinary Shares, (iii) TGVC’s directors and officers and the Sponsor Related Parties (as defined in this proxy statement) will own approximately 12.2% of the outstanding PubCo Ordinary Shares, (iv) ARC will own 3.5% of the outstanding PubCo Ordinary Shares, and (v) ThinkEquity will own approximately 0.2% of the outstanding PubCo Ordinary Shares.

 

vi

 

  

The ownership percentages with respect to PubCo following the Business Combination are based upon the number of Flexi Shares (as defined in this proxy statement) and shares of TGVC Common Stock issued and outstanding as of December 29, 2023 and are subject to a number of assumptions. These relative percentages assume (i) no exercise of TGVC Warrants, (ii) no Flexi Shareholder exercises his, her or its rights of appraisal, and (iii) after the 2023 Redemptions, no TGVC Public Stockholder exercises redemption rights in connection with his, her or its TGVC Public Shares. If TGVC Public Stockholders exercise any redemption rights in respect of TGVC Public Shares, or any of the other assumptions are not correct, these percentages will be different.

 

Proposals to approve the Business Combination Agreement, the Charter Limitation Amendment and the other matters discussed in this proxy statement will be presented at the special meeting of TGVC Stockholders scheduled to be held on February 8, 2024 in virtual format.

 

Although PubCo is not currently a public reporting company, following the effectiveness of the registration statement of which this proxy statement is a part and the closing of the Business Combination, PubCo will become subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). PubCo has applied to list the PubCo Ordinary Shares and will apply to list the PubCo Warrants on The Nasdaq Stock Market LLC (“Nasdaq”) under the proposed symbols “FLXG” and “FLXGW,” respectively, to be effective at the consummation of the Business Combination. It is a condition of the consummation of the transactions under the Business Combination Agreement that the PubCo Ordinary Shares are approved for listing on Nasdaq (subject only to official notice of issuance thereof and round lot holder requirements). While trading on Nasdaq is expected to begin on the first business day following the date of completion of the Business Combination, there can be no assurance that PubCo’s securities will be listed on Nasdaq or that a viable and active trading market will develop. See “Risk Factors” beginning on page 61 for more information.

 

This proxy statement provides you with detailed information about the Business Combination, the Charter Limitation Amendment and other matters to be considered at the TGVC Special Meeting. We encourage you to carefully read this entire document.

 

THERE ARE LEGAL AND OPERATIONAL RISKS ASSOCIATED WITH TGVC’S SPONSOR BEING BASED IN HONG KONG AND FLEXI HAVING OPERATIONS IN HONG KONG. SUCH RISKS COULD RESULT IN A MATERIAL CHANGE IN TGVC’S OPERATIONS AND ITS ABILITY TO CONSUMMATE A BUSINESS COMBINATION. FOR EXAMPLE, RELEVANT ORGANIZATIONS OF MAINLAND CHINA’S GOVERNMENT HAVE MADE RECENT STATEMENTS OR RECENTLY TAKEN REGULATORY ACTIONS RELATED TO CYBERSECURITY, DATA SECURITY, ANTI-MONOPOLY, AND OVERSEAS LISTINGS OF MAINLAND CHINA-BASED BUSINESSES. IN ADDITION, RELEVANT MAINLAND CHINA GOVERNMENT AGENCIES HAVE RECENTLY TAKEN ANTI-TRUST ENFORCEMENT ACTION AGAINST CERTAIN MAINLAND CHINA-BASED BUSINESSES. IF THE MAINLAND CHINA GOVERNMENT WERE TO EXPAND THE SCOPE OF SUCH ACTIONS TO REGULATE NON-MAINLAND CHINA-BASED COMPANIES, SUCH REGULATION COULD IMPACT TGVC’S ABILITY TO CONDUCT ITS BUSINESS AND ACCEPT FOREIGN INVESTMENT.

 

ALTHOUGH NEITHER TGVC NOR FLEXI HAS SUBSIDIARIES OR OPERATIONS IN MAINLAND CHINA, GIVEN HONG KONG IS A SPECIAL ADMINISTRATIVE REGION OF THE PRC AND GIVEN THE MAINLAND CHINA GOVERNMENT’S SIGNIFICANT OVERSIGHT OVER THE CONDUCT OF BUSINESS OPERATIONS IN THE PRC, THE LEGAL AND OPERATIONAL RISKS ASSOCIATED WITH OPERATING IN MAINLAND CHINA ALSO APPLY TO OPERATIONS IN HONG KONG.

 

for a discussion of information that should be considered before voting on the proposed Business Combination and each of the other matters to be presented at the TGVC Special Meeting, PLEASE REFER TO the risk factors described in “Risk Factors” beginning on page 61 of this proxy statement, INCLUDING THE RISK FACTORS REGARDING THE LEGAL AND OPERATIONAL RISKS ASSOCIATED WITH OPERATING IN CHINA.

 

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Business Combination or the other transactions described in THIS proxy statement or any of the securities to be issued in the Business Combination, passed upon the merits or fairness of the Business Combination or related transactions or passed upon the adequacy or accuracy of the disclosure in THIS proxy statement. Any representation to the contrary is a criminal offense.

 

This proxy statement is dated January 9, 2024, and is first being mailed to TGVC Stockholders on or about January 9, 2024.

 

vii

 

  

TABLE OF CONTENTS 

 

  Page
Letter to Stockholders of TG Venture Acquisition Corp.  i
Notice of Special Meeting of Stockholders of TG Venture Acquisition Corp.  iv
About This Proxy Statement 1
Industry and Market Data 1
Additional Information  1
Financial Statement Presentation 2
Trademarks, Service Marks and Trade Names 2
Frequently Used Terms 3
Cautionary Note Regarding Forward-Looking Statements 9
Questions and Answers About the Proposed Business Combination 11
Summary of the Proxy Statement 29
Summary of Risk Factors 55
Selected Historical Financial Information and Operating Data of Flexi 57
Selected Historical Financial Information of TGVC 58
Selected Unaudited Pro Forma Condensed Combined Financial Information 59
Comparative Per Share Information 60
Risk Factors 61
Enforceability of Civil Liabilities 112
Unaudited Pro Forma Condensed Combined Financial Information 114
Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2023 118
Unaudited Pro Forma Condensed Combined Statement of Operations For the Six Months Ended June 30, 2023 119
Unaudited Pro Forma Condensed Combined Statement of Operations For the Year Ended December 31, 2022 119
Notes to Unaudited Pro Forma Condensed Combined Financial Statements 120
Special Meeting of TGVC Stockholders 125
The Business Combination Proposal; Terms of The Business Combination 131
The Charter Limitation Amendment Proposal 178
The Adjournment Proposal 179
Information About TGVC 180
TGVC’s Management 191
Information Related to PubCo 197
Business of Flexi and Certain Information About Flexi 198
TGVC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations 217
Flexi’s Directors and Senior Management 225
Flexi’s Management’s Discussion and Analysis of Financial Condition and Results of Operations 227
Management of PubCo Following the Business Combination 242
Beneficial Ownership of Securities 245
Certain Relationships and Related Person Transactions 251
Material Tax Considerations 254
Description of PubCo Securities 271
Comparison of Corporate Governance and Shareholder Rights 274
Shares Eligible For Future Sale 285
Stock Market and Dividend Information 286
Annual Meeting Shareholder Proposals 287
PubCo Legal Matters 287
Experts 287
Transfer Agent and Registrar 288
Submission of Stockholder Proposals 288
Stockholder Communications 288
Where You Can Find More Information 288

 

viii

 

  

ANNEXES

  

Annex A: Business Combination Agreement  A-1
Annex B: Memorandum and Articles of Association of The Flexi Group Holdings Ltd  B-1
Annex C: Opinion of Marshall & Stevens Transaction Advisory Services LLC  C-1
Annex D: The Flexi Group Holdings Ltd 2023 Omnibus Securities and Incentive Plan  D-1

  

ix

 

 

About This Proxy Statement

 

This document, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by The Flexi Group Holdings Ltd, constitutes a prospectus of PubCo under Section 5 of the U.S. Securities Act of 1933, as amended (the “Securities Act”) with respect to the PubCo Ordinary Shares to be issued to TGVC Stockholders and the Flexi Shareholders, the PubCo Warrants to be issued to holders of TGVC Warrants, and the PubCo Ordinary Shares underlying such warrants, if the Business Combination is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act with respect to the Special Meeting of TGVC Stockholders at which TGVC Stockholders shall be asked to consider and vote upon a proposal (i) to approve the Business Combination by the adoption of the Business Combination Agreement, among other matters, (ii) to approve the Charter Limitation Amendment, and (iii) to adjourn the meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to approve the Business Combination Proposal or the Charter Limitation Amendment Proposal.

 

References to “U.S. Dollars” and “$” in this proxy statement are to United States dollars, the legal currency of the United States. Discrepancies in any table between totals and sums of the amounts listed are due to rounding. Certain amounts and percentages have been rounded; consequently, certain figures may add up to be more or less than the total amount and certain percentages may add up to be more or less than 100%. In particular and without limitation, amounts expressed in millions contained in this proxy statement have been rounded to a single decimal place for the convenience of readers. Unless otherwise expressly provided in this proxy statement, the figures presented in this proxy statement exclude the effect of the PubCo Offering, which we anticipate will close immediately following the consummation of the Business Combination.

 

Capitalized terms that are not otherwise defined herein shall have the meaning ascribed to them in the “Frequently Used Terms” section below.

 

Industry and Market Data

 

This proxy statement contains estimates, projections, and other information concerning Flexi’s industry and business, as well as data regarding market research, estimates, and forecasts prepared by Flexi’s management. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. The industry in which Flexi operates is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” Unless otherwise expressly stated, Flexi obtained industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry and general publications, government data, and similar sources. Forecasts and other forward-looking information with respect to industry, business, market, and other data are subject to the same qualifications and additional uncertainties as the other forward-looking statements in this proxy statement. See “Cautionary Note Regarding Forward-Looking Statements.”

 

ADDITIONAL INFORMATION

 

This proxy statement incorporates important business and financial information about TGVC from other documents that are not included in or delivered with this proxy statement. This information is available for you to review on the SEC’s website at www.sec.gov. You can also obtain the documents incorporated by reference into this proxy statement free of charge by requesting them in writing or by telephone from the appropriate company at the following address:

 

The Flexi Group Holdings Ltd
Wisma UOA Damansara II, Penthouse 16-1 Level 16, No. 6,

Changkat Semantan, Bukit Damansara, 50490

Kuala Lumpur, Malaysia 

+60 3 2011 9888

 

TG Venture Acquisition Corp.

1390 Market Street, Suite 200

San Francisco, California 94102

(628) 251-1369

 

To obtain timely delivery, TGVC Stockholders must request the materials no later than five business days prior to the Special Meeting, or by February 1, 2024.

 

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

 

1
 

  

For a more detailed description of the information incorporated by reference in this proxy statement and how you may obtain it, see the section entitled “Where You Can Find More Information.”

 

Financial Statement Presentation

 

TGVC

 

The historical financial statements of TGVC included in this proxy statement were prepared in accordance with U.S. GAAP and are denominated in U.S. Dollars.

 

Flexi

 

Flexi’s audited consolidated financial statements as of and for the years ended December 31, 2022 and 2021, and unaudited consolidated financial statements as of and for the six months ended June 30, 2023, included in this proxy statement have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and are denominated in U.S. Dollars.

 

Flexi refers in various places in this proxy statement to non-IFRS financial measures, including earnings before interest, taxes, depreciation, and amortization (“EBITDA”), which are more fully explained in “Selected Historical Financial Information and Operating Data of Flexi.” The presentation of non-IFRS information is not meant to be considered in isolation or as a substitute for Flexi’s audited consolidated financial results prepared in accordance with IFRS.

 

PubCo

 

PubCo was incorporated on November 10, 2022, for the sole purpose of effectuating the transactions described herein. PubCo has no material assets and does not operate any businesses. Accordingly, no financial statements of PubCo have been included in this proxy statement.

 

The Business Combination is made up of the series of transactions provided for in the Business Combination Agreement as described within this proxy statement. The transactions will be accounted for as a capital reorganization under IFRS.

 

Following the Business Combination, PubCo will qualify as a foreign private issuer and will prepare its financial statements in accordance with IFRS and will be denominated in U.S. Dollars.

 

Accordingly, the unaudited pro forma condensed combined financial information and the comparative per share information presented in this proxy statement is prepared in accordance with IFRS and is denominated in U.S. Dollars.

 

Trademarks, Service Marks and Trade Names

 

The Flexi name, logos and other trademarks and service marks of Flexi appearing in this proxy statement are the property of Flexi. Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this proxy statement are presented without the ® and ™ symbols, but such references are not intended to indicate, in any way, that Flexi will not assert, to the fullest extent under applicable law, its rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This proxy statement contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this proxy statement 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.

 

2
 

  

Frequently Used Terms

 

In this document:

 

2023 Promissory Note” means that certain promissory note, dated as of March 16, 2023, issued by TGVC to the Sponsor, under which TGVC may borrow up to $3,000,000 to be used to defray expenses in connection with the Business Combination, which is payable on the date on which TGVC consummates its initial business combination.

 

2023 Redemptions” means (i) the redemption of 10,164,304 TGVC Public Shares in connection with the Initial Extension in May 2023 and (ii) the redemption of 467,026 TGVC Public Shares in connection with the Second Extension in November 2023, collectively.

 

Acquisition Entities” means, collectively, PubCo, Target Merger Sub and SPAC Merger Sub, and each, individually, an “Acquisition Entity.”

 

Acquisition Proposal” means, as to Flexi or TGVC, other than the Transactions and other than the acquisition or disposition of equipment or other tangible personal property in the ordinary course of business, any offer or proposal relating to: (i) any acquisition or purchase, direct or indirect, of (a) 15% or more of the consolidated assets of such Person and its subsidiaries or (b) 15% or more of any class of equity or voting securities (for the avoidance of doubt, excluding a sale of warrant(s) issued by Flexi prior to the date of the Business Combination Agreement by a warrant holder) of (x) such Person or (y) one or more subsidiaries of such Person holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of such Person and its subsidiaries; (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any Person beneficially owning 15% or more of any class of equity or voting securities of (a) such Person or (b) one or more subsidiaries of such Person holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of such Person and its subsidiaries; or (iii) a merger, consolidation, share exchange, business combination, sale of substantially all of the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving (a) such Person or (b) one or more subsidiaries of such Person holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of such Person and its subsidiaries.

 

Action” means any action, lawsuit, complaint, claim, petition, suit, audit, examination, assessment, arbitration, mediation or inquiry, or any proceeding or investigation, by or before any governmental authority.

 

Adjournment Proposal” means the proposal to be considered at the Special Meeting to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if it is determined by TGVC that more time is necessary or appropriate to approve one or more proposals at the Special Meeting.

 

Advisory Agreement” means that certain agreement, dated December 23, 2022, by and between TGVC and ThinkEquity, as amended.

 

Ancillary Agreements” means, collectively: (i) the Shareholder Support Agreement; (ii) the Sponsor Support Agreement; (iii) the BCA Lock-Up Agreements; and (iv) the PubCo Governing Documents.

 

ARC” means ARC Group Limited, advisor to Flexi.

 

ARC Engagement Letter” means that certain letter agreement between ARC and Flexi, dated as of April 8, 2022.

 

Assumed TGVC Warrants” means the PubCo Warrants into which the outstanding TGVC Warrants will be converted at the Effective Time.

 

BCA Lock-Up Agreements” means the separate lock-up agreements entered into concurrently with the execution of the Business Combination Agreement among TGVC, PubCo and the BCA Lock-Up Shareholders, pursuant to which 95% of the BCA Lock-Up Securities received by such BCA Lock-Up Shareholders will be locked-up and subject to transfer restrictions for a period of time following the Closing.

 

BCA Lock-Up Shareholders” means certain Key Flexi Shareholders, the Sponsor Related Parties and TGVC’s directors and officers.

 

BCA Lock-Up Securities” means the PubCo Ordinary Shares to be received by the BCA Lock-Up Shareholders in the Business Combination.

 

Business Combination” means the Mergers and the other transactions to be consummated under the Business Combination Agreement.

 

Business Combination Agreement” means that certain agreement dated as of December 5, 2022, by and among TGVC, Flexi, PubCo, Target Merger Sub and SPAC Merger Sub, as it may be amended, supplemented, or otherwise modified from time to time.

 

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

 

BVI” means the British Virgin Islands.

 

3
 

  

BVI Act” means the BVI Business Companies Act, 2004, as amended.

 

Charter Limitation” means the limitation in the TGVC Charter that, in connection with an initial business combination, TGVC may not redeem TGVC Public Shares in an amount that would result in TGVC’s failure to have net tangible assets of at least $5,000,001.

 

Charter Limitation Amendment” means the amendment of the TGVC Charter to remove the Charter Limitation from the TGVC Charter.

 

Charter Limitation Amendment Proposal” means the proposal to approve the Charter Limitation Amendment.

 

Closing” means the closing of the Business Combination.

 

Closing Date” means the date on which the Business Combination is consummated.

 

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

 

Combination Period” means the date by which TGVC must complete an initial business combination.

 

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

 

Disclosure Letters” means the Flexi Disclosure Letter and the TGVC Disclosure Letter, collectively.

 

Dissenting Flexi Shares” means Flexi Shares that are outstanding immediately prior to the Initial Merger Effective Time and that are held by Flexi Shareholders who have not voted in favor of the Initial Merger nor consented thereto in writing and who have given a notice of election to dissent pursuant to section 179 of the BVI Act and otherwise complied with all of the provisions of the BVI Act relevant to the exercise and perfection of dissenters’ rights.

 

Dragon” means Dragon Active Limited, a Hong Kong company, which is controlled by the managing director of the Sponsor.

 

Earnout Shares” means an aggregate of up to 2,900,000 additional PubCo Ordinary Shares that Flexi Shareholders will have the right to receive based on the revenue of PubCo during the two-year period after the Closing Date.

 

First Amendment” means that certain First Amendment to the Business Combination Agreement, dated as of August 10, 2023, by and among TGVC, Flexi, PubCo, Target Merger Sub and SPAC Merger Sub.

 

Flexi Companies” means, collectively, Flexi and its subsidiaries (but not, for the avoidance of doubt, PubCo) and “Flexi Company” means any one of the Flexi Companies.

 

Flexi Disclosure Letter” means the disclosure letter that Flexi provided to TGVC in connection with the Business Combination Agreement.

 

Flexi Exchange Ratio” means the quotient obtained by dividing the Price per Flexi Share by ten dollars ($10.00).

 

Flexi Governing Documents” means, collectively, the Flexi Memorandum and the Amended and Restated Articles of Association of Flexi adopted on November 10, 2017, as may be amended and/or restated from time to time.

 

Flexi Memorandum” means the Amended and Restated Memorandum of Association of Flexi adopted on November 10, 2017.

  

Flexi Prospective Financial Information” or the “Projections” means the financial projections of Flexi for the years ending December 31, 2022 through December 31, 2026, as prepared by Flexi’s management in September 2022.

 

Flexi Shareholder” means a holder of Flexi Shares.

 

Flexi Shares” means the ordinary shares of Flexi, no par value, as defined in the Flexi Memorandum.

 

4
 

  

Flexi Transaction Expenses” means any out-of-pocket fees and expenses payable by any of the Flexi Companies or their respective affiliates (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of the Transactions, including (i) all fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers; (ii) any change in control bonus, transaction bonus, retention bonus, termination or severance payment or payment relating to terminated options, warrants or other equity appreciation, phantom equity, profit participation or similar rights, in any case, to be made to any current or former employee, independent contractor, director or officer of any of the Flexi Companies at or after the Closing pursuant to any agreement to which any of the Flexi Companies is a party prior to the Closing that become payable (including if subject to continued employment) as a result of the execution of the Business Combination Agreement or the consummation of the Transactions; and (iii) filing fees paid to governmental authorities in connection with the Transactions in accordance with the Business Combination Agreement.

 

Flexi Written Consent” means the written consent, in form and substance reasonably acceptable to TGVC, of the Key Flexi Shareholders in favor of the approval and adoption of the Business Combination Agreement, the Initial Merger and the other Transactions.

 

Founder Shares” means 2,889,149 shares of TGVC Class B Common Stock owned by TGVC’s officers and directors and the Sponsor Related Parties (including any shares of TGVC Class A Common Stock issued upon conversion of such shares of TGVC Class B Common Stock and the PubCo Ordinary Shares issued in exchange thereof pursuant to the TGVC Merger).

 

HFI” means HFI Limited, a company incorporated in the British Virgin Islands.

 

IASB” means the International Accounting Standards Board.

 

IFRS” means the International Financial Reporting Standards, as adopted by the IASB.

 

Incentive Plan” means The Flexi Group Holdings Ltd 2023 Omnibus Securities and Incentive Plan.

 

Initial Extension” means the extension of the date by which TGVC must complete a business combination for an additional six months, from May 5, 2023 to November 5, 2023, which was effected by the amendments to the then existing TGVC Charter and the then existing Trust Agreement, approved by the TGVC Stockholders at the Initial Extension Meeting.

 

Initial Extension Meeting” means TGVC’s special meeting of stockholders held on May 4, 2023, to vote on the Initial Extension.

 

Initial Extension Non-Redemption Agreement” means that certain non-redemption agreement, dated April 30, 2023, by and among TGVC, the Sponsor and the Non-Redemption Investors, entered into in connection with the Initial Extension.

 

Initial Extension Non-Redemption Payment” means that payment of $105,000 that the Sponsor or its designee made to the Non-Redemption Investors in exchange for the Non-Redemption Investors agreeing to hold and not redeem their TGVC Public Shares in connection with the Initial Extension.

 

Initial Extension Notes” means those certain unsecured promissory notes issued by TGVC to the Sponsor, each in the amount of the Monthly Initial Extension Payments.

 

Initial Holders” means the Sponsor Related Parties, TGVC’s directors and officers, and ThinkEquity.

 

Initial Merger” means the merger of Flexi with and into Target Merger Sub.

 

Initial Merger Effective Time” means the date and time that the Initial Merger becomes effective in accordance with the Business Combination Agreement.

 

IPO” means TGVC’s initial public offering of TGVC Units, consummated on November 5, 2021.

 

IPO Lock-Up Agreement” means the Letter Agreement, dated November 2, 2021, by and among TGVC, the Sponsor Related Parties and ThinkEquity, pursuant to which all of the Founder Shares, all of the Representative Shares, all of the TGVC Placement Warrants and all of the Representative Warrants will be locked-up and subject to transfer restrictions for a period of time following the Closing.

 

IPO Lock-Up Securities” means the Founder Shares and the Representative Shares.

 

IPO Lock-Up Shareholders” means the Sponsor Related Parties and ThinkEquity.

 

IRS” means the United States Internal Revenue Service.

 

Key Flexi Shareholders” means certain holders of Flexi Shares specified in the Flexi Disclosure Letter.

 

Key Markets” means Hong Kong, Singapore and Australia.

 

Liquidation Trigger Date” means the date by which TGVC must liquidate, if the Sponsor or its designee fails to make a payment to the Non-Redemption Investors by the applicable payment date (subject to a two-day grace period), pursuant to the terms of the Second Extension Non-Redemption Agreement.

 

Marshall & Stevens” means Marshall & Stevens Transaction Advisory Services LLC, independent fairness opinion provider to the TGVC Board.

 

Monthly Initial Extension Payments” means those certain additional cash contributions of $53,427.84, or $0.04 per TGVC Public Share, that the Sponsor, or its designee, has deposited monthly into the Trust Account in connection with the Initial Extension.

 

Nasdaq” means The Nasdaq Stock Market LLC.

 

5
 

  

NDA” means the confidentiality agreement, effective as of July 25, 2022, between TGVC and Flexi.

 

Non-Redemption Investors” means, collectively, Bulldog Investors, LLP and Phillip Goldstein.

 

PCAOB” means the Public Company Accounting Oversight Board (United States).

 

Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, trust, estate, joint venture, joint stock company, governmental authority or instrumentality or other entity of any kind.

  

PRC” or “China” means the People’s Republic of China, including the Hong Kong Special Administrative Region of the PRC, the Macau Special Administrative Region of the PRC, and the Taiwan Region.

 

Price per Flexi Share” means the quotient obtained by dividing $190,000,000 by the total number of issued and outstanding Flexi Shares as of immediately prior to the Initial Merger Effective Time, determined on a fully diluted basis.

 

Proposals” means the Business Combination Proposal, the Charter Limitation Amendment Proposal and the Adjournment Proposal.

 

PubCo Board” means the board of directors of PubCo.

 

PubCo Governing Documents” means the Amended and Restated Memorandum of Association and Articles of Association of PubCo.

 

PubCo Offering” means the proposed sale of PubCo Ordinary Shares pursuant to the PubCo Offering Registration Statement.

 

PubCo Offering Registration Statement” means the registration statement on Form F-1 (Registration No. 333-275734), filed by PubCo on November 22, 2023, in connection with the PubCo Offering.

 

PubCo Ordinary Shares” means the ordinary shares of PubCo, par value $0.0001 per share.

 

PubCo Public Warrants” means PubCo Warrants that will be exchanged for the TGVC Public Warrants.

 

PubCo Warrants” means all warrants to purchase PubCo Ordinary Shares.

 

Record Date” means January 4, 2024, the record date for the Special Meeting.

 

Regulatory Approvals” means any necessary or advisable regulatory approvals, Actions, nonactions or waivers in order to complete lawfully the Transactions.

 

Representative Shares” means the shares of TGVC Class A Common Stock sold as part of the Representative Units in the IPO.

 

Representative Units” means the units issued to ThinkEquity and/or its designees as part of ThinkEquity’s compensation simultaneously with the closing of the IPO, each containing one share of TGVC Class A Common Stock and one TGVC Warrant.

 

Representative Warrants” means the TGVC Warrants sold as part of the Representative Units in the IPO.

 

SEC” means the United States Securities and Exchange Commission.

  

Second Extension” means the extension of the date by which TGVC must complete a business combination for up to an additional six months, from November 5, 2023 to up until May 5, 2024, which was effected by the amendments to the then existing TGVC Charter and the then existing Trust Agreement, approved by the TGVC Stockholders at the Second Extension Meeting.

 

Second Extension Meeting” means TGVC’s special meeting of stockholders held on November 1, 2023, to vote on the Second Extension.

 

Second Extension Non-Redemption Agreement” means that certain non-redemption agreement, dated as of October 27, 2023, by and among TGVC, the Sponsor and the Non-Redemption Investors, in connection with the Second Extension.

 

Second Extension Non-Redemption Payment” means that payment of up to an aggregate of $369,002 that the Sponsor, or its designee, agreed to pay to the Non-Redemption Investors in exchange for the Non-Redemption Investors agreeing to hold and not redeem their TGVC Public Shares in connection with the Second Extension.

 

Securities Act” means the United States Securities Act of 1933, as amended.

 

Shares Lock-Up Period” means the period ending on the earlier of (i) six months following the Closing or (ii) subsequent to the Closing, (x) if the last sale price of the PubCo 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 (y) the date on which PubCo completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the shareholders of PubCo having the right to exchange their PubCo Ordinary Shares for cash, securities or other property.

 

SPAC” means a special purpose acquisition company.

 

Special Meeting” means the special meeting of the TGVC Stockholders, to be held virtually on February 8, 2024 at 11:00 a.m. Eastern Time.

 

6
 

  

Sponsor” means Tsangs Group Holdings Limited.

 

Sponsor Related Parties” means the Sponsor, Dragon, TriPoint and HFI, as the initial stockholders of TGVC Class B Common Stock, and any permitted transferees (excluding the TGVC independent directors and officers).

 

TGVC Board” means the board of directors of TGVC.

 

TGVC Bylaws” means the bylaws of TGVC in effect immediately prior to the TGVC Merger Effective Time, as amended or restated from time to time.

 

TGVC Capital Stock” means, collectively, the TGVC Common Stock and the preferred stock of TGVC, par value $0.0001 per share.

 

TGVC Charter” means the Amended and Restated Certificate of Incorporation of TGVC, dated November 1, 2021, as amended or restated from time to time.

 

TGVC Class A Common Stock” means Class A Common Stock of TGVC, par value $0.0001 per share.

 

TGVC Class B Common Stock” means Class B Common Stock of TGVC, par value $0.0001 per share.

 

TGVC Common Stock” means, collectively, the TGVC Class A Common Stock and the TGVC Class B Common Stock.

 

TGVC Disclosure Letter” means the disclosure letter that TGVC provided to Flexi in connection with the Business Combination Agreement.

 

TGVC Governing Documents” means, collectively, the TGVC Charter and the TGVC Bylaws.

 

TGVC Merger” means the merger of SPAC Merger Sub with and into TGVC.

 

TGVC Merger Effective Time” means the date and time that the TGVC Merger becomes effective in accordance with the Business Combination Agreement.

 

TGVC Placement Warrants” means the TGVC Warrants issued to the Sponsor in the TGVC Private Placement.

 

TGVC Private Placement” means the private placement that closed concurrently with the closing of the IPO pursuant to which TGVC issued and sold to the Sponsor 5,500,000 TGVC Placement Warrants at a price of $1.00 per TGVC Placement Warrant, generating gross proceeds of $5,500,000.

 

TGVC Public Shares” means the shares of TGVC Class A Common Stock sold as part of the TGVC Public Units in the IPO.

 

TGVC Public Stockholders” means holders of shares of TGVC Class A Common Stock included as part of the TGVC Units sold in the IPO (whether such shares were purchased in the IPO or in the secondary market following the IPO and whether or not such holders are the Sponsor Related Parties or officers or directors of TGVC, or affiliates of any of the foregoing).

 

TGVC Public Units” means the units issued to TGVC Public Stockholders in the IPO, each containing one share of TGVC Class A Common Stock and one TGVC Public Warrant.

 

TGVC Public Warrants” means the TGVC Warrants sold as part of the TGVC Public Units in the IPO.

 

TGVC Share Redemption” means the election by an eligible holder of shares of TGVC Common Stock (as determined in accordance with the TGVC Governing Documents) to redeem all or a portion of the shares of TGVC Common Stock held by such holder at a per-share price, payable in cash, equal to a pro rata share of the aggregate amount on deposit in the Trust Account (including any interest earned on the funds held in the Trust Account) (as determined in accordance with the TGVC Governing Documents) in connection with the Proposals.

 

7
 

  

TGVC Stockholder” means any holder of any shares of TGVC Capital Stock.

 

TGVC Stockholders’ Approval” means the approval of the Proposals, in each case, by an affirmative vote of a majority of the votes cast by the TGVC Stockholders as of the Record Date who attend or are represented by proxy at the Special Meeting (as determined in accordance with the TGVC Governing Documents).

 

TGVC Transaction Expenses” means any out-of-pocket fees and expenses paid or payable by TGVC or Sponsor (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of the Transactions, including (i) all fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers, (ii) transfer taxes, and (iii) filing fees paid to governmental authorities in connection with the Transactions in accordance with the Business Combination Agreement.

 

TGVC Units” means the TGVC Public Units and the Representative Units, collectively.

 

TGVC Warrant Agreement” means that certain Warrant Agreement, dated November 2, 2021, by and between TGVC and Continental Stock Transfer & Trust Company, as the warrant agent.

 

TGVC Warrants” means warrants to purchase shares of TGVC Class A Common Stock for $11.50 per share, including the TGVC Public Warrants, the TGVC Placement Warrants and the Representative Warrants.

 

ThinkEquity” means ThinkEquity, LLC, the representative of the underwriters in the IPO and the financial advisor to TGVC in connection with the Business Combination.

 

Trading Day” means any day on which Nasdaq is open for trading.

 

Transactions” means, collectively, the Mergers and each of the other transactions contemplated by the Business Combination Agreement or any of the Ancillary Agreements.

 

Transfer Agent” means Continental Stock Transfer & Trust Company, TGVC’s transfer agent.

 

TriPoint” means TriPoint Capital Management, LLC, a Delaware limited liability company.

 

Trust Account” means the Trust Account of TGVC for the benefit of the TGVC Public Stockholders.

 

Trust Agreement” means the Investment Management Trust Agreement, dated as of November 2, 2021, between TGVC and the Trustee, as amended from time to time.

 

Trustee” means Continental Stock Transfer & Trust Company, as trustee pursuant to the Trust Agreement.

 

U.S. GAAP” means accounting principles generally accepted in the United States of America.

 

Warrant Lock-Up Period” means the period ending 30 days following the Closing.

 

Working Capital Loans” means any loans that may be provided to TGVC by the Sponsor for working capital.

 

8
 

 

Cautionary Note Regarding Forward-Looking Statements

 

This proxy statement contains forward-looking statements regarding, among other things, the operational and financial plans, strategies and prospects of TGVC and Flexi. These statements are based on the beliefs and assumptions of the respective management of TGVC and Flexi. Although TGVC and Flexi believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, neither TGVC nor Flexi can assure you that either will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement include, but are not limited to, statements about:

  

  the benefits from the Business Combination;
     
  TGVC’s ability to consummate the Business Combination or, if TGVC does not complete the Business Combination, any other initial business combination;
     
  any satisfaction or waiver (if applicable) of the conditions to the Business Combination, including, among other things: the satisfaction or waiver of certain customary Closing conditions (including the non-existence of a material adverse effect affecting TGVC or Flexi and receipt of certain stockholder approvals contemplated by this proxy statement);
     
  the occurrence of any other event, change or other circumstances that could give rise to the termination of the Business Combination Agreement;
     
  PubCo’s ability to initially list, and once listed, maintain the listing of the PubCo Ordinary Shares on Nasdaq following the Business Combination;
     
  PubCo Ordinary Shares’ potential liquidity and trading;
     
  Flexi’s expectations regarding future growth and expansion;
     
  Flexi’s future financial performance following the Business Combination, including expectations regarding changes in revenues and expenses and expected sources of income in the future;
     
  the implementation, market acceptance and success of Flexi’s business model, including the benefits associated with its asset-light model;
     
  TGVC’s officers and directors allocating their time to other businesses and potentially having conflicts of interest with TGVC’s business or in approving the Business Combination;
     
  the impact of the COVID-19 pandemic;
     
 

PubCo’s ability to consummate the PubCo Offering or to raise additional financing in the future;

     
  the success of Flexi in retaining or recruiting, or changes required in, Flexi’s officers, key employees or directors following the completion of the Business Combination;
     
  Flexi’s ability to raise additional financing following the consummation of the Business Combination or otherwise in the future; and
     
  the use of proceeds not held in the Trust Account or available to TGVC from interest income on the Trust Account balance.

 

9
 

  

These forward-looking statements are based on the beliefs and assumptions of TGVC and Flexi’s management as of the date of this proxy statement. Although TGVC and Flexi believe that their respective plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, neither TGVC nor Flexi can assure you that either will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Accordingly, forward-looking statements should not be relied upon as representing TGVC or Flexi’s views as of any subsequent date, and they do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date the statements were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

In addition, statements that TGVC or Flexi “believes,” and similar statements, reflect such parties’ beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this proxy statement, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that either TGVC or Flexi has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

 

You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the Proposals. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause PubCo’s actual results to differ include:

  

  the inability to complete the Business Combination due to the failure to obtain approval of the TGVC Stockholders or Flexi Shareholders or the failure of other conditions to Closing in the Business Combination Agreement;
     
  the occurrence of any event, change or other circumstances that could give rise to the termination of the Business Combination Agreement;
     
  the outcome of any legal proceedings that may be instituted against TGVC, Flexi or others following announcement of the Business Combination and the transactions contemplated therein;
     
  the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the Business Combination;
     
  the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, the ability of PubCo to grow and manage growth profitably, maintain relationships with customers, compete within its industry and retain its key employees;
     
  costs related to the proposed Business Combination;
     
  the possibility that TGVC or Flexi may be adversely impacted by other economic, business, or competitive factors;
     
  the significant uncertainty created by the COVID-19 pandemic;
     
  Flexi’s success in retaining or recruiting, or changes required in, Flexi’s officers, key employees or directors following the completion of the Business Combination;
     
  Flexi may experience difficulties in managing its growth and expanding its operations;
     
  the ability of PubCo to maintain an effective system of internal control over financial reporting;
     
  the health of the commercial real estate industry;
     
  risks associated with Flexi’s real estate assets and increased competition in the commercial real estate industry;
     
  the ability of Flexi to manage, develop and refine its platform for managing and powering flexible workspaces and access to Flexi’s customer base;
     
  the success of strategic relationships with third parties; and
     
  other risks and uncertainties indicated in this proxy statement, including those in the section titled “Risk Factors” herein, and other filings that have been made or will be made with the SEC by TGVC or PubCo.

 

10
 

  

Questions and Answers About the Proposed Business Combination

 

The following questions and answers briefly address some commonly asked questions about the Business Combination and the Proposals. The following questions and answers do not include all the information that is important to TGVC Stockholders or to Flexi Shareholders. We urge you to carefully read this entire proxy statement, including the annexes and other documents referred to herein.

 

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS — TGVC STOCKHOLDERS

  

  Q: Why am I receiving this proxy statement?

 

  A: TGVC, Flexi, PubCo and other parties have agreed to the Business Combination under the terms of the Business Combination Agreement that is described in this proxy statement. The Business Combination Agreement provides for, among other things, (i) the merger of Flexi with and into Target Merger Sub, upon which the separate existence of Target Merger Sub will cease and Flexi will be the surviving corporation and a direct, wholly owned subsidiary of PubCo, and (ii) the merger of TGVC with and into SPAC Merger Sub, upon which the separate existence of SPAC Merger Sub will cease and TGVC will be the surviving corporation and a direct, wholly owned subsidiary of PubCo.

 

As a result of the Mergers, (i) all outstanding shares of Flexi will be automatically cancelled in exchange for the right to receive such number of newly-issued PubCo Ordinary Shares that is equal to the Flexi Exchange Ratio calculated in accordance with the Business Combination Agreement, which as of the date hereof was 74.7584, (ii) each outstanding TGVC Unit will be automatically detached and the holder thereof will be deemed to hold one share of TGVC Class A Common Stock and one TGVC Warrant, (iii) each outstanding share of TGVC Class B Common Stock will automatically convert into one share of TGVC Class A Common Stock, (iv) each outstanding share of TGVC Class A Common Stock will be cancelled in exchange for the right to receive one PubCo Ordinary Share, and (v) each outstanding TGVC Warrant will be converted into a PubCo Warrant.

 

This proxy statement and its annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting, along with important information about Flexi and the business of the Flexi Companies following consummation of the Business Combination. You should read this proxy statement and its annexes carefully and in their entirety.

 

  Q: What proposals are TGVC Stockholders being asked to vote upon?

 

  A: At the Special Meeting, TGVC is asking holders of TGVC Common Stock to consider and vote upon the following proposals:

 

  The Business Combination Proposal—To vote to approve the Business Combination Agreement and the transactions contemplated thereby. See the section entitled “The Business Combination Proposal; Terms of the Business Combination.”

 

  The Charter Limitation Amendment Proposal—To vote to approve the Charter Limitation Amendment. See the section entitled “The Charter Limitation Amendment Proposal.”

 

 

The Adjournment Proposal—To vote upon a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and voting of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposal or the Charter Limitation Amendment Proposal. This proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Business Combination Proposal or the Charter Limitation Amendment Proposal.

 

This proxy statement contains important information about the proposed Business Combination, the Charter Limitation Amendment and the other matters to be acted upon at the Special Meeting. TGVC Stockholders should read it carefully.

 

This stockholder vote is important. TGVC encourages all TGVC Stockholders to submit their completed proxy card as soon as possible after carefully reviewing this proxy statement.

 

11
 

 

  Q: Why is TGVC providing stockholders with the opportunity to vote on the Business Combination?

 

  A: Under the TGVC Charter, holders of the TGVC Public Shares must have the opportunity to have their TGVC Public Shares redeemed upon the consummation of TGVC’s initial business combination, either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, TGVC has elected to provide its stockholders with the opportunity to have their TGVC Public Shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, TGVC is seeking to obtain the approval of its stockholders of the Business Combination Proposal in order to allow TGVC Public Stockholders the opportunity to redeem their TGVC Public Shares in connection with the Closing.

 

  Q: How many votes do I have at the Special Meeting?

 

  A:

TGVC Stockholders are entitled to one vote at the Special Meeting for each share of TGVC Common Stock held of record as of January 4, 2024, the Record Date for the Special Meeting. As of the close of business on the Record Date, there were 3,815,319 shares of TGVC Common Stock issued and outstanding.

 

  Q:

What vote is required to approve the Proposals?

 

  A:

Proposal No. 1 — The Business Combination Proposal: The approval of the Business Combination Proposal requires the affirmative vote of a majority of the votes cast by the TGVC Stockholders as of the Record Date who attend or are represented by proxy at the Special Meeting. Accordingly, under the DGCL, a TGVC Stockholder’s failure to vote, as well as a broker non-vote, will have no effect on the outcome of the vote on the Business Combination Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the outcome of the vote on the Business Combination Proposal. The Initial Holders, who represent holders of approximately 75.7% in voting power of TGVC Common Stock issued and outstanding, have agreed to vote their shares of TGVC Common Stock “FOR” the Business Combination Proposal. As a result, no TGVC Public Shares will be required to vote in favor of the Business Combination Proposal in order to approve the Business Combination.

  

Proposal No. 2 The Charter Limitation Amendment Proposal: The approval of the Charter Limitation Amendment Proposal requires the affirmative vote of holders of at least 65% of all the outstanding shares of TGVC Common Stock entitled to vote at the Special Meeting. A TGVC Stockholder’s failure to vote, an abstention from voting, or a broker non-vote will have the same effect as a vote against the Charter Limitation Amendment Proposal. The Initial Holders, who represent holders of approximately 75.7% in voting power of TGVC Common Stock issued and outstanding, have agreed to vote their shares of TGVC Common Stock “FOR” the Charter Limitation Amendment Proposal. As a result, no TGVC Public Shares will be required to vote in favor of the Charter Limitation Amendment Proposal in order to approve the Charter Limitation Amendment.

 

Proposal No. 3 The Adjournment Proposal: The approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the TGVC Stockholders as of the Record Date who attend or are represented by proxy at the Special Meeting. Accordingly, under the DGCL, a TGVC Stockholder’s failure to vote, as well as a broker non-vote, will have no effect on the outcome of the vote on the Adjournment Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the outcome of the vote on the Adjournment Proposal. The Initial Holders, who represent holders of approximately 75.7% in voting power of TGVC Common Stock issued and outstanding, have agreed to vote their shares of TGVC Common Stock “FOR” the Adjournment Proposal. As a result, no TGVC Public Shares will be required to vote in favor of the Adjournment Proposal.

 

  Q: What constitutes a quorum at the Special Meeting?

 

  A: Holders of a majority in voting power of TGVC Common Stock issued and outstanding and entitled to vote at the Special Meeting constitute a quorum. In the absence of a quorum, the meeting chair has the power to adjourn the Special Meeting. As of the Record Date, 2,141,173 shares of TGVC Common Stock would be required to achieve a quorum.

 

  Q: How will the Initial Holders vote?

 

  A:

The Initial Holders, who represent holders of approximately 75.7% in voting power of TGVC Common Stock issued and outstanding, have agreed to vote any shares of TGVC Common Stock held by them in favor of TGVC’s initial business combination, which includes the Business Combination, any other proposals determined by TGVC and PubCo to be necessary or appropriate in connection with the Mergers and each of the other transactions contemplated by the Business Combination Agreement, which includes the Charter Limitation Amendment Proposal and the Adjournment Proposal. Accordingly, the necessary stockholder approval will be received. As a result, no TGVC Public Shares will be required to vote in favor of the Proposals in order to approve the Business Combination, the Charter Limitation Amendment or the adjournment of the Special Meeting, if presented at the Special Meeting.

 

  Q: What interests do the Initial Holders have in the Business Combination?

 

  A: The Initial Holders have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interest. These interests include:

 

12
 

 

  the TGVC Charter provides that the doctrine of corporate opportunity will not apply with respect to any of its officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have, except as set forth in the TGVC Charter. TGVC does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target. In the course of their other business activities, TGVC’s officers and directors may become aware of other investment and business opportunities that may be appropriate for presentation to TGVC as well as other entities with which they are affiliated. TGVC’s management has pre-existing fiduciary duties and contractual obligations, and if there is a conflict of interest in determining to which entity a particular business opportunity should be presented, any entities holding a pre-existing fiduciary obligation will be presented the opportunity before TGVC is presented with it;

 

 

on May 4, 2023, TGVC held the Initial Extension Meeting, at which the TGVC Stockholders approved the Initial Extension. In connection with the Initial Extension, 10,164,304 TGVC Public Shares were tendered for redemption, which represented approximately 88.4% of the total TGVC Public Shares outstanding at the time of redemption, and approximately $105.6 million was released from the Trust Account to pay such redeeming TGVC Public Stockholders. As a result of this redemption, as of the date thereof, there were 1,335,696 TGVC Public Shares issued and outstanding. In connection with the Initial Extension, (i) in order to induce TGVC Public Stockholders not to redeem their TGVC Public Shares, TGVC and the Sponsor entered into the Initial Extension Non-Redemption Agreement with the Non-Redemption Investors whereby, among other things, the Sponsor or its designee paid the Initial Extension Non-Redemption Payment to the Non-Redemption Investors in exchange for the Non-Redemption Investors agreeing to hold and not redeem their TGVC Public Shares, (ii) TGVC amended the Advisory Agreement and paid ThinkEquity an advisory fee of $50,000, and (iii) a director of TGVC made a short-term loan of $105,000 to the Sponsor, which is expected to be repaid on or before February 28, 2024;

 

 

additionally, in order to induce TGVC Public Stockholders not to redeem their TGVC Public Shares in connection with the Initial Extension, the Sponsor, or its designee, has deposited Monthly Initial Extension Payments into the Trust Account. A total of $320,567 from six Monthly Initial Extension Payments has been deposited in the Trust Account as of the date hereof. Each Monthly Initial Extension Payment is evidenced by an Initial Extension Note, each in the principal amount equal to the Monthly Initial Extension Payment. The Initial Extension Notes bear no interest and are payable in full upon TGVC’s consummation of a business combination. If TGVC does not consummate a business combination by May 5, 2024 (or a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), the Initial Extension Notes will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven;

     
 

additionally, on November 1, 2023, TGVC held the Second Extension Meeting, at which the TGVC Stockholders approved the Second Extension. In connection with the Second Extension, 467,026 TGVC Public Shares were tendered for redemption, which represented approximately 35.0% of the total TGVC Public Shares outstanding at the time of redemption, and approximately $5.2 million was released from the Trust Account to pay such redeeming TGVC Public Stockholders. As a result of this redemption, as of the date hereof, there are 868,670 TGVC Public Shares issued and outstanding, and there is approximately $9.66 million remaining in the Trust Account that is available for a business combination. In connection with the Second Extension, (i) in order to induce the Non-Redemption Investors not to redeem their TGVC Public Shares, TGVC and the Sponsor entered into the Second Extension Non-Redemption Agreement with the Non-Redemption Investors, whereby, among other things, the Sponsor, or its designee, agreed to pay the Second Extension Non-Redemption Payment to the Non-Redemption Investors in exchange for the Non-Redemption Investors agreeing to hold and not redeem their TGVC Public Shares, and (ii) TGVC amended the Advisory Agreement and agreed to pay ThinkEquity an advisory fee of $40,000. As of the date hereof, the Sponsor or its designee has paid a total of $87,749 of the Second Extension Non-Redemption Payment and such amount is considered to be a Working Capital Loan evidenced by the 2023 Promissory Note. Pursuant to the terms of the Second Extension Non-Redemption Agreement, (x) if the Sponsor or its designee fails to make a payment to the Non-Redemption Investors by the applicable payment date (subject to a two-day grace period) (such date, inclusive of the grace period, the “Liquidation Trigger Date”), then TGVC will liquidate and dissolve as soon as practicable (and not later than three days) after the Liquidation Trigger Date; and (y) TGVC has agreed not to use the funds held in the Trust Account to pay its taxes or any dissolution expenses;

 

 

unless TGVC consummates an initial business combination, TGVC’s officers and directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses they incurred on behalf of TGVC ($11,110 of such expenses were incurred and had not been reimbursed as of the date hereof), to the extent that such expenses exceed the amount of available proceeds not held in the Trust Account;

 

  the Sponsor has agreed that it will not sell or transfer its TGVC Placement Warrants until the expiration of the Warrant Lock-Up Period, subject to limited exceptions;

 

 

the fact that (i) the Sponsor Related Parties and TGVC’s directors and officers paid a nominal amount for the Founder Shares (of which they currently hold an aggregate of 2,889,149 shares), which Founder Shares, if unrestricted and freely tradeable, would be valued at approximately $31.3 million in the aggregate based on the closing price of TGVC Class A Common Stock on December 29, 2023, (ii) such shares will become worthless if TGVC does not consummate a business combination, and (iii) the Sponsor Related Parties and TGVC’s directors and officers can earn a positive rate of return on their investment even if the PubCo Ordinary Shares fall significantly below the per share value implied in the Business Combination of $10.00 per share and TGVC Public Stockholders experience a negative return following the consummation of the Business Combination;

 

13
 

  

 

if TGVC does not complete an initial business combination by May 5, 2024 (or a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), the proceeds from the sale of the TGVC Placement Warrants of $5.5 million will be included in the liquidating distribution to TGVC Public Stockholders and the TGVC Placement Warrants purchased by the Sponsor will expire worthless;

 

  if the Trust Account is liquidated, including in the event that TGVC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify TGVC to ensure that the proceeds in the Trust Account are not reduced below (i) $10.20 per TGVC Public Share or (ii) such lesser amount per TGVC Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, in each case net of the amount of interest withdrawn to pay taxes, by the claims of prospective target businesses with which TGVC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to TGVC, 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 Related Parties and TGVC’s officers and directors will lose their entire investment in TGVC, which investment is equal to approximately $6.7 million as of December 29, 2023 and is comprised of (i) approximately $5.53 million aggregate purchase price for their Founder Shares and TGVC Placement Warrants, (ii) approximately $800,394 of borrowings under the Working Capital Loans, as evidenced by the 2023 Promissory Note, (iii) $320,567 of Monthly Initial Extension Payments that have been deposited in the Trust Account, as evidenced by the Initial Extension Notes and (iv) $11,110 of out-of-pocket expenses they incurred on behalf of TGVC, if TGVC does not complete an initial business combination. For more information about the Working Capital Loans and the Monthly Initial Extension Payments, which may be repaid to the Sponsor upon consummation of the Business Combination, please see “TGVC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity, Capital Resources and Going Concern” starting on page 219 of this proxy statement;

 

 

the fact that TGVC’s three independent directors own an aggregate of 90,000 Founder Shares that the Sponsor transferred to them at a nominal cost, which if unrestricted and freely tradeable would be valued at $975,600 based on the closing price of TGVC Class A Common Stock on December 29, 2023;

  

  the fact that TGVC’s existing officers and directors will be eligible for continued indemnification and coverage under a directors’ and officers’ liability insurance policy after the Closing and pursuant to the Business Combination Agreement;

 

  the fact that Sponsor has the ability to designate two members of the PubCo Board, although we expect the Sponsor to decline to designate any of the initial members of the PubCo Board;

 

 

the fact that ThinkEquity, in addition to serving as the representative of the several underwriters in the IPO, also served as a financial advisor to TGVC in connection with the Business Combination in consideration for payment of an amount equal to the greater of either (i) 4.0% of the net funds from the Trust Account after investor redemptions, or (ii) $300,000, plus reimbursement of expenses incurred in connection with its services and the agreement by TGVC to indemnify ThinkEquity for certain liabilities arising out of the engagement;

 

 

the fact that ThinkEquity additionally served as a financial advisor to TGVC in connection with the Initial Extension Meeting and the Second Extension Meeting, in consideration for payment of $50,000 and $40,000, respectively; and

  

  the fact that ThinkEquity is serving as the representative of the underwriters in the PubCo Offering and, in connection therewith, will receive fees from PubCo as more fully described in the PubCo Offering Registration Statement.

 

The existence of the interests described above may result in a conflict of interest on the part of TGVC’s officers and directors in entering into the Business Combination Agreement and making their recommendation that you vote in favor of the approval of the Business Combination. In particular, the existence of the interests described above may incentivize TGVC’s officers and directors to complete an initial business combination, even if on terms less favorable to the TGVC Stockholders compared to liquidating TGVC, because, among other things, if TGVC is liquidated without completing an initial business combination, the Founder Shares held by TGVC’s officers and directors and the Sponsor Related Parties and the TGVC Placement Warrants held by the Sponsor would become worthless (which, if unrestricted and freely tradable, would be worth an aggregate of approximately $31.4 million based on the closing price of TGVC Class A Common Stock and TGVC Public Warrants on December 29, 2023).

  

  Q: Did the TGVC Board obtain a fairness opinion in determining whether or not to proceed with the Business Combination?

 

14
 

 

  A: Yes. On November 28, 2022, at a meeting of the TGVC Board held to evaluate the proposed Business Combination, Marshall & Stevens delivered an oral opinion, subsequently confirmed by delivery of a written opinion to the TGVC Board, to the effect that, as of that date and subject to and based on the assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in such opinion, (i) the aggregate merger consideration comprised of (a) the Upfront Shares, as defined in the M&S Opinion in the section titled “The Business Combination Proposal; Terms of the Business Combination—Opinion of Marshall & Stevens,” valued at $10.00 per share, plus (b) the discounted fair value of the Earnout shares (collectively, the “Aggregate Merger Consideration”) is fair, from a financial point of view, to TGVC, and (ii) Flexi has a fair market value equal to at least 80% of the balance of funds in the Trust Account (excluding deferred underwriting commissions and taxes payable and subject to proportionate adjustments under Nasdaq’s 80% test) (the “80% Test”). For additional information, please see the section entitled “The Business Combination Proposal; Terms of the Business Combination—Opinion of Marshall & Stevens” and the written opinion of Marshall & Stevens attached as Annex C hereto.

 

  Q: What factors did the TGVC Board consider in determining whether or not to proceed with the Business Combination?

 

  A: The TGVC 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 (i) a large addressable market and workspace trends providing Flexi significant growth potential, (ii) the belief that Flexi has sustainable competitive advantages with respect to its venue depth in the Asia-Pacific region and multi-brand strategy, (iii) Flexi’s increasing pursuit of an asset-light model, which will allow it to efficiently manage its capital and cashflows, and (iv) Flexi’s technological capabilities in the flexible workspace industry. The TGVC Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, macroeconomic risks generally and in the flexible workspace industry, risks that Flexi’s business plan and projections may not be achieved, and risks related to TGVC’s valuation of Flexi’s business. See the section titled “The Business Combination Proposal; Terms of the Business Combination—The TGVC Board’s Reasons for Approval of the Business Combination.”

 

  Q: What happens if I sell my shares of TGVC Class A Common Stock before the Special Meeting?

 

  A: The Record Date is earlier than the date of the Special Meeting. If you transfer your shares of TGVC Class A Common Stock after the Record Date, but before the date of 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 shares because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination in accordance with the provisions described herein. If you transfer your shares of TGVC Class A Common Stock prior to the Record Date, you will have no right to vote those shares at the Special Meeting.

 

  Q: What happens if I vote against the Business Combination Proposal?

 

  A:

Pursuant to the TGVC Charter, if the TGVC Stockholders do not approve the Business Combination Proposal and TGVC does not otherwise consummate an alternative business combination by May 5, 2024 (or a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), TGVC will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to TGVC Public Stockholders.

 

In addition, if the TGVC Stockholders do not approve the Business Combination Proposal, the Charter Limitation Amendment contemplated by the Charter Limitation Amendment Proposal will not be adopted.

 

  Q: What happens if I vote against the Charter Limitation Amendment Proposal?

 

  A: The TGVC Charter prohibits redemption of TGVC Class A Common Stock in connection with a business combination if, after such redemption, TGVC would not be in compliance with the Charter Limitation. If the TGVC Stockholders do not approve the Charter Limitation Amendment Proposal, then TGVC will not be able to consummate a business combination, if in connection therewith, a substantial number of TGVC Public Shares are redeemed and TGVC’s net tangible assets, or of the entity that succeeds TGVC as a public company, will be less than $5,000,001.  

 

  Q: How do the TGVC Public Warrants differ from the TGVC Placement Warrants and what are the related risks to any holders of TGVC Public Warrants following the Business Combination?

 

  A: The TGVC Placement Warrants are identical to the TGVC Public Warrants in all material respects, except that the TGVC Placement Warrants will not be transferable, assignable or salable until the expiration of the Warrant Lock-Up Period and they will not be redeemable by PubCo so long as they are held by the Sponsor or its permitted transferees. If the TGVC Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the TGVC Placement Warrants will be redeemable by PubCo in all redemption scenarios and exercisable by the holders on the same basis as the TGVC Public Warrants.

 

15
 

  

Following the Business Combination, PubCo may redeem the PubCo Public Warrants prior to their exercise at a time that is disadvantageous to the holder, thereby significantly impairing the value of such warrants. PubCo will have the ability to redeem outstanding PubCo Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the PubCo Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 Trading Days within a 30-Trading Day period ending on the third Trading Day prior to the date on which a notice of redemption is sent to the warrant holders. PubCo will not redeem the warrants as described above unless a registration statement under the Securities Act covering the PubCo Ordinary Shares issuable upon exercise of such warrants is effective and a current prospectus relating to those PubCo Ordinary Shares is available throughout the 30-day redemption period. If and when the PubCo Public Warrants become redeemable by PubCo, if PubCo has elected to require the exercise of PubCo Public Warrants on a cashless basis, PubCo will not redeem the warrants as described above if the issuance of PubCo Ordinary Shares upon exercise of PubCo Public Warrants is not exempt from registration or qualification under applicable state securities laws or PubCo is unable to effect such registration or qualification. Redemption of the outstanding PubCo Public Warrants could force you to (i) exercise your PubCo Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your PubCo Public Warrants at the then-current market price when you might otherwise wish to hold your PubCo Public Warrants, or (iii) accept the nominal redemption price which, at the time the outstanding PubCo Public Warrants are called for redemption, is likely to be substantially less than the market value of your PubCo Public Warrants. The closing price for the TGVC Class A Common Stock as of December 29, 2023 was $10.84 and has never exceeded the $18.00 threshold that would trigger PubCo’s right to redeem the PubCo Public Warrants following the Closing.

 

PubCo may only call the PubCo Public Warrants for redemption upon a minimum of 30 days’ prior written notice of redemption to each registered holder pursuant to the terms of the TGVC Warrant Agreement (as assumed by PubCo at Closing), provided that holders will be able to exercise their PubCo Public Warrants prior to the time of redemption and, at PubCo’s election, PubCo may require that any such exercise be on a cashless basis.

  

  Q: Do I have redemption rights?

 

  A:

Pursuant to the TGVC Charter, holders of TGVC Public Shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with the TGVC Charter. As of December 29, 2023, based on funds in the Trust Account of approximately $9.66 million, this would have amounted to $11.12 per TGVC Public Share. If a holder exercises its redemption rights, then such holder will be exchanging its shares of TGVC Class A Common Stock for cash. Such a holder will be entitled to receive cash for TGVC Public Shares only if he, she or it properly demands redemption and delivers its shares (either physically or electronically) to the Transfer Agent prior to the Special Meeting. See the question “How do I exercise my redemption rights?” below, and the section titled “Special Meeting of TGVC Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your TGVC Public Shares for cash.

 

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

 

  A:

No. You may exercise your redemption rights regardless of whether you vote or, if you vote, irrespective of whether you vote “FOR” or “AGAINST,” or if you abstain from voting, on the Business Combination Proposal, the Charter Limitation Amendment Proposal or the Adjournment Proposal. As a result, the Business Combination Agreement, and the Charter Limitation Amendment, can be approved by stockholders who will redeem their shares and no longer remain TGVC 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 Nasdaq’s listing standards.

 

  Q: How do I exercise my redemption rights?

 

  A: In order to exercise your redemption rights, you must, prior to 5:00 p.m., Eastern Time on February 6, 2024 (two business days before the Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your TGVC Public Shares for cash to the Transfer Agent, at the following address:

  

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
Tel: (212) 845-3233
E-mail: fwolf@continentalstock.com

 

16
 

 

Please also affirmatively certify in your request to the Transfer Agent for redemption if you “ARE” or “ARE NOT” acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to TGVC Public Shares. A holder of the TGVC Public Shares, together with any of its affiliates or any other Person with whom such holder is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act), will be restricted from seeking redemption rights with respect to an aggregate of more than 15% of the TGVC Public Shares. Accordingly, all TGVC Public Shares in excess of the 15% threshold beneficially owned by a TGVC Public Stockholder or group will not be redeemed for cash. 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 to effect delivery. It is TGVC’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, TGVC does not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will need to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

 

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with TGVC’s consent, until the vote is taken with respect to the Business Combination. If you deliver 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). 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.

 

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

 

  A: TGVC expects that a U.S. Holder (as defined below in “Material 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 TGVC 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. Additionally, the Excise Tax (as defined below) may apply to the Business Combination. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “Material Tax Considerations—Material U.S. Federal Income Tax Consequences of the Redemption to the Holders of TGVC 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 is the impact of the Inflation Reduction Act on redemptions?

 

  A: On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023 (the “Excise Tax”). The Excise Tax is imposed on the repurchasing corporation itself, not its shareholders from whom shares are repurchased. The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the Excise Tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the Excise Tax. As of the time of this filing, the Treasury has issued Notice 2023-2, which provides some guidance regarding the Excise Tax.

 

17
 

  

Any redemptions occurring in connection with the Business Combination, the Initial Extension, the Second Extension or otherwise, may be subject to the Excise Tax. Whether and to what extent TGVC would be subject to the Excise Tax in connection with the Business Combination, the Initial Extension, the Second Extension or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, the Initial Extension, the Second Extension or otherwise, (ii) the structure of the Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with the Business Combination (or otherwise issued not in connection with the Business Combination but issued within the same taxable year as the Business Combination) and (iv) the content of regulations and other future guidance from the Treasury. In addition, because the Excise Tax would be payable by TGVC and not by the redeeming holder, the mechanics of any required payment of the Excise Tax have not been determined.

 

For the avoidance of doubt, the proceeds deposited in the Trust Account and the interest earned thereon will not be used to pay for any Excise Tax due under the IR Act in connection with any redemptions of the TGVC Public Shares prior to or in connection with the Business Combination. As of December 29, 2023, there was approximately $9.66 million in the Trust Account. The redemption price per share at the Special Meeting or TGVC’s subsequent liquidation (assuming no additional TGVC Public Shares were redeemed and no additional Monthly Initial Extension Payments are made) will be approximately $11.12 per TGVC Public Share.

  

  Q: If I am a TGVC Warrant holder, can I exercise redemption rights with respect to my TGVC Warrants?

 

  A: No. The holders of TGVC Warrants have no redemption rights with respect to such TGVC Warrants.

 

  Q: If I am a holder of TGVC Units, can I exercise redemption rights with respect to my TGVC Units?

 

  A: Holders of outstanding TGVC Public Units must separate the underlying TGVC Public Shares and TGVC Public Warrants prior to exercising redemption rights with respect to the TGVC Public Shares.

 

If you hold TGVC Public Units registered in your own name, you must deliver the certificate for such TGVC Public Units to the Transfer Agent, with written instructions to separate such TGVC Public Units into TGVC Public Shares and TGVC Public Warrants. This must be completed far enough in advance to permit the mailing of the TGVC Public Share certificates back to you so that you may then exercise your redemption rights upon the separation of the TGVC Public Shares from the TGVC Public Units. See the question “How do I exercise my redemption rights?” above. The address of the Transfer Agent is listed under the question “Who can help answer my questions?” below.

 

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

  

  Q: What happens if a substantial number of the TGVC Public Stockholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

 

18
 

  

  A: The Business Combination Agreement provides that completion of the Business Combination is conditioned on, among other things, TGVC having net tangible assets of not less than $5,000,001 immediately prior to Closing, after deducting (i) the amount required to satisfy TGVC’s obligations to its stockholders that exercise their redemption rights, and (ii) the value of the TGVC Transaction Expenses (the “Net Tangible Assets Condition”). The Net Tangible Assets Condition may operate, in effect, as a minimum cash requirement and make it more difficult for TGVC to complete the Business Combination as contemplated. If a substantial number of TGVC Public Stockholders exercise their redemption rights and the Net Tangible Assets Condition is not satisfied, then the Business Combination Agreement could be terminated and the Business Combination may not be consummated. In addition, pursuant to the TGVC Charter, TGVC will be prohibited from redeeming shares of TGVC Class A Common Stock in connection with a business combination if, after such redemption, TGVC would not be in compliance with the Charter Limitation, unless the Charter Limitation Amendment Proposal is approved and the Charter Limitation Amendment is implemented.

 

The sensitivity table below shows the potential impact of redemptions on (i) the ownership of current TGVC Public Stockholders and Flexi Shareholders and (ii) the pro forma book value per share of the shares owned by TGVC Public Stockholders under different redemption scenarios, taking into account certain potential sources of dilution as detailed below.

    

   No Additional Redemptions  50% Maximum Redemptions (1)  Maximum Redemptions (2)
   Shares  %  Shares  %  Shares  %
Flexi Shareholders   19,000,000    80.4%   19,000,000    81.2%   19,000,000    82.1%
TGVC Public Stockholders (3)   868,670    3.7%   633,426    2.7%   398,182    1.7%
TGVC’s directors and officers and the Sponsor Related Parties (4)   2,889,149    12.2%   2,889,149    12.4%   2,889,149    12.5%
ARC(5)   827,315    3.5%   818,789    3.5%   810,263    3.5%
ThinkEquity (6)   57,500    0.2%   57,500    0.2%   57,500    0.2%
Total PubCo Ordinary Shares outstanding at Closing, not reflecting potential sources of dilution   23,642,634    100%   23,398,864    100%   23,155,094    100%
                               
Total PubCo Ordinary Shares outstanding at Closing, not reflecting potential sources of dilution   23,642,634    51.5%   23,398,864    51.3%   23,155,094    51.1%
Potential sources of dilution:                              
Shares underlying TGVC Public Warrants   11,500,000    25.1%   11,500,000    25.2%   11,500,000    25.3%
Shares underlying TGVC Placement Warrants   5,500,000    12.0%   5,500,000    12.1%   5,500,000    12.1%
Shares underlying Representative Warrants   57,500    0.1%   57,500    0.1%   57,500    0.1%
Shares underlying Working Capital Loans   758,479    1.7%   758,479    1.7%   758,479    1.7%
Earnout Shares   2,900,000    6.3%   2,900,000    6.3%   2,900,000    6.4%
Shares issued in PubCo Offering(9)    1,500,000    3.3%   1,500,000    3.3%   1,500,000    3.3%
Total PubCo Ordinary Shares outstanding at Closing   45,858,613    100%   45,614,843    100%   45,371,073    100%
Total Pro Forma Equity Value of PubCo Ordinary Shares outstanding at Closing (7)  $458,586,130        $456,148,430        $453,710,730      
Per Share Pro Forma Equity Value of PubCo Ordinary Shares outstanding at Closing (8)  $10.00        $10.00        $10.00      
Per Share Pro Forma Book Value of PubCo Ordinary Shares outstanding at Closing (8)  $8.85        $9.26        $9.71      

 

  (1)

This scenario assumes that, after the 2023 Redemptions, TGVC Public Stockholders exercise their redemption rights with respect to 235,244 TGVC Public Shares for $2.6 million upon consummation of the Business Combination at a redemption price of approximately $11.04 per share.

 

19
 

  

  (2)

This scenario assumes that, after the 2023 Redemptions, TGVC Public Stockholders exercise their redemption rights with respect to 470,488 TGVC Public Shares for $5.2 million upon consummation of the Business Combination at a redemption price of approximately $11.04 per share. The maximum redemptions amount reflects the maximum number of the TGVC Public Shares that can be redeemed without violating the conditions of the Business Combination Agreement. The maximum redemptions amount reflects the assumption that the TGVC Charter is amended pursuant to the Charter Limitation Amendment Proposal, such that TGVC will not be required to maintain a minimum net tangible asset value of $5,000,001 either immediately prior to or upon the closing of the Business Combination. If the Charter Limitation Amendment Proposal is not approved, TGVC would not be permitted to proceed with the Business Combination unless TGVC has net tangible asset value of at least $5,000,001 either immediately prior to or upon the Closing.

 

  (3) Excluding 11,500,000 shares underlying the TGVC Public Warrants.

 

  (4) Excluding 5,500,000 shares underlying the TGVC Placement Warrants.

 

  (5) Pursuant to the terms of the ARC Engagement Letter, ARC will receive 3.5% of the outstanding PubCo Ordinary Shares upon the closing of the Business Combination as consideration for its advisory services to Flexi. For more information, see “Flexi’s Directors and Senior ManagementThird Party Advisors.”
     
  (6) Excluding 57,500 shares underlying the Representative Warrants.

 

  (7) In each redemption scenario, the per share pro forma equity value of the shares will be $10.00 at Closing in accordance with the terms of the Business Combination Agreement.

 

  (8) The per share pro forma book value of the shares is based on the pro forma book value of equity at Closing.

 

  (9)

Assumes, for illustrative purposes only, the issuance of 1,500,000 PubCo Ordinary Shares at $10.00 per share in the PubCo Offering, which is expected to be consummated immediately after the closing of the Business Combination. The actual public offering price per PubCo Ordinary Share will be determined between Flexi and the underwriters at the time of pricing and may be at a discount to this assumed offering price. Therefore, the assumed public offering price to be used throughout this proxy statement may not be indicative of the final offering price. The sale of the PubCo Ordinary Shares is dependent upon the closing of the Business Combination. The offering will not be closed and no PubCo Ordinary shares will be sold if the Business Combination is not consummated. If PubCo sells 2,000,000 PubCo Ordinary Shares in the offering, this will represent 4.3%, 4.3% and 4.4% of the outstanding PubCo Ordinary Shares on a fully diluted basis under the No Additional Redemptions, 50% Maximum Redemptions and Maximum Redemptions scenarios, respectively. If PubCo sells 2,500,000 PubCo Ordinary Shares in the offering, this will represent 5.3%, 5.4% and 5.4% of the outstanding PubCo Ordinary Shares on a fully diluted basis under the No Additional Redemptions, 50% Maximum Redemptions and Maximum Redemptions scenarios, respectively.

 

  Q: Is there a limit on the number of shares you may redeem?

 

  A: Yes. The TGVC Charter provides that TGVC may not redeem TGVC Public Shares in an amount that would result in TGVC’s failure to have net tangible assets of at least $5,000,001 or any greater net tangible asset or cash requirement that may be contained in the Business Combination Agreement. Thus, the TGVC Charter will prohibit TGVC’s redemption of TGVC Class A Common Stock in connection with a business combination, if, after such redemption, TGVC would not be in compliance with the Charter Limitation, unless the Charter Limitation Amendment Proposal is approved and the Charter Limitation Amendment is implemented. In addition, the Business Combination Agreement provides that it may be terminated in the event that TGVC does not meet the Net Tangible Assets Condition. The Net Tangible Assets Condition may operate, in effect, as a minimum cash requirement and make it more difficult for TGVC to complete the Business Combination as contemplated if a substantial number of TGVC Public Stockholders exercise their redemption rights.

  

Furthermore, under the TGVC Charter, in connection with an initial business combination, you, together with any affiliate or any other Person with whom you are acting in concert or as a “group” (as defined under Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the TGVC Public Shares held by you or the group. For more information, see “Risk Factors—Risks Related to the Redemption—If you or a “group” of TGVC Stockholders of which you are a part is deemed to hold an aggregate of more than 15% of the TGVC Public Shares, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the TGVC Public Shares.

 

Based on the amount of cash and securities as of December 29, 2023, including approximately $9.66 million in the Trust Account, approximately 470,488 TGVC Public Shares may be redeemed and still enable TGVC to have sufficient cash to satisfy the Closing conditions in the Business Combination Agreement. We refer to this as the “Maximum Redemptions Scenario” in this proxy statement.

  

  Q: Do I have appraisal rights if I object to the proposed Business Combination?

 

  A: No. There are no appraisal rights available to holders of TGVC Common Stock, TGVC Units or TGVC Warrants in connection with the Business Combination.

 

  Q: What happens to the funds deposited 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 released to:

 

  pay TGVC Public Stockholders who properly exercise their redemption rights;

 

  pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees, and other professional fees) that were incurred by TGVC or Flexi in connection with the Business Combination and pursuant to the terms of the Business Combination Agreement;

 

  repay any loans owed by TGVC to the Sponsor for any TGVC Transaction Expenses or other administrative expenses incurred by TGVC; and

 

20
 

  

  provide for general corporate purposes of PubCo including, but not limited to, working capital for Flexi.

 

  Q: What happens if the Business Combination is not consummated?

 

  A: There are certain circumstances under which the Business Combination Agreement may be terminated. See the section titled “The Business Combination Proposal; Terms of the Business Combination—The Business Combination Agreement—Termination” for information regarding the parties’ specific termination rights.

 

If, as a result of the termination of the Business Combination Agreement or otherwise, TGVC is unable to complete the Business Combination or another initial business combination transaction by May 5, 2024 (or a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), the TGVC Charter provides that TGVC will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than 10 business days thereafter, subject to lawfully available funds therefor, redeem 100% of the TGVC Public Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to it to pay its taxes, by (B) the total number of then outstanding TGVC Public Shares, which redemption will completely extinguish rights of the TGVC Public Stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining TGVC Stockholders and the TGVC Board in accordance with applicable law, dissolve and liquidate, subject in the case of clauses (ii) and (iii) to its obligations under the DGCL to provide for claims of creditors and requirements of other applicable law.

 

TGVC expects that the amount of any distribution the TGVC Public Stockholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the Business Combination, subject in each case to TGVC’s obligations under the DGCL to provide for claims of creditors and requirements of other applicable law. Holders of Founder Shares have waived any right to any liquidation distribution with respect to those shares.

 

In the event of liquidation, there will be no distribution with respect to outstanding TGVC Warrants. Accordingly, the TGVC Warrants will expire worthless.

  

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

 

  A: As discussed more fully in “Material Tax Considerations—Material U.S. Federal Income Tax Consequences of the Business Combination,” the Business Combination was originally structured to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, however, based upon the most recent available information, it is not expected that the requirements for a “reorganization” will be satisfied. Specifically, it is not expected that PubCo will satisfy the continuity of business enterprise requirement under Treas. Reg. § 1.368-1(d). Accordingly, counsel to TGVC will not be able to issue an opinion on whether the Business Combination qualifies as a “reorganization.”

  

The Business Combination will qualify as a transaction described in Section 351(a) of the Code. As a result, U.S. Holders generally will not recognize gain or loss for U.S. federal income tax purposes with respect to the receipt of PubCo Ordinary Shares in exchange for such U.S. Holder’s TGVC Class A Common Stock as a result of the Business Combination. However, the exchange of TGVC Warrants for PubCo Warrants likely will be taxable under this scenario.

 

21
 

  

This conclusion is not impacted by the “passive foreign investment company” (“PFIC”) rules because TGVC is a domestic corporation. We note that proposed Treasury Regulations issued on April 1, 1992 contain certain provisions that could potentially impact the nonrecognition treatment of certain transactions, including a contribution of shares governed by Section 351 of the Code in situations in which: (i) the shares being transferred are shares of a corporation classified as a PFIC for U.S. federal income tax purposes and (ii) the proposed Treasury Regulations are retroactively finalized. Under those proposed Treasury Regulations, subject to certain exceptions, a shareholder recognizes gain on any direct or indirect disposition of stock of a “section 1291 fund” without regard to whether the disposition is a result of a nonrecognition transfer (e.g., a contribution under section 351 of the Code). For this purpose, a “section 1291 fund” includes all PFICs other than: (1) a “pedigreed qualified electing fund” (generally, a PFIC that has been a qualified electing fund with respect to the shareholder throughout the shareholder’s holding period); or (2) a PFIC with respect to the shareholder that has validly elected mark-to-market treatment. Because TGVC is a domestic corporation, it is not a “section 1291 fund” and as a result, the U.S. holders of TGVC Class A Common Stock will not recognize gain under Section 351 of the Code even if the proposed Treasury Regulations are retroactively finalized.

 

However, 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 TGVC Common Stock and/or the conversion of the TGVC Warrants. If it is determined that Section 367(a) of Code does apply, then a U.S. Holder would generally recognize gain, if any, in an amount equal to the excess of (i) the fair market value of the PubCo Ordinary Shares (and, if such U.S. Holders also hold TGVC Warrants that pursuant to the terms of the TGVC Warrants convert into PubCo Warrants, the converted PubCo Warrants) received over (ii) such U.S. Holder’s adjusted tax basis in such TGVC Class A Common Stock (and TGVC Warrants, if any). This could result in a U.S. Holder of TGVC Class A Common Stock (and TGVC Warrants, if any) recognizing a greater amount of gain for U.S. federal income tax purposes than such U.S. Holder would have recognized if Section 368(a) or Section 351(a) of the Code applied or Section 367(a) of the Code did not apply.

 

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

  

  Q: When and where is the Special Meeting?

 

  A: TGVC is pleased to conduct the Special Meeting virtually via the internet through a live webcast and online shareholder tools. TGVC believes that a virtual format facilitates stockholder attendance and participation by leveraging technology to allow TGVC to communicate more effectively and efficiently with its stockholders. This format empowers TGVC Stockholders around the world to participate at no cost. TGVC will use the virtual format to enhance stockholder access and participation and protect stockholder rights.

  

The Special Meeting will be held at 11:00 a.m. Eastern Time, on February 8, 2024, as a virtual meeting. The meeting will be held virtually over the internet by means of a live audio webcast. You will be able to attend and vote your shares during the Special Meeting via a live webcast available at www.virtualshareholdermeeting.com/TGVC2024SM.

  

  Q: How can I attend the Special Meeting virtually?

 

  A:

You will be able to attend and vote your shares during the Special Meeting via a live webcast available at www.virtualshareholdermeeting.com/TGVC2024SM.

 

  Q: What do I need to do now?

 

  A: We urge you to read carefully and consider the information contained in this proxy statement, including the annexes, and to consider how the Business Combination will affect you as a stockholder and/or warrant holder of TGVC. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares of TGVC Common Stock through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or other nominee.

 

  Q: How do I vote?

 

  A: If you are a holder of record of TGVC Common Stock on January 4, 2024, the Record Date, you may vote with respect to the Proposals at the Special Meeting via the virtual meeting platform, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. 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 other 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 via the virtual meeting platform, obtain a proxy from your broker, bank or other nominee.

 

22
 

  

  Q: What will happen if I abstain from voting or fail to vote at the Special Meeting?

 

  A:

At the Special Meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for purposes of determining whether a quorum is present. For purposes of approval, neither a broker non-vote nor an abstention will have any effect on the outcome of the vote on the Business Combination Proposal or the Adjournment Proposal; a broker non-vote or an abstention will, however, have the same effect as a vote against the Charter Limitation Amendment 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 TGVC without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders at the Special Meeting. 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, should I return my proxy card instead?

 

  A: Yes. Whether you plan to attend the Special Meeting or not, please read the enclosed proxy statement 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 other nominee automatically vote my shares for me?

 

  A:

No. Under the rules of various national and regional securities exchanges, your broker, bank or other 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 other nominee. TGVC believes that the Proposals will be considered non-discretionary and therefore your broker, bank or other nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your bank, broker 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. Stockholders may send a later-dated, signed proxy card to TGVC’s Secretary at the address set forth below under the question “Who can help answer my questions?” so that it is received by TGVC’s Secretary prior to the Special Meeting or attend the Special Meeting and vote via the virtual meeting platform. Stockholders also may revoke their proxy by sending a notice of revocation to TGVC’s Secretary, which TGVC’s secretary must receive prior to the Special Meeting.

 

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

 

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

 

  Q: Who will solicit and pay the cost of soliciting proxies?

 

  A: TGVC will pay the cost of soliciting proxies for the Special Meeting. TGVC has engaged Okapi Partners LLC (“Okapi”) to assist in the solicitation of proxies for the Special Meeting. TGVC has agreed to pay to Okapi a fee of approximately $45,000, plus disbursements. TGVC will reimburse Okapi for reasonable out-of-pocket expenses and will indemnify its affiliates against certain claims, liabilities, losses, damages and expenses. TGVC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of TGVC Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the TGVC Common Stock and in obtaining voting instructions from those owners. TGVC’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

23
 

 

  Q: Who can help answer my questions?

 

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

 

TG Venture Acquisition Corp.
1390 Market Street, Suite 200
San Francisco, CA 94102
Tel: (628) 521-1369

E-mail: TGVC@tsangsgroup.co

 

You may also contact Okapi, our proxy solicitor, at:

 

Okapi Partners LLC

Tel: Banks and brokerage firms, please call: (212) 297-0720

Shareholders and all others call toll-free: (855) 208-8903

E-mail: info@okapipartners.com

 

To obtain timely delivery, TGVC Stockholders must request the materials no later than February 1, 2024.

 

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

 

If you intend to seek redemption of your TGVC Public Shares, you will need to send a letter demanding redemption and deliver your stock (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 stock, please contact:

 

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
Tel: (212) 845-3233

E-mail: fwolf@continentalstock.com

 

QUESTIONS AND ANSWERS ABOUT THE PROPOSED BUSINESS COMBINATION — FLEXI SHAREHOLDERS

  

  Q: Why am I receiving this proxy statement?

 

  A: TGVC, Flexi, PubCo and other parties have agreed to the Business Combination under the terms of the Business Combination Agreement that is described in this proxy statement. The Business Combination Agreement provides for, among other things, (i) the merger of Flexi with and into Target Merger Sub, upon which the separate existence of Target Merger Sub will cease and Flexi will be the surviving corporation and a direct, wholly owned subsidiary of PubCo, and (ii) the merger of TGVC with and into SPAC Merger Sub, upon which the separate existence of SPAC Merger Sub will cease and TGVC will be the surviving corporation and a direct, wholly owned subsidiary of PubCo.

  

As a result of the Mergers, all outstanding shares of Flexi will be automatically cancelled in exchange for the right to receive such number of newly-issued PubCo Ordinary Shares that is equal to the Flexi Exchange Ratio calculated in accordance with the Business Combination Agreement, which as of the date hereof was 74.7584. Flexi Shareholders may also receive additional PubCo Ordinary Shares constituting the Earnout Shares if the conditions for the issuance thereof are satisfied, as further discussed in this proxy statement. This constitutes an offer by PubCo of such PubCo Ordinary Shares, and this document is a prospectus of PubCo with respect to PubCo’s offer and issuance of such PubCo Ordinary Shares in connection with the Business Combination. As a Flexi Shareholder, you are being offered such PubCo Ordinary Shares in exchange for your Flexi Shares in connection with the Business Combination, and that is why you are receiving this proxy statement.

 

24
 

 

This proxy statement and its annexes contain important information about the proposed Business Combination, along with important information about PubCo and the business of PubCo and its subsidiaries following consummation of the Business Combination. You should read this proxy statement and its annexes carefully and in their entirety.

  

  Q: Does the proposed Business Combination need to be approved by Flexi Shareholders? Will Flexi be holding a special meeting of its shareholders?

 

  A: Yes. Pursuant to the BVI Act, the Initial Merger must be approved by a resolution of the Flexi Shareholders, passed by a simple majority. In addition, the Amended and Restated Shareholders Agreement Related to The Hive Worldwide Limited (“Hive Worldwide”) dated June 1, 2022, by and among Common Ground Works Pte Ltd (“Common Ground”), Hive Worldwide, and the Flexi Shareholders (the “Shareholders Agreement”) requires that Flexi obtain the unanimous approval of the Flexi Shareholders of the Initial Merger. Further, the Business Combination Agreement requires that Flexi obtain the written consent of certain Flexi Shareholders, who own an aggregate of approximately 92.4% of the Flexi Shares, in favor of the approval and adoption of the Business Combination Agreement, the Initial Merger and the other Transactions (including as required under the BVI Act and the Flexi Governing Documents) within five business days after the Registration Statement of which this proxy statement forms a part becomes effective, and that Flexi will forward to all Flexi Shareholders a consent solicitation statement with respect to soliciting the written consent of the Flexi Shareholders, which with respect to Flexi Shareholders accompanies this proxy statement.

  

As Flexi is asking its shareholders to provide their written consent to adopt and approve the Business Combination Agreement, the Initial Merger, and the other Transactions, Flexi will not hold a meeting of its shareholders to approve these matters.

  

  Q: What vote is required to approve and adopt the Business Combination Agreement, the Initial Merger, and the other Transactions?

 

  A: In accordance with the Shareholders Agreement, the approval and adoption of the Business Combination Agreement, the Initial Merger, and the other Transactions requires unanimous approval of the Flexi Shareholders; in other words, each Flexi Shareholder must approve these matters in order for us to obtain the requisite shareholder approval to consummate the Business Combination.

 

  Q: What do I need to do now?

 

  A: We urge you to read carefully and consider the information contained in this proxy statement, including the annexes, and to consider how the Business Combination will affect you as a Flexi Shareholder. Flexi Shareholders should then review and execute the written consent accompanied by this proxy statement and return it to Flexi as instructed therein.

 

  Q: May I change my vote after I have submitted my written consent?

 

  A: No, the written consents are irrevocable.

 

  Q: Do I have appraisal rights if I object to the proposed Business Combination?

 

  A: Yes. Flexi Shareholders are entitled to dissent from the Initial Merger that forms part of the Business Combination and to receive payment of the “fair value” of their shares determined in accordance with the BVI Act. Where a Flexi Shareholder who exercises such dissent rights and Flexi are unable to agree on the “fair value” of such shares, a statutory appraisal process is required to determine the “fair value.”

 

  Q: Did the board of directors of Flexi obtain a fairness opinion in determining whether or not to proceed with the Business Combination?

 

  A: No.

 

25
 

 

  Q: What happens if the Business Combination is not consummated?

 

  A: There are certain circumstances under which the Business Combination Agreement may be terminated. See the section titled “The Business Combination Proposal; Terms of the Business Combination—The Business Combination Agreement—Termination” for information regarding the parties’ specific termination rights.

 

If TGVC and Flexi do not complete the Business Combination by May 5, 2024 (or a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), TGVC will cease its operations (except for the purpose of winding up) and must redeem 100% of the TGVC Public Shares, Flexi will remain an independent company and you will continue to hold the Flexi Shares you currently own. Similarly, if one or both of TGVC or Flexi terminate the Business Combination Agreement in accordance with its terms, the Business Combination will not be consummated, Flexi will remain an independent company, and you will continue to hold the Flexi Shares that you currently own.

  

  Q: Will PubCo adopt an equity incentive plan in anticipation of the Business Combination?

 

  A: PubCo intends to adopt the Incentive Plan in anticipation of the Business Combination in order to help PubCo attract, retain and provide incentives to key management employees, non-employee directors and consultants of PubCo and its affiliates and to align the interests of these service providers and PubCo’s shareholders. See “Management of PubCo Following the Business Combination2023 Omnibus Securities and Incentive Plan” and the full text of the Incentive Plan attached as Annex D hereto.

  

QUESTIONS AND ANSWERS ABOUT THE PROPOSED BUSINESS COMBINATION — TGVC STOCKHOLDERS AND FLEXI SHAREHOLDERS

  

  Q: What equity stake will the TGVC Stockholders and the Flexi Shareholders hold in PubCo upon completion of the Business Combination?

 

  A: We anticipate that upon consummation of the Business Combination, PubCo will become a new public company and the former holders of securities of TGVC and Flexi will all become securityholders of PubCo.

  

We anticipate that upon Closing, (i) the TGVC Public Stockholders will own approximately 3.7% of the outstanding PubCo Ordinary Shares, (ii) the Flexi Shareholders will own approximately 80.4% of the outstanding PubCo Ordinary Shares, (iii) TGVC’s directors and officers and the Sponsor Related Parties will own approximately 12.2% of the outstanding PubCo Ordinary Shares, (iv) ARC will own 3.5% of the outstanding PubCo Ordinary Shares, and (v) ThinkEquity will own approximately 0.2% of the outstanding PubCo Ordinary Shares.

 

The ownership percentages with respect to PubCo following the Business Combination are based upon the number of Flexi Shares and shares of TGVC Common Stock issued and outstanding as of December 29, 2023 and are subject to a number of assumptions. These relative percentages assume that (i) no Earnout Shares are issued, (ii) no TGVC Warrants are exercised, (iii) no warrants underlying Working Capital Loans are exercised, (iv) no Flexi Shareholder exercises its rights of appraisal, and (v) after the 2023 Redemptions, no TGVC Public Stockholders exercise redemption rights in connection with their TGVC Public Shares. If TGVC Public Stockholders exercise any redemption rights in respect of TGVC Public Shares, or any of the other assumptions are not correct, these percentages will be different.

 

Please see “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

In addition, future issuances of PubCo Ordinary Shares, including any Earnout Shares or PubCo Ordinary Shares issued pursuant to any awards that may be granted under the Incentive Plan to be adopted in connection with the Business Combination, would dilute current stockholders’ ownership percentage. See “Risk Factors—Risks Related to PubCo—Upon consummation of the Business Combination, and upon consummation of the PubCo Offering which is anticipated to occur immediately thereafter, PubCo shareholders (including the current TGVC Stockholders who are expected to be PubCo shareholders following the Closing) will experience dilution as a consequence of, among other transactions, the issuance of PubCo Ordinary Shares by PubCo as consideration in the Business Combination and in connection with the PubCo Offering. Having a minority share position may reduce the influence that current TGVC Stockholders have on the management of PubCo.”

 

26
 

  

The following table presents the share ownership of various holders of PubCo Ordinary Shares upon the Closing and is based on (i) the assumptions set forth above, (ii) a Closing Date of December 31, 2022, (iii) no additional equity securities of TGVC being issued at or prior to Closing, and (iv) the following redemption scenarios:

 

No Additional Redemptions: This scenario assumes that, after the 2023 Redemptions, no TGVC Public Stockholders exercise redemption rights in connection with the approval of the Business Combination with respect to their TGVC Public Shares.

 

50% of Maximum Redemptions: This scenario assumes that, after the 2023 Redemptions, TGVC Public Stockholders exercise redemption rights with respect to approximately 235,244 TGVC Public Shares (27.1% of the issued, outstanding and unredeemed TGVC Public Shares) in connection with the approval of the Business Combination, at a price of $11.04 per share.

 

Maximum Redemptions: This scenario assumes that, after the 2023 Redemptions, TGVC Public Stockholders exercise redemption rights with respect to 470,488 TGVC Public Shares (54.2% of the issued, outstanding and unredeemed TGVC Public Shares) in connection with the approval of the Business Combination, at a price of $11.04 per share. Assuming this “Maximum Redemptions” scenario and a price of $11.04 per TGVC Public Share, PubCo would have a public float of approximately $5.0 million.

  

   No Additional Redemptions  50% of Maximum Redemptions  Maximum Redemptions
   Number     Number     Number   
Shareholders of  of PubCo     of PubCo     of PubCo   
PubCo Post Business  Ordinary  % of  Ordinary  % of  Ordinary  % of
Combination  Shares  Total(1)  Shares  Total(1)  Shares  Total(1)
TGVC Public Stockholders   868,670    3.7%   633,426    2.7%   398,182    1.7%
Flexi Shareholders   19,000,000    80.4%   19,000,000    81.2%   19,000,000    82.1%
TGVC’s directors and officers and the Sponsor Related Parties   2,889,149    12.2%   2,889,149    12.4%   2,889,149    12.5%
ARC   827,315    3.5%   818,789    3.5%   810,263    3.5%
ThinkEquity   57,500    0.2%   57,500    0.2%   57,500    0.2%
                               
Total   23,642,634    100.0%   23,398,864    100.0%   23,155,094    100.0%

 

  (1) Approximate percentage of total outstanding PubCo Ordinary Shares following the Closing.

  

The following table presents the share ownership of various holders of PubCo Ordinary Shares upon the Closing on a fully diluted basis.

 

   No Additional Redemptions  50% of Maximum Redemptions  Maximum Redemptions
   Number of PubCo Ordinary Shares  % of Total  Number of PubCo Ordinary Shares  % of Total  Number of PubCo Ordinary Shares  % of Total
TGVC Public Stockholders   868,670    1.9%   633,426    1.4%   398,182    0.9%
Flexi Shareholders   19,000,000    41.4%   19,000,000    41.7%   19,000,000    41.9%
TGVC’s directors and officers and the Sponsor Related Parties   2,889,149    6.3%   2,889,149    6.3%   2,889,149    6.4%
ARC   827,315    1.8%   818,789    1.8%   810,263    1.8%
ThinkEquity   57,500    0.1%   57,500    0.1%   57,500    0.1%
Total PubCo Ordinary Shares outstanding at Closing, not reflecting potential sources of dilution   23,642,634    51.5%   23,398,864    51.3%   23,155,094    51.1%
Potential sources of dilution:                              
Shares underlying TGVC Public Warrants   11,500,000    25.1%   11,500,000    25.2%   11,500,000    25.3%
Shares underlying TGVC Placement Warrants   5,500,000    12.0%   5,500,000    12.1%   5,500,000    12.1%
Shares underlying Working Capital Loans   758,479    1.7%   758,479    1.7%   758,479    1.7%
Earnout Shares   2,900,000    6.3%   2,900,000    6.3%   2,900,000    6.4%
Shares underlying Representative Warrants   57,500    0.1%   57,500    0.1%   57,500    0.1%
Shares issued in PubCo Offering   1,500,000    3.3%   1,500,000    3.3%   1,500,000    3.3%
Total PubCo Ordinary Shares outstanding at Closing   45,858,613    100%   45,614,843    100%   45,371,073    100%

  

27
 

 

  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 but not limited to, the following:

 

  approval of the Business Combination Proposal by the TGVC Stockholders;

 

  receipt, termination or expiration of, as the case may be, all Regulatory Approvals;

 

  the effectiveness of the Registration Statement on Form F-4 in which this proxy statement is included and the absence of any issued or pending stop order by the SEC;

 

  receipt of approval for the PubCo Ordinary Shares and the Assumed TGVC Warrants to be listed on Nasdaq, subject to round lot holder requirements;

 

  the absence of any law or order preventing or prohibiting the consummation of the Transactions; and

 

  satisfaction of the Net Tangible Assets Condition by TGVC, which may operate, in effect, as a minimum cash requirement and make it more difficult for TGVC to complete the Business Combination as contemplated.

  

For a summary of all of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the section entitled “The Business Combination Proposal; Terms of the Business Combination—The Business Combination AgreementConditions to the Closing of the Business Combination.”

 

28
 

  

Summary of the Proxy Statement

 

This summary, together with the section titled “Questions and Answers About the Proposed Business Combination,” summarizes certain information contained in this proxy statement, but may not contain all of the information that is important to you. To better understand the Business Combination and the Proposals to be considered at the Special Meeting, you should carefully read this entire proxy statement, including the annexes. See also the section titled “Where You Can Find More Information.”

 

Unless otherwise indicated or the context otherwise requires, references in this Summary of the Proxy Statement to “PubCo” refer to PubCo and its consolidated subsidiaries (including TGVC and Flexi) after giving effect to the Business Combination, references to “TGVC” refer to TG Venture Acquisition Corp. and references to “Flexi” refer to The Flexi Group Limited and its consolidated subsidiaries.

 

Unless otherwise specified, all share calculations (i) assume no exercise of redemption rights by the TGVC Public Stockholders in connection with the Business Combination and (ii) do not include any shares of TGVC Common Stock issuable upon the exercise of the TGVC Warrants.

 

Unless otherwise specified, the figures presented exclude the effect of the PubCo Offering, which we anticipate will close immediately following the consummation of the Business Combination.

 

Information About the Parties to the Business Combination

 

TG Venture Acquisition Corp.

 

TGVC is a SPAC formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. TGVC Class A Common Stock, TGVC Units, and TGVC Warrants are currently listed on Nasdaq under the symbols “TGVC,” “TGVCU” and “TGVCW,” respectively. The mailing address of TGVC’s principal executive office is 1390 Market Street, Suite 200, San Francisco, CA 94102, and its phone number is (628) 251-1369.

 

Legal and Operational Risks Associated with the Sponsor Being Based in Hong Kong

 

Hong Kong is a Special Administrative Region of the PRC and enjoys its own limited autonomy as defined by the Basic Law, which is a national law of mainland China and the constitutional document for Hong Kong. Hong Kong’s legal system, which is different from that of mainland China, is based on common law and has its own laws and regulations.

 

Pursuant to the Basic Law, national laws of mainland China shall not be applied in Hong Kong, except for those relating to defense, foreign affairs and other matters outside the autonomy of Hong Kong, which may be listed in Annex III of the Basic Law and applied locally by promulgation or local legislation. While the National People’s Congress of the People’s Republic of China (the “National People’s Congress”) has the power to amend the Basic Law, the Basic Law expressly provides that no amendment to the Basic Law shall contravene the established basic policies of the PRC regarding Hong Kong. As a result, national laws of mainland China not listed in Annex III of the Basic Law (and any regulatory notices issued pursuant to those national laws) do not apply in Hong Kong. Nonetheless, the legal and operational risks associated with operating in mainland China apply to companies with operations in Hong Kong. 

 

Additionally, as the Sponsor is based in Hong Kong, a Special Administrative Region of the PRC, there is no guarantee that certain existing or future laws of mainland China will not become applicable to a company such as TGVC. For more information, see “Risk Factors—Risks Related to TGVC and the Business CombinationTGVC faces legal and operational risks associated with the Sponsor being based in Hong Kong, which could result in a material change in TGVC’s operations and jeopardize its ability to consummate the Business Combination.”

 

29
 

 

Given the mainland China government’s significant oversight over the conduct of business operations in the PRC, and in light of (a) mainland China’s recent extension of authority into Hong Kong and (b) the fact that rules and regulations in China can change quickly with little or no advance notice, there are risks and uncertainties that TGVC and the Sponsor cannot foresee at this time. For example, (i) the government of Hong Kong may (x) enact similar laws and regulations to those in mainland China, which may seek to exert control over business combinations conducted by Hong Kong-based entities or sponsors or (y) implement laws on such business activities to be more aligned with mainland China, and (ii) certain mainland China laws and regulations may become applicable in Hong Kong in the future. To the extent that any mainland China laws and regulations become applicable to TGVC or the Sponsor, TGVC or the Sponsor may be subject to the risks and uncertainties associated with the evolving laws and regulations of mainland China, their interpretation and implementation, and the legal and regulatory system in mainland China more generally, including with respect to the enforcement of laws and the possibility of changes of rules and regulations with little or no notice. If certain mainland China laws and regulations, including existing laws and regulations and those enacted or promulgated in the future, were to become applicable to companies such as TGVC or the Sponsor in the future, the application of such laws and regulations may have a material adverse impact on the business, financial condition, results of operations, and prospects of TGVC, TGVC’s ability to consummate a business combination, including the Business Combination and its ability to offer securities to investors, any of which may, in turn, cause the value of TGVC’s securities to significantly decline or become worthless.

 

Relevant organizations of mainland China’s government have made recent statements or recently taken regulatory actions related to cybersecurity, data security, anti-monopoly, and overseas listings of mainland China-based businesses. For example, in addition to the Data Security Law of the People’s Republic of China (the “Data Security Law”) and the Measures for Cybersecurity Review issued by the Cyberspace Administration of China (the “CAC”) that became effective on February 15, 2022 (the “Cybersecurity Review Measures”), relevant mainland China government agencies have recently taken anti-trust enforcement action against certain mainland China-based businesses. TGVC’s management understands that such enforcement action was taken pursuant to the mainland China Anti-Monopoly Law that applies to monopolistic activities in domestic economic activities in mainland China and monopolistic activities outside mainland China that eliminate or restrict market competition in mainland China. In addition, in July 2021, the mainland China government provided new guidance on mainland China-based companies raising capital outside of mainland China, including through arrangements called variable interest entities (“VIEs”). In light of such developments, the SEC has imposed enhanced disclosure requirements on mainland China-based companies seeking to register the offer and sale of securities with the SEC. For more information, see the section titled “Information About TGVC—No Permission Required from the PRC Authorities for the Business Combination.” To date, the Cybersecurity Review Measures have not impacted TGVC’s ability to conduct its business, accept foreign investment or list its securities on Nasdaq because neither TGVC nor the Sponsor are mainland China-based businesses and because neither TGVC nor the Sponsor engage in the types of activities regulated by the Cybersecurity Review Measures. However, if the mainland China government were to expand the scope of the Cybersecurity Review Measures to regulate non-mainland China-based companies, such regulation could impact TGVC’s ability to conduct its business and accept foreign investment.

 

Additionally, on February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) published the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies and several supporting guidelines (collectively, the “Overseas Listing Filing Rules”), which became effective on March 31, 2023 and regulate both direct and indirect overseas offering and listing of mainland China-based companies by adopting a filing-based regulatory regime. According to the Overseas Listing Filing Rules, if the issuer meets both of the following criteria (“Criteria for CSRC Filing”), the overseas securities offering and listing conducted by such issuer shall be deemed as an indirect overseas offering and listing: (i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic mainland China-based companies; and (ii) the main parts of the issuer’s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly citizens of mainland China or domiciled in mainland China. As of the date of this proxy statement, neither TGVC nor the Sponsor meet the Criteria for CSRC Filing.

 

Changes in the policies, regulations, rules and the enforcement of laws of the mainland China government may be made quickly with little or no advance notice. Recent statements by the mainland China government have indicated an intent of the that government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in mainland China-based issuers. The mainland China government may intervene in or influence the operations of non-mainland China-based issuers at any time, and may exert more control over offerings conducted overseas and/or foreign investment in non-mainland China-based issuers.

 

If the mainland China government determines that TGVC or the Sponsor is a mainland China-based issuer, if that government takes any other actions to exert more oversight and control over offerings that are conducted overseas, if mainland China rules and regulations become applicable in Hong Kong, or if the mainland China government’s statements and regulatory actions otherwise apply to TGVC or the Sponsor, the mainland China government would be able to intervene in and influence TGVC’s or the Sponsor’s operations at any time and such governmental or regulatory interference could result in a material change in TGVC’s operations, its ability to consummate a business combination, including the Business Combination, and/or the value of the TGVC Public Shares. For more information, see Risk Factors—Risks Related to TGVC and the Business CombinationThe mainland China government may intervene in or influence the operations of mainland China-based issuers at any time and may exert control over offerings conducted overseas and foreign investment in mainland China-based issuers. If the mainland China government determines that TGVC or the Sponsor is a mainland China-based issuer, such governmental or regulatory interference could result in a material change in TGVC’s operations, its ability to consummate a business combination, including the Business Combination, and/or the value of the TGVC Public Shares. Additionally, mainland China governmental and regulatory interference could significantly limit or completely hinder TGVC’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.”

 

30
 

 

As a Hong Kong company, the Sponsor is subject to certain Hong Kong laws and regulations, such as the Personal Data (Privacy) Ordinance (“PDPO”), the Competition Ordinance and the Inland Revenue Ordinance. As of the date of this proxy statement, the Sponsor believes that it is in compliance with each of the Hong Kong laws and regulations to which it is subject.

 

The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles (the “Data Protection Principles”) contained in Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice, as the case may be, is required or permitted under the PDPO. The six Data Protection Principles are: (i) purpose and manner of collection of personal data; (ii) accuracy and duration of retention of personal data; (iii) use of personal data; (iv) security of personal data; (v) information to be generally available; and (vi) access to personal data. Non-compliance with a Data Protection Principle may lead to a complaint to the Privacy Commissioner for Personal Data (the “Privacy Commissioner”). The Privacy Commissioner may serve an enforcement notice to direct the data user to remedy the contravention and/or instigate prosecution actions. A data user who contravenes an enforcement notice commits an offense that may lead to a fine and imprisonment. The PDPO criminalizes, including, but not limited to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request, and the unauthorized disclosure of personal data obtained without the relevant data user’s consent. An individual who suffers damage, including injured feelings, by reason of a contravention of the PDPO in relation to his or her personal data may seek compensation from the data user concerned.

 

The Competition Ordinance prohibits and deters undertakings in all sectors from adopting anticompetitive conduct that has the objective or effect of preventing, restricting or distorting competition in Hong Kong. The Competition Ordinance prohibits three forms of behavior to prevent and discourage anti-competitive conduct: (i) agreements between undertakings that have the objective or effect of preventing, restricting or distorting competition in Hong Kong; (ii) engaging in conduct that has the objective or effect of preventing, restricting or distorting competition in Hong Kong by undertakings with a substantial degree of market power in a market; and (iii) mergers that have or are likely to have the effect of substantially lessening competition in Hong Kong. Currently, the merger rule only applies to the telecommunications sector. Each of the aforesaid rules is, however, subject to a number of exclusions and exemptions.

 

Pursuant to section 82 of the Competition Ordinance, if the Competition Commission has reasonable cause to believe that (i) a contravention of the first conduct rule has occurred; and (ii) the contravention does not involve serious anti-competitive conduct, it must, before bringing proceedings in the Competition Tribunal against the undertaking whose conduct is alleged to constitute the contravention, issue a notice to the undertaking. However, under section 67 of the Competition Ordinance, where a contravention of the first conduct rule has occurred and the contravention involves serious anti-competitive conduct or a contravention of the second conduct rule has occurred, the Competition Commission may, instead of bringing proceedings in the Competition Tribunal in the first instance, issue a notice (an “Infringement Notice”) to the person against whom it proposes to bring proceedings, offering not to bring those proceedings on condition that the person makes a commitment to comply with requirements of the Infringement Notice. “Serious anti-competitive conduct” means any conduct that consists of any of the following or any combination of the following: (i) fixing, maintaining, increasing or controlling the price for the supply of goods or services; (ii) allocating sales, territories, customers or markets for the production or supply of goods or services; (iii) fixing, maintaining, controlling, preventing, limiting or eliminating the production or supply of goods or services; or (iv) bid-rigging.

 

In the event of breaches of the Competition Ordinance, the Competition Tribunal may make orders including: imposing a pecuniary penalty if satisfied that an entity has contravened a competition rule; disqualifying a person from acting as a director of a company or taking part in the management of a company; prohibiting an entity from making or giving effect to an agreement; modifying or terminating an agreement; and requiring the payment of damages to a person who has suffered loss or damage.

 

Under the Inland Revenue Ordinance, where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than one month before such individual ceases to be employed in Hong Kong.

 

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect to dividends paid by Hong Kong companies.

 

No Reliance on Dividends

 

Neither TGVC nor the Sponsor has relied, and neither expects to rely, on dividends or other distributions on equity from any of their subsidiaries for their cash requirements. Although TGVC has no plans to declare cash dividends, if it determines to pay cash dividends to the TGVC Public Stockholders in the future, it may depend on receipt of funds from one or more subsidiaries.

 

31
 

 

If, in the future, (i) TGVC was to have any mainland China-based subsidiaries or (ii) TGVC was to be considered by the mainland China government to be a mainland China-based subsidiary of the Sponsor, such subsidiaries or TGVC, as applicable, would be subject to certain restrictions on their ability to pay dividends under mainland China laws and regulations. In particular, any mainland China subsidiary may pay dividends only out of its accumulated after-tax profits after making up losses as determined in accordance with mainland China accounting standards and regulations. In addition, any mainland China subsidiary would be required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund a statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Such reserve funds would not be permitted to be distributed to TGVC or the Sponsor, as applicable, as dividends. At its discretion, any mainland China subsidiary would be permitted to allocate a portion of its after-tax profits based on mainland China accounting standards to a discretionary common reserve.

 

Any future mainland China subsidiaries of TGVC would likely generate a portion of their revenue in Renminbi, the legal currency of mainland China, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of any such mainland China subsidiaries to use their Renminbi revenues to pay dividends to TGVC and, if TGVC were to generate any Renminbi revenues, it may have limited ability to pay dividends to the Sponsor.

 

In addition, the Enterprise Tax Law of the People’s Republic of China (the “EIT Law”) and its implementing rules provide that dividends paid by a mainland China entity to a nonresident enterprise for income tax purposes is subject to mainland China withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with mainland China. Pursuant to the Arrangement between mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a mainland China enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the mainland China enterprise. Pursuant to the Notice of the State Administration of Taxation (“SAT”) on the Issues concerning the Application of the Dividend Clauses of Tax Agreements (“SAT Circular 81”), a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (1) it must be a company; (2) it must directly own the required percentage of the total owner’s equity and the proportion of the voting shares in the mainland China resident enterprise; and (3) it must have directly owned such required percentage in the mainland China resident enterprise throughout the consecutive 12 months prior to receiving the dividends. In October 2019, the SAT promulgated the Administrative Measures for Nonresident Taxpayers to Enjoy Treatment under Tax Treaties (“SAT Circular 35”), which became effective on January 1, 2020. SAT Circular 35 provides that nonresident enterprises are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax. Instead, nonresident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting documents when performing tax filings, which will be subject to post-tax filing examinations by the relevant tax authorities. Accordingly, TGVC (through any future Hong Kong subsidiary) and the Sponsor may be able to benefit from the 5% withholding tax rate for dividends they receive from any future mainland China subsidiaries, if they satisfy the conditions prescribed under SAT Circulate 81 and other relevant tax rules and regulations. However, according to SAT Circular 81 and SAT Circular 35, if the relevant tax authorities consider the transactions or arrangements between a mainland China enterprise and a non-mainland China enterprise are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.

 

32
 

 

Furthermore, if certain procedural requirements are satisfied, the payment of current account items, as defined in the relevant PRC laws and regulations, including profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from mainland China’s State Administration of Foreign Exchange (“SAFE”) or its local branches. However, where Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses, such as the repayment of loans denominated in foreign currencies, approval from or registration with competent government authorities or their authorized banks is required. The mainland China government may take measures at its discretion from time to time to restrict access to foreign currencies for current account or capital account transactions. To the extent that TGVC desires to use funds from any future mainland China subsidiaries to fund its operations, the foreign exchange control system could prevent TGVC from obtaining sufficient foreign currencies to satisfy its foreign currency demands, and TGVC may not be able to pay dividends in foreign currencies to any offshore intermediate holding companies or ultimate parent company, or to its shareholders or investors in TGVC Public Shares. Further, we cannot assure you that new regulations or policies that may further restrict the remittance of Renminbi into or out of the PRC will not be promulgated in the future. We cannot assure you, in light of the restrictions in place, or any amendment that might be made from time to time, that TGVC’s future mainland China subsidiaries, if any, will be able to satisfy their respective payment obligations that are denominated in foreign currencies, including the remittance of dividends outside of mainland China.

 

No Permission Required from the PRC Authorities for the Business Combination  

 

TGVC is a Delaware corporation with no subsidiaries in mainland China. TGVC does not maintain operations in mainland China, does not generate revenues from mainland China, and does not provide services or conduct sales or marketing activities in mainland China or to residents in mainland China. TGVC has committed not to undertake its initial business combination with any entity that is based in, located in or has its principal business operations in the PRC, and it has conducted a target search outside of the PRC. As of the date of this proxy statement, TGVC has not been contacted by any Chinese authorities in connection with its operations or consummation of the Business Combination. TGVC’s legal counsel in mainland China, Han Kun Law Offices, has advised that, as of the date of this proxy statement, neither TGVC nor the Sponsor is required to obtain permissions or approvals from the CSRC, the CAC, or any other mainland China governmental agency to operate TGVC’s business or to consummate the Business Combination. If (i) the Sponsor fails to receive or maintain any required permissions or approvals, (ii) the Sponsor inadvertently concludes that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and the Sponsor is required to obtain such permissions or approvals in the future, it may result in additional costs and expenses incurred by the Sponsor and/or TGVC to ensure compliance or to pay applicable fines or sanctions, or to comply with other orders or regulatory actions, and TGVC and/or the Sponsor may no longer be permitted to continue their current business operations, which could adversely affect their financial condition and results of operations, or even TGVC’s ability to consummate the Business Combination. In addition, if any or all of the foregoing were to occur, this could significantly limit or completely hinder TGVC’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.

 

TGVC’s legal counsel in Hong Kong, DLA Piper Hong Kong, has advised that, as of the date of this proxy statement, neither TGVC nor the Sponsor is required to obtain permissions or approvals from any Hong Kong governmental agency to operate TGVC’s business or to consummate the Business Combination. For more information, see the section titled “Information About TGVC—No Permission Required from the PRC Authorities for the Business Combination.”

 

Nasdaq Listing Rule

 

On June 22, 2023, TGVC received a letter from Nasdaq’s Listing Qualifications Department indicating that, based upon the closing bid price of TGVC Class A Common Stock for the last 30 consecutive business days and its number of publicly held shares, TGVC no longer meets Nasdaq Listing Rule 5450(b)(3)(C), which requires listed companies to maintain a minimum market value of publicly held shares (“MVPHS”) of at least $15 million (the “MVPHS Requirement”).

 

33
 

 

Nasdaq Listing Rule 5810(c)(3)(D) provided a compliance period of 180 calendar days, or until December 19, 2023 (the “First Compliance Date”), in which to regain compliance with the MVPHS Requirement; however, TGVC was unable to regain compliance by such date. As discussed below, Nasdaq provided notice to TGVC that TGVC Class A Common Stock will be subject to delisting, and TGVC has appealed that determination to a Nasdaq Hearings Panel.

 

On August 11, 2023, TGVC received a second letter from Nasdaq indicating that, based upon the closing bid price of TGVC’s listed securities for the last 30 consecutive business days and its number of publicly held securities, TGVC no longer meets Nasdaq Listing Rule 5450(b)(2)(A), which requires listed companies to maintain a minimum market value of listed securities (“MVLS”) of at least $50 million (the “MVLS Requirement”).

 

Nasdaq Listing Rule 5810(c)(3)(C) provides TGVC with a period of 180 calendar days, or until February 7, 2024 (the “Second Compliance Date”), to regain compliance with the MVLS Requirement. If TGVC’s MVLS is $50 million or more for a minimum of ten consecutive business days during the 180-day compliance period, Nasdaq will provide written notice of compliance to TGVC. If TGVC fails to regain compliance with the MVLS Requirement by the Second Compliance Date, Nasdaq will provide notice that TGVC’s listed securities will be subject to delisting.

 

On October 9, 2023, TGVC received a third letter from Nasdaq indicating that, based on the number of beneficial holders and holders of record of TGVC Class A Common Stock (the “Total Holders”), TGVC no longer meets Nasdaq Listing Rule 5450(a)(2), which requires listed companies to maintain a minimum of 400 Total Holders. Pursuant to Nasdaq Listing Rule 5810(c)(2)(C), TGVC had 45 calendar days, or until November 24, 2023 (the “Third Compliance Date”), to submit to Nasdaq a plan to regain compliance (the “Nasdaq Compliance Plan”), which TGVC submitted to Nasdaq on November 22, 2023. Nasdaq did not accept the Nasdaq Compliance Plan, and as discussed below, TGVC has appealed the decision to a Nasdaq Hearings Panel.

 

On December 26, 2023, TGVC received a delist determination letter from Nasdaq advising TGVC that the Nasdaq Staff had determined that TGVC did not meet the MVPHS Requirement by the First Compliance Date, and acknowledging that TGVC did not comply with the Total Holders Requirement, which serves as an additional and separate basis for delisting (the “Nasdaq Determination”). On December 27, 2023, TGVC appealed the Nasdaq Determination and requested a formal hearing before the Nasdaq Hearings Panel (the “Nasdaq Hearing”), which has automatically stayed the delisting until the hearing process concludes and any extension granted by the Nasdaq Hearings Panel expires. At the Nasdaq Hearing, TGVC intends to present a plan to regain compliance with the MVPHS Requirement and the Total Holders Requirement. The formal Nasdaq Hearing is scheduled to be held on March 21, 2024 at 12:00 p.m. Eastern Time via video conference.

 

The Nasdaq notifications and the Nasdaq Determination have no immediate effect on the listing of TGVC’s securities on Nasdaq. While TGVC is exercising diligent efforts to maintain the listing of its securities on Nasdaq, there can be no assurance that it will be able to regain or maintain compliance with Nasdaq’s listing standards or that the Nasdaq Determination will be reversed, and as a result, TGVC may be subject to delisting from Nasdaq. See “Risk Factors—Risks Related to TGVC and the Business Combination.

 

For more information about TGVC, see the sections entitled “TGVC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Information About TGVC.”

 

34
 

 

Flexi

 

Flexi believes that it is a leading operator and pioneer of “asset-light” flexible workspaces across the Asia-Pacific region. With 43 locations in eight countries, Flexi builds beautifully designed workspaces that inspire genuine connections, unlock flexibility and drive productivity. Flexi has three distinct brands – the Hive, Common Ground and The Cluster – providing a wide range of flexible office solutions to businesses of all sizes, from “hot desk” memberships for start-ups to large, bespoke spaces designed for enterprise customers. Flexi expects that its asset-light growth strategy, whereby it partners with landlords and real estate owners on mutually advantageous joint venture structures rather than entering into traditional lease agreements, will allow it to quickly add new venues with lower capital outlay. Currently, approximately 46.5% of Flexi’s locations are operated pursuant to traditional leases and the remainder are operated under arrangements that Flexi considers to be “asset-light” arrangements.

 

On a combined basis, Flexi has more than 25 years of experience in designing, building, and operating flexible workspaces in Australia, Singapore, Malaysia, Hong Kong, Taiwan, Thailand, the Philippines and Vietnam. Flexi was an early adopter of the asset-light flexible workspace model in the Asia-Pacific region, beginning implementation in 2017 when few, if any, competing operators employed this method.

 

Flexi was formed through the mergers of three prominent coworking brands in the Asia-Pacific region. Hong Kong Hive Limited was incorporated in January 2012 and leveraged award-winning design and accessibility to expand across Asia. Flexi was originally incorporated in February 2015 as Hive Worldwide to act as a holding company for Hong Kong Hive Limited and other related entities. In April 2021, Hive Worldwide acquired The Cluster, a pioneer of Australia’s coworking industry according to the Melbourne Guide and an established, premium brand. In June 2022, Hive Worldwide acquired Common Ground and began operating all three brands as “The Flexi Group.”

 

The mailing address of Flexi’s principal executive office is Wisma UOA Damansara II, Penthouse 16-1 Level 16, No. 6, Changkat Semantan, Bukit Damansara, 50490 Kuala Lumpur, Malaysia, and its phone number is + 60 3 2011 9888.

  

Legal and Operational Risks Associated with Flexi’s Operations in Hong Kong

 

While Flexi has operations in Hong Kong, it currently does not have operations in mainland China, does not generate revenues from mainland China, and does not provide services or conduct sales or marketing activities in mainland China or to residents in mainland China. Accordingly, Flexi is not regulated by any regulatory authorities in mainland China. Pursuant to the Basic Law, which is a national law of mainland China and the constitutional document for Hong Kong, national laws of mainland China shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law and applied locally by promulgation or local legislation. The Basic Law expressly provides that the national laws of mainland China, which may be listed in Annex III of the Basic Law, shall be confined to those relating to defense and foreign affairs as well as other matters outside the autonomy of Hong Kong. While the National People’s Congress has the power to amend the Basic Law, the Basic Law also expressly provides that no amendment to the Basic Law shall contravene the basic policies of the PRC regarding Hong Kong. As a result, national laws of mainland China not listed in Annex III of the Basic Law (and any regulatory notices issued pursuant to those national laws) do not apply to Hong Kong-based businesses. Nonetheless, the legal and operational risks associated with operating in mainland China apply to companies with operations in Hong Kong.

 

35
 

 

Except as set forth above, the laws in mainland China are expected to apply to mainland China-based businesses and not businesses in Hong Kong, which operate under a different set of laws from mainland China. Nonetheless, the legal and operational risks associated with operating in mainland China apply to companies with operations in Hong Kong. The laws and regulations in the PRC continue to evolve, and their enactment timetable, interpretation, and implementation involve significant uncertainties.

 

As Flexi maintains operations in Hong Kong, a Special Administrative Region of the PRC, there is no guarantee that certain existing or future laws of mainland China will not become applicable to a company such as Flexi. Given the mainland China government’s significant oversight over the conduct of business operations in the PRC, and in light of (a) mainland China’s recent extension of authority not only in mainland China but also into Hong Kong and (b) the fact that rules and regulations in China can change quickly with little or no advance notice, there are risks and uncertainties that Flexi cannot foresee at this time. For example, (i) the government of Hong Kong may (x) enact similar laws and regulations to those in mainland China, which may seek to exert control over business combinations conducted by Hong Kong-based subsidiaries or their parent companies or (y) implement laws on such business activities to be more aligned with mainland China, and (ii) certain mainland China laws and regulations may become applicable in Hong Kong in the future. To the extent that any mainland China laws and regulations become applicable to Flexi, Flexi may be subject to the risks and uncertainties associated with the evolving laws and regulations of mainland China, their interpretation and implementation, and the legal and regulatory system in mainland China more generally, including with respect to the enforcement of laws and the possibility of changes of rules and regulations with little or no notice. If certain mainland China laws and regulations, including existing laws and regulations and those enacted or promulgated in the future, were to become applicable to companies such as Flexi or its subsidiaries in the future, the application of such laws and regulations may have a material adverse impact on the business, financial condition, results of operations, and prospects of Flexi and its ability to offer securities to investors, any of which may, in turn, cause the value of Flexi’s securities to significantly decline or become worthless.

 

Relevant organizations of mainland China’s government have made recent statements or recently taken regulatory actions related to cybersecurity, data security, anti-monopoly, and overseas listings of mainland China-based businesses. For example, in addition to the Cybersecurity Review Measures issued by the CAC, relevant mainland China government agencies have recently taken anti-trust enforcement action against certain mainland China-based businesses. Flexi’s management understands that such enforcement action was taken pursuant to the mainland China Anti-Monopoly Law that applies to monopolistic activities in domestic economic activities in mainland China and monopolistic activities outside mainland China that eliminate or restrict market competition in mainland China. In addition, in July 2021, the mainland China government provided new guidance on mainland China-based companies raising capital outside of mainland China, including through VIEs. In light of such developments, the SEC has imposed enhanced disclosure requirements on mainland China-based companies seeking to register the offer and sale of securities with the SEC. For more information, see the section titled “Information about TGVC—No Permission Required from the PRC Authorities for the Business Combination.”

 

Additionally, on February 17, 2023, the CSRC published the Overseas Listing Filing Rules, which became effective on March 31, 2023 and regulate both direct and indirect overseas offering and listing of mainland China-based companies by adopting a filing-based regulatory regime. According to the Overseas Listing Filing Rules, if the issuer meets both of the Criteria for CSRC Filing, the overseas securities offering and listing conducted by such issuer shall be deemed as an indirect overseas offering and listing: (i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic mainland China-based companies; and (ii) the main parts of the issuer’s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly citizens of mainland China or domiciled in mainland China. As of the date of this proxy statement, neither Flexi nor PubCo, whether prior to or after the consummation of the Business Combination, meet the Criteria for CSRC Filing.

 

While Flexi currently does not have any operations in mainland China, there is no guarantee that the recent statements or regulatory actions by the relevant organizations of mainland China’s government, including statements relating to the Data Security Law, the Personal Information Protection Law of the People’s Republic of China (the “Personal Information Protection Law”), and VIEs, as well as the anti-monopoly enforcement actions will continue not to apply to Flexi. Should such statements or regulatory actions apply to companies such as Flexi or its subsidiaries in the future, it could have a material adverse impact on Flexi’s business, financial condition, results of operations, and prospects, its ability to accept foreign investments, and its ability to offer or continue to offer securities to investors on a U.S. or other international securities exchange, any of which may, in turn, cause the value of Flexi’s securities to significantly decline or become worthless. Flexi cannot predict the extent of such impact if such events were to occur.

 

Flexi may also become subject to the laws and regulations of mainland China to the extent that it commences business and customer facing operations in mainland China as a result of any future partnership, acquisition, expansion, or organic growth.

 

As Flexi maintains operations in Hong Kong, it is subject to certain Hong Kong laws and regulations. As of the date of this proxy statement, Flexi believes that it is in compliance with each of the Hong Kong laws and regulations to which it is subject.

 

36
 

 

The PDPO imposes a statutory duty on data users to comply with the requirements of the Data Protection Principles. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice, as the case may be, is required or permitted under the PDPO. The six Data Protection Principles are: (i) purpose and manner of collection of personal data; (ii) accuracy and duration of retention of personal data; (iii) use of personal data; (iv) security of personal data; (v) information to be generally available; and (vi) access to personal data. Non-compliance with a Data Protection Principle may lead to a complaint to the Privacy Commissioner. The Privacy Commissioner may serve an enforcement notice to direct the data user to remedy the contravention and/or instigate prosecution actions. A data user who contravenes an enforcement notice commits an offense that may lead to a fine and imprisonment. The PDPO criminalizes, including, but not limited to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request, and the unauthorized disclosure of personal data obtained without the relevant data user’s consent. An individual who suffers damage, including injured feelings, by reason of a contravention of the PDPO in relation to his or her personal data may seek compensation from the data user concerned. As of the date hereof, Flexi’s Hong Kong subsidiary does not collect, process or use personal information of entities or individuals other than what is necessary for its business, does not disseminate such information, and does not conduct any data processing activities in mainland China.

 

The Competition Ordinance prohibits and deters undertakings in all sectors from adopting anticompetitive conduct that has the objective or effect of preventing, restricting or distorting competition in Hong Kong. The Competition Ordinance prohibits three forms of behavior to prevent and discourage anti-competitive conduct: (i) agreements between undertakings that have the objective or effect of preventing, restricting or distorting competition in Hong Kong; (ii) engaging in conduct that has the objective or effect of preventing, restricting or distorting competition in Hong Kong by undertakings with a substantial degree of market power in a market; and (iii) mergers that have or are likely to have the effect of substantially lessening competition in Hong Kong. Currently, the merger rule only applies to the telecommunications sector. Each of the aforesaid rules is, however, subject to a number of exclusions and exemptions.

 

Pursuant to section 82 of the Competition Ordinance, if the Competition Commission has reasonable cause to believe that (i) a contravention of the first conduct rule has occurred; and (ii) the contravention does not involve serious anti-competitive conduct, it must, before bringing proceedings in the Competition Tribunal against the undertaking whose conduct is alleged to constitute the contravention, issue a notice to the undertaking. However, under section 67 of the Competition Ordinance, where a contravention of the first conduct rule has occurred and the contravention involves serious anti-competitive conduct or a contravention of the second conduct rule has occurred, the Competition Commission may, instead of bringing proceedings in the Competition Tribunal in the first instance, issue an Infringement Notice to the person against whom it proposes to bring proceedings, offering not to bring those proceedings on condition that the person makes a commitment to comply with requirements of the Infringement Notice.

 

In the event of breaches of the Competition Ordinance, the Competition Tribunal may make orders including: imposing a pecuniary penalty if satisfied that an entity has contravened a competition rule; disqualifying a person from acting as a director of a company or taking part in the management of a company; prohibiting an entity from making or giving effect to an agreement; modifying or terminating an agreement; and requiring the payment of damages to a person who has suffered loss or damage.

 

Under the Inland Revenue Ordinance, where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than one month before such individual ceases to be employed in Hong Kong.

 

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect to dividends paid by Hong Kong companies.

 

37
 

 

PubCo

 

PubCo was incorporated under the laws of the BVI on November 10, 2022 and is a direct, wholly owned subsidiary of Flexi. PubCo was formed for the sole purpose of entering into and consummating the Business Combination. Accordingly, PubCo has no operations, only nominal assets, no liabilities or contingent liabilities, and no outstanding commitments other than as described in the Business Combination Agreement. As of the date of this proxy statement, the directors of PubCo are Christopher Ian Edwards, Constant Tedder, Erman Akinci, Juhn Teo and Alexis Grolin.

 

The address of PubCo’s registered office is Conyers Trust Company (BVI) Limited, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, BVI VG1110 and its registration number is 2111418. Upon the Closing, the principal office of PubCo will be that of Flexi: Wisma UOA Damansara II, Penthouse 16-1 Level 16, No. 6, Changkat Semantan, Bukit Damansara, 50490 Kuala Lumpur, Malaysia, and its phone number is + 60 3 2011 9888.

 

Upon the effectiveness of the registration statement of which this proxy statement forms a part, PubCo will report under the Exchange Act as a non-U.S. public company with foreign private issuer status. Even after PubCo no longer qualifies as an emerging growth company, as long as PubCo continues to qualify as a foreign private issuer under the Exchange Act, PubCo will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

  

  the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

 

  the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

 

  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, or Current Reports on Form 8-K, upon the occurrence of specified significant events.

  

In addition, PubCo will not be required to file annual reports and financial statements with the SEC as promptly as U.S. domestic companies whose securities are registered under the Exchange Act, and will not be required to comply with Regulation FD, which restricts the selective disclosure of material information.

 

As a foreign private issuer, PubCo will be permitted and intends to follow home country corporate governance practices instead of certain corporate governance practices required by Nasdaq for U.S. domestic issuers. For further information, see the section titled “Management of PubCo Following the Business Combination—Foreign Private Issuer Exemption” on page 242 of this proxy statement.

 

Reliance on Dividends

 

Flexi is a holding company and has no material assets other than its ownership interests in its subsidiaries that own and operate each of Flexi’s locations. Flexi has no independent means of generating revenue. Flexi intends to cause its subsidiaries to make distributions in an amount sufficient to cover all applicable taxes and other expenses payable and dividends, if any, declared by it. To the extent that Flexi needs funds, and one or more of its subsidiaries is restricted from making such distributions under applicable law or regulation, or is otherwise unable to provide such funds, it could materially adversely affect Flexi’s liquidity and financial condition.

 

38
 

 

PubCo’s cash is expected to be primarily held by PubCo and by its subsidiaries located in Hong Kong, Singapore, Malaysia, Australia and Vietnam, and it does not believe that there are any significant restrictions on its ability to distribute these funds to PubCo from their respective distributable profits or other distributable reserves in accordance with applicable laws. While PubCo does not currently have any mainland China subsidiaries, there would be restrictions on the ability of any future mainland China subsidiaries to pay dividends under mainland China laws and regulations. In particular, any of PubCo’s future mainland China subsidiaries would be permitted to pay dividends only out of their respective accumulated after-tax profits after making up losses as determined in accordance with mainland China accounting standards and regulations. In addition, any of PubCo’s future mainland China subsidiaries would be required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund a statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Such reserve funds could not be distributed to PubCo as dividends. At its discretion, any future mainland China subsidiary could allocate a portion of its after-tax profits based on mainland China accounting standards to a discretionary common reserve.

 

Any future mainland China subsidiaries would likely generate a portion of their revenue in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of any such mainland China subsidiaries to use their Renminbi revenues to pay dividends to PubCo.

 

In addition, the EIT Law and its implementing rules provide that dividends paid by a mainland China entity to a nonresident enterprise for income tax purposes is subject to mainland China withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with mainland China. Pursuant to the Arrangement between mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a mainland China enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the mainland China enterprise. Pursuant to SAT Circular 81, a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (1) it must be a company; (2) it must directly own the required percentage of the total owner’s equity and the proportion of the voting shares in the mainland China resident enterprise; and (3) it must have directly owned such required percentage in the mainland China resident enterprise throughout the consecutive 12 months prior to receiving the dividends. In October 2019, the SAT promulgated SAT Circular 35, which became effective on January 1, 2020. SAT Circular 35 provides that nonresident enterprises are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax. Instead, nonresident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting documents when performing tax filings, which will be subject to post-tax filing examinations by the relevant tax authorities. Accordingly, Flexi’s Hong Kong subsidiary may be able to benefit from the 5% withholding tax rate for dividends it receives from any future mainland China subsidiaries, if it satisfies the conditions prescribed under SAT Circulate 81 and other relevant tax rules and regulations. However, according to SAT Circular 81 and SAT Circular 35, if the relevant tax authorities consider the transactions or arrangements between a mainland China enterprise and a non-mainland China enterprise are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.

  

Furthermore, if certain procedural requirements are satisfied, the payment of current account items, as defined in the relevant PRC laws and regulations, including profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE or its local branches. However, where Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses, such as the repayment of loans denominated in foreign currencies, approval from or registration with competent government authorities or their authorized banks is required. The mainland China government may take measures at its discretion from time to time to restrict access to foreign currencies for current account or capital account transactions. To the extent that PubCo desires to use funds from any future mainland China subsidiaries to fund its operations, the foreign exchange control system could prevent PubCo from obtaining sufficient foreign currencies to satisfy its foreign currency demands, and PubCo may not be able to pay dividends in foreign currencies to any offshore intermediate holding companies or ultimate parent company, or to its shareholders or investors in PubCo Ordinary Shares. Further, we cannot assure you that new regulations or policies that may further restrict the remittance of Renminbi into or out of mainland China will not be promulgated in the future. We cannot assure you, in light of the restrictions in place, or any amendment that might be made from time to time, that future PubCo mainland China subsidiaries, if any, will be able to satisfy their respective payment obligations that are denominated in foreign currencies, including the remittance of dividends outside of mainland China.

 

39
 

 

Target Merger Sub

 

Target Merger Sub was incorporated under the laws of the BVI on November 10, 2022. Target Merger Sub was formed solely in contemplation of the Business Combination, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, or any outstanding commitments other than as set forth in the Business Combination Agreement.

 

The address of Target Merger Sub’s registered office is Conyers Trust Company (BVI) Limited, Commerce House, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, BVI VG1110.

 

SPAC Merger Sub

 

SPAC Merger Sub was formed under the laws of Delaware on October 21, 2022. SPAC Merger Sub was formed solely in contemplation of the Business Combination, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, or any outstanding commitments other than as set forth in the Business Combination Agreement.

 

The address of SPAC Merger Sub’s registered office is c/o Vcorp Services, LLC, 108 W. 13th Street, Suite 100, Wilmington, DE 19801.

  

The Proposals to be Voted on by the TGVC Stockholders

 

The Business Combination Proposal

 

TGVC and Flexi have agreed to the Business Combination under the terms of the Business Combination Agreement. Pursuant to the terms and subject to the conditions set forth in the Business Combination Agreement, at the Closing, (i) the Initial Merger will be consummated pursuant to which Target Merger Sub will merge with and into Flexi, with Flexi continuing as the surviving corporation and becoming a direct, wholly owned subsidiary of PubCo, and (ii) immediately following confirmation of the effective filing of the Initial Merger, SPAC Merger Sub will merge with and into TGVC, with TGVC continuing as the surviving corporation of the TGVC Merger and becoming a direct, wholly owned subsidiary of PubCo. For more information about the Business Combination Agreement and the Business Combination (including the Mergers), see the section titled “The Business Combination Proposal; Terms of the Business Combination.”

 

The Charter Limitation Amendment Proposal

 

TGVC is asking the TGVC Stockholders to approve an amendment to the TGVC Charter to eliminate from the TGVC Charter the Charter Limitation, in order to facilitate the consummation of the Business Combination. The Charter Limitation Amendment Proposal is not conditioned on any other Proposal, though the Charter Limitation Amendment contemplated by the Charter Limitation Amendment Proposal will be implemented only if the Business Combination Proposal is approved. For more information about the Charter Limitation Amendment Proposal, see the section titled “The Charter Limitation Amendment Proposal.”

 

The Adjournment Proposal

 

The Adjournment Proposal will only be presented to TGVC Stockholders in the event that based upon the tabulated vote at the time of the Special Meeting there are insufficient votes for the approval of the Business Combination Proposal or the Charter Limitation Amendment Proposal. The Adjournment Proposal, if adopted, will allow the Chair of the Special Meeting to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies. For more information about the Adjournment Proposal, see the section titled “The Adjournment Proposal.”

 

40
 

 

Transaction Agreements

 

The Business Combination Agreement

 

On December 5, 2022, TGVC, PubCo, Target Merger Sub, SPAC Merger Sub and Flexi entered into the Business Combination Agreement. On August 10, 2023, TGVC, PubCo, Target Merger Sub, SPAC Merger Sub and Flexi entered into the First Amendment.

 

Pursuant to the Business Combination Agreement, subject to the terms and conditions set forth therein, upon the Closing, (i) Target Merger Sub will merge with and into Flexi, whereby the separate corporate existence of Target Merger Sub will cease and Flexi will be the surviving corporation and become a direct, wholly owned subsidiary of PubCo, and (ii) immediately following confirmation of the effective filing of the Initial Merger, SPAC Merger Sub will merge with and into TGVC, whereby the separate corporate existence of SPAC Merger Sub will cease and TGVC will be the surviving corporation of the TGVC Merger and become a direct, wholly owned subsidiary of PubCo.

 

As a result of the Mergers, (i) all outstanding shares of Flexi will be automatically cancelled in exchange for the right to receive such number of newly-issued PubCo Ordinary Shares that is equal to the Flexi Exchange Ratio calculated in accordance with the Business Combination Agreement, which as of the date hereof was 74.7584, (ii) each outstanding TGVC Unit will be automatically detached and the holder thereof will be deemed to hold one share of TGVC Class A Common Stock and one TGVC Warrant, (iii) each outstanding share of TGVC Class B Common Stock will automatically convert into one share of TGVC Class A Common Stock, (iv) each outstanding share of TGVC Class A Common Stock will be cancelled in exchange for the right to receive one PubCo Ordinary Share, and (v) each outstanding TGVC Warrant will be converted into a PubCo Warrant.

 

The Flexi Shareholders will have the right to receive an aggregate of up to an additional 2,900,000 PubCo Ordinary Shares based on PubCo’s achievement of certain revenue thresholds during the two-year period following the Closing Date, in accordance with the Business Combination Agreement. See the section titled “The Business Combination Proposal; Terms of the Business CombinationEarnout” below.

 

Representations, Warranties and Covenants

 

The Business Combination Agreement contains customary representations and warranties of the parties, which will not survive the Closing. Many of the representations and warranties are qualified by materiality, Flexi Material Adverse Effect or TGVC Material Adverse Effect (each as defined in the section entitled “The Business Combination Proposal; Terms of the Business Combination—The Business Combination Agreement—Material Adverse Effect”).

 

41
 

  

The Business Combination Agreement also contains pre-Closing covenants of the parties, including obligations of the parties to use reasonable efforts to operate their respective businesses in the ordinary course consistent with past practice, and to refrain from taking certain specified actions without the prior written consent of the other applicable parties, in each case, subject to certain exceptions and qualifications. Additionally, the parties have agreed not to solicit, negotiate, or enter into competing transactions, as further provided in the Business Combination Agreement. The covenants do not survive the Closing (other than those that are to be performed after the Closing).

 

TGVC and Flexi have agreed, as promptly as practicable after the execution of the Business Combination Agreement, to prepare, and TGVC and PubCo have agreed to file with the SEC, a registration statement on Form F-4 (as amended, the “Registration Statement”) in connection with the registration under the Securities Act of the issuance of the PubCo Ordinary Shares and the PubCo Warrants to be issued to the TGVC Stockholders and the Flexi Shareholders, and containing a proxy statement for the purpose of (i) TGVC soliciting proxies from its stockholders to obtain the TGVC Stockholders’ Approval at the Special Meeting and providing the TGVC Public Stockholders an opportunity, in accordance with the TGVC Governing Documents, to have their TGVC Public Shares redeemed, and (ii) Flexi soliciting the written consent of the Flexi Shareholders to adopt and approve the Business Combination Agreement, the Initial Merger, and the other Transactions.

 

Conditions to the Parties’ Obligations to Consummate the Mergers

 

Under the Business Combination Agreement, the obligations of the parties to consummate (or cause to be consummated) the Business Combination are subject to a number of customary conditions for, including, among others, the following: (i) the approval of the Initial Merger and the other Transactions by the Flexi Shareholders and the approval of the Proposals by the TGVC Stockholders; (ii) all Regulatory Approvals having been obtained or having expired or terminated, as applicable; (iii) the effectiveness of the Registration Statement; (iv) PubCo’s initial listing application with Nasdaq having been conditionally approved and, immediately following the Closing, PubCo shall satisfy any applicable initial and continuing listing requirements of Nasdaq and PubCo shall not have received any notice of non-compliance therewith; (v) the PubCo Ordinary Shares and the PubCo Warrants having been approved for listing on Nasdaq, subject to round lot holder requirements; (vi) the absence of any law or order preventing or prohibiting the consummation of the Transactions; and (vii) satisfaction of the Net Tangible Assets Condition by TGVC, which may operate, in effect, as a minimum cash requirement and make it more difficult for TGVC to complete the Business Combination as contemplated.

 

The obligations of TGVC to consummate (or cause to be consummated) the Business Combination are also subject to, among other things, (i) the representations and warranties of Flexi and of each Acquisition Entity contained in the Business Combination Agreement being true and correct, subject to the knowledge and materiality standards contained therein, (ii) material compliance by Flexi and each Acquisition Entity with its pre-Closing covenants, and (iii) there not being any event that has had, or would be reasonably expected to have, individually or in the aggregate, a Flexi Material Adverse Effect.

 

In addition, the obligations of Flexi to consummate (and cause to be consummated) the Business Combination are also subject to, among other things (i) the representations and warranties of TGVC contained in the Business Combination Agreement being true and correct, subject to the knowledge and materiality standards contained therein, (ii) material compliance by TGVC with its pre-Closing covenants, and (iii) there not being any event that has had, or would be reasonably expected to have, individually or in the aggregate, a TGVC Material Adverse Effect.

  

42
 

 

Termination Rights

 

The Business Combination Agreement contains certain termination rights, including, among others, the following: (i) upon the mutual written consent of TGVC and Flexi; (ii) by either TGVC or Flexi if the consummation of the Business Combination is prohibited or prevented by a governmental order; (iii) by either TGVC or Flexi if the Closing has not occurred on or before May 5, 2023, (iv) in connection with an uncured breach of a representation, warranty, covenant or other agreement by a party; (v) by either TGVC or Flexi if the board of directors of the other party publicly changes its recommendation with respect to the Business Combination Agreement and the Business Combination and related shareholder approvals; (vi) by either TGVC or Flexi if TGVC holds the Special Meeting but does not obtain the TGVC Stockholders’ Approval; (vii) by TGVC if the audited and unaudited financials of Flexi for the first, second and third quarters of 2022 (to the extent required in accordance with the Business Combination Agreement) have not been delivered by January 4, 2023, with respect to the first and second quarters, and January 16, 2023, with respect to the third quarter; or (viii) by TGVC if Flexi does not receive the Flexi Written Consent within five business days after the Registration Statement has become effective.

 

None of the parties to the Business Combination Agreement are required to pay a termination fee or reimburse any other party for its expenses as a result of a termination of the Business Combination Agreement. However, each party will remain liable for willful and material breaches of the Business Combination Agreement prior to termination.

 

Trust Account Waiver

 

Flexi and each Acquisition Entity have agreed that it and its affiliates will not have any right, title, interest or claim of any kind in or to any monies in the Trust Account, and have agreed not to, and waived any right to, make any claim against the Trust Account (including any distributions therefrom).

 

Shareholder Support Agreement

 

Contemporaneously with the execution of the Business Combination Agreement, Flexi, PubCo and certain Flexi Shareholders entered into a Shareholder Support Agreement (the “Shareholder Support Agreement”) pursuant to which, among other things, certain Flexi Shareholders agreed: (i) to vote (including by execution of a written consent) their Flexi Shares in favor of the Business Combination Agreement, the Initial Merger and the other Transactions; (ii) to waive any rights to seek appraisal, rights of dissent, or any similar rights in connection with the Business Combination Agreement, the Business Combination and the transactions contemplated thereby; and (iii) to consent to the termination of certain shareholder agreements with Flexi (with certain exceptions), effective at Closing, subject to the terms and conditions contemplated by the Shareholder Support Agreement. The shareholders party to the Shareholder Support Agreement collectively have a sufficient number of votes to approve the Business Combination Agreement, the Initial Merger, and the other Transactions. For more information, see “The Business Combination Proposal; Terms of the Business Combination—Related Agreements—Shareholder Support Agreement.”

 

Sponsor Support Agreement

 

Contemporaneously with the execution of the Business Combination Agreement, TGVC entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”) with the Sponsor Related Parties and TGVC’s directors and officers, Flexi and PubCo, pursuant to which, among other things, the Sponsor Related Parties and TGVC’s directors and officers agreed to vote (including by execution of a written consent) their shares of TGVC Common Stock in favor of the Business Combination Agreement, the TGVC Merger and the other Transactions, subject to the terms and conditions contemplated by the Sponsor Support Agreement. For more information, see “The Business Combination Proposal; Terms of the Business Combination—Related Agreements—Sponsor Support Agreement.”

 

Lock-Up Agreements

 

In connection with the IPO, TGVC entered into the IPO Lock-Up Agreement with the IPO Lock-Up Shareholders, pursuant to which all of the IPO Lock-Up Securities held by such persons will be locked-up and subject to transfer restrictions, subject to certain exceptions, until the expiration of the Shares Lock-Up Period.

 

In addition, pursuant to the IPO Lock-Up Agreement, all of the TGVC Warrants (or securities issued or issuable upon the exercise thereof) held by the IPO Lock-Up Shareholders will be locked-up and subject to transfer restrictions until the expiration of the Warrant Lock-Up Period.

 

Concurrently with the execution of the Business Combination Agreement, TGVC and PubCo entered into separate BCA Lock-Up Agreements with the BCA Lock-Up Shareholders, pursuant to which 95% of the BCA Lock-Up Securities held by such persons will be locked-up and subject to transfer restrictions, subject to certain exceptions, until the expiration of the Shares Lock-Up Period.

  

43
 

 

Executive Officers of PubCo

 

The executive officers of PubCo upon the Closing will be the executive officers of Flexi immediately prior to the Closing, as further described in the section titled “—Interests of Flexi’s Directors and Officers in the Business Combination” below.

 

Board of Directors of PubCo

 

Upon the Closing, the PubCo Board will consist of no less than five individuals, two of whom may be designated by the Sponsor. We expect that the Sponsor will decline to designate any initial members of the PubCo Board and, as a result, the PubCo Board will initially consist of Christopher Ian Edwards, Constant Tedder, Erman Akinci, Juhn Teo and Alexis Grolin. Under current Nasdaq rules, as a foreign private issuer, PubCo will not be required to have a majority-independent board of directors.

 

TGVC’s Reasons for the Business Combination

 

The TGVC Board considered a variety of factors in connection with its evaluation of the Business Combination. In light of the complexity of those factors, the TGVC Board, as a whole, did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific factors it took into account in reaching its decision. The TGVC 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 members of the TGVC Board may have given different weight to different factors. This explanation of the reasons for the TGVC Board’s approval of 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 in the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

 

Before reaching its decision, the TGVC Board reviewed Flexi’s business model, certain historical financial information, the Flexi Prospective Financial Information, and the results of the due diligence conducted by TGVC’s management and legal and financial advisors. TGVC’s due diligence process took place over approximately a 13-week period beginning on or about September 6, 2022 and continuing through the signing of the Business Combination Agreement on December 5, 2022. TGVC’s management, as well as its directors and advisors, have many years of experience in both operational management and investment and financial management and analysis and, in the opinion of the TGVC Board, was suitably qualified to oversee the due diligence conducted by TGVC’s legal and financial advisors and to conduct the portions of the due diligence and other investigations performed by TGVC’s management in connection with the search for a business combination partner. A detailed description of the professional experience of TGVC’s executive officers and directors is included in the section entitled “TGVC’s Management.” The due diligence conducted by TGVC’s management team and/or TGVC’s legal and financial advisors included:

  

  Meetings and calls with Flexi’s management and accounting teams regarding Flexi’s locations, business model, operations, customers, software and forecasts;

 

  review of Flexi’s material contracts;

 

  review of Flexi’s software and intellectual property matters;

 

  review of financial, tax, legal, and accounting due diligence, including a review of Flexi’s finance and accounting staff and finance and accounting staff needs;

 

  consultation with TGVC’s legal, financial and accounting advisors; and

 

  review of the historical financial statements of Flexi and the Flexi Prospective Financial Information.

 

44
 

 

Prior to reaching the decision to approve the Business Combination and the Business Combination Agreement, the TGVC Board consulted with TGVC’s management, as well as with its legal and financial advisors. In making its determination with respect to the Business Combination, the TGVC Board also considered the financial analysis undertaken by Marshall & Stevens, an independent fairness opinion provider to the TGVC Board in connection with the Business Combination. On November 28, 2022, at a meeting of the TGVC Board held to evaluate the proposed Business Combination, Marshall & Stevens delivered an oral opinion, subsequently confirmed by delivery of a written opinion to the TGVC Board, to the effect that, as of that date and subject to and based on the assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in such opinion, (i) the Aggregate Merger Consideration is fair, from a financial point of view, to TGVC, and (ii) based upon Flexi’s enterprise value range of approximately $167,500,000 to $213,700,000, the midpoint of the range of $190,600,000 was sufficient to pass the 80% Test. See the section entitled “The Business Combination Proposal; Terms of the Business Combination—Opinion of Marshall & Stevens—Reconciled Conclusion of Value.” The full text of Marshall & Stevens’ written opinion is attached as Annex C to this proxy statement and is incorporated herein by reference.

 

In the prospectus for the IPO, TGVC stated that, while it may pursue an acquisition in any business industry or sector, TGVC intended to focus on prospective target companies in the technology, financial technology and the technology, media and telecom, or TMT, industries (but would not undertake any business combination with an entity that conducts a majority of its business or is headquartered in China, including Hong Kong and Macau). The TGVC Board considered these factors identified in the prospectus in its evaluation of Flexi. Furthermore, in light of the due diligence conducted on Flexi by the TGVC management team and its third party advisors, and taking into account Flexi’s focus on flexible workspaces in Asia and Australia with a robust technology infrastructure offering for customers, the TGVC Board determined that Flexi met the criteria in TGVC’s prospectus for the IPO.

 

In approving the Business Combination, the TGVC Board considered the factors that include, but are not limited to, those set forth above as well as the following positive factors, several of which are based upon TGVC’s due diligence:

 

  Large Venue Depth. Flexi’s large network of flexible workspaces in the Asia-Pacific region with a flexible, decentralized structure and a broad collection of localized venues.

 

  Multi-Brand Strategy. Flexi’s multi-brand strategy to cater to different price points, customer industries and market segments.

 

  Asset-light Model. Flexi’s increasing pursuit of an asset-light model, whereby it partners with landlords and real estate owners on mutually advantageous joint venture structures rather than entering into traditional lease agreements, which may allow Flexi to expand more quickly, with a lower capital outlay, than if it used a traditional leasing model.

 

  Top-Tier Partners. Flexi’s key partnerships with large developers and real estate owners in the Asia-Pacific region.

 

  Marshall & Stevens Opinion. The TGVC Board obtained an opinion from Marshall & Stevens to the effect that, as of December 5, 2022 and based on and subject to the matters described in its opinion, the Aggregate Merger Consideration in the transaction was fair, from a financial point of view, to TGVC. Based upon Marshall & Stevens’ reconciled fair market value range for Flexi, the midpoint of the range of fair market value was sufficient to pass the 80% Test.

 

  Due Diligence. Due diligence examinations of Flexi by TGVC management, as well as by TGVC’s legal, financial and other advisors, and discussions with Flexi’s management.

 

  Negotiated Transaction. The financial and other terms of the Business Combination Agreement and the related agreements, including the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between TGVC and Flexi.

 

  Other Alternatives. The TGVC Board’s belief, after a thorough review of other business combination opportunities reasonably available to TGVC, that the Business Combination represents the best potential business combination for TGVC and the TGVC Stockholders. No opportunity came to the attention of any member of TGVC’s management or the TGVC Board in his or her personal capacity, that impacted TGVC’s search for an acquisition target.

 

45
 

 

  Flexi Shareholder Support Agreement. Flexi, PubCo and certain Flexi Shareholders entered into a Shareholder Support Agreement, pursuant to which, among other things, certain Flexi Shareholders agreed to: (i) vote (including by execution of a written consent) their Flexi Shares in favor of the Business Combination Agreement, the Initial Merger and the other Transactions; (ii) waive any rights to seek appraisal or rights of dissent in connection with the Business Combination Agreement, the Initial Merger and the other Transactions contemplated thereby; and (iii) consent to the termination of certain shareholder agreements with Flexi (with certain exceptions), effective at Closing, subject to the terms and conditions contemplated by the Shareholder Support Agreement, such that Flexi would have a sufficient number of votes to approve the Initial Merger and increasing the likelihood Flexi would satisfy such condition to Closing.

 

  Continued Support by Existing Flexi Shareholders. Existing Flexi Shareholders would not receive any cash consideration in connection with the Initial Merger; instead existing Flexi Shareholders will own over 37% of PubCo on a fully-diluted basis immediately after the Closing (assuming no additional redemptions by TGVC Public Stockholders); and certain Key Flexi Shareholders agreed to have their ownership subjected to post-Closing lock-up arrangements, such that 95% of the BCA Lock-Up Securities held by such persons will be locked-up and subject to transfer restrictions until the expiration of the Shares Lock-Up Period.

 

  Public Company Risk. The risks that are associated with being a publicly traded company that is in its early, developmental stage with a management team with limited to no experience operating a public company.

 

  Redemption Risk. The risk that the TGVC Public Stockholders would redeem their TGVC Public Shares for cash in connection with the consummation of the Business Combination, thereby reducing the amount of cash available to PubCo following the consummation of the Business Combination. In addition, the consummation of the Business Combination is conditioned upon, among other things, the Net Tangible Assets Condition by TGVC, which may operate, in effect, as a minimum cash requirement and make it more difficult for TGVC to complete the Business Combination as contemplated.

 

  Stockholder Vote Risk. The risk that the TGVC Stockholders may fail to provide the votes necessary to effect the Business Combination.

 

  Closing Conditions Risk. The risk that completion of the Business Combination is conditioned on the satisfaction of certain Closing conditions that are not within TGVC’s control.

 

  Benefits May Not Be Achieved Risk. The risk that the potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe.

 

 

Termination Date. The risk that the Business Combination may not be consummated by the date that is 18 months from the closing of the IPO, or May 5, 2023 (such date was subsequently extended to November 5, 2023, has been further extended to up until May 5, 2024, and may be further extended by the TGVC Stockholders).

 

 

Liquidation of TGVC. The risks and costs to TGVC if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in TGVC being unable to effect a business combination by May 5, 2023 (such deadline was subsequently extended to November 5, 2023, has been further extended to up until May 5, 2024, and may be further extended by the TGVC Stockholders), and could force it to liquidate and the TGVC Placement Warrants would expire worthless.

 

  Litigation Risk. The risk of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.

 

  Post-Business Combination Corporate Governance. The amount of equity to be held by existing Flexi Shareholders and the fact that TGVC Public Stockholders will likely hold a minority position in PubCo following consummation of the Business Combination, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control.

 

  Fees, Expenses and Time Risk. The risk of incurring significant fees and expenses associated with completing the Business Combination and the substantial time and effort of management required to complete the Business Combination.

 

  Other Risk Factors. Various other risk factors associated with Flexi’s business, as described in the section entitled “Risk Factors.”

 

46
 

 

In the course of its deliberations, the TGVC Board also considered a variety of uncertainties, risks and other potentially negative factors relevant to the Business Combination, including the following:

 

In addition to considering the factors described above, the TGVC Board also considered that the Initial Holders may have interests in the Business Combination that are in addition to, and that may be different from, the interests of TGVC Stockholders. These interests include, among others, the fact that (i) unless TGVC consummates an initial business combination, TGVC’s officers and directors and the Sponsor Related Parties will not receive reimbursement for any out-of-pocket expenses they incurred on behalf of TGVC, and (ii) if TGVC does not complete an initial business combination by May 5, 2023 (such date was subsequently extended to November 5, 2023, has been further extended to up until May 5, 2024, and may be further extended to a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), the proceeds from the sale of the TGVC Placement Warrants of $5.5 million will be included in the liquidating distribution to TGVC Public Stockholders and the TGVC Placement Warrants will expire worthless. TGVC’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and unanimously approving, as members of the TGVC Board, the Business Combination Agreement and the Business Combination. For more information, see the section entitled “The Business Combination Proposal; Terms of the Business Combination—Interests of the Initial Holders in the Business Combination.”

 

The TGVC Board concluded that the potential benefits that it expects TGVC and the TGVC Stockholders to achieve as a result of the Business Combination outweigh the potentially negative factors associated with the Business Combination. Accordingly, the TGVC Board, based on its consideration of the specific factors listed above, unanimously (a) determined that the Business Combination and the other Transactions are advisable, fair to, and in the best interests of TGVC and the TGVC Stockholders, (b) authorized and approved in all respects the Business Combination Agreement, and the agreements and transactions contemplated thereby, (c) in accordance with the DGCL, directed that the Business Combination Agreement and the Business Combination, be submitted for consideration by the TGVC Stockholders for approval, and (d) recommended that the TGVC Stockholders approve the Business Combination Agreement and the Business Combination.

 

The above discussion of the material factors considered by the TGVC Board is not intended to be exhaustive but does set forth the principal factors considered by the TGVC Board.

 

Organizational Structure

 

The following diagram illustrates the transaction structure of the Business Combination and the organizational structure of the parties thereto prior to Closing.

 

47
 

  

  

  

The following diagram illustrates the organizational structure of PubCo upon consummation of the Business Combination.

 

48
 

  

We anticipate that, upon the completion of the Business Combination:

  

 

TGVC Stockholders (other than the Initial Holders) will own approximately 3.7% of the outstanding PubCo Ordinary Shares,

 

 

the Flexi Shareholders will own approximately 80.4% of the outstanding PubCo Ordinary Shares,

 

 

TGVC’s officers and directors and Sponsor Related Parties will own approximately 12.2% of the outstanding PubCo Ordinary Shares,

 

  ARC will own 3.5% of the outstanding PubCo Ordinary Shares, and

 

  ThinkEquity will own approximately 0.2% of the outstanding PubCo Ordinary Shares.

  

The ownership percentages with respect to PubCo following the Business Combination are based upon the number of Flexi Shares and shares of TGVC Common Stock issued and outstanding as of December 29, 2023 and are subject to a number of assumptions. These relative percentages assume that (i) no Earnout Shares are issued, (ii) no TGVC Warrants are exercised, (iii) no warrants underlying Working Capital Loans are exercised, (iv) no Flexi Shareholder exercises its rights of appraisal, and (v) after the 2023 Redemptions, no TGVC Public Stockholder exercises redemption rights in connection with its TGVC Public Shares. If TGVC Public Stockholders exercise any redemption rights in respect of TGVC Public Shares, or if any of the other assumptions are not correct, these percentages will be different.

 

Please see “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

In addition, future issuances of PubCo Ordinary Shares, including any Earnout Shares or any PubCo Ordinary Shares issued pursuant to awards that may be granted under the Incentive Plan to be adopted in connection with the Business Combination, would dilute current stockholders’ ownership percentage. See “Risk Factors—Risks Related to PubCo—Upon consummation of the Business Combination, and upon consummation of the PubCo Offering which is anticipated to occur immediately thereafter, PubCo shareholders (including the current TGVC Stockholders who are expected to be PubCo shareholders following the Closing) will experience dilution as a consequence of, among other transactions, the issuance of PubCo Ordinary Shares by PubCo as consideration in the Business Combination and in connection with the PubCo Offering. Having a minority share position may reduce the influence that current TGVC Stockholders have on the management of PubCo.”

 

The following table presents the share ownership of various holders of PubCo Ordinary Shares upon the Closing and is based on (i) the assumptions set forth above, (ii) a Closing Date of December 31, 2022, (iii) no additional equity securities of TGVC being issued at or prior to Closing, and (iv) the following redemption scenarios:

 

No Additional Redemptions: This scenario assumes that, after the 2023 Redemptions, no TGVC Public Stockholders exercise redemption rights in connection with the approval of the Business Combination with respect to their TGVC Public Shares.

 

50% of Maximum Redemptions: This scenario assumes that, after the 2023 Redemptions, TGVC Public Stockholders exercise redemption rights with respect to approximately 235,244 TGVC Public Shares (27.1% of the issued, outstanding and unredeemed TGVC Public Shares) in connection with the approval of the Business Combination, at a price of $11.04 per share.

 

Maximum Redemptions: This scenario assumes that, after the 2023 Redemptions, TGVC Public Stockholders exercise redemption rights with respect to approximately 470,488 TGVC Public Shares (54.2% of the issued, outstanding and unredeemed TGVC Public Shares) in connection with the approval of the Business Combination, at a price of $11.04 per share. Assuming this “Maximum Redemptions” scenario and a price of $11.04 per TGVC Public Share, PubCo would have a public float of approximately $5.0 million.

 

49
 

 

   No Additional Redemptions  50% of Maximum Redemptions  Maximum Redemptions
   Number     Number     Number   
Shareholders of  of PubCo     of PubCo     of PubCo   
PubCo Post Business  Ordinary  % of  Ordinary  % of  Ordinary  % of
Combination  Shares  Total(1)  Shares  Total(1)  Shares  Total(1)
TGVC Public Stockholders   868,670    3.7%   633,426    2.7%   398,182    1.7%
Flexi Shareholders   19,000,000    80.4%   19,000,000    81.2%   19,000,000    82.1%
TGVC’s directors and officers and the Sponsor Related Parties   2,889,149    12.2%   2,889,149    12.4%   2,889,149    12.5%
ARC   827,315    3.5%   818,789    3.5%   810,263    3.5%
ThinkEquity   57,500    0.2%   57,500    0.2%   57,500    0.2%
                               
Total   23,642,634    100.0%   23,398,864    100.0%   23,155,094    100.0%

  

  (1) Approximate percentage of total outstanding PubCo Ordinary Shares following the Closing.

  

Date, Time and Place of Special Meeting

 

The Special Meeting will be held at 11:00 a.m. Eastern Time, on February 8, 2024, as a virtual meeting. The meeting will be held virtually over the internet by means of a live audio webcast. You will be able to attend and vote your shares during the Special Meeting via a live webcast available at www.virtualshareholdermeeting.com/TGVC2024SM.

 

Record Date; Outstanding Shares of TGVC Common Stock and TGVC Warrants; TGVC Stockholders and TGVC Warrant Holders Entitled to Vote

 

TGVC has fixed the close of business on January 4, 2024 as the Record Date for determining the TGVC Stockholders entitled to notice of and to attend and vote at the Special Meeting.

 

As of the close of business on the Record Date there were 3,815,319 shares of TGVC Common Stock outstanding and entitled to vote, consisting of 868,670 TGVC Public Shares, 57,500 Representative Shares and 2,889,149 shares of TGVC Class B Common Stock, and 17,057,500 TGVC Warrants, consisting of 11,500,000 TGVC Public Warrants, 5,500,000 TGVC Placement Warrants and 57,500 Representative Warrants.

 

Each share of TGVC Common Stock is entitled to one vote per share at the Special Meeting. TGVC Warrants have no voting rights at the Special Meeting. TGVC’s officers and directors and the Sponsor Related Parties own an aggregate of 2,889,149 shares of TGVC Common Stock entitled to vote at the Special Meeting.

 

Quorum and Required Vote for the Proposals

 

A quorum of TGVC Stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if a majority of the shares of TGVC Common Stock issued and outstanding and entitled to vote at the Special Meeting is present via the virtual meeting platform or represented by proxy at the Special Meeting. Abstentions will count as present for the purposes of establishing a quorum. Broker non-votes will not be counted for purposes of establishing a quorum.

 

The approval of the Business Combination Proposal requires the affirmative vote of a majority of the votes cast by the TGVC Stockholders as of the Record Date who attend or are represented by proxy at the Special Meeting. Accordingly, under the DGCL, a TGVC Stockholder’s failure to vote, as well as a broker non-vote, will have no effect on the outcome of the vote on the Business Combination Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the outcome of the vote on the Business Combination Proposal.

 

The approval of the Charter Limitation Amendment Proposal requires the affirmative vote of holders of at least 65% of all the outstanding shares of TGVC Common Stock entitled to vote at the Special Meeting. A TGVC Stockholder’s failure to vote, an abstention from voting, or a broker non-vote will have the same effect as a vote against the Charter Limitation Amendment Proposal.

 

The approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the TGVC Stockholders as of the Record Date who attend or are represented by proxy at the Special Meeting. Accordingly, under the DGCL, a TGVC Stockholder’s failure to vote, as well as a broker non-vote, will have no effect on the outcome of the vote on the Adjournment Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the outcome of the vote on the Adjournment Proposal.

 

50
 

  

It is important for you to note that in the event that the Business Combination Proposal does not receive the requisite vote for approval, we will not then consummate the Business Combination. If TGVC does not consummate the Business Combination and fails to complete an initial business combination by May 5, 2024 (or a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), TGVC will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the TGVC Public Stockholders in accordance with the TGVC Charter.

 

Proxy Solicitation

 

Proxies may be solicited by telephone, by facsimile, by mail, on the Internet or in person. We have engaged Okapi to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares via the virtual meeting platform if it revokes its proxy before the Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section titled “Special Meeting of TGVC Stockholders—Revoking Your Proxy.”

 

Redemption Rights

 

Under the TGVC Charter, TGVC Public Stockholders may elect to have their TGVC Public Shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the Closing, including interest, by (b) the total number of the then-issued and outstanding TGVC Public Shares; provided that TGVC will not redeem any TGVC Public Shares to the extent that such redemption would result in TGVC having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001 (this limitation will not apply if the Charter Limitation Amendment Proposal is approved and the Charter Limitation Amendment is implemented). As of December 29, 2023, this would have amounted to $11.12 per TGVC Public Share. TGVC Public Stockholders on or before February 6, 2024 (two business days before the Special Meeting) may exercise redemption rights whether or not they are holders as of the Record Date and whether or not such shares are voted at the Special Meeting. However, under the TGVC Charter, in connection with an initial business combination, a TGVC Public Stockholder, together with any affiliate or any other Person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Exchange Act), is restricted from seeking redemption rights with respect to more than 15% of the TGVC Public Shares held by the TGVC Public Stockholder or the group.

 

If a holder exercises its redemption rights, then such holder will be exchanging its TGVC Public Shares for cash, will no longer own TGVC Public Shares and will not receive PubCo Ordinary Shares in connection with the Business Combination. Such a holder will be entitled to receive cash for its TGVC 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. See the section titled “Special Meeting of TGVC Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash. A stockholder holding both TGVC Public Shares and TGVC Public Warrants may redeem its TGVC Public Shares but retain the TGVC Public Warrants, which if the Business Combination closes, will be exchanged for PubCo Public Warrants.

 

Interests of the Initial Holders in the Business Combination

 

The Initial Holders have interests in the Business Combination that are different from or in addition to (and which may conflict with) the interests of TGVC Public Stockholders. These interests include, among other things:

  

  the TGVC Charter provides that the doctrine of corporate opportunity will not apply with respect to any of its officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have, except as set forth in the TGVC Charter. TGVC does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target. In the course of their other business activities, TGVC’s officers and directors may become aware of other investment and business opportunities that may be appropriate for presentation to TGVC as well as other entities with which they are affiliated. TGVC’s management has pre-existing fiduciary duties and contractual obligations and if there is a conflict of interest in determining to which entity a particular business opportunity should be presented, any entities holding a pre-existing fiduciary obligation will be presented the opportunity before TGVC is presented with it;

 

51
 

 

  on May 4, 2023, TGVC held the Initial Extension Meeting, at which the TGVC Stockholders approved the Initial Extension. In connection with the Initial Extension, 10,164,304 TGVC Public Shares were tendered for redemption, which represented approximately 88.4% of the total TGVC Public Shares outstanding at the time of redemption, and approximately $105.6 million was released from the Trust Account to pay such redeeming TGVC Public Stockholders. As a result of this redemption, as of the date thereof, there were 1,335,696 TGVC Public Shares issued and outstanding. In connection with the Initial Extension, (i) in order to induce TGVC Public Stockholders not to redeem their TGVC Public Shares, TGVC and the Sponsor entered into the Initial Extension Non-Redemption Agreement with the Non-Redemption Investors whereby, among other things, the Sponsor or its designee paid the Initial Extension Non-Redemption Payment to the Non-Redemption Investors in exchange for the Non-Redemption Investors agreeing to hold and not redeem their TGVC Public Shares, (ii) TGVC amended the Advisory Agreement and paid ThinkEquity an advisory fee of $50,000, and (iii) a director of TGVC made a short-term loan of $105,000 to the Sponsor, which is expected to be repaid on or before February 28, 2024;

 

  additionally, in order to induce TGVC Public Stockholders not to redeem their TGVC Public Shares in connection with the Initial Extension, the Sponsor, or its designee, has deposited Monthly Initial Extension Payments into the Trust Account. A total of $320,567 from six Monthly Initial Extension Payments has been deposited in the Trust Account as of the date hereof. Each Monthly Initial Extension Payment is evidenced by an Initial Extension Note, each in the principal amount equal to the Monthly Initial Extension Payment. The Initial Extension Notes bear no interest and are payable in full upon TGVC’s consummation of a business combination. If TGVC does not consummate a business combination by May 5, 2024 (or a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), the Initial Extension Notes will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven;
     
 

additionally, on November 1, 2023, TGVC held the Second Extension Meeting, at which the TGVC Stockholders approved the Second Extension. In connection with the Second Extension, 467,026 TGVC Public Shares were tendered for redemption, which represented approximately 35.0% of the total TGVC Public Shares outstanding at the time of redemption, and approximately $5.2 million was released from the Trust Account to pay such redeeming TGVC Public Stockholders. As a result of this redemption, as of the date hereof, there are 868,670 TGVC Public Shares issued and outstanding, and there is approximately $9.66 million remaining in the Trust Account that is available for a business combination. In connection with the Second Extension, (i) in order to induce the Non-Redemption Investors not to redeem their TGVC Public Shares, TGVC and the Sponsor entered into the Second Extension Non-Redemption Agreement with the Non-Redemption Investors, whereby, among other things, the Sponsor, or its designee, agreed to pay the Second Extension Non-Redemption Payment to the Non-Redemption Investors in exchange for the Non-Redemption Investors agreeing to hold and not redeem their TGVC Public Shares and (ii) TGVC amended the Advisory Agreement and agreed to pay ThinkEquity an advisory fee of $40,000. As of the date hereof, the Sponsor or its designee has paid a total of $87,749 of the Second Extension Non-Redemption Payment and such amount is considered to be a Working Capital Loan evidenced by the 2023 Promissory Note. Pursuant to the terms of the Second Extension Non-Redemption Agreement, (x) if the Sponsor or its designee fails to make a payment to the Non-Redemption Investors by the applicable Liquidation Trigger Date, then TGVC will liquidate and dissolve as soon as practicable (and not later than three days) after such Liquidation Trigger Date; and (y) TGVC has agreed not to use the funds held in the Trust Account to pay its taxes or any dissolution expenses;

 

 

unless TGVC consummates an initial business combination, TGVC’s officers and directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses they incurred on behalf of TGVC ($11,110 of such expenses were incurred and had not been reimbursed as of the date hereof), to the extent that such expenses exceed the amount of available proceeds not held in the Trust Account;

 

  the Sponsor has agreed that it will not sell or transfer its TGVC Placement Warrants until the expiration of the Warrant Lock-Up Period, subject to limited exceptions;

 

 

the fact that (i) the Sponsor Related Parties and TGVC’s directors and officers paid a nominal amount for the Founder Shares (of which they currently hold an aggregate of 2,889,149 shares), which Founder Shares, if unrestricted and freely tradeable, would be valued at approximately $31.3 million in the aggregate based on the closing price of TGVC Class A Common Stock on December 29, 2023, (ii) such shares will become worthless if TGVC does not consummate a business combination, and (iii) the Sponsor Related Parties and TGVC’s directors and officers can earn a positive rate of return on their investment even if the PubCo Ordinary Shares fall significantly below the per share value implied in the Business Combination of $10.00 per share and TGVC Public Stockholders experience a negative return following the consummation of the Business Combination;

 

  if TGVC does not complete an initial business combination by May 5, 2024 (or a later date approved by the TGVC Stockholders pursuant to the TGVC Charter), the proceeds from the sale of the TGVC Placement Warrants of $5.5 million will be included in the liquidating distribution to TGVC Public Stockholders and the TGVC Placement Warrants purchased by the Sponsor will expire worthless;

 

  if the Trust Account is liquidated, including in the event that TGVC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify TGVC to ensure that the proceeds in the Trust Account are not reduced below (i) $10.20 per TGVC Public Share or (ii) such lesser amount per TGVC Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, in each case net of the amount of interest withdrawn to pay taxes, by the claims of prospective target businesses with which TGVC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to TGVC, 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 Related Parties and TGVC’s officers and directors will lose their entire investment in TGVC, which investment is equal to approximately $6.7 million as of December 29, 2023 and is comprised of (i) approximately $5.53 million aggregate purchase price for their Founder Shares and TGVC Placement Warrants, (ii) approximately $800,394 of borrowings under the Working Capital Loans, as evidenced by the 2023 Promissory Note, (iii) $320,567 of Monthly Initial Extension Payments that have been deposited in the Trust Account, as evidenced by the Initial Extension Notes and (iv) $11,110 of out-of-pocket expenses they incurred on behalf of TGVC, if TGVC does not complete an initial business combination. For information about the Working Capital Loans and the Monthly Initial Extension Payments, which may be repaid to the Sponsor upon consummation of the Business Combination, please see “TGVC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity, Capital Resources and Going Concern” starting on page 219 of this proxy statement;

 

52
 

 

 

the fact that TGVC’s three independent directors own an aggregate of 90,000 Founder Shares that the Sponsor transferred to them at a nominal cost, which if unrestricted and freely tradeable would be valued at $975,600 based on the closing price of TGVC Class A Common Stock on December 29, 2023;

 

  the fact that TGVC’s existing officers and directors will be eligible for continued indemnification and coverage under a directors’ and officers’ liability insurance policy after the Closing and pursuant to the Business Combination Agreement;

 

  the fact that the Sponsor has the ability to designate two members of the PubCo Board, although we expect the Sponsor to decline to designate any of the initial members of the PubCo Board;

 

 

the fact that ThinkEquity, in addition to serving as the representative of the several underwriters in the IPO, also served as a financial advisor to TGVC in connection with the Business Combination in consideration for payment of an amount equal to the greater of either (i) 4.0% of the net funds from the Trust Account after investor redemptions, or (ii) $300,000, plus reimbursement of expenses incurred in connection with its services and the agreement by TGVC to indemnify ThinkEquity for certain liabilities arising out of the engagement;

 

  the fact that ThinkEquity additionally served as a financial advisor to TGVC in connection with the Initial Extension Meeting and the Second Extension Meeting, in consideration for payment of $50,000 and $40,000, respectively; and

 

  the fact that ThinkEquity is serving as the representative of the underwriters in the PubCo Offering and, in connection therewith, will receive fees from PubCo as more fully described in the PubCo Offering Registration Statement.

 

The existence of the interests described above may result in a conflict of interest on the part of TGVC’s officers and directors in entering into the Business Combination Agreement and making their recommendation that you vote in favor of the approval of the Business Combination. In particular, the existence of the interests described above may incentivize TGVC’s officers and directors to complete an initial business combination, even if on terms less favorable to the TGVC Stockholders compared to liquidating TGVC, because, among other things, if TGVC is liquidated without completing an initial business combination, the Founder Shares held by TGVC’s officers and directors and the Sponsor Related Parties and the TGVC Placement Warrants held by the Sponsor would become worthless (which, if unrestricted and freely tradable, would be worth an aggregate of approximately $31.4 million based on the closing price of TGVC Class A Common Stock and TGVC Public Warrants on December 29, 2023), and out-of-pocket expenses advanced by the Sponsor would not be repaid to the extent such amounts exceed cash held by TGVC outside of the Trust Account.

 

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

 

In considering the recommendation of the TGVC Board to vote in favor of the approval of the Business Combination Proposal, you should keep in mind that certain members of the board of directors of Flexi and executive officers of Flexi have interests in the Business Combination Proposal that are different from, or in addition to, those of TGVC Stockholders and of the Flexi Shareholders. In particular, Flexi’s directors and executive officers are expected to become and/or remain directors and/or executive officers of PubCo upon the completion of the Business Combination. We expect the following individuals who are currently directors of Flexi and PubCo to remain directors of PubCo upon completion of the Business Combination: Christopher Ian Edwards, Constant Tedder, Erman Akinci, Juhn Teo and Alexis Grolin. In addition, we expect Christopher Ian Edwards, the current Chief Executive Officer of Flexi and PubCo, to remain Chief Executive Officer of PubCo, and Yee Fei Chan, the current Chief Financial Officer of Flexi, to become Chief Financial Officer of PubCo, following completion of the Business Combination.

 

Recommendation to Stockholders

 

The TGVC Board believes that the Proposals are in the best interests of TGVC and its stockholders and unanimously recommends that the TGVC Stockholders vote “FOR” each of the Proposals.

 

For more information about the TGVC Board’s recommendation and the Proposals, see the sections titled “Special Meeting of TGVC Stockholders—Recommendation of the TGVC Board” beginning on page 125 and “The Business Combination Proposal; Terms of the Business Combination—TGVC Board’s Reasons for Approval of the Business Combination” beginning on page 150.

  

53
 

 

Appraisal/Dissenters’ Rights

 

TGVC Stockholders do not have appraisal rights in connection with the Business Combination.

 

Flexi Shareholders are entitled to dissent from the Initial Merger that forms part of the Business Combination and to receive payment of the “fair value” of their shares determined in accordance with the laws of the BVI following consummation of the Initial Merger. Where a Flexi Shareholder who exercises such dissent rights and Flexi are unable to agree on the “fair value” of such shares, a statutory appraisal process is required to determine the “fair value.”

 

Sources and Uses of Funds for the Business Combination

 

The following table summarizes the sources and uses for funding the Business Combination, calculated as of December 29, 2023. These figures assume that, after the 2023 Redemptions, no TGVC Public Stockholders exercise their redemption rights and that no Flexi Shareholders exercise their appraisal rights in connection with the Business Combination.

 

Sources (in millions)  Uses (in millions)
Cash held in the Trust Account  $9.66   Transaction expenses  $6.73 
        Cash to Balance Sheet  $2.93 
Total Sources  $9.66   Total Uses  $9.66 

      

Expected Accounting Treatment

 

The Business Combination will be accounted for as a capital reorganization under IFRS. See the subsection titled “The Business Combination Proposal; Terms of the Business Combination—Expected Accounting Treatment.”

 

Regulatory Approvals

 

The Business Combination is not subject to any regulatory requirement or approval, except for (i) filings with the State of Delaware and the Registrar of Corporate Affairs of the BVI, and (ii) filings required with the SEC pursuant to the reporting requirements applicable to TGVC, and the requirements of the Securities Act and the Exchange Act to disseminate this proxy statement to TGVC Stockholders. The Business Combination is not subject to any required filings or notices under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), or the expiration or termination of any applicable waiting period under the HSR Act.

 

54
 

 

Summary of Risk Factors

 

The consummation of the Business Combination and the business and financial condition of PubCo subsequent to Closing are subject to numerous risks and uncertainties, including those highlighted in the section entitled “Risk Factors” of this proxy statement. The occurrence of one or more of the events or circumstances described below, alone or in combination with other events or circumstances, may adversely affect TGVC’s or Flexi’s ability to effect the Business Combination, and may have an adverse effect on the business, cash flows, financial condition and results of operations of TGVC or Flexi prior to the Business Combination and that of PubCo subsequent to the Business Combination. Such risks include, but are not limited to:

  

  Flexi has a history of losses and may not be able to achieve or maintain profitability in the future;

 

  Flexi’s workforce and operations have grown substantially since its inception, and Flexi expects that they will continue to do so. If Flexi is unable to effectively manage that growth, its financial performance and future prospects will be adversely affected;

 

  Flexi increasingly pursues asset-light arrangements with real estate owners via joint venture arrangements, which may allow its landlord partners to terminate Flexi’s agreements more easily than they could under a traditional landlord-tenant relationship;

  

  Flexi may not be able to continue to retain existing members, most of whom enter into membership agreements with short-term commitments, or attract new members in sufficient numbers or at sufficient rates to sustain and increase its memberships or at all;

 

  An economic downturn or subsequent declines in market rents may result in increased member terminations and could adversely affect Flexi’s results of operations;

 

  Flexi’s success depends on its ability to maintain the value and reputation of its brands and the success of its partnerships;

 

  Security breaches and other disruptions could disrupt Flexi’s business, result in the disclosure of confidential information, damage its reputation, and create significant financial and legal exposure;

  

  A material portion of Flexi’s revenues are generated in Hong Kong. The business, financial condition, results of operations, and prospects of Flexi may be materially and adversely affected if certain additional PRC laws and regulations become applicable to Flexi or its subsidiaries. Flexi may be subject to the risks and uncertainties associated with the evolving laws and regulations in the PRC, their interpretation and implementation, and the legal and regulatory system in the PRC more generally, including with respect to the enforcement of laws and the possibility of changes of rules and regulations with little or no advance notice. For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—The business, financial condition, results of operations, and prospects of Flexi may be materially and adversely affected because certain laws and regulations of the PRC are applicable to Flexi and its subsidiaries. Flexi may be subject to the risks and uncertainties associated with the evolving laws and regulations in the PRC, their interpretation and implementation, and the legal and regulatory system in the PRC more generally, including with respect to the enforcement of laws and the possibility of changes of rules and regulations with little or no advance notice” on page 68 of this proxy statement;

  

  The recent state government interference into business activities of U.S. listed mainland Chinese companies may negatively impact Flexi’s existing and future operations in the PRC. For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—The recent state government interference into business activities of U.S. listed mainland China-based companies may negatively impact Flexi’s existing and future operations in the PRC” on page 69 of this proxy statement;

 

  Flexi Shareholders and, after the consummation of the Business Combination, PubCo shareholders, may experience difficulties in effecting service of legal process in the U.S. and enforcing civil liabilities in the PRC against Flexi and, after the consummation of the Business Combination, PubCo, and certain of their directors and officers. For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—Flexi Shareholders and, after the consummation of the Business Combination, PubCo shareholders, may experience difficulties in effecting service of legal process in the U.S. and enforcing civil liabilities in the PRC against Flexi and, after the consummation of the Business Combination, PubCo, and certain of their directors and officers” on page 70 of this proxy statement;

 

 

The M&A Rules and certain other regulations of mainland China establish certain procedures for some acquisitions of mainland China-based companies by foreign investors that could make it more difficult for PubCo to pursue growth through future acquisitions in mainland China. For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—The M&A Rules and certain other regulations of mainland China establish certain procedures for some acquisitions of mainland China-based companies by foreign investors that could make it more difficult for PubCo to pursue growth through future acquisitions in mainland China” on page 71 of this proxy statement;

 

  Interpretation of mainland China laws and their implementation in Hong Kong involve uncertainty. For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—Interpretation of mainland China laws and their implementation in Hong Kong involve uncertainty” on page 71 of this proxy statement;

 

 

PubCo may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws. For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—PubCo may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws” on page 72 of this proxy statement;

 

  The mainland China government may issue further restrictive measures in the future that could adversely affect PubCo’s business and prospects. For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—The mainland China government may issue further restrictive measures in the future that could adversely affect PubCo’s business and prospects” on page 72 of this proxy statement;

 

 

Flexi’s Hong Kong subsidiaries may be subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on their business, financial condition and results of operations. For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—Flexi’s Hong Kong subsidiary may be subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on its business, financial condition and results of operations” on page 72 of this proxy statement;

 

  It may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China (including Hong Kong). For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—It may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China (including Hong Kong)” on page 74 of this proxy statement;

 

55
 

  

  The Hong Kong legal system embodies uncertainties which could limit the legal protections available to PubCo. For a more complete discussion, see “Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—The Hong Kong legal system embodies uncertainties that could limit the legal protections available to Flexi and PubCo” on page 74 of this proxy statement;

 

 

The mainland China government may intervene in or influence the operations of mainland China-based issuers at any time and may exert control over offerings conducted overseas and foreign investment in mainland China-based issuers. For a more complete discussion, see Risk Factors—Risks Related to Flexi’s Operations in Hong Kong—The mainland China government may intervene in or influence the operations of mainland China-based issuers at any time and may exert control over offerings conducted overseas and foreign investment in mainland China-based issuers. If the mainland China government determines that PubCo is a mainland China-based issuer, the mainland China government would be able to intervene in and influence PubCo’s operations at any time and such governmental or regulatory interference could result in a material change in PubCo’s operations and/or the value of the PubCo Ordinary Shares. Additionally, mainland China governmental and regulatory interference could significantly limit or completely hinder PubCo’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthlesson page 74 of this proxy statement;

 

  Flexi operates a significant portion of its business in Southeast Asia, and therefore it may be exposed to risks in operating or investing within this region. For a more complete discussion, see Risk Factors—Risks Related to Flexi’s Geographic Operations—Flexi operates a significant portion of its business in Southeast Asia, and therefore it may be exposed to risks in operating or investing within this regionon page 76 of this proxy statement;

 

  The Sponsor Related Parties and each of TGVC’s officers and directors have agreed to vote in favor of the Proposals, including the Business Combination Proposal, regardless of how the TGVC Public Stockholders vote;

 

  The Initial Holders have interests that are different, or in addition to (and which may conflict with), the interests of TGVC Public Stockholders, and a conflict of interest may have existed in determining whether the Business Combination is appropriate as TGVC’s initial business combination. Such interests include that the Sponsor will lose its entire investment in TGVC if a business combination is not completed;

 

  TGVC faces legal and operational risks associated with the Sponsor being based in Hong Kong, which could result in a material change in TGVC’s operations and jeopardize its ability to consummate the Business Combination. For a more complete discussion, see Risk Factors—Risks Related to TGVC and the Business Combination—TGVC faces legal and operational risks associated with the Sponsor being based in Hong Kong, which could result in a material change in TGVC’s operations and jeopardize its ability to consummate the Business Combination” on page 81 of this proxy statement;

 

  The mainland China government may intervene in or influence the operations of mainland China-based issuers at any time and may exert control over offerings conducted overseas and foreign investment in mainland China-based issuers. For a more complete discussion, see Risk Factors—Risks Related to TGVC and the Business Combination—The mainland China government may intervene in or influence the operations of mainland China-based issuers at any time and may exert control over offerings conducted overseas and foreign investment in mainland China-based issuers. If the mainland China government determines that TGVC or the Sponsor is a mainland China-based issuer, the mainland China government would be able to intervene in and influence TGVC’s and the Sponsor’s operations at any time and such governmental or regulatory interference could result in a material change in TGVC’s operations, its ability to consummate a business combination, including the Business Combination, and/or the value of the TGVC Public Shares. Additionally, mainland China governmental and regulatory interference could significantly limit or completely hinder TGVC’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthlesson page 81 of this proxy statement;

 

  TGVC may not be able to obtain certain benefits under the relevant tax treaty on dividends paid by its future mainland China subsidiaries (if any) to it through its future Hong Kong subsidiaries (if any). For a more complete discussion, see “Risk Factors—Risks Related to TGVC and the Business Combination—TGVC may not be able to obtain certain benefits under the relevant tax treaty on dividends paid by its future mainland China subsidiaries (if any) to it through its future Hong Kong subsidiaries (if any)” on page 83 of this proxy statement;
     
  TGVC Stockholders may experience difficulties in effecting service of legal process in the U.S. and enforcing civil liabilities in the PRC against TGVC, the Sponsor and certain of their directors and officers. For a more complete discussion, see Risk Factors—Risks Related to TGVC and the Business Combination—TGVC Stockholders may experience difficulties in effecting service of legal process in the U.S. and enforcing civil liabilities in the PRC against TGVC, the Sponsor and certain of their directors and officerson page 83 of this proxy statement;

 

 

If TGVC were considered to be a “foreign person,” it might not be able to complete an initial business combination with a U.S. target company if such initial business combination is subject to U.S. foreign investment regulations or review by a U.S. government entity, such as the Committee on Foreign Investment in the United States (“CFIUS”). For a more complete discussion, see Risk Factors—Risks Related to TGVC and the Business Combination—If TGVC were considered to be a “foreign person,” it might not be able to complete an initial business combination with a U.S. target company if such initial business combination is subject to U.S. foreign investment regulations or review by a U.S. government entity, such as CFIUSon page 83 of this proxy statement;

 

  TGVC’s business, financial condition and results of operations, the value of the TGVC Common Stock, TGVC’s ability to offer or continue to offer securities to investors, and/or TGVC’s ability to consummate a business combination may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as TGVC. For a more complete discussion, see Risk Factors—Risks Related to TGVC and the Business Combination—TGVC’s business, financial condition and results of operations, the value of the TGVC Common Stock, TGVC’s ability to offer or continue to offer securities to investors, and/or TGVC’s ability to consummate a business combination may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as TGVCon page 84 of this proxy statement;

 

  The exercise of the TGVC Board’s discretion in agreeing to changes or waivers in the terms of the Business Combination Agreement and related agreements, including Closing conditions, may result in a conflict of interest when determining whether such changes to the terms or waivers of conditions are appropriate and in TGVC Stockholders’ best interest;

 

  TGVC may not be able to consummate the Business Combination if (i) the Net Tangible Assets Condition is not satisfied or waived, or (ii) the Charter Limitation is violated, unless the Charter Limitation Amendment Proposal is approved and the Charter Limitation Amendment is implemented;

 

  Subsequent to consummation of the Business Combination, PubCo may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on PubCo’s financial condition, results of operations and the price of its securities, which could cause you to lose some or all of your investment;

 

  The COVID-19 pandemic has adversely impacted Flexi’s business and may continue to do so, thereby exposing it to risks associated with member bankruptcy, fluctuating revenue streams, and financial position;

 

  The historical financial results of Flexi and unaudited pro forma financial information included elsewhere in this proxy statement may not be indicative of what Flexi’s actual financial position or results of operations would have been if it were a public company;

 

  The Sponsor Related Parties or TGVC’s or Flexi’s respective directors, officers, advisors or respective affiliates may elect to purchase shares of TGVC Class A Common Stock from TGVC Public Stockholders prior to the consummation of the Business Combination, which may reduce the public “float” of the TGVC Class A Common Stock;

 

  TGVC Stockholders may be held liable for claims by third parties against TGVC to the extent of distributions received by them upon redemption of their TGVC Public Shares;

 

 

TGVC Public Stockholders who wish to redeem their TGVC Public Shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If TGVC Public Stockholders fail to comply with the redemption requirements specified in this proxy statement, they will not be entitled to redeem their TGVC Public Shares for a pro rata portion of the funds held in the Trust Account;

 

 

As a foreign private issuer, PubCo will be permitted, and intends, to follow certain home country corporate governance practices instead of otherwise applicable Nasdaq corporate governance requirements, and this may result in less investor protection than that accorded to investors under rules applicable to domestic U.S. issuers. See “Risk Factors—Risks Related to Investment in a BVI Company and PubCo’s Status as a Foreign Private Issuer—As a foreign private issuer, PubCo will be permitted, and intends, to follow certain home country corporate governance practices instead of otherwise applicable Nasdaq corporate governance requirements, and this may result in less investor protection than that accorded to investors under rules applicable to domestic U.S. issuers” on page 101 of this proxy statement; and

     
  PubCo will be required to comply with economic substance requirements in the BVI.

 

56
 

 

Selected Historical Financial Information and Operating Data of Flexi

 

The information presented below is derived from Flexi’s audited consolidated financial statements as of and for the fiscal years ended December 31, 2022, and December 31, 2021, and unaudited consolidated financial statements as of and for the six months ended June 30, 2023, included elsewhere in this proxy statement. The information presented below should be read alongside Flexi’s consolidated financial statements and accompanying footnotes included elsewhere in this proxy statement. You should read the following financial data together with “Risk Factors,” and “Flexi’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The summary consolidated financial data in this section is not intended to replace Flexi’s consolidated financial statements and related notes and are qualified in their entirety thereby. Flexi’s historical results are not necessarily indicative of the results to be expected in the future or for any full year period.

 

        For the year ended
  For the
six months
ended
June 30,
2023
  December 31,
2022
  December 31,
2021
Balance Sheet Data:            
Total assets   $ 95,124,540     $ 99,975,678     $ 27,197,194  
Total liabilities     45,217,383       48,837,632       25,745,182  
Total equity   $ 49,907,157     $ 51,138,046     $ 1,452,012  

 

      For the year ended
   For the
six months
ended
June 30,
2023
  December 31,
2022
  December 31,
2021
Income Statement Data:               
Revenue from operations  $11,425,670   $18,105,055   $11,937,078 
Cost of sales   (4,500,292)   (7,725,291)   (6,366,591)
Gross profit   6,925,378    10,379,764    5,570,487 
                
Other income/(expense)   395,615    139,223    (743,857)
Administration expenses   (7,557,411)   (13,033,558)   (7,951,446)
Net impairment losses of financial assets       (47,620)    
Finance cost   (679,302)   (1,177,589)   (996,728)
Share of profit from equity accounted investments   (79,160)   (140,142)    
Loss before income tax expense   (994,880)   (3,879,922)   (4,121,544)
Income tax (expense)/benefit   (93,085)   (182,145)   828,632 
Loss for the year   (1,087,965)   (4,062,067)   (3,292,912)
Loss attributable to               
Non-controlling interest   7,070    (36,864)    
Owners of the parent  $(1,095,035)  $(4,025,203)  $(3,292,912)

 

        For the year ended
    For the
six months
ended
June 30,
2023
  December 31,
2022
  December 31,
2021
Cash Flow Statement Data:                        
Net cash from operating activities   $ 4,663,902     $ 6,970,784     $ 3,604,384  
Net cash used in investing activities     (113,445 )     (590,190 )     (2,421,525 )
Net cash used in financing activities     (4,646,651 )     (8,380,651 )     (2,915,687 )
Net increase in cash and cash equivalents     (96,194 )     (2,000,057 )     (1,732,826 )
Cash and cash equivalents at beginning of year     3,297,485       2,251,884       2,720,412  
Effect of foreign exchange rate changes     55,116       (99,074 )     1,264,299  
Cash acquired on acquisition           3,144,732        
Cash and cash equivalents at end of year   $ 3,256,407     $ 3,297,485     $ 2,251,884  

 

57
 

 

Selected Historical Financial Information of TGVC

 

The following tables present TGVC’s selected historical financial information derived from TGVC’s audited financial statements included elsewhere in this proxy statement as of December 31, 2022, and for the year ended December 31, 2022 and as of December 31, 2021, and for the period from February 8, 2021 (inception) through December 31, 2021, TGVC’s unaudited financial statements included elsewhere in this proxy statement as of and for the nine months ended September 30, 2023 and TGVC’s unaudited financial statements included elsewhere in this proxy statement as of and for the six months ended June 30, 2023.

 

The financial data set forth below should be read in conjunction with, and is qualified by reference to, “TGVC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto included elsewhere in this proxy statement. TGVC’s financial statements are prepared and presented in accordance with U.S. GAAP.

  

   For the
nine months
ended
September 30,
2023
  For the
six months ended June 30,
2023
  For the
year ended December 31,
2022
  For the
period from
February 8,
2021
(inception) to
December 31,
2021
Income Statement Data:                    
Loss from operations  $(3,436,700)  $(2,524,207)  $(2,238,122)  $(375,267)
Net loss  $(1,661,254)  $(907,322)  $(857,534)  $(1,073,167)
Weighted average shares outstanding, Class A Common Stock subject to possible redemption   6,399,232    8,972,963    11,557,500    2,014,610 
Basic and diluted net loss per share, Class A Common Stock subject to possible redemption  $(0.18)  $(0.08)  $(0.06)  $(0.26)
Weighted average shares outstanding, Class B Common Stock   2,889,149    2,889,149    2,889,149    2,095,139 
Basic and diluted net loss per share, Class B Common Stock  $(0.18)  $(0.08)  $(0.06)  $(0.26)

 

 

   September 30, 2023  June 30, 2023  December 31, 2022  December 31, 2021
Balance Sheet Data:       $14,284,440           
Cash and investments held in the Trust Account  $14,632,141   $15,260,495   $118,956,557   $117,307,730 
Total assets  $14,950,770   $5,429,517   $119,244,269   $118,547,455 
Total liabilities  $5,873,724   $14,298,565   $1,830,070   $275,722 
Common stock subject to possible redemption  $14,567,407   $4,467,587   $118,309,040   $117,300,000 
Total stockholders’ (deficit) equity  $(5,490,361)  $14,284,440   $(894,841)  $971,733 

 

58
 

  

Selected Unaudited Pro Forma Condensed Combined Financial Information

 

The unaudited pro forma condensed combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the Business Combination occurred on the dates indicated. The unaudited pro forma condensed combined financial statements also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only.

 

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption into cash of TGVC Class A Common Stock:

  

 

Assuming No Additional Redemptions: This presentation assumes that, after the 2023 Redemptions, no TGVC Public Stockholders exercise redemption rights with respect to their TGVC Public Shares upon consummation of the Business Combination.

 

 

Assuming Maximum Redemptions: This presentation assumes that, after the 2023 Redemptions, TGVC Public Stockholders exercise their redemption rights with respect to 470,488 TGVC Public Shares for approximately $5.2 million upon consummation of the Business Combination at a redemption price of approximately $11.04 per share. The maximum redemptions amount reflects the maximum number of the TGVC Public Shares that can be redeemed without violating the conditions of the Business Combination Agreement. The maximum redemptions amount reflects the assumption that the TGVC Charter is amended pursuant to the Charter Limitation Amendment Proposal, such that TGVC will not be required to maintain a minimum net tangible asset value of $5,000,001 either immediately prior to or upon the closing of the Business Combination. If the Charter Limitation Amendment Proposal is not approved, TGVC would not be permitted to proceed with the Business Combination unless TGVC has net tangible asset value of at least $5,000,001 either immediately prior to or upon the Closing. This scenario includes all adjustments contained in the “No Additional Redemptions” scenario and presents additional adjustments to reflect the effect of the maximum redemptions.

  

The following table sets out share ownership of PubCo on a pro forma basis assuming the No Additional Redemptions Scenario and the Maximum Redemptions Scenario:

  

   No Additional Redemptions Scenario  Maximum Redemptions Scenario
Flexi Shareholders   19,000,000    19,000,000 
TGVC Public Stockholders   868,670    398,182 
TGVC’s directors and officers and the Sponsor Related Parties   2,889,149    2,889,149 
ARC   827,315    810,263 
ThinkEquity   57,500    57,500 
Total   23,642,634    23,155,094 

 

The following table sets out summary data derived from the unaudited pro forma condensed combined statement of financial position and the unaudited pro forma condensed combined statement of operations. The summary unaudited pro forma condensed combined balance sheet as of June 30, 2023 gives effect to the Business Combination as if it had occurred on June 30, 2023. The summary unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2023 and for the year ended December 31, 2022, gives effect to the Business Combination as if it had occurred on January 1, 2022:

  

   No Additional Redemptions Scenario  Pro Forma Combined Maximum Redemptions Scenario
Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data For the Six Months Ended June 30, 2023          
Net loss  $(3,380,138)  $(3,380,138)
Net loss per share – basic and diluted  $(0.14)  $(0.15)
Weighted average shares outstanding of common stock – basic and diluted   23,642,634    23,155,094 
Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data For the Year Ended December 31, 2022          
Net loss  $(48,318,014)  $(48,200,109)
Net loss per share – basic and diluted  $(2.04)  $(2.08)
Weighted average shares outstanding of common stock – basic and diluted   23,642,634    23,155,094 
Summary Unaudited Pro Forma Condensed Combined Balance Sheet Data As of June 30, 2023          
Total assets  $98,290,591   $93,180,230 
Total liabilities  $46,452,345   $46,452,345 
Total equity  $51,838,246   $46,727,885 

  

59
 

 

Comparative Per Share Information

 

The following table sets forth the historical comparative share information for Flexi and TGVC on a stand-alone basis and pro forma combined per share information after giving effect to the Business Combination assuming that (i) after the 2023 Redemptions, no TGVC Public Stockholders exercise redemption rights with respect to their TGVC Public Shares upon the consummation of the Business Combination; (ii) after the 2023 Redemptions, TGVC Public Stockholders exercise their redemption rights with respect to a maximum of 470,488 TGVC Public Shares upon consummation of the Business Combination and (iii) in each case, no Flexi Shareholders exercise their appraisal rights with respect to Flexi Shares.

 

The historical financial statements of Flexi have been prepared in accordance with IFRS as issued by the IASB and in its presentation currency of U.S. Dollars. The historical financial statements of TGVC have been prepared in accordance with U.S. GAAP in its presentation currency of U.S. Dollars. The historical financial information of TGVC has been adjusted to give effect to the differences between U.S. GAAP and IFRS for the purposes of the pro forma combined financial information.

 

The historical information should be read in conjunction with the information in the sections entitled “Selected Historical Financial Information and Operating Data of Flexi” and “Selected Historical Financial Information of TGVC” and the historical financial statements of Flexi and TGVC included elsewhere in this proxy statement. The pro forma combined per share information is derived from, and should be read in conjunction with, the information contained in the section of this proxy statement entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

 

The pro forma combined share information below does not purport to represent what the actual results of operations or the earnings per share would have been had the companies been combined during the periods presented, nor to project PubCo’s results of operations or earnings per share for any future date or period. The pro forma combined shareholders’ equity per share information below does not purport to represent what the value of Flexi and TGVC would have been had the companies been combined during the periods presented.

  

         Pro Forma Combined
         Assuming No  Assuming
   Flexi  TGVC  Additional  Maximum
   (Historical)  (Historical)  Redemptions  Redemptions
Six Months Ended June 30, 2023            
Net loss  $(1,095,035)  $(907,322)  $(3,380,138)  $(3,380,138)
Shareholders’ equity (deficit)  $49,907,157   $(4,467,587)  $51,838,246   $46,727,885 
Shareholders’ equity per share basic and diluted  $   $(0.31)  $2.19   $2.02 
Cash dividends  $   $   $   $ 
Weighted average shares basic and diluted       14,446,649    23,642,634    23,155,094 
Net loss per share basic and diluted  $   $(0.08)  $(0.14)  $(0.15)
                     
Year Ended December 31, 2022                    
Net loss  $(5,754,244)  $(857,534)  $(48,318,014)  $(48,200,109)
Weighted average shares basic and diluted       14,446,649    23,642,634    23,155,094 
Net loss per share basic and diluted  $   $(0.06)  $(2.04)  $(2.08)

 

Shareholders’ equity per share = total equity/shares outstanding

 

60
 

 

Risk Factors

 

TGVC Stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement, before they decide whether to vote or instruct their vote to be cast to approve the Proposals described in this proxy statement.

 

Unless otherwise indicated or the context otherwise requires, references in this section to PubCo refer to PubCo and its consolidated subsidiaries (including TGVC and Flexi) after giving effect to the Business Combination. References in this section to “TGVC” refer to TG Venture Acquisition Corp. and references in this section to “Flexi” refer to The Flexi Group Limited and its subsidiaries.

 

Risks Related to Flexi’s Business and Industry

 

Flexi has a history of losses and may not be able to achieve or maintain profitability in the future.

 

On a pro forma basis Flexi has incurred net losses in each fiscal year since its inception. As of June 30, 2023, Flexi had accumulated losses of $29.4 million. Flexi expects to continue to incur significant costs and expenses associated with the operation and development of an expanding business. These efforts may prove more expensive than Flexi currently anticipates, and Flexi may not succeed in increasing its revenue sufficiently, or at all, to offset these higher expenses and to achieve and maintain profitability. Growth of Flexi’s revenue may slow or revenue may decline for a number of possible reasons, including a decrease in Flexi’s ability to attract and retain members, a failure to increase the number of Flexi’s landlord partners, an increase in competition, and a decrease in the growth of Flexi’s overall markets compared to current expectations. If Flexi is unable to address these risks and challenges as it encounters them, Flexi’s business and operating results may be adversely affected, and it may not be able to achieve or sustain profitability.

 

Flexi’s workforce and operations have grown substantially since its inception, and Flexi expects that they will continue to do so. If Flexi is unable to effectively manage that growth, its financial performance and future prospects will be adversely affected.

 

Flexi has experienced rapid growth since its inception. For example, the number of Flexi’s full-time employees has increased from 63 as of December 31, 2017, to 194 as of December 31, 2023. Flexi is committed to expanding its global operations. Such expansion will increase the complexity of Flexi’s business and place significant strain on its management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. Flexi may not be able to manage its growth effectively, which could damage Flexi’s reputation, limit its growth, increase its costs, and negatively affect its results of operations. In part due to Flexi’s increased headcount, Flexi has increased its reliance on third party providers, which has introduced additional complexities, including more complex and expanded reporting structures. Flexi’s business is becoming increasingly more complex, and this complexity and Flexi’s rapid growth have demanded, and will continue to demand, substantial resources and attention from Flexi’s management.

 

61
 

 

To accommodate Flexi’s expected growth, Flexi must improve and maintain its technology, systems, and network infrastructure. Failure to effectively upgrade its technology or network infrastructure could result in unanticipated system disruptions, slow response times, and/or poor experiences for Flexi’s customers. Flexi’s current and planned personnel, systems, procedures, and controls may not be adequate to support its future operations. If Flexi is unable to expand its operations in an efficient manner, it could adversely affect customer satisfaction and cause Flexi’s expenses to grow disproportionately relative to its revenue, and its financial performance and future prospects will be adversely affected.

 

Flexi may not be able to retain existing members, most of whom enter into membership agreements with short-term commitments, or attract new members in sufficient numbers or at sufficient rates to sustain or increase its membership.

 

A significant portion of Flexi’s business is generated from the sale of memberships, which can expire without renewal or be subject to downgrades or early terminations. Due to the COVID-19 pandemic, Flexi has experienced, and may continue to experience, higher levels of membership non-renewals. While Flexi is unable to quantify how many members terminated or did not renew their memberships due to the COVID-19 pandemic, during the period from March 2020 to December 31, 2021, members cited the following reasons for non-renewal: inability to utilize the office space due to government enforced restrictions on people’s movement and accessibility of the workspace; inability to travel to the office space if based overseas; slowdown of business performance or complete shutdown/ bankruptcy; or increased adoption of work from home workplace strategies. Flexi has seen this occur across all of its markets. In addition, while Flexi’s membership agreements provide that they are not terminable by the member prior to their expiration date, members may nevertheless abandon their space without making further payments and leaving outstanding payments. Although the amount of outstanding payments as a result of such abandonments to date has not been material, such outstanding payments, in the aggregate, may have a material adverse effect on Flexi’s results of operations. Non-renewal of or non-payment on membership contracts may occur for many reasons, including, but not limited to, underutilized office space, a downward trend in performance of a member’s business, a member’s lack of cash flow or need to reduce its expenses, a member’s perception that alternative work environments may provide a better value or a more preferable experience, or a change in a member’s senior management. As of December 31, 2023, 759 of Flexi’s members, including those with virtual memberships, representing approximately $109,754 or approximately 56.2% of Flexi’s monthly membership income, may cancel their memberships in any one calendar month.

 

In addition, Flexi’s results of operations could be adversely affected by a decline in demand for its memberships. Demand for Flexi’s memberships has been and may continue to be negatively affected by public health concerns, including COVID-19, and could also be affected by a number of other factors, including geopolitical uncertainty, cybersecurity incidents, decline in Flexi’s reputation, competition, and saturation in the markets where Flexi operates and prevailing general and local economic conditions. Current and potential members that are small- and mid-sized businesses may be disproportionately affected by adverse economic conditions.

 

Flexi must continually add new members both to replace departing members and to expand its current member base. However, Flexi may not be able to attract new members in sufficient numbers to fully replace departing members. For these and other reasons, Flexi may continue to experience a decline in its revenue growth, which could adversely affect its results of operations.

 

62
 

 

An economic downturn or subsequent decline in market rents may result in increased member terminations and could adversely affect Flexi’s results of operations.

 

While Flexi believes that it has a durable business model in all economic cycles, there can be no assurance that this will be the case in an economic downturn. A significant portion of Flexi’s member base consists of small- and mid-sized businesses and freelancers who may be disproportionately affected by adverse economic conditions. In addition, Flexi’s concentration in specific cities magnifies the risk to Flexi of adverse localized economic conditions in those cities or the surrounding regions. Economic downturns in Flexi’s current markets may have an adverse effect on Flexi’s ability to retain members, in particular members that are small- and mid-sized businesses, which may require Flexi to expend time and resources on sales and marketing activities that may not be successful. Furthermore, an outbreak of a contagious disease, such as a resurgence of COVID-19 or any similar illness, has had and may continue to have a disproportionate effect on businesses located in large metropolitan areas, as larger cities may be more likely to institute a quarantine or “shelter-in-place” requirements. In addition, Flexi’s business may be affected by generally prevailing economic conditions in the markets where it operates, which can result in a general decline in real estate activity, reduce demand for Flexi’s products and services, and exert downward pressure on its revenue.

 

The long-term and fixed-cost nature of a portion of Flexi’s leases may limit its ability to operate effectively and could adversely affect Flexi’s liquidity and financial performance.

 

Currently, approximately 46.5% of Flexi’s locations are operated pursuant to traditional leases, 39.5% of Flexi’s locations are operated pursuant to hybrid agreements, 9.3% of Flexi’s locations are operated pursuant to management agreements, and 4.7% of Flexi’s locations are operated pursuant to enterprise agreements. While Flexi considers hybrid agreements, management agreements and enterprise agreements to be “asset-light” agreements, they each include some features of a traditional lease. Except for limited exceptions, Flexi is not permitted to terminate these traditional, enterprise and hybrid agreements prior to the end of their term. Flexi’s obligations to landlords under these agreements extend for periods that generally exceed the length of Flexi’s agreements with its members.

 

Flexi’s traditional leases generally provide for fixed monthly or quarterly payments that are not tied to space utilization or the size of Flexi’s member base, and the majority of its hybrid agreements contain variable or minimum rental payment obligations.

 

As a result, in locations where Flexi does not generate sufficient revenue from members at a particular space, including if members terminate their membership agreements with Flexi and Flexi is not able to replace these departing members or Flexi ceases to operate at leased spaces, Flexi’s lease cost expense may exceed its revenue. In addition, Flexi may not be able to negotiate lower fixed monthly payments under its leases to rates that are commensurate with the lower rates Flexi may agree to for its monthly membership fees, which may also result in its rent expense exceeding its membership and service revenue at these locations. At certain locations, Flexi has not been able to, and may not be able to, reduce its rent under the lease or otherwise terminate the lease, whether in accordance with its terms or by negotiation.

 

If Flexi experiences a prolonged reduction in revenues at a particular leased location, including as a result of any resurgence in COVID-19, its results of operations in respect of that space would be adversely affected unless and until the lease or hybrid agreement expires or Flexi is able to assign the lease or sublease the space to a third party or otherwise renegotiate the terms of the lease or an exit from that space. Flexi’s ability to assign a lease or sublease for a particular space to a third party may be constrained by provisions in the agreement that restrict these transfers without notice to, or the prior consent of, the landlord. Additionally, Flexi could incur significant costs if it decides to assign or sublease unprofitable leases or hybrid agreements, as Flexi may incur transaction costs associated with finding and negotiating with potential transferees, and the ultimate transferee may require upfront payments or other inducements. Flexi is also party to a variety of lease agreements and other types of occupancy agreements containing a variety of contractual rights and obligations that may be subject to interpretation. Flexi’s interpretation of such contracts may be disputed by its landlords or members, which could result in litigation, damage to its reputation, or contractual or other legal remedies becoming available to such landlords and members and may negatively impact its results of operations.

 

Flexi’s consolidated financial condition and results of operations depend on its ability to perform its obligations under its leases and other agreements over time. Flexi’s business, reputation, financial condition, and results of operations depend on Flexi’s ongoing compliance with its leases and other agreements.

 

63
 

 

Should there be a change in market conditions that negatively affects Flexi’s business and its ability to sustain demand for any particular location, Flexi’s financial performance may suffer as the location sustains losses.

 

Flexi’s current and projected portfolio contains a significant portion of joint venture agreements with developers, asset owners, and landlords, and a portion contain early termination clauses, which may impact Flexi’s revenues and profitability at any time.

 

Flexi’s growth strategy includes and has historically included entering into joint ventures with landlords in non-U.S. jurisdictions, such as Australia, Hong Kong, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam. Flexi’s success in these locations is therefore partially dependent on third parties whose actions Flexi cannot control.

 

Joint venture arrangements with Flexi’s landlord partners come in varying forms and with varying termination clauses, such as, but not limited to, the failure to achieve performance hurdles, the failure to make timely payments, and the failure to report correctly, which may provide Flexi’s landlord partners the ability to terminate Flexi’s agreements more easily than they would under traditional lease arrangements. Any dispute arising from the failure to uphold all clauses within joint venture arrangements can lead to a risk of early termination. There are also variations within each form of agreement such that Flexi’s arrangements with its landlord partners may differ from deal to deal, landlord to landlord, or country to country. For example, Flexi includes a variable rent provision providing that rent can vary from $0 to market rate based on landlords and market rental expectations. Some of Flexi’s locations operate under traditional leases, which can be more expensive for flexible workspace operators than asset-light arrangements.

 

A significant part of Flexi’s growth strategy will be through joint ventures with developers, asset owners and landlords, and disputes with Flexi’s partners may adversely affect its interest in these joint ventures.

 

Joint venture arrangements with Flexi’s landlord partners come in varying forms and with varying clauses that require partner consent, such as but not limited to, consent on repairs and maintenance of a location, approvals on commissions payable, approval on barter deals, and so on. Flexi’s partners in these joint ventures may have interests that differ from Flexi’s, and Flexi may disagree with its partners on a resolution of a particular issue or as to the management or conduct of the business in general. Any dispute arising from issues within joint venture arrangements can lead to a risk of a lengthy dispute and could have a material adverse effect on Flexi’s interest in the joint venture or the business of the joint venture in general. In addition, Flexi has entered into and may continue to enter into agreements that provide its partners with exclusivity or other pre-emptive rights in agreed-upon geographic areas, which may limit Flexi’s ability to pursue business opportunities in the manner that Flexi desires.

 

Flexi’s success depends on its ability to maintain the value and reputation of its brands and the success of its partnerships.

 

Flexi’s workspace brands are integral to its business. Maintaining, promoting, and positioning the Hive, Common Ground, and The Cluster brands will depend largely on Flexi’s ability to provide a consistently high-quality member experience and on its marketing and community-building efforts. To the extent that Flexi’s locations, workspace solutions, or product or service offerings are perceived to be of low quality or otherwise are not compelling to new and existing members, Flexi’s ability to maintain positive brand reputations may be adversely affected.

 

In addition, failure by third parties on whom Flexi relies but whose actions it cannot control, such as joint venture partners, general contractors, and construction managers who oversee its construction activities, or their respective facilities management staff, to uphold a high and consistent standard of workmanship, ethics, conduct, and legal compliance could subject Flexi to reputational harm based on their association with Flexi and its brands.

 

Unfavorable publicity or member perception or experience with Flexi’s offerings, practices, or services could adversely affect Flexi’s reputation, resulting in difficulties in attracting and retaining employees, members, landlords, and other partners, regulatory scrutiny, and litigation, and limiting the success of Flexi’s community-building efforts and the range of products and services that Flexi is able to offer. Any or all of these could have a material adverse effect on Flexi’s business, prospects, financial condition, and results of operations.

 

The COVID-19 pandemic has adversely impacted Flexi’s business and may continue to do so, thereby exposing it to risks associated with member bankruptcy, fluctuating revenue streams, and financial position.

 

The global spread and unprecedented impact of COVID-19, including variants of the virus, have resulted in significant disruption and created additional risks to Flexi’s business, its landlord partners, Flexi’s industry, and the global economy generally. During the COVID-19 pandemic, governments in Flexi’s countries of operations imposed numerous restrictions at different times, including travel bans and restrictions, quarantines, stay-at-home orders, social distancing requirements, and mandatory closure of “non-essential” businesses in an effort to curb the spread of COVID-19.

 

64
 

 

As a result, Flexi’s and its landlord partners’ businesses were significantly disrupted and their operations significantly reduced. These included varying degrees of government enforced restrictions on movement and accessibility of the workplace across the majority of Flexi’s countries of operation. These restrictions ranged from:

  

Australia March 2020 to October 2020
February 2021
May 2021 to October 2021
Hong Kong January 2021 to March 2021
May 2021 to September 2021
Japan April 2020 to September 2021
November 2021 to October 2022
Malaysia March 2020 to October 2021
The Philippines March 2020 to September 2021
Singapore April 2020 to June 2022
Taiwan No major restrictions
Thailand No major restrictions
Vietnam July 2021 to October 2021

  

COVID-19 was first prevalent in Flexi’s markets of operation in March 2020, and, as such, it is pertinent to discuss the adverse impacts when analyzing 2019 to 2020. Flexi’s revenues decreased 0.1% from 2019 to 2020, when the COVID-19 pandemic hit most of Flexi’s markets of operation and governments enforced restrictions on movement and accessibility of the workplace. This decrease was offset by the opening of four new locations in 2019, which accounted for approximately 8.6% of gross revenue in 2019 and 15.0% of gross revenue in 2020. Typically, new openings take 10-12 months to achieve stabilized performance, which coincided with slowdown across legacy locations due to COVID-19 restrictions, allowing Flexi to maintain gross revenue stability across 2019 to 2020.

 

Other revenues decreased by approximately 58.4% from 2019 to 2020 and space rental income decreased by approximately 18.1% across the same period.

 

Similar to 2020, 2021 saw continued government enforced restrictions on movement and workplace accessibility in most of Flexi’s markets. During this period, however, Flexi increased revenues by approximately 18.6%. Any slowdown in performance within Flexi’s legacy locations was offset by the four new locations opened in 2019 achieving stable performance, as well as two additional new locations and the acquisition of The Cluster in April 2021. Together, these new locations accounted for 29.2% of gross revenue in 2021. Excluding the new locations, Flexi’s membership-related revenues decreased from approximately $7,911,078 to $7,487,082, or 5.36%, from 2020 to 2021. Similarly, space rental income decreased from approximately $437,940 to $408,178, or 6.8%, over the same period.

 

For locations under the Common Ground brand, Flexi experienced an average monthly churn rate of 8.0% in 2020 and 7.0% in 2021, compared to 5.0% in 2022. For locations under the Hive and The Cluster brands, Flexi experienced an average monthly churn rate of 3.0% in 2020, 5.0% in 2021 and 1.0% in 2022. Flexi believes that the higher churn rates in 2020 and 2021 were due to increased COVID-19 related restrictions on movement and workplace accessibility in the majority of its markets. While such restrictions are not currently in place, it is possible that such measures could be re-imposed in the future based on developments with COVID-19, in particular, the emergence of new strains of the virus. In addition, the spread of COVID-19 has caused Flexi to modify its business practices (including employee travel, employee work locations and cancellation of physical participation in meetings, events and conferences), and Flexi may take further actions, as may be required by government authorities or that Flexi determines are in the best interests of its employees and members. There is no certainty that such measures will be sufficient to mitigate the risks that continue to be posed by COVID-19, and Flexi’s ability to perform critical functions, including operating its locations, could be further adversely affected.

 

65
 

 

Flexi also experienced a reduction in new memberships, membership renewals, and sales of ancillary products and services since the start of the COVID-19 pandemic, which negatively affected, and may continue to negatively affect, Flexi’s results of operations. While Flexi is unable to quantify how many members terminated or did not renew their memberships due to the COVID-19 pandemic, members cited the following reasons for non-renewal: inability to utilize the office space due to government enforced restrictions on people’s movement and accessibility of the workspace; inability to travel to the office space if based overseas; slowdown of business performance or complete shutdown / bankruptcy; or increased adoption of work from home workplace strategies. As of December 31, 2023, 759 of Flexi’s members, including those with virtual memberships, representing approximately $109,754 or approximately 6.2% of monthly membership income may cancel their memberships in any one calendar month. Flexi was also, and may continue to be, adversely impacted by non-payment (or delayed payment) from its members seeking payment concessions or deferrals as a result of the COVID-19 pandemic.

  

Flexi may be unable to adequately protect or prevent unauthorized use of its intellectual property rights and Flexi may be prevented by third parties from using or registering its intellectual property.

 

To protect its intellectual property rights, Flexi relies on a combination of trademark, copyright, trade dress, and trade secret protection laws, and protective agreements with its employees and third parties, and physical and electronic security measures. Flexi has obtained a strategic set of intellectual property registrations and applications, including for the Hive, Common Ground, and The Cluster brands and Ambition Engine, in certain jurisdictions throughout the world. Nevertheless, these applications may not proceed to registration or issuance or otherwise be granted protection. Flexi may not be able to adequately protect or enforce its intellectual property rights or prevent others from copying or using Flexi’s intellectual property in certain jurisdictions throughout the world and in jurisdictions where intellectual property laws may not be adequately developed or favorable to Flexi. In addition, third parties may attack Flexi’s trademarks by opposing said applications or cancelling registrations on a variety of bases, including validity and non-use. Third parties may claim that Flexi is infringing their intellectual property rights or challenge the validity or enforceability of Flexi’s intellectual property rights, and Flexi may not be successful in defending these claims. These claims, even if they are without merit, could result in the prevention of Flexi registering or enforcing its intellectual property. These claims can also cause Flexi to stop using certain intellectual property and force Flexi to rebrand or redesign its marketing, product, or technology. Additionally, the agreements and security measures that Flexi has in place may be inadequate or otherwise fail to effectively accomplish their protective purposes. In some cases, Flexi may need to litigate these claims or negotiate a settlement that can include a monetary payment or license arrangement or cause it to stop using certain intellectual property. This may also trigger certain indemnification provisions in third party license agreements. Flexi may be unable to defend its proprietary rights or prevent infringement or misappropriation without substantial expense to it and this may negatively impact its intellectual property rights.

 

Third parties may also infringe or misappropriate Flexi’s intellectual property rights, including its brands or Ambition Engine, and Flexi may not be successful in asserting intellectual property rights against third parties. There may be instances where Flexi may need to resort to litigation or other proceedings to enforce its intellectual property rights, which may be costly and result in counterclaims against Flexi.

 

Further, Flexi licenses certain intellectual property rights, including the Hive, Common Ground, and The Cluster brands, to joint venture partners and other third parties. If a licensee fails to maintain the quality of the services used in connection with Flexi’s trademarks, Flexi’s rights to and the value of its trademarks could be diminished. Failure to maintain, control and protect Flexi’s brand and other intellectual property could negatively affect Flexi’s ability to acquire members, and ultimately, negatively affect its business. If the licensees misuse Flexi’s intellectual property, then this could lead to third party claims against Flexi and could negatively affect its brands.

 

Many companies have encountered significant problems in protecting and defending intellectual property rights in certain of the jurisdictions in which Flexi operates. The legal systems in certain jurisdictions outside of the United States, particularly those in certain developing countries, do not favor the enforcement of trademarks, trade secrets, and other intellectual property protection, which could make it difficult to stop any infringement, misappropriation, or other violation of Flexi’s intellectual property rights. Flexi may not prevail in proceedings that it initiates and the damages or other remedies awarded to Flexi, if any, may not be meaningful or fully address the resulting harms to it.

 

If the measures that Flexi has taken to protect its brands, Ambition Engine, and its other proprietary rights are inadequate to prevent unauthorized use or misappropriation by third parties or if Flexi is prevented from using intellectual property due to successful third party claims, the value of its brands and other intangible assets may be diminished and its business and results of operations may be adversely affected.

 

Security breaches and other disruptions could disrupt Flexi’s business, result in the disclosure of confidential information, damage Flexi’s reputation, and create significant financial and legal exposure.

 

As further discussed in “Business of Flexi and Certain Information About Flexi,” a significant portion of Flexi’s operations are dependent on its in-house designed, developed, and operated proprietary software that manages the core of its business, which is used by members to, among other things, pay invoices and book meeting rooms and event spaces, and by Flexi’s employees to manage its locations. As a result, Flexi’s operations are dependent upon its ability to protect its computer systems and network infrastructure against damage from physical break-ins, cybersecurity breaches, and other disruptive problems caused by internet problems, other users, or unrelated third parties.

 

66
 

 

In September 2022, Flexi discovered that Googlebot had spammed Flexi’s server with random URL suffix and that Google search results showed non-existent commonground.work URLs, which led to spam sites. As a result, Flexi’s server slowed down from the constant spamming from Googlebot, and Flexi’s search engine optimization results were affected.

 

While this incident did not cause material problems or result in the loss of any data, any further such incidents, cyberattacks, and other disruptions could jeopardize the security of information stored in and transmitted through Flexi’s computer systems and network infrastructure, including proprietary business information or member information (including personal information of third parties). Despite the security measures that Flexi has put in place it may be subject to cyberattacks that could threaten Flexi’s data, systems, and networks.

 

The occurrence of any system failures, interruption, or breach of security could damage Flexi’s reputation and result in a loss of existing and potential members and other business, or expose Flexi to litigation and possible financial liability. Any of these events could have a material adverse effect on Flexi’s business, prospects, financial condition, and results of operations.

 

Flexi’s ability to secure new locations may be adversely affected by changes in market conditions or its health.

 

A significant portion of Flexi’s growth will occur through its ability to secure new locations on joint venture arrangements with developers, asset owners, and landlords. Any changes to market conditions, reputational damage involving Flexi or its brands, or Flexi’s financial position may impact its ability to scale at projected rates, which will have a negative impact on Flexi’s ability to meet its growth plans and, as a result, will have an adverse effect on its financial performance.

 

A portion of Flexi’s growth relies on its ability to execute on acquisitions, often in markets where it does not have any footprint or experience. This inherently holds risks as acquisitions may not bring the desired results, may divert management’s attention or Flexi may not be successful in pursuing investment and acquisition opportunities.

 

Flexi has completed strategic acquisitions in the past and plans to explore additional acquisitions in the future. For example, Flexi acquired The Cluster in Australia in 2021 and merged Hive Worldwide, The Cluster and Common Ground together in 2022.

 

Strategic acquisitions and the subsequent integration of new businesses and assets with Flexi’s business can require significant attention from Flexi’s management and result in a diversion of resources from Flexi’s existing business, which in turn could adversely affect its business operations. There is a risk that acquisitions may fail to meet Flexi’s strategic objectives or that the acquired business may not perform in line with expectations. The process of integrating an acquired company, business or technology may also create unforeseen operating difficulties and expenses, and Flexi may fail to achieve expected synergies, cost savings, returns, and other benefits as a result of integration challenges. There is also a risk that customers of acquired businesses do not remain customers after such acquisition, for example, if they are unwilling to pay higher prices or do not agree with any changes in membership structure. Any future acquisitions could also fail to achieve anticipated revenue, earnings, or cash flow, and Flexi may be unable to maintain the key customers, business relationships, suppliers, and brand potential of any acquired companies. In addition, there may be difficulties and expenses in assimilating particular portions of any acquisitions, such as their operations, products, technology, information systems, or personnel. Further, there may be challenges and increased demands on Flexi’s personnel associated with the management of additional locations and revenue streams. Any such negative developments could adversely affect Flexi’s business, financial condition, and results of operations.

 

Acquisitions inherently involve the risk of incurring liability for the past acts, omissions, or liabilities of the acquired business that are unforeseen or greater than anticipated. In such cases, Flexi may be subject to legal, operational, tax, and other risks, its financial and operating performance and growth prospects may be adversely impacted, and its reputation and that of its existing or acquired brands may be harmed. Flexi may continue to be exposed to such risks and liabilities for a period after the actual acquisition as it reviews and integrates its acquisitions and, where necessary, improve the acquired business’ reporting, compliance, and other functions.

 

67
 

 

While Flexi expects to undertake due diligence investigations in respect of its acquisition targets and may engage external advisors to provide it with reports on due diligence matters, it may not be able to identify all risks (including but not limited to, risks relating to finance, legal, operational, or tax matters) or verify the accuracy, reliability, or completeness of information obtained during its diligence investigations. These risks may increase when there are limitations or restrictions on the scope or nature of the due diligence that Flexi is able to undertake.

 

Flexi’s expansion and ability to accelerate growth is limited by the risks associated with the design, development, and construction of the locations into which it expands.

 

Flexi does not have long-term contractual commitments with its contractors, subcontractors, or materials suppliers. The prices Flexi pays for the labor or materials that these third parties provide, or other construction-related costs, could unexpectedly increase, which could have an adverse effect on the viability of the projects Flexi pursues and on its results of operations and liquidity. Skilled parties and high-quality materials may not continue to be available at reasonable rates in the markets in which Flexi pursues its construction activities.

 

The people that Flexi engages in connection with a construction project are subject to the usual hazards associated with providing construction and related services on construction project sites, which can cause personal injury and loss of life, damage to or destruction of property, plant and equipment, and environmental damage. Flexi’s insurance coverage may be inadequate in scope or coverage amount to fully compensate it for any losses that it may incur arising from any such events at a construction site it operates or oversees. In some cases, general contractors and their subcontractors may use improper construction practices or defective materials. Improper construction practices or defective materials can result in the need to perform extensive repairs to Flexi’s spaces, loss of revenue during the repairs and, potentially, personal injury or death. Flexi also can suffer damage to its reputation, and may be exposed to possible liability, if these third parties fail to comply with applicable laws.

 

Flexi incurs costs relating to the preparation, maintenance, repair, refurbishment, and reinstatement of its locations, which may be higher than it has anticipated.

 

The terms of a portion of Flexi’s leases generally require that it maintain, refurbish, and reinstate to their original shell condition its locations. Flexi is also responsible for a portion of such costs under its hybrid agreements with its landlord partners. The costs associated with such repair, maintenance, refurbishment, and reinstatement are often significant, may be ad-hoc, and may not be part of or may vary from Flexi’s projections or forecasts, for example, if there is a major unanticipated repair or early termination of a lease. In addition, Flexi may incur significantly greater expenses, with greater frequency, to maintain its accommodations in a condition that is satisfactory to local codes, ordinances, or regulations. For example, all land in Hong Kong is state property and the government of Hong Kong manages the use and development, as well as lease or grant to individuals or organizations for use and development. Any failure to comply with local codes, ordinances or regulation will materially adversely impact Flexi’s business, results of operations, and financial condition.

 

Flexi’s only material assets are its ownership interests in its subsidiaries that own and operate each of Flexi’s locations, and Flexi is accordingly dependent upon distributions from its subsidiaries to pay dividends and expenses.

 

Flexi is a holding company and has no material assets other than its ownership interests in its subsidiaries that own and operate each of Flexi’s locations. Flexi has no independent means of generating revenue. Flexi intends to cause its subsidiaries to make distributions in an amount sufficient to cover all applicable taxes and other expenses payable and dividends, if any, declared by it. To the extent that Flexi needs funds, and one or more of its subsidiaries is restricted from making such distributions under applicable law or regulation, or is otherwise unable to provide such funds, it could materially adversely affect Flexi’s liquidity and financial condition.

 

Risks Related to Flexi’s Operations in Hong Kong

 

The business, financial condition, results of operations, and prospects of Flexi may be materially and adversely affected because certain laws and regulations of the PRC are applicable to Flexi and its subsidiaries. Flexi may be subject to the risks and uncertainties associated with the evolving laws and regulations in the PRC, their interpretation and implementation, and the legal and regulatory system in the PRC more generally, including with respect to the enforcement of laws and the possibility of changes of rules and regulations with little or no advance notice.

 

68
 

 

While Flexi has operations in Hong Kong, it currently does not have operations in mainland China, and none of its directors or officers are based in mainland China. Accordingly, Flexi is not currently regulated by any regulatory authorities in mainland China. Pursuant to the Basic Law, which is a national law of mainland China and the constitutional document for Hong Kong, national laws of mainland China shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law and applied locally by promulgation or local legislation. The Basic Law expressly provides that the national laws of mainland China, which may be listed in Annex III of the Basic Law, shall be confined to those relating to defense and foreign affairs as well as other matters outside the autonomy of Hong Kong. While the National People’s Congress has the power to amend the Basic Law, the Basic Law also expressly provides that no amendment to the Basic Law shall contravene the basic policies of the PRC regarding Hong Kong. As a result, national laws of mainland China not listed in Annex III of the Basic Law do not apply to Hong Kong-based businesses. Nonetheless, the legal and operational risks associated with operating in mainland China apply to companies with operations in Hong Kong.

 

However, the laws and regulations in the PRC continue to evolve, and their enactment timetable, interpretation, and implementation involve significant uncertainties. As Flexi maintains operations in Hong Kong, a Special Administrative Region of the PRC, there is no guarantee that certain existing or future laws of mainland China will not become applicable to a company such as Flexi. Given the mainland China government’s significant oversight over the conduct of business operations in the PRC, and in light of (a) mainland China’s recent extension of authority not only in mainland China but also into Hong Kong and (b) the fact that rules and regulations in China can change quickly with little or no advance notice, there are risks and uncertainties that Flexi cannot foresee at this time. For example, (i) the government of Hong Kong may (x) enact similar laws and regulations to those in mainland China, which may seek to exert control over business combinations conducted by Hong Kong-based subsidiaries or their parent companies or (y) implement laws on such business activities to be more aligned with mainland China, and (ii) certain mainland China laws and regulations may become applicable in Hong Kong in the future. Accordingly, the legal and operational risks associated with operating in mainland China also apply to operations in Hong Kong. Additionally, if certain mainland China laws and regulations, including existing laws and regulations and those enacted or promulgated in the future, were to become applicable to companies such as Flexi or its subsidiaries in the future, the application of such laws and regulations may have a material adverse impact on the business, financial condition, results of operations, and prospects of Flexi and its ability to offer securities to investors, any of which may, in turn, cause the value of Flexi’s securities to significantly decline or become worthless.

 

Relevant organizations of mainland China’s government have made recent statements or recently taken regulatory actions related to cybersecurity, data security, anti-monopoly, and overseas listings of mainland China-based businesses. For example, in addition to the Cybersecurity Review Measures issued by the CAC, relevant mainland China government agencies have recently taken anti-trust enforcement action against certain mainland China-based businesses. Flexi’s management understands that such enforcement action was taken pursuant to the mainland China Anti-Monopoly Law that applies to monopolistic activities in domestic economic activities in mainland China and monopolistic activities outside mainland China that eliminate or restrict market competition in mainland China. In addition, in July 2021, the mainland China government provided new guidance on mainland China-based companies raising capital outside of mainland China, including through VIEs. In light of such developments, the SEC has imposed enhanced disclosure requirements on mainland China-based companies seeking to register the offer and sale of securities with the SEC.

 

While Flexi currently does not have any operations in mainland China, there is no guarantee that the recent statements or regulatory actions by the relevant organizations of mainland China’s government, including statements relating to the Data Security Law, the Personal Information Protection Law, and VIEs as well as the anti-monopoly enforcement actions will continue not to apply to Flexi. Should such statements or regulatory actions apply to companies such as Flexi or its subsidiaries in the future, it could have a material adverse impact on Flexi’s business, financial condition, results of operations, and prospects, its ability to accept foreign investments, and its ability to offer or continue to offer securities to investors on a U.S. or other international securities exchange, any of which may, in turn, cause the value of Flexi’s securities to significantly decline or become worthless. Flexi cannot predict the extent of such impact if such events were to occur.

 

Flexi may also become subject to the laws and regulations of mainland China to the extent that it commences business and customer facing operations in mainland China as a result of any future partnership, acquisition, expansion, or organic growth.

 

The recent state government interference into business activities of U.S. listed mainland China-based companies may negatively impact Flexi’s existing and future operations in the PRC.

 

69
 

 

Recently, the mainland China government announced that it would step up supervision of mainland China-based firms listed offshore. Under the new measures, the mainland China government will improve regulation of cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuances, market manipulation and insider trading. The mainland China government will also check sources of funding for securities investment and control leverage ratios. The CAC has also opened a cybersecurity probe into several U.S.-listed technology giants focusing on anti-monopoly, financial technology regulation and, more recently, with the passage of the Data Security Law, how companies collect, store, process and transfer data. If Flexi’s Hong Kong subsidiary is subject to such a probe or if it is required to comply with stepped-up supervisory requirements, Flexi may have to expend valuable management time and money in complying and/or responding to the probe and requirements, thus diverting valuable resources and attention away from its operations. This may, in turn, negatively impact Flexi’s operations.

 

PubCo is headquartered in the BVI. PubCo is not a Chinese operating company but a BVI holding company and, after consummation of the Business Combination, it will have operations conducted by its subsidiary based in Hong Kong. This structure involves unique risks to investors. Flexi does not, and PubCo does not intend to, use VIEs in their corporate structure. Flexi is a flexible workspace operator that provides a wide range of flexible office solutions to businesses. This business activity does not appear to be within the current targeted areas of concern for the mainland China government. Following the Business Combination, Flexi will explore a consolidation strategy in several jurisdictions, including Asia-Pacific, North America, the Middle East and Europe. Nonetheless, Flexi intends to keep Hong Kong as part of its operating structure going forward and this would potentially subject it to political and economic influence from China to the extent of such operations.

 

Because of Flexi’s subsidiary in Hong Kong and its operations there and given the mainland China government’s significant oversight and discretion over the conduct of Flexi’s Hong Kong subsidiary’s business operations there, there is always a risk that the mainland China government may, in the future, seek to affect operations of any company with any level of operations in China including its ability to offer securities to investors, list its securities on a U.S. or other foreign exchange, conduct its business or accept foreign investment. In light of the mainland China government’s recent extension of authority not only in mainland China but also into Hong Kong, there are risks and uncertainties that PubCo and Flexi cannot presently foresee, and rules and regulations in China can change quickly with little or no advance notice. The mainland China government may intervene in or influence Flexi’s current and future operations in Hong Kong at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers like PubCo.

 

If any or all of the foregoing were to occur, this could lead to a material change in Flexi’s Hong Kong subsidiary’s operations and/or the value of the PubCo Ordinary Shares and/or significantly limit or completely hinder PubCo’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.

 

Flexi Shareholders and, after the consummation of the Business Combination, PubCo shareholders, may experience difficulties in effecting service of legal process in the U.S. and enforcing civil liabilities in the PRC against Flexi and, after the consummation of the Business Combination, PubCo, and certain of their directors and officers.

 

Flexi conducts a significant amount of its operations in Hong Kong through its Hong Kong Hive Limited subsidiary. It may be difficult or impossible for investors to effect service of legal process upon Flexi or its management in the PRC, or to obtain swift and equitable enforcement of laws that do exist or to obtain enforcement of the judgment of one court by a court of another jurisdiction. Mainland China’s legal system is based on the civil law regime, that is, it is based on written statutes. A decision by one judge does not set a legal precedent that is required to be followed by judges in other cases. In addition, the recognition and enforcement of foreign judgments are provided for under the Civil Procedures Law of the People’s Republic of China (the “Civil Procedures Law”). The courts in mainland China may recognize and enforce foreign judgments in accordance with the requirements of the Civil Procedures Law and other applicable laws and regulations based either on treaties between mainland China and the country where the judgment is made or on principles of reciprocity between jurisdictions. The PRC does not have any treaties or other forms of reciprocity with the United States or the British Virgin Islands that provide for the reciprocal recognition and enforcement of foreign judgments. Due to the lack of reciprocity and treaties between the U.S. and the British Virgin Islands, on the one hand, and the PRC, on the other hand, and the additional time and cost constraints in order to enforce judgments obtained in U.S. courts based upon the civil liability provisions of U.S. federal securities laws in the PRC, Flexi Shareholders and, after the consummation of the Business Combination, PubCo shareholders, may experience difficulties in effecting service of legal process in the U.S. or the British Virgin Islands and enforcing civil liabilities in the PRC against Flexi, and after the consummation of the Business Combination, PubCo, and certain of their directors and officers. In addition, according to the Civil Procedures Law, courts in mainland China will not enforce a foreign judgment against Flexi or its management if they decide that the judgment violates the basic principles of law or national sovereignty, security or public interest in mainland China. Therefore, it is uncertain whether a mainland China court would enforce a judgment rendered by a court in the United States or in the British Virgin Islands. Under the Civil Procedures Law, foreign investors may originate actions based on the law of mainland China against a company in mainland China for disputes if they can establish sufficient nexus to mainland China for a court in mainland China to have jurisdiction, and meet other procedural requirements, including, among others, that the plaintiff have a direct interest in the case, and that there be a concrete claim, a factual basis and a cause for the suit. There is also uncertainty as to whether the courts of Hong Kong would enforce in Hong Kong, in original actions or in actions for enforcement, judgments of United States courts of civil liabilities predicated solely upon the federal securities laws of the United States or the securities laws of any state or territory within the United States. A judgment of a court in the United States predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action in a Hong Kong court on that judgment for the amount due thereunder, and then seeking summary judgment on the strength of the foreign judgment, provided that the foreign judgment, among other things, is (i) for a debt or a definite sum of money (not being taxes or similar charges to a foreign government taxing authority or a fine or other penalty) and (ii) final and conclusive on the merits of the claim, but not otherwise. Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud; (b) the proceedings in which the judgment was obtained were opposed to natural justice; (c) its enforcement or recognition would be contrary to the public policy of Hong Kong; (d) the court of the United States was not jurisdictionally competent; or (e) the judgment was in conflict with a prior Hong Kong judgment. As a result, Flexi’s and, after the consummation of the Business Combination, PubCo’s, investors may have more difficulty in protecting their interests through actions against Flexi’s or PubCo’s management, directors or major stockholders than would investors of a corporation doing business entirely or predominantly within the U.S. For more information, see “Enforceability of Civil Liabilities.”

 

70
 

 

The M&A Rules and certain other regulations of mainland China establish certain procedures for some acquisitions of mainland China-based companies by foreign investors that could make it more difficult for PubCo to pursue growth through future acquisitions in mainland China.

 

On August 8, 2006, six mainland China governmental agencies, including the Ministry of Commerce (“MOFCOM”) jointly issued the Rules on Mergers and Acquisitions of Domestic Enterprise by Foreign Investors (the “M&A Rules”), which took effect on September 8, 2006, and were amended on June 22, 2009. The M&A Rules and other recently adopted regulations and rules concerning mergers and acquisitions established certain procedures and requirements for merger and acquisition activities by foreign investors in mainland China. For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a domestic enterprise in mainland China, if any important industry is concerned, such transaction involves factors that impact or may impact national economic security, or such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or a mainland China time-honored brand. In addition, the M&A Rules require an overseas special purpose vehicle formed for listing purposes through acquisitions of domestic companies and controlled by mainland China persons or entities to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. TGVC’s legal counsel in mainland China, Han Kun Law Offices, has advised that based on its understanding of the current laws and regulations of mainland China, approval of the CSRC under the M&A Rules may not be required for TGVC and the Sponsor to consummate the Business Combination, given that: (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like TGVC’s under this prospectus are subject to the M&A Rules, (ii) TGVC is a Delaware corporation without subsidiaries, operations and revenues in mainland China, and has committed not to undertake its initial business combination with any entity that is based in, located in or has its principal business operations in China (including Hong Kong and Macau), and it has conducted a target search outside of China, (iii) the Sponsor is a Hong Kong company without subsidiaries, operations and revenues in mainland China, and (iv) Flexi is a British Virgin Islands company without subsidiaries, operations and revenues in mainland China, and only some of Flexi’s business operations are conducted in Hong Kong through its Hong Kong subsidiary. However, TGVC’s counsel in mainland China has further advised that there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. We cannot assure you that relevant mainland China government agencies, including the CSRC, would reach the same conclusion as TGVC’s counsel in mainland China.

 

In addition, in 2011, the General Office of the State Council of the People’s Republic of China promulgated a Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (“Circular 6”), which officially established a security review system for mergers and acquisitions of domestic enterprises by foreign investors. Further, MOFCOM promulgated the Regulations on Implementation of Security Review System for the Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, effective in September 2011, to implement Circular 6. Under Circular 6, a security review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire “de facto control” of domestic enterprises with “national security” concerns. Under the foregoing MOFCOM regulations, MOFCOM will focus on the substance and actual impact of the transaction when deciding whether a specific merger or acquisition is subject to security review. If MOFCOM decides that a specific merger or acquisition is subject to a security review, it will submit such transaction to the Inter-Ministerial Panel, an authority established under Circular 6 led by the National Development and Reform Commission, or NDRC, and MOFCOM under the leadership of the State Council of the People’s Republic of China, to carry out security review. The regulations prohibit foreign investors from bypassing the security review by structuring transactions through holding shares on behalf of others, trusts, reinvestment at multiple levels, leases, loans, control through contractual arrangements or offshore transactions.

 

On December 19, 2020, the NDRC and MOFCOM jointly promulgated the Measures on the Security Review of Foreign Investment, effective on January 18, 2021, setting forth provisions concerning the security review mechanism on foreign investment, including the types of investments subject to review, and the scope and procedures for review, among others. The Office of the Working Mechanism of the Security Review of Foreign Investment (the “Office of the Working Mechanism”) will be established under the NDRC, which will lead the task together with MOFCOM. Foreign investors or relevant parties in mainland China must declare the security review to the Office of the Working Mechanism prior to the investments in or obtaining control over enterprises in certain industries, including among others, important cultural products and services, important information technology and internet products and services, important financial services, key technologies and other important fields relating to national security.

 

In the future, PubCo may grow its business by acquiring complementary businesses in mainland China, although it has no current plans or intensions to do so. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming and costly, and any required approval processes, including obtaining approval from mainland China governmental agencies may delay or inhibit PubCo’s ability to complete such transactions. If PubCo fails to comply with such requirements, it may be subject to penalty, including but not limited to, a fine.

 

Interpretation of mainland China laws and their implementation in Hong Kong involve uncertainty.

 

Mainland China’s legal system is based on written statutes, and prior court decisions can only be used as a reference. Since 1979, the mainland China government has promulgated laws and regulations in relation to economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, with a view to developing a comprehensive system of commercial law, including laws relating to property ownership and development. However, because these laws and regulations have not been fully developed, and because of the limited volume of published cases and the non-binding nature of prior court decisions, interpretation of mainland China’s laws and regulations involves a degree of uncertainty. Some of these laws may be changed with little advance notice, without immediate publication or may be amended with retroactive effect.

 

71
 

  

On June 30, 2020, mainland China’s top legislature unanimously passed a new National Security Law for Hong Kong (the “Hong Kong National Security Law”) that was enacted on the same day. Similar to mainland China’s laws and regulations, the interpretation of the Hong Kong National Security Law involves a degree of uncertainty.

 

Depending on the government agency or how an application or case is presented to such agency, Flexi or PubCo may receive less favorable interpretations of laws and regulations than its competitors, particularly if a competitor has long been established in the locality and has developed a relationship with such agency. In addition, any litigation may be protracted and result in substantial costs and a diversion of resources and management attention. All of these uncertainties may cause difficulties in the enforcement of Flexi’s land use rights, entitlements under its permits and other statutory and contractual rights and interests.

 

PubCo may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws.

 

In connection with any future offering, PubCo may be subjected to the U.S. Foreign Corrupt Practices Act (“FCPA”) and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. PubCo and/or Flexi may also be subjected to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. Going forward, Flexi’s Hong Kong subsidiary may have operations, agreements with third parties, and sell its memberships in Hong Kong, and it may experience corruption. Flexi’s Hong Kong subsidiary’s future activities in Hong Kong may create the risk of unauthorized payments or offers of payments by one of its employees, because these employees are out of Flexi’s direct control. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and PubCo and/or Flexi may be subject to other liabilities, which could negatively affect their business, operating results and financial condition. In addition, the government may seek to hold PubCo liable for successor liability for FCPA violations committed by companies in which PubCo invests or that it acquires.

 

The mainland China government may issue further restrictive measures in the future that could adversely affect PubCo’s business and prospects.

 

PubCo cannot assure you that the mainland China government will not issue further restrictive measures in the future. To the extent that PubCo commences business and operations in mainland China as a result of any future partnership, acquisition, expansion, or organic growth, or to the extent that the mainland China government determines that additional mainland China rules and regulations should apply in Hong Kong, the mainland China government’s restrictive regulations and measures could increase PubCo’s existing and future operating costs in adapting to these regulations and measures, limit its access to capital resources or even restrict its existing and future business operations, which could adversely affect its business and prospects.

 

Flexi’s Hong Kong subsidiary may be subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on its business, financial condition and results of operations.

 

Flexi’s Hong Kong subsidiary may be subject to various risks and costs associated with the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. This data is wide ranging and relates to employees, contractors and other counterparties and third parties. The relevant PRC laws apply not only to third-party transactions, but also to transfers of information between Flexi, its subsidiaries and other parties with which they have commercial relations.

  

72
 

 

The PRC regulatory and enforcement regime with regard to privacy and data security is still evolving. The Cybersecurity Law of the People’s Republic of China (the “Cybersecurity Law”), which was promulgated on November 7, 2016 and became effective on June 1, 2017, provides that personal information and important data collected and generated by operators of critical information infrastructure in the course of their operations in mainland China should be stored in mainland China, and the law imposes heightened regulation and additional security obligations on operators of critical information infrastructure. According to the Cybersecurity Review Measures promulgated by the CAC and certain other mainland China regulatory authorities in April 2020, which became effective in June 2020, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services that do or may affect national security. If they provide or are deemed to provide such network products and services to critical information infrastructure operators, or they are deemed to be a critical information infrastructure operator, they would be required to follow cybersecurity review procedures. There can be no assurance that Flexi would be able to complete the applicable cybersecurity review procedures in a timely manner, or at all, if it was required to follow such procedures. Any failure or delay in the completion of the cybersecurity review procedures may prevent it from using or providing certain network products and services, and may result in fines of up to ten times the purchase price of such network products and services being imposed upon it, if it is deemed a critical information infrastructure operator using network products or services without having completed the required cybersecurity review procedures. The mainland China government is increasingly focused on data security, recently launching cybersecurity review against a number of mobile apps operated by several U.S.-listed mainland China-based companies and prohibiting these apps from registering new users during the review period.

 

On June 10, 2021, the Standing Committee of the National People’s Congress of China (the “Standing Committee”) promulgated the Data Security Law which took effect in September 2021. The Data Security Law provides for data security and privacy obligations of entities and individuals carrying out data activities, prohibits entities and individuals in mainland China from providing any foreign judicial or law enforcement authority with any data stored in mainland China without approval from the competent mainland China authority, and sets forth the legal liabilities of entities and individuals found to be in violation of their data protection obligations, including rectification order, warning, fines of up to 10 million Renminbi, suspension of relevant business, and revocation of business permits or licenses.

 

On August 20, 2021, the Standing Committee adopted the Personal Information Protection Law, which became effective November 1, 2021. The Personal Information Protection Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information, the rights of individuals in personal information processing activities, the obligations of personal information processors, and the legal responsibilities for illegal collection, processing, and use of personal information.

 

In addition, on December 28, 2021, the CAC, the NDRC, and several other administrations jointly issued the revised Measures for Cybersecurity Review (the “Cybersecurity Revised Review Measures”), which became effective and replaced the Cybersecurity Review Measures on February 15, 2022. The Cybersecurity Revised Review Measures require any “online platform operator” that possesses personal data of more than one million users and intends to list in a foreign country to apply for a cybersecurity review. The National Security Law of the People’s Republic of China (the “Mainland China National Security Law”) covers various types of national security, including technology security and information security.

 

Flexi’s Hong Kong subsidiary does not collect, process or use personal information of entities or individuals other than what is necessary for its business, does not disseminate such information, and does not conduct any data processing activities in mainland China. It does not operate mobile apps and it does not possess information on more than one million entities/individuals. Although Flexi believes that it currently is not required to obtain clearance from the CAC under the Cybersecurity Revised Review Measures or the Opinions on Strictly Cracking Down on Illegal Securities Activities, it faces uncertainties as to the interpretation or implementation of such regulations or rules, and if required, whether such clearance can be timely obtained, or at all.

 

Compliance with the Cybersecurity Law, the Mainland China National Security Law, the Data Security Law, the Personal Information Protection Law, and the Cybersecurity Revised Review Measures, as well as additional laws and regulations that mainland China regulatory bodies may enact in the future, including data security and personal information protection laws, may result in additional expenses to PubCo and subject PubCo to negative publicity, which could harm its reputation among users and negatively affect the trading price of the PubCo Ordinary Shares in the future. The Cybersecurity Law, the Mainland China National Security Law and the Data Securit