Q. | When and where is the General Meeting? |
A. | The General Meeting will be held at 11:30 a.m., Eastern Time, on October 3, 2023, via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned. Only shareholders who held Twin Ridge Ordinary Shares at the close of business on the Record Date will be entitled to vote at the General Meeting. |
Q. | What equity stake will the Public Shareholders and the current shareholders of Carbon Revolution hold in MergeCo immediately after the Closing? |
A. | It is anticipated that, upon completion of the Business Combination, and assuming no holders of Public Shares exercise their redemption rights: (i) Public Shareholders will retain an ownership interest of approximately 25.07% of the outstanding MergeCo Ordinary Shares; (ii) the Founder Holders will own approximately 20.00% of the outstanding MergeCo Ordinary Shares; (iii) Carbon Revolution shareholders and Carbon Revolution performance rights holders will own approximately 54.72% of the outstanding MergeCo Ordinary Shares; and (iv) Yorkville Advisors will own approximately 0.06% of the outstanding MergeCo Ordinary Shares (consisting solely of the MergeCo Ordinary Shares issued as a commitment fee and excluding any other shares issuable under the Equity Purchase Agreement from time to time after Closing). These levels of ownership assume (A) that at or after the Closing no MergeCo Warrant or OIC MergeCo Warrant will be exercised and (B) no shares under the Committed Equity Financing have been issued. |
Q. | What happens if a substantial number of Public Shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights? |
A. | The Public Shareholders are not required to vote “FOR” the Business Combination in order to exercise their Redemption Right. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Shareholders are reduced as a result of redemptions by Public Shareholders. |
| | Assuming No Redemption(1) | | | Assuming 25% Redemption(2) | | | Assuming 75% Redemption(3) | | | Assuming Maximum Redemption(4) | |||||||||||||
Shareholders | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % |
Holders of Twin Ridge Class A Ordinary Shares | | | 6,266,645 | | | 25.15% | | | 4,699,984 | | | 20.11% | | | 1,566,661 | | | 7.73% | | | — | | | 0.0% |
Holders of Twin Ridge Class B Ordinary Shares(5) | | | 5,000,000 | | | 20.06% | | | 5,000,000 | | | 21.40% | | | 5,000,000 | | | 24.67% | | | 5,000,000 | | | 26.72% |
Yorkville Advisors(6) | | | 15,000 | | | 0.06% | | | 15,000 | | | 0.06% | | | 15,000 | | | 0.07% | | | 15,000 | | | 0.08% |
Carbon Revolution Performance Rights(7) | | | 76,911 | | | 0.32% | | | 76,911 | | | 0.33% | | | 76,911 | | | 0.38% | | | 76,911 | | | 0.41% |
Existing Carbon Revolution Equityholders | | | 13,561,373 | | | 54.42% | | | 13,577,032 | | | 58.10% | | | 13,608,349 | | | 67.15% | | | 13,624,008 | | | 72.79% |
Total Shares Outstanding Excluding Additional Dilution Sources | | | 24,919,929 | | | 100.00% | | | 23,368,927 | | | 100.00% | | | 20,266,921 | | | 100.00% | | | 18,715,919 | | | 100.00% |
MergeCo Warrant | | | 12,210,780 | | | 24.88% | | | 12,210,780 | | | 25.72% | | | 12,210,780 | | | 27.57% | | | 12,210,780 | | | 28.60% |
OIC MergeCo Warrant(9) | | | 5,633,321 | | | 11.48% | | | 5,586,348 | | | 11.77% | | | 5,492,403 | | | 12.40% | | | 5,445,431 | | | 12.76% |
Committed Equity Financing(10) | | | 6,315,789 | | | 12.87% | | | 6,315,789 | | | 13.30% | | | 6,315,789 | | | 14.26% | | | 6,315,789 | | | 14.80% |
Total Additional Dilution Sources | | | 24,159,890 | | | 49.23% | | | 24,112,917 | | | 50.78% | | | 24,018,972 | | | 54.24% | | | 23,972,000 | | | 56.16% |
(1) | This scenario assumes that no Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge—Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(2) | This scenario assumes that 1,566,661 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge—Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(3) | This scenario assumes that 4,699,984 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge—Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. The Business Combination Agreement and Scheme Implementation Deed provide that Carbon Revolution’s obligation to consummate the Business Combination is conditioned on, among other things, MergeCo being reasonably expected to have at least $5,000,001 of net tangible assets upon closing of the Business Combination. The net tangible assets of MergeCo will include the net tangible assets of Carbon Revolution, as increased by the gross proceeds of the Trust Account and decreased by the transaction expenses described in the table above, as well as increased by the net proceeds of any equity financing obtained by MergeCo in connection with the closing of the Business Combination. MergeCo expects net tangible assets to exceed $5,000,001 upon closing of the Business Combination even in a Maximum Redemption Scenario. See “Business of Twin Ridge and Certain Information About Twin Ridge—Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(4) | This scenario assumes that 6,266,645 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. The Business Combination Agreement and Scheme Implementation Deed provide that Carbon Revolution’s obligation to consummate the Business Combination is conditioned on, among other things, MergeCo being reasonably expected to have at least $5,000,001 of net tangible assets upon closing of the Business Combination. The net tangible assets of MergeCo will include the net tangible assets of Carbon Revolution, as increased by the gross proceeds of the Trust Account and decreased by the transaction expenses described in the table above, as well as increased by the |
(5) | Excludes 327,203 of the Sponsor’s Twin Ridge Class B Ordinary Shares that shall automatically be forfeited and surrendered to Twin Ridge for no additional consideration immediately prior to the consummation of the Merger and conditioned upon the consummation of the Merger. |
(6) | Represents the commitment fee of 15,000 MergeCo Ordinary Shares issued to Yorkville Advisors in connection with the Committed Equity Financing which takes effect at Closing. |
(7) | Consists of performance rights, as of September 1, 2023. Such securities will be cancelled and converted into Carbon Revolution ordinary shares on or prior to the Scheme Record Date. These 76,911 performance rights relate to performance rights currently on issue under Carbon Revolution’s STI plans. All options and performance rights issued under Carbon Revolution’s LTI plans will be cancelled. |
(8) | The Equity % with respect to each Additional Dilution Source set forth above, including the Total Additional Dilution Sources, includes the full amount of shares issued with respect to the applicable Additional Dilution Source in the numerator and the full amount of shares issued with respect to the Total Additional Dilution Sources in the denominator, based on the stated assumptions. For example, in the 25% redemption scenario, the Equity % with respect to the MergeCo Warrants would be calculated as follows: (a) 12,210,780 MergeCo Ordinary Shares issued pursuant to the MergeCo Warrants; divided by (b) (i) 23,445,745 MergeCo Ordinary Shares (the number of MergeCo Ordinary Shares outstanding prior to any issuance pursuant to the MergeCo Warrants, OIC MergeCo Warrants or Carbon Revolution Performance Rights) plus (ii) 12,210,780 MergeCo Ordinary Shares issued pursuant to the MergeCo Warrants, 5,586,348 MergeCo Ordinary Shares issued pursuant to the OIC MergeCo Warrants and 6,315,789 pursuant to the Committed Equity Financing assuming conversion at $9.50 (see footnote 9 below). MergeCo intends to grant initial equity incentive awards with respect to a number of MergeCo Ordinary Shares equal to 5% of the number of issued and outstanding MergeCo Ordinary Shares immediately after the closing of the Business Combination (such number of issued and outstanding MergeCo Ordinary Shares, the “Total Shares Outstanding”) promptly following MergeCo’s eligibility to register the issuance of such awards on Form S-8, which is expected to occur 60 days after the closing of the Business Combination. Such awards may take the form of MergeCo Ordinary Shares or other instruments such as options or rights with respect to MergeCo Ordinary Shares. Under the terms of the Scheme Implementation Deed, Carbon Revolution must seek the consent of Twin Ridge (not to be unreasonably withheld) in relation to the form and quantum of any employee or director short-term or long-term incentive or similar arrangements in excess of such 5% limitation. The total number of MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards thereafter is expected to equal approximately 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares Outstanding, inclusive of the initial equity incentive awards). |
(9) | The terms of the OIC MergeCo Warrant provide that the OIC MergeCo Warrant will be exercisable for additional shares if MergeCo Ordinary Shares are issued pursuant to any award made under any equity incentive or similar plan prior to the second anniversary of the closing of the Business Combination. The number of MergeCo Ordinary Shares included pursuant to the OIC MergeCo Warrant assumes the MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards that is expected to equal approximately 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares Outstanding, inclusive of the initial equity incentive awards) are issued prior to the second anniversary of the closing of the Business Combination. In the event that less than the amount reserved for issuance is issued prior to the second anniversary of the closing of the Business Combination, the number of shares issuable under the OIC MergeCo Warrant will be lower. |
(10) | Represents the issuance of 6,315,789 MergeCo Ordinary Shares pursuant to the Committed Equity Financing, based on the stated assumptions. The terms of the Committed Equity Financing provide for a purchase price equal to 95% or 97% of the volume-weighted average price of MergeCo Ordinary Shares for a specified period, depending upon which specified period is selected. This amount assumes conversion at $9.50, which is the lower of such purchase prices, assuming the volume-weighted average price is equal to the assumed trading price of $10.00 per share the deemed value of MergeCo Ordinary Shares in the Business Combination for determining the number of MergeCo Ordinary Shares issuable to holders of Carbon Revolution Shares and assumes the issuance of all shares issuable pursuant to the terms of the Equity Purchase Agreement. The actual trading price of MergeCo Ordinary Shares may be lower than $10.00, which would result in a lower conversion price for the purpose of the Committed Equity Financing and therefore greater dilution to other MergeCo shareholders. |
• | your proportionate ownership interest in MergeCo following the Closing will decrease; |
• | the relative voting strength of each previously outstanding share of MergeCo Ordinary Shares following the Business Combination will be diminished; or |
• | the market price of the MergeCo Ordinary Shares and the Public Warrants may decline. |
| | Assuming No Redemption(1) | | | Assuming 25% Redemption(2) | | | Assuming 75% Redemption(3) | | | Assuming Maximum Redemption(4) | |||||||||||||
Shareholders | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % |
Holders of Twin Ridge Class A Ordinary Shares | | | 6,266,645 | | | 25.15% | | | 4,699,984 | | | 20.11% | | | 1,566,661 | | | 7.73% | | | — | | | 0.00% |
Holders of Twin Ridge Class B Ordinary Shares(5) | | | 5,000,000 | | | 20.06% | | | 5,000,000 | | | 21.40% | | | 5,000,000 | | | 24.67% | | | 5,000,000 | | | 26.72% |
Yorkville Advisors(6) | | | 15,000 | | | 0.06% | | | 15,000 | | | 0.06% | | | 15,000 | | | 0.07% | | | 15,000 | | | 0.08% |
Carbon Revolution Performance Rights(7) | | | 76,911 | | | 0.32% | | | 76,911 | | | 0.33% | | | 76,911 | | | 0.38% | | | 76,911 | | | 0.41% |
Existing Carbon Revolution Equityholders | | | 13,561,373 | | | 54.42% | | | 13,577,032 | | | 58.10% | | | 13,608,349 | | | 67.15% | | | 13,624,008 | | | 72.79% |
Total Shares Outstanding Excluding Additional Dilution Sources | | | 24,919,929 | | | 100.00% | | | 23,368,927 | | | 100.00% | | | 20,266,921 | | | 100.00% | | | 18,715,919 | | | 100.00% |
MergeCo Warrant | | | 12,210,780 | | | 24.88% | | | 12,210,780 | | | 25.72% | | | 12,210,780 | | | 27.57% | | | 12,210,780 | | | 28.60% |
OIC MergeCo Warrant(9) | | | 5,633,321 | | | 11.48% | | | 5,586,348 | | | 11.77% | | | 5,492,403 | | | 12.40% | | | 5,445,431 | | | 12.76% |
Committed Equity Financing(10) | | | 6,315,789 | | | 12.87% | | | 6,315,789 | | | 13.30% | | | 6,315,789 | | | 14.26% | | | 6,315,789 | | | 14.80% |
Total Additional Dilution Sources | | | 24,159,890 | | | 49.23% | | | 24,112,917 | | | 50.78% | | | 24,018,972 | | | 54.24% | | | 23,972,000 | | | 56.16% |
(1) | This scenario assumes that no Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge—Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(2) | This scenario assumes that 1,566,661 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge—Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(3) | This scenario assumes that 4,699,984 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge—Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(4) | This scenario assumes that 6,266,645 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. The Business Combination Agreement and Scheme Implementation Deed provide that Carbon Revolution’s obligation to consummate the Business Combination is conditioned on, among other things, MergeCo being reasonably expected to have at least $5,000,001 of net tangible assets upon closing of the Business Combination. The net tangible assets of MergeCo will include the net tangible assets of Carbon Revolution, as increased by the gross proceeds of the Trust Account and decreased by the transaction expenses described in the table above, as well as increased by the proceeds of any equity financing obtained by MergeCo in connection with the closing of the Business Combination. MergeCo expects net tangible assets to exceed $5,000,001 upon closing of the Business Combination even in a Maximum Redemption Scenario. See “Business of Twin Ridge and Certain Information About Twin Ridge—Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(5) | Excludes 327,203 of the Sponsor’s Twin Ridge Class B Ordinary Shares that shall automatically be forfeited and surrendered to Twin Ridge for no additional consideration immediately prior to the consummation of the Merger and conditioned upon the consummation of the Merger. |
(6) | Represents the commitment fee of 15,000 MergeCo Ordinary Shares issued to Yorkville Advisors in connection with the Committed Equity Financing which takes effect at Closing. |
(7) | Consists of performance rights, as of September 1, 2023. Such securities will be canceled and converted into Carbon Revolution ordinary shares on or prior to the Scheme Record Date. These 76,911 performance rights relate to performance rights currently on issue under Carbon Revolution’s STI plans. All options and performance rights issued under Carbon Revolution’s LTI plans will be cancelled. |
(8) | The Equity % with respect to each Additional Dilution Source set forth above, including the Total Additional Dilution Sources, includes the full amount of shares issued with respect to the applicable Additional Dilution Source in the numerator and the full amount of shares issued with respect to the Total Additional Dilution Sources in the denominator, based on the stated assumptions. For example, in the 25% redemption scenario, the Equity % with respect to the MergeCo Warrant would be calculated as follows: (a) 12,210,780 MergeCo Ordinary Shares issued pursuant to the MergeCo Warrant; divided by (b) (i) 23,445,745 MergeCo Ordinary Shares (the number of MergeCo Ordinary Shares outstanding prior to any issuance pursuant to the MergeCo Warrant, OIC MergeCo Warrant or Carbon Revolution Performance Rights) plus (ii) 12,210,780 MergeCo Ordinary Shares issued pursuant to the MergeCo Warrant, 5,586,348 MergeCo Ordinary Shares issued pursuant to the OIC MergeCo Warrant and 6,315,789 pursuant to the Committed Equity Financing assuming conversion at $9.50 (see footnote 9 below). MergeCo intends to grant initial equity incentive awards with respect to a number of MergeCo Ordinary Shares equal to 5% of the number of issued and outstanding MergeCo Ordinary Shares immediately after the closing of the Business Combination (such number of issued and outstanding MergeCo Ordinary Shares, the “Total Shares Outstanding”) promptly following MergeCo’s eligibility to register the issuance of such awards on Form S-8, which is expected to occur 60 days after the closing of the Business Combination. Such awards may take the form of MergeCo Ordinary Shares or other instruments such as options or rights with respect to MergeCo Ordinary Shares. Under the terms of the Scheme Implementation Deed, Carbon Revolution must seek the consent of Twin Ridge (not to be unreasonably withheld) in relation to the form and quantum of any employee or director short-term or long-term incentive or similar arrangements in excess of such 5% limitation. The total number of MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards thereafter is expected to equal approximately 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares Outstanding, inclusive of the initial equity incentive awards). |
(9) | The terms of the OIC MergeCo Warrant provide that the OIC MergeCo Warrant will be exercisable for additional shares if MergeCo Ordinary Shares are issued pursuant to any award made under any equity incentive or similar plan prior to the second anniversary of the closing of the Business Combination. The number of MergeCo Ordinary Shares included pursuant to the OIC MergeCo Warrant assumes the MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards that is expected to equal approximately 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares Outstanding, inclusive of the initial equity incentive awards) are issued prior to the second anniversary of the closing of the Business Combination. In the event that less than the amount reserved for issuance is issued prior to the second anniversary of the closing of the Business Combination, the number of shares issuable under the OIC MergeCo Warrant will be lower. |
(10) | Represents the issuance of 6,315,789 MergeCo Ordinary Shares pursuant to the Committed Equity Financing, based on the stated assumptions. The terms of the Committed Equity Financing provide for a purchase price equal to 95% or 97% of the volume-weighted average price of MergeCo Ordinary Shares for a specified period, depending upon which specified period is selected. This amount assumes conversion at $9.50, which is the lower of such purchase prices, assuming the volume-weighted average price is equal to the assumed trading price of $10.00 per share the deemed value of MergeCo Ordinary Shares in the Business Combination for determining the number of MergeCo Ordinary Shares issuable to holders of Carbon Revolution Shares and assumes the issuance of all shares issuable pursuant to the terms of the Equity Purchase Agreement. The actual trading price of MergeCo Ordinary Shares may be lower than $10.00, which would result in a lower conversion price for the purpose of the Committed Equity Financing and therefore greater dilution to other MergeCo shareholders. |
• | A condensed combined statement of financial position as of December 31, 2022 assuming the transaction was consummated on that date; and |
• | A condensed combined statement of comprehensive income for the year ended June 30, 2022 and six months ended December 31, 2022 assuming the transaction was consummated as of July 1, 2021, at the commencement of the earliest period presented. |
• | The exchange of shares between MergeCo, Carbon Revolution and Twin Ridge as a result of the Scheme Implementation Deed and the Business Combination Agreement and associated transaction costs; and |
• | The issuance of shares as a commitment fee as consideration for the CEF (as defined below) upon completion of the Business Combination; and |
• | The issuance of preferred shares and warrants pursuant to the OIC securities purchase agreement that is effective on completion of the Business Combination and receipt of the proceeds therefrom; and |
• | The partial deferral of Twin Ridge transaction costs on completion of the Business Combination. |
• | Carbon Revolution’s unaudited financial statements as of and for the six months ended December 31, 2022 and the related notes thereto, included elsewhere in this proxy statement/prospectus; |
• | Carbon Revolution’s audited financial statements as of and for the year ended June 30, 2022 and the related notes thereto, included elsewhere in this proxy statement/prospectus; |
• | Twin Ridge’s audited financial statements as of December 31, 2021 and the period from January 7, 2021 (inception) through December 31, 2021, the audited financial statements as of and for the year ended December 31, 2022, included elsewhere in this proxy statement/prospectus and the unaudited interim financial statements as of June 30, 2022 and June 30, 2021 (as restated) and for the six months ended June 30, 2022 and for the period from January 7, 2021 (inception) through June 30, 2021 and the related notes thereto and the unaudited interim financial statements as of September 30, 2022 and December 31, 2022 (audited) and for the three months ended September 30, 2022 and December 31, 2022 (audited) and the related notes thereto. The income statement of Twin Ridge for the year ended June 30, 2022 and the six months ended December 31, 2022 for pro forma purposes has been arithmetically derived from these financial statements – refer also to Note 2 to the Unaudited Pro Forma Condensed Combined Financial Information; and |
• | the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Carbon Revolution” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Twin Ridge” and other financial information. |
• | Carbon Revolution’s existing shareholders will have the greatest voting interest in the combined entity under both the 75% Redemption and Maximum Redemption (both terms, as defined below) scenarios. Further, even in the instance of No Redemptions, Twin Ridge shareholders would not have a substantial majority of the voting interests, being approximately 32% and board and management representation are considered further below; |
• | Carbon Revolution’s directors will represent the majority of the board of directors of the combined company following the consummation of the Business Combination; |
• | Carbon Revolution’s senior management will be the senior management of the combined company following the consummation of the Business Combination as disclosed elsewhere in this proxy statement/prospectus. Of the disclosed executive officers, all of them are current Carbon Revolution employees; |
• | Carbon Revolution is the larger entity based on historical operating activity and its employee base; and |
• | MergeCo will continue to operate under the Carbon Revolution trade name and the combined entity’s headquarters will be based in Australia with its corporate head office in Geelong, consistent with the current location of Carbon Revolution’s head office. |
• | Assuming No Redemptions: This presentation assumes that no further Twin Ridge shareholders exercise redemption rights with respect to their Twin Ridge Class A Ordinary Shares (the “No Redemption”). |
• | Assuming 25% Redemptions: This presentation assumes that Twin Ridge shareholders holding 1,566,661 Twin Ridge Class A Ordinary Shares will exercise their redemption rights for approximately A$23.4 million at a redemption price of approximately $10.14 per share-based on the investment held in the Trust Account as of December 31, 2022, which represents 25% of Twin Ridge Class A Ordinary Shares that could be redeemed by Twin Ridge shareholders, after giving effect to exercise of redemption rights by such Twin Ridge shareholders and payments thereto in such redemption (the “25% Redemption”). |
• | Assuming 75% Redemptions: This presentation assumes that Twin Ridge shareholders holding 4,699,984 Twin Ridge Class A Ordinary Shares will exercise their redemption rights for approximately A$70.3 million at a redemption price of approximately $10.14 per share-based on the investment held in the Trust Account as of December 31, 2022, which represents 75% of Twin Ridge Class A Ordinary Shares that could be redeemed by Twin Ridge shareholders, after giving effect to exercise of redemption rights by such Twin Ridge shareholders and payments thereto in such redemption (the “75% Redemption”). |
• | Assuming Maximum Redemptions: This presentation assumes that Twin Ridge shareholders holding 6,266,645 Twin Ridge Class A Ordinary Shares will exercise their redemption rights for approximately A$93.8 million at a redemption price of approximately $10.14 per share-based on the investment held |
• | Each Twin Ridge Class B Ordinary Share, shall convert automatically, on a one-for-one basis, into a Twin Ridge Class A Ordinary Share; |
• | Immediately after the Pre-Merger Conversion, each Twin Ridge Class A Ordinary Share shall be automatically cancelled in exchange for one validly issued, fully paid and non-assessable MergeCo Ordinary Share; |
• | Each Public Warrant shall be automatically exchanged to become one MergeCo Public Warrant. Each such MergeCo Public Warrant will be subject to substantially the same terms and conditions set forth in the Existing Warrant Agreement, pursuant to which such Twin Ridge Public Warrant was issued immediately prior to the Twin Ridge Merger Effective Time; and |
• | Each Private Placement Warrant shall be automatically exchanged to become one MergeCo Public Warrant (each, a “MergeCo Founder Warrant”). Each such MergeCo Founder Warrant will be subject to substantially the same terms and conditions set forth in the Existing Warrant Agreement pursuant to which such Twin Ridge Private Warrant was issued immediately prior to the Twin Ridge Merger Effective Time. |
• | For a period of three years from closing, MergeCo has the right to require Yorkville Advisors to purchase new MergeCo Ordinary Shares in a series of advances, with each advance being in an amount up to the greater of (i) $10 million or (ii) the aggregate trading volume of MergeCo Ordinary Shares for the five trading days immediately preceding MergeCo requesting an advance. MergeCo is not obliged to require Yorkville Advisors to purchase a minimum volume of MergeCo Ordinary Shares. |
• | MergeCo can choose one of two Purchase Price Options: |
○ | Purchase Price Option 1: Yorkville Advisors will purchase MergeCo Ordinary Shares at a price equal to 95.0% of the average VWAP during the day on which the advance request was made. If the volume threshold under an advance is not reached during the pricing period, the number of shares purchased will be reduced to the greater of (i) 35.0% of the trading volume during the pricing period, or (ii) the number of shares sold by the Yorkville Advisors during the pricing period. The volume threshold is the amount of the advance in shares divided by 35.0%. |
○ | Purchase Price Option 2: Yorkville Advisors will purchase MergeCo Ordinary Shares at a price equal to 97.0% of the lowest VWAP of the MergeCo Ordinary Shares during the pricing period of three consecutive trading days commencing on the trading day commencing after the advance notice is received by Yorkville Advisors. |
• | During either pricing period, Yorkville Advisors will have the ability to hedge its position by short selling in full the quantum of shares that it is required to purchase under any advance notice. Under Purchase Price Option 2, MergeCo will have the ability to notify Yorkville Advisors of the minimum acceptable price (“MAP”) at which it can sell the new shares. If MergeCo does not set a MAP, this may have a material and adverse impact on MergeCo’s share price depending on the quantum of shares being sold relative to overall liquidity of MergeCo’s shares. |
• | Yorkville Advisors cannot be issued MergeCo Ordinary Shares in an amount that would result in it holding more than the CEF Ownership Restriction at any one time. In the circumstance where Yorkville Advisors is unable to dispose of its MergeCo Ordinary Shares on an ongoing basis, it will not be required to purchase additional shares under the CEF beyond the CEF Ownership Restriction, which means MergeCo may not have full access to the stated $60 million CEF capital. Carbon Revolution determined that the CEF right to issue shares represents a purchased put option which is classified as a derivative asset with a de minimus fair value at inception. |
• | MergeCo has agreed to issue 15,000 MergeCo Ordinary Shares to Yorkville Advisors as a ‘commitment fee’ to secure the facility. These must be issued upon completion of the Business Combination. |
| | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||
| | Shares | | | % | | | Shares | | | % | | | Shares | | | % | | | Shares | | | % | |
Twin Ridge Ordinary Shares | | | | | | | | | | | | | | | | | ||||||||
Twin Ridge Class A Ordinary Shares currently outstanding | | | 21,308,813 | | | | | 21,308,813 | | | | | 21,308,813 | | | | | 21,308,813 | | | ||||
Less: Twin Ridge Class A Ordinary shares known redemptions (70.6%) | | | (15,042,168) | | | | | (15,042,168) | | | | | (15,042,168) | | | | | (15,042,168) | | | ||||
Twin Ridge Class A Ordinary Shares(1) | | | 6,266,645 | | | | | 6,266,645 | | | | | 6,266,645 | | | | | 6,266,645 | | | ||||
Less: Redeemed Twin Ridge Class A ordinary shares | | | — | | | | | (1,566,661) | | | | | (4,699,984) | | | | | (6,266,645) | | | ||||
Sub-total: Twin Ridge Class A Ordinary Shares | | | 6,266,645 | | | 25.15 | | | 4,699,984 | | | 20.11 | | | 1,566,661 | | | 7.73 | | | — | | | 0.00 |
Twin Ridge Class B Ordinary Shares(2) | | | 5,000,000 | | | 20.06 | | | 5,000,000 | | | 21.40 | | | 5,000,000 | | | 24.67 | | | 5,000,000 | | | 26.72 |
Twin Ridge Shareholders | | | 11,266,645 | | | 45.21 | | | 9,699,984 | | | 41.51 | | | 6,566,661 | | | 32.40 | | | 5,000,000 | | | 26.72 |
Carbon Revolution Shareholders(3) | | | 13,561,373 | | | 54.42 | | | 13,577,032 | | | 58.10 | | | 13,608,349 | | | 67.15 | | | 13,624,008 | | | 72.79 |
Carbon Revolution Performance Rights(4) | | | 76,911 | | | 0.32 | | | 76,911 | | | 0.33 | | | 76,911 | | | 0.38 | | | 76,911 | | | 0.41 |
Yorkville Advisors Global, LP(5) | | | 15,000 | | | 0.06 | | | 15,000 | | | 0.06 | | | 15,000 | | | 0.07 | | | 15,000 | | | 0.08 |
Total Pro Forma MergeCo Ordinary Shares Outstanding as of December 31, 2022 | | | 24,919,929 | | | 100.00 | | | 23,368,927 | | | 100.00 | | | 20,266,921 | | | 100.00 | | | 18,715,919 | | | 100.00 |
(1) | The Twin Ridge Class A Ordinary Shares held by the current Twin Ridge shareholders as at December 31, 2022 less the number of Twin Ridge Class A Ordinary Shares redeemed in connection with the Extension Meeting (70.6%) is used for the purpose of the unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statement of operations as shown below. |
(2) | Includes, in all scenarios, the Founder Shares to be converted into 5,000,000 MergeCo Ordinary Shares as part of the Pro Forma Transaction. |
(3) | Carbon Revolution shareholders shares are based upon anticipated total share consideration to owners of equity interests in Carbon Revolution equal to 13,638,284 MergeCo Ordinary Shares (reflecting an equity value of $136,382,845, divided by $10.00 per share), with 13,638,284 MergeCo Ordinary Shares issuable to holders of Carbon Revolution shares. Additional dilution will occur when performance rights or options are issued to employees post completion of the Business Combination. As disclosed in “The Business Combination Agreement, Scheme Implementation Deed and Ancillary Documents—Other Agreements Related to the Business Combination—2023 Incentive Equity Plan”, prior to the effectiveness of the registration statement, the MergeCo board and MergeCo’s shareholders will approve and adopt the Carbon Revolution Company FY2023 Incentive Equity Plan (the “FY2023 Incentive Equity Plan”) which will reserve for grant a number of MergeCo Ordinary Shares or other forms of equity in MergeCo. Such grants may include both one-off retention grants, and business-as-usual grants in respect of FY2023. MergeCo intends to grant initial equity incentive awards with respect to a number of MergeCo Ordinary Shares equal to 5% of the Total Shares Outstanding promptly following MergeCo’s eligibility to register the issuance of such awards on Form S-8, which is expected to occur 60 days after the closing of the Business Combination. Such awards may take the form of MergeCo Ordinary Shares or other instruments such as options or rights with respect to MergeCo Ordinary Shares. Under the terms of the Scheme Implementation Deed, Carbon Revolution must seek the consent of Twin Ridge (not to be unreasonably withheld) in relation to the form and quantum of any employee or director short-term or long-term incentive or similar arrangements in excess of such 5% limitation. The total number of MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards thereafter is expected to equal 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares Outstanding, inclusive of the initial equity incentive awards). Shares or other equities issued under the 2023 Equity Incentive Plan are not included in the table above and would result in an increase of the number of equities on issue which would be dilutive to existing shares. The unaudited pro forma condensed combined financial information |
(4) | These 76,911 MergeCo Ordinary Shares that will be issued on or before the Scheme Record Date upon the cancellation of performance rights relate only to performance rights issued under Carbon Revolution’s STI plans and do not include any number in relation to options and performance rights issued under Carbon Revolution’s LTI plans which will be canceled and not convertible to Carbon Revolution Shares. |
(5) | Includes, in all scenarios, the commitment fee of 15,000 MergeCo Ordinary Shares to Yorkville Advisors irrespective of subsequent drawdown. |
AS OF DECEMBER 31, 2022 (in thousands) | | | Carbon Revolution | | | Twin Ridge | | | | | Twin Ridge | | | | | | | | | | | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||||||||||||||||||
| | IFRS (Historical) | | | US GAAP (Historical) | | | IFRS Adjustments | | | IFRS (Historical) | | | Notes | | | Transaction Accounting Adjustments – Financing Transaction | | | Notes | | | Pro forma for financing transaction | | | Transaction Accounting Adjustments - Business Combination(1) | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments – Business Combination(2) | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination(3) | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments – Business Combination(4) | | | Notes | | | Pro Forma | |
| | AUD | | | AUD | | | AUD | | | AUD | | | | | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | |||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Current assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Cash and cash equivalents | | | 14,078 | | | 1,524 | | | — | | | 1,524 | | | | | 40,176 | | | 1L | | | 55,778 | | | 318,921 | | | 1A | | | 170,046 | | | 318,921 | | | 1A | | | 146,599 | | | 318,921 | | | 1A | | | 99,703 | | | 318,921 | | | 1A | | | 76,255 | |
| | | | | | | | | | | | | | | | | | — | | | | | | | (23,448) | | | 1A.1 | | | | | (70,343) | | | 1A.2 | | | | | (93,791) | | | 1A.3 | | | ||||||||||||||
| | | | | | | | | | | | | | | | | | (6,536) | | | 1C | | | | | (6,536) | | | 1C | | | | | (6,536) | | | 1C | | | | | (6,536) | | | 1C | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (13,248) | | | 1C | | | | | (13,248) | | | 1C | | | | | (13,248) | | | 1C | | | | | (13,248) | | | 1C | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (8,005) | | | 1D | | | | | (8,005) | | | 1D.1 | | | | | (8,005) | | | 1D.2 | | | | | (8,005) | | | 1D.3 | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 48,266 | | | 1N | | | | | 48,266 | | | 1N | | | | | 48,266 | | | 1N | | | | | 48,266 | | | 1N | | | |||||||||||||
Restricted Cash | | | — | | | — | | | — | | | — | | | | | 14,347 | | | 1L | | | 14,347 | | | — | | | | | 66,608 | | | — | | | | | 66,608 | | | — | | | | | 66,608 | | | — | | | | | 66,608 | |||||
| | | | | | | | | | | | | | | | | | 51,661 | | | 1N | | | | | 51,661 | | | 1N | | | | | 51,661 | | | 1N | | | | | 51,661 | | | 1N | | | |||||||||||||
Receivables | | | 5,674 | | | — | | | — | | | — | | | | | — | | | | | 5,674 | | | — | | | | | 5,674 | | | — | | | | | 5,674 | | | | | — | | | | | 5,674 | | | — | | | 5,674 | ||||||
Contract assets | | | 1,946 | | | — | | | — | | | — | | | | | — | | | | | 1,946 | | | — | | | | | 1,946 | | | — | | | | | 1,946 | | | — | | | | | 1,946 | | | — | | | | | 1,946 | ||||||
Inventories | | | 20,754 | | | — | | | — | | | — | | | | | — | | | | | 20,754 | | | — | | | | | 20,754 | | | — | | | | | 20,754 | | | — | | | | | 20,754 | | | — | | | | | 20,754 | ||||||
Prepaid expenses | | | — | | | 111 | | | — | | | 111 | | | | | — | | | | | 111 | | | — | | | | | 111 | | | — | | | | | 111 | | | — | | | | | 111 | | | — | | | | | 111 | ||||||
Other current assets | | | 2,640 | | | 19 | | | — | | | 19 | | | | | — | | | | | 2,659 | | | — | | | | | 2,659 | | | — | | | | | 2,659 | | | — | | | | | 2,659 | | | — | | | | | 2,659 | ||||||
Total current assets | | | 45,092 | | | 1,654 | | | — | | | 1,654 | | | | | 54,523 | | | | | 101,269 | | | 165,929 | | | | | 267,198 | | | 142,482 | | | | | 243,751 | | | 95,586 | | | | | 196,855 | | | 72,138 | | | | | 173,407 | ||||||
Non-current assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Marketable securities held in Trust Account | | | — | | | 318,921 | | | — | | | 318,921 | | | | | — | | | | | 318,921 | | | (318,921) | | | 1A | | | — | | | (318,921) | | | 1A | | | — | | | (318,921) | | | 1A | | | — | | | (318,921) | | | 1A | | | — | ||
Property, plant and equipment | | | 58,488 | | | — | | | — | | | — | | | | | — | | | | | 58,488 | | | — | | | | | 58,488 | | | — | | | | | 58,488 | | | — | | | | | 58,488 | | | — | | | | | 58,488 | ||||||
Right-of-use assets | | | 7,804 | | | — | | | — | | | — | | | | | — | | | | | 7,804 | | | — | | | | | 7,804 | | | — | | | | | 7,804 | | | — | | | | | 7,804 | | | — | | | | | 7,804 | ||||||
Intangible assets | | | 15,688 | | | — | | | — | | | — | | | | | — | | | | | 15,688 | | | — | | | | | 15,688 | | | — | | | | | 15,688 | | | — | | | | | 15,688 | | | — | | | | | 15,688 | ||||||
Total non-current assets | | | 81,980 | | | 318,921 | | | — | | | 318,921 | | | | | — | | | | | 400,901 | | | (318,921) | | | | | 81,980 | | | (318,921) | | | | | 81,980 | | | (318,921) | | | | | 81,980 | | | (318,921) | | | | | 81,980 | ||||||
Total assets | | | 127,072 | | | 320,575 | | | — | | | 320,575 | | | | | 54,523 | | | | | 502,170 | | | (152,992) | | | | | 349,178 | | | (176,439) | | | | | 325,731 | | | (223,335) | | | | | 278,835 | | | (246,783) | | | | | 255,387 | ||||||
Current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Payables | | | 8,120 | | | 6,536 | | | — | | | 6,536 | | | | | — | | | | | 14,656 | | | (6,536) | | | 1C | | | 32,887 | | | (6,536) | | | 1C | | | 32,887 | | | (6,536) | | | 1C | | | 32,887 | | | (6,536) | | | 1C | | | 32,887 | ||
| | | | | | | | | | | | | | | | | | (2,938) | | | 1D | | | | | (2,938) | | | 1D.1 | | | | | (2,938) | | | 1D.2 | | | | | (2,938) | | | 1D.3 | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 27,705 | | | 1D | | | | | 27,705 | | | 1D | | | | | 27,705 | | | 1D | | | | | 27,705 | | | 1D | | | |||||||||||||
Borrowings | | | 20,581 | | | — | | | — | | | — | | | | | (14,658) | | | 1L | | | 5,923 | | | 10,462 | | | 1N | | | 16,385 | | | 10,374 | | | 1N | | | 16,297 | | | 10,200 | | | 1N | | | 16,123 | | | 10,113 | | | 1N | | | 16,036 | |
Lease liability | | | 633 | | | — | | | — | | | — | | | | | — | | | | | 633 | | | — | | | | | 633 | | | — | | | | | 633 | | | — | | | | | 633 | | | — | | | | | 633 | ||||||
Contract liability | | | 779 | | | — | | | — | | | — | | | | | — | | | | | 779 | | | — | | | | | 779 | | | — | | | | | 779 | | | — | | | | | 779 | | | — | | | | | 779 | ||||||
Deferred income | | | 1,763 | | | — | | | — | | | — | | | | | — | | | | | 1,763 | | | — | | | | | 1,763 | | | — | | | | | | | 1,763 | | | — | | | | | 1,763 | | | — | | | 1,763 | ||||||
Provisions | | | 4,414 | | | — | | | — | | | — | | | | | — | | | | | 4,414 | | | — | | | | | 4,414 | | | — | | | | | 4,414 | | | — | | | | | 4,414 | | | — | | | | | 4,414 | ||||||
Total current liabilities | | | 36,290 | | | 6,536 | | | — | | | 6,536 | | | | | (14,658) | | | | | 28,168 | | | 28,692 | | | | | 56,860 | | | 28,605 | | | | | 56,733 | | | 28,431 | | | | | 56,599 | | | 28,344 | | | | | 56,512 | ||||||
Non-current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Borrowings | | | — | | | — | | | 318,921 | | | 318,921 | | | (a) | | | 69,181 | | | 1L | | | 388,102 | | | (318,921) | | | 1A | | | 158,646 | | | (318,921) | | | 1A | | | 158,734 | | | (318,921) | | | 1A | | | 158,908 | | | (318,921) | | | 1A | | | 158,995 |
| | | | | | | | | | | | | | | | | | 89,465 | | | 1N | | | | | 89,553 | | | 1N | | | | | 89,727 | | | 1N | | | | | 89,814 | | | 1N | | | |||||||||||||
Lease liability | | | 7,694 | | | — | | | — | | | — | | | | | — | | | | | 7,694 | | | — | | | | | 7,694 | | | — | | | | | 7,694 | | | — | | | | | 7,694 | | | — | | | | | 7,694 | ||||||
Deferred income | | | 15,950 | | | — | | | — | | | — | | | | | — | | | | | 15,950 | | | — | | | | | 15,950 | | | — | | | | | 15,950 | | | — | | | | | 15,950 | | | — | | | | | 15,950 | ||||||
Provisions | | | 657 | | | — | | | — | | | — | | | | | — | | | | | 657 | | | — | | | | | 657 | | | — | | | | | 657 | | | — | | | | | 657 | | | — | | | | | 657 | ||||||
Warrant liabilities | | | — | | | 555 | | | — | | | 555 | | | | | — | | | | | 555 | | | — | | | | | 555 | | | — | | | | | 555 | | | — | | | | | 555 | | | | | | | 555 | |||||||
Commitment fee shares | | | — | | | 217 | | | — | | | 217 | | | | | — | | | | | 217 | | | — | | | | | 217 | | | — | | | | | 217 | | | — | | | | | 217 | | | — | | | | | 217 | ||||||
Total non-current liabilities | | | 24,301 | | | 772 | | | 318,921 | | | 319,693 | | | | | 69,181 | | | | | 413,175 | | | (229,456) | | | | | 183,719 | | | (229,368) | | | | | 183,807 | | | (229,194) | | | | | 183,981 | | | (229,107) | | | | | 184,068 | ||||||
Total Liabilities | | | 60,591 | | | 7,308 | | | 318,921 | | | 326,229 | | | | | 54,523 | | | | | 441,343 | | | (200,763) | | | | | 240,580 | | | (200,763) | | | | | 240,580 | | | (200,763) | | | | | 240,580 | | | (200,763) | | | | | 240,580 |
AS OF DECEMBER 31, 2022 (in thousands) | | | Carbon Revolution | | | Twin Ridge | | | | | Twin Ridge | | | | | | | | | | | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||||||||||||||||||
| | IFRS (Historical) | | | US GAAP (Historical) | | | IFRS Adjustments | | | IFRS (Historical) | | | Notes | | | Transaction Accounting Adjustments – Financing Transaction | | | Notes | | | Pro forma for financing transaction | | | Transaction Accounting Adjustments - Business Combination(1) | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments – Business Combination(2) | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination(3) | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments – Business Combination(4) | | | Notes | | | Pro Forma | |
| | AUD | | | AUD | | | AUD | | | AUD | | | | | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | |||||||||||||
Commitment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Class A ordinary shares subject to possible redemption, 21,308,813 shares at redemption value | | | — | | | 318,921 | | | (318,921) | | | — | | | (a) | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | |||||
Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Twin Ridge | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Preference shares | | | — | | | — | | | — | | | — | | | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | ||||||
Class A ordinary shares | | | — | | | — | | | — | | | — | | | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | ||||||
Class B ordinary shares | | | — | | | 1 | | | 34,554 | | | 34,555 | | | (b) | | | — | | | | | 34,555 | | | (34,555) | | | 1G | | | — | | | (34,555) | | | 1G | | | — | | | (34,555) | | | 1G | | | — | | | (34,555) | | | 1G | | | — | |
MergeCo common stock | | | — | | | — | | | — | | | — | | | | | — | | | | | — | | | 318,921 | | | 1A | | | 513,596 | | | 318,921 | | | 1A | | | 490,856 | | | 318,921 | | | 1A | | | 445,699 | | | 318,921 | | | 1A | | | 428,439 | ||
| | | | | | | | | | | | | | | | | | — | | | | | | | (23,448) | | | 1A.1 | | | | | (70,343) | | | 1A.2 | | | | | (93,791) | | | 1A.3 | | | ||||||||||||||
| | | | | | | | | | | | | | | | | | 28 | | | 1E | | | | | 28 | | | 1E | | | | | 28 | | | 1E | | | | | 28 | | | 1E | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 385,536 | | | 1F | | | | | 385,536 | | | 1F | | | | | 385,536 | | | 1F | | | | | 385,536 | | | 1F | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (8,634) | | | 1D | | | | | (7,927) | | | 1D.1 | | | | | (6,187) | | | 1D.2 | | | | | — | | | 1D.3 | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 7,876 | | | 1B | | | | | 7,876 | | | 1B | | | | | 7,876 | | | 1B | | | | | 7,876 | | | 1B | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 444 | | | 1H | | | | | 444 | | | 1H | | | | | 444 | | | 1H | | | | | 444 | | | 1H | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 34,555 | | | 1G | | | | | 34,555 | | | 1G | | | | | 34,555 | | | 1G | | | | | 34,555 | | | 1G | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | |||||||||||||
Additional paid-in-capital | | | — | | | 7,876 | | | — | | | 7,876 | | | | | — | | | | | 7,876 | | | (7,876) | | | 1B | | | — | | | (7,876) | | | 1B | | | — | | | (7,876) | | | 1B | | | — | | | (7,876) | | | 1B | | | — | ||
Share based payment reserves | | | — | | | — | | | | | — | | | | | — | | | | | | | 24,187 | | | 1C.1 | | | 24,187 | | | 24,187 | | | 1C.1 | | | 24,187 | | | 24,187 | | | 1C.1 | | | 24,187 | | | 24,187 | | | 1C.1 | | | 24,187 | ||||
Carbon Revolution Contributed equity | | | 385,536 | | | — | | | — | | | — | | | | | — | | | | | 385,536 | | | (385,536) | | | 1F | | | — | | | (385,536) | | | 1F | | | — | | | (385,536) | | | 1F | | | — | | | (385,536) | | | 1F | | | — | ||
Carbon Revolution Reserves | | | 7,070 | | | — | | | — | | | — | | | | | — | | | | | 7,070 | | | — | | | | | 7,070 | | | — | | | | | 7,070 | | | — | | | | | 7,070 | | | — | | | | | 7,070 | ||||||
Accumulated losses | | | (326,125) | | | (13,531) | | | (34,554) | | | (48,085) | | | (b) | | | | | | | (374,210) | | | — | | | | | (436,255) | | | — | | | | | (436,962) | | | — | | | | | (438,701) | | | — | | | | | (444,888) | ||||||
| | | | | | | | | | | | | | | | | | (24,138) | | | 1D | | | | | (24,845) | | | 1D.1 | | | | | (26,584) | | | 1D.2 | | | | | (32,771) | | | 1D.3 | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (28) | | | 1E | | | | | (28) | | | 1E | | | | | (28) | | | 1E | | | | | (28) | | | 1E | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (13,248) | | | 1C | | | | | (13,248) | | | 1C | | | | | (13,248) | | | 1C | | | | | (13,248) | | | 1C | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (24,187) | | | 1C.1 | | | | | (24,187) | | | 1C.1 | | | | | (24,187) | | | 1C.1 | | | | | (24,187) | | | 1C.1 | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (444) | | | 1H | | | | | (444) | | | 1H | | | | | (444) | | | 1H | | | | | (444) | | | 1H | | | |||||||||||||
Total Stockholders’ Equity | | | 66,481 | | | 313,267 | | | (318,921) | | | (5,654) | | | | | — | | | | | 60,827 | | | 47,772 | | | | | 108,599 | | | 24,324 | | | | | 85,151 | | | (22,572) | | | | | 38,255 | | | (46,019) | | | | | 14,808 | ||||||
Total Liabilities and Stockholders’ Equity | | | 127,072 | | | 320,575 | | | — | | | 320,575 | | | | | 54,523 | | | | | 502,170 | | | (152,992) | | | | | 349,178 | | | (176,439) | | | | | 325,731 | | | (223,335) | | | | | 278,835 | | | (246,783) | | | | | 255,387 |
| | | | | | | | | | | | | | | | | | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||||||||||||||||||||||
AS OF JUNE 30, 2022 (in thousands) | | | Carbon Revolution | | | Twin Ridge | | | IFRS Conversion And Presentation Alignment | | | Twin Ridge IFRS | | | Notes | | | Transaction Accounting Adjustments - Financing transactions | | | Notes | | | Pro forma for financing transaction | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments – Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments – Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments – Business Combination | | | Notes | | | Pro Forma |
| | AUD | | | AUD | | | AUD | | | AUD | | | | | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | |||||||||||||
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Sale of Wheels | | | 38,276 | | | — | | | — | | | — | | | | | — | | | | | 38,276 | | | — | | | | | 38,276 | | | — | | | | | 38,276 | | | — | | | | | 38,276 | | | — | | | | | 38,276 | ||||||
Engineering Services | | | 464 | | | — | | | — | | | — | | | | | — | | | | | 464 | | | — | | | | | 464 | | | — | | | | | 464 | | | — | | | | | 464 | | | — | | | | | 464 | ||||||
Sale of tooling | | | 1,596 | | | — | | | — | | | — | | | | | — | | | | | 1,596 | | | — | | | | | 1,596 | | | — | | | | | 1,596 | | | — | | | | | 1,596 | | | — | | | | | 1,596 | ||||||
Total Revenue | | | 40,336 | | | — | | | — | | | — | | | | | — | | | | | 40,336 | | | — | | | | | 40,336 | | | — | | | | | 40,336 | | | — | | | | | 40,336 | | | — | | | | | 40,336 | ||||||
Cost of goods sold | | | (57,445) | | | — | | | — | | | — | | | | | — | | | | | (57,445) | | | — | | | | | (57,445) | | | — | | | | | (57,445) | | | — | | | | | (57,445) | | | — | | | | | (57,445) | ||||||
Gross Margin | | | (17,109) | | | — | | | — | | | — | | | | | — | | | | | (17,109) | | | — | | | | | (17,109) | | | — | | | | | (17,109) | | | — | | | | | (17,109) | | | — | | | | | (17,109) | ||||||
Other income (expense), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Other income | | | 4,320 | | | 338 | | | — | | | 338 | | | | | — | | | | | 4,658 | | | — | | | | | 4,658 | | | — | | | | | 4,658 | | | — | | | | | 4,658 | | | — | | | | | 4,658 | ||||||
Operational expenses | | | (2,013) | | | (3,244) | | | — | | | (3,244) | | | | | — | | | | | (5,257) | | | — | | | | | (5,257) | | | — | | | | | (5,257) | | | — | | | | | (5,257) | | | — | | | | | (5,257) | ||||||
Research and development | | | (16,933) | | | — | | | — | | | — | | | | | — | | | | | (16,933) | | | — | | | | | (16,933) | | | — | | | | | (16,933) | | | — | | | | | (16,933) | | | — | | | | | (16,933) | ||||||
Administrative expenses | | | (13,146) | | | — | | | — | | | — | | | | | — | | | | | (13,146) | | | (444) | | | 1H | | | (13,590) | | | (444) | | | 1H | | | (13,590) | | | (444) | | | 1H | | | (13,590) | | | (444) | | | 1H | | | (13,590) | ||
Marketing expenses | | | (1,550) | | | — | | | — | | | — | | | | | — | | | | | (1,550) | | | | | | | (1,550) | | | — | | | | | (1,550) | | | — | | | | | (1,550) | | | — | | | | | (1,550) | |||||||
Borrowing costs | | | (1,390) | | | — | | | 14,070 | | | 14,070 | | | (d) | | | (11,402) | | | 1M | | | 1,278 | | | (28) | | | 1E | | | (12,896) | | | (28) | | | 1E | | | (12,878) | | | (28) | | | 1E | | | (12,843) | | | (28) | | | 1E | | | (12,826) |
| | | | | | | | | | | | | | | | | | (14,146) | | | 1O | | | | | (14,128) | | | 1O | | | | | (14,093) | | | 1O | | | | | (14,076) | | | 1O | | | |||||||||||||
Transaction costs | | | — | | | — | | | — | | | — | | | | | — | | | | | — | | | (13,248) | | | 1C | | | (65,534) | | | (13,248) | | | 1C | | | (66,241) | | | (13,248) | | | 1C | | | (67,980) | | | (13,248) | | | 1C | | | (84,890) | ||
| | | | | | | | | | | | | | | | | | (25,210) | | | 1C.1 | | | — | | | (25,210) | | | 1C.1 | | | — | | | (25,210) | | | 1C.1 | | | — | | | (25,210) | | | 1C.1 | | | — | |||||||||
| | | | | | | | | | | | | | | | | | (27,076) | | | 1D | | | — | | | (27,783) | | | 1D.1 | | | — | | | (29,522) | | | 1D.2 | | | — | | | (35,710) | | | 1D.3 | | | — | |||||||||
| | | | | | | | | | | | | | | | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | (10,722) | | | 1A.3 | | | — | ||||||||||||
Change in fair value of warrant liability | | | — | | | 13,648 | | | (13,648) | | | — | | | (d) | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | |||||
Change in fair value of over-allotment liability | | | — | | | 422 | | | (422) | | | — | | | (d) | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | |||||
(Loss)/profit before income taxes | | | (47,821) | | | 11,164 | | | — | | | 11,164 | | | | | (11,402) | | | | | (48,059) | | | (80,151) | | | | | (128,210) | | | (80,841) | | | | | (128,900) | | | (82,545) | | | | | (130,604) | | | (99,438) | | | | | (147,497) | ||||||
Income tax expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Net Loss | | | (47,821) | | | 11,164 | | | — | | | 11,164 | | | | | (11,402) | | | | | (48,059) | | | (80,151) | | | | | (128,210) | | | (80,841) | | | | | (128,900) | | | (82,545) | | | | | (130,604) | | | (99,438) | | | | | (147,497) | ||||||
Pro forma weighted average common shares outstanding - basic and diluted | | | | | | | | | | | | | | | | | | | | | | | 24,919,929 | | | | | | | 23,368,927 | | | | | | | 20,266,921 | | | | | | | 18,715,919 | ||||||||||||||||
Pro forma net loss per share - basic and diluted | | | | | | | | | | | | | | | | | | | | | | | (5.14) | | | | | | | (5.52) | | | | | | | (6.44) | | | | | | | (7.88) |
| | | | | | | | | | | | | | | | | | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2022 (in thousands) | | | Carbon Revolution | | | Twin Ridge | | | IFRS Conversion and Presentation Alignment | | | Twin Ridge IFRS | | | Notes | | | Transaction Accounting Adjustments – Financing transaction | | | Notes | | | Pro forma for financing transaction | | | Transaction Accounting Adjustments – Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma |
| | AUD | | | AUD | | | AUD | | | AUD | | | | | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | |||||||||||||
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Sale of Wheels | | | 18,009 | | | — | | | — | | | — | | | | | — | | | | | 18,009 | | | — | | | | | 18,009 | | | — | | | | | 18,009 | | | — | | | | | 18,009 | | | — | | | | | 18,009 | ||||||
Engineering Services | | | — | | | — | | | — | | | — | | | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | ||||||
Sale of tooling | | | — | | | — | | | — | | | — | | | | | — | | | — | | | | | — | | | | | — | | | — | | | | | — | | | | | — | | | | | | | | | |||||||||
Total Revenue | | | 18,009 | | | — | | | — | | | — | | | | | — | | | | | 18,009 | | | — | | | | | 18,009 | | | — | | | | | 18,009 | | | — | | | | | 18,009 | | | — | | | | | 18,009 | ||||||
Cost of goods sold | | | (25,586) | | | — | | | — | | | — | | | | | — | | | | | (25,586) | | | — | | | | | (25,586) | | | — | | | | | (25,586) | | | — | | | | | (25,586) | | | — | | | | | (25,586) | ||||||
Gross Margin | | | (7,577) | | | — | | | — | | | — | | | | | — | | | | | (7,577) | | | — | | | | | (7,577) | | | — | | | | | (7,577) | | | — | | | | | (7,577) | | | — | | | | | (7,577) | ||||||
Other income (expense), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Other income | | | 2,485 | | | 4,601 | | | — | | | 4,601 | | | | | — | | | | | 7,086 | | | — | | | | | 7,086 | | | — | | | | | 7,086 | | | — | | | | | 7,086 | | | — | | | | | 7,086 | ||||||
Operational expenses | | | (388) | | | (5,180) | | | — | | | (5,180) | | | | | — | | | | | (5,568) | | | — | | | | | (5,568) | | | — | | | | | (5,568) | | | — | | | | | (5,568) | | | — | | | | | (5,568) | ||||||
Research and development | | | (9,134) | | | — | | | — | | | — | | | | | — | | | | | (9,134) | | | — | | | | | (9,134) | | | — | | | | | (9,134) | | | — | | | | | (9,134) | | | — | | | | | (9,134) | ||||||
Administrative expenses | | | (7,855) | | | — | | | — | | | — | | | | | — | | | | | (7,855) | | | (305) | | | 1J | | | (8,160) | | | (305) | | | 1J | | | (8,160) | | | (305) | | | 1J | | | (8,160) | | | (305) | | | 1J | | | (8,160) | ||
Marketing expenses | | | (732) | | | — | | | — | | | — | | | | | — | | | | | (732) | | | — | | | | | (732) | | | — | | | | | (732) | | | — | | | | | (732) | | | — | | | | | (732) | ||||||
Borrowing costs | | | (1,037) | | | — | | | 1,048 | | | 1,048 | | | (d) | | | (6,253) | | | 1M | | | (6,242) | | | 224 | | | 1I | | | (13,673) | | | 224 | | | 1I | | | (13,664) | | | 224 | | | 1I | | | (13,647) | | | 224 | | | 1I | | | (13,638) |
| | | | | | | | | | | | | | | | | | (7,655) | | | IO | | | | | (7,646) | | | IO | | | | | (7,629) | | | IO | | | | | (7,620) | | | IO | | | |||||||||||||
Transaction costs | | | (3,243) | | | — | | | — | | | — | | | | | — | | | | | (3,243) | | | 305 | | | 1J | | | (2,938) | | | 305 | | | 1J | | | (2,938) | | | 305 | | | 1J | | | (2,938) | | | 305 | | | 1J | | | (2,938) | ||
Change in fair value of warrant liability | | | — | | | 1,272 | | | (1,272) | | | — | | | (d) | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | |||||
Fair value of Commitment fee shares | | | — | | | (224) | | | 224 | | | — | | | (d) | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | |||||
(Loss)/profit before income taxes | | | (27,481) | | | 469 | | | — | | | 469 | | | | | (6,253) | | | | | (33,265) | | | (7,431) | | | | | (40,696) | | | (7,422) | | | | | (40,687) | | | (7,705) | | | | | (40,670) | | | (7,396) | | | | | (40,661) | ||||||
Income tax expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Net (Loss)/profit | | | (27,481) | | | 469 | | | — | | | 469 | | | | | (6,253) | | | | | (33,265) | | | (7,431) | | | | | (40,696) | | | (7,422) | | | | | (40,687) | | | (7,705) | | | | | (40,670) | | | (7,396) | | | | | (40,661) | ||||||
Pro forma weighted average common shares outstanding - basic and diluted | | | | | | | | | | | | | | | | | | | 24,919,929 | | | | | | | 13,368,927 | | | | | | | 20,266,921 | | | | | | | 18,715,919 | | | | | ||||||||||||||||
Pro forma net loss per share - basic and diluted | | | | | | | | | | | | | | | | | | | (1.63) | | | | | | | (1.74) | | | | | | | (2.01) | | | | | | | (2.17) | | | | |
3. | Adjustments to Unaudited Pro Forma Condensed Combined Financial Information |
• | (a) Reflects the U.S. GAAP to IFRS conversion adjustment related to the reclassification of Twin Ridge’s historical mezzanine equity (Twin Ridge Class A Ordinary Shares subject to possible redemption) into Non-current Liabilities (Borrowings). |
• | (b) Reflects the award of Founder Shares measured at fair value of A$34.6 million in accumulated losses representing an IFRS 2 charge for the Twin Ridge Class B Ordinary Shares awarded to the Sponsor in Q1, 2021. IFRS 2 requires that where an issuance of shares is made for less than fair value, an IFRS 2 expense is recognized for any unidentifiable services provided at the value of the difference. The adjustment represents the value of the difference between the aggregate consideration paid and the aggregate value of B shares issued with reference to the $5.01 fair value of the Founder Shares as determined by the concurrent award of Class B shares to the directors of Twin Ridge described below. As the award did not contain any performance or forfeiture conditions, nor any variability based on the outcome of a subsequent business combination, the IFRS 2 charge is recognized at the date of issuance of the shares being for services deemed to be provided by the Sponsor up to that date. As this took place prior to July 1, 2021 no corresponding pro forma compensation charge is recognized in the pro forma statement of operations for the twelve months ended June 30, 2022. US GAAP does not contain a similar prescriptive requirement regarding unidentifiable services. |
• | (c) As reflected in the pro forma C and D series of adjustments below, transaction costs that are not direct and incremental to the issuance of new shares for consideration are expensed as a pro forma adjustment. |
Costs | | | No redemption scenario | | | 25% redemption scenario | | | 75% redemption scenario | | | Maximum redemption scenario |
Fraction of Carbon transaction costs capitalized based on proportionate shares issued to Twin Ridge shareholders. These predominantly comprise US counsel and other direct and incremental advisory fees related to the transaction and preparation of the associated registration statement as at December 31, 2022. | | | 8,634 | | | 7,927 | | | 6,187 | | | — |
Fraction of Carbon transaction costs expensed based on proportionate share and other costs not direct and incremental to the transaction. These other costs include Australian legal counsel, advisory fees relating to the structure of MergeCo, taxation advice and insurances recognized in accumulated losses at December 31, 2022. | | | 27,076 | | | 27,783 | | | 29,522 | | | 35,710 |
• | (d) Reflects the U.S. GAAP to IFRS conversion adjustment related to the reclassification of Twin Ridge’s change in fair value of warrant liability and fair value of commitment fees shares into finance expenses (Borrowings). |
• | (1A) Reflects the recognition and reclassification of approximately AUD equivalent $318.9 million of cash and marketable securities held in the Trust Account as of December 31, 2022 to cash and cash equivalents that becomes available for general use by MergeCo following the closing of the Business Combination. It also reflects the issuance of MergeCo Ordinary Shares in exchange for Twin Ridge Class A Ordinary Shares currently classified in borrowings. |
• | (1A.1) Represents the impact to cash of a 25% redemption scenario in which 1,566,661 shares of Twin Ridge Class A Ordinary Shares are redeemed for A$23.4 million allocated to common stock, using a par value of $0.0001 per share at a redemption price of $10.14 per share. |
• | (1A.2) Represents the impact to cash of a 75% redemption scenario in which 4,699,984 shares of Twin Ridge Class A Ordinary Shares are redeemed for A$70.3 million allocated to common stock, using a par value of AUD0.0001 per share at a redemption price of $10.14 per share. |
• | (1A.3) Represents the impact to cash of a maximum redemption scenario in which 6,266,645 shares of Twin Ridge Class A Ordinary Shares are redeemed for A$93.8 million allocated to common stock, using a par value of $0.0001 per share. Additionally, an IFRS 2 charge has been recognized for the excess of the fair value of MergeCo Ordinary Shares issued to Twin Ridge shareholders over the net assets of Twin Ridge as a pro forma adjustment. |
• | (1B) Under Australian law share capital does not have any par value or share premium. Accordingly, this pro forma adjustment represents the reclassification of Twin Ridge additional paid-in-capital to MergeCo Ordinary Shares as a result of the Business Combination. |
• | (1C) Represents the preliminary estimated direct and incremental transaction costs incurred prior to, or concurrent with, the completion of the Business Combination by Twin Ridge recognized in profit and loss which are partially settled through cash proceeds from the Transaction. |
• | (1C.1) Represents a non-cash compensation incurred, concurrent with, the completion of the Business Combination by Twin Ridge through a share-based award payment to advisors. $16.4 million is translated at the relevant AUD/USD exchange rates. |
• | (1D) Represents preliminary estimated direct and incremental transaction costs incurred by Carbon Revolution, allocated between new capital raised and the listing of Carbon Revolution legacy shareholder securities in a no redemption scenario directly in equity and in profit and loss respectively. |
• | (1D.1) Represents preliminary estimated direct and incremental transaction costs incurred by Carbon Revolution, allocated between new and existing capital using a 25% redemption scenario directly in equity and in profit and loss respectively. |
• | (1D.2) Represents preliminary estimated direct and incremental transaction costs incurred by Carbon Revolution, allocated between new and existing capital using a 75% redemption scenario directly in equity and in profit and loss respectively. |
• | (1D.3) Represents preliminary estimated direct and incremental transaction costs incurred by Carbon Revolution recognized in profit and loss in a maximum redemption scenario with no new capital raised. |
• | (1E) Represents the commitment fee being the fair value of 15,000 MergeCo Ordinary Shares issued to Yorkville Advisors for establishment of the committed equity facility which takes effect at closing of the Business Combination. The fair value of MergeCo Ordinary Shares is determined by reference to the implied value based on the market price of Carbon Revolution shares and associated proposed transaction exchange ratio. |
• | (1F) Represents the pro forma adjustment for the exchange of Carbon Revolution shares as a result of the Business Combination. |
• | (1G) Represents the pro forma adjustment for the award of Founder Shares of A$34.6 million as a result of the Business Combination with no forfeiture conditions and the award of shares to the Twin Ridge directors that are contingent on successful completion of a business combination. |
• | (1H) Represents the pro forma adjustment for the share-based compensation offered to the directors that is contingent on successful completion of a business combination. |
• | (1I) Reversal of commitment fee being the fair value of 15,000 MergeCo Ordinary Shares issued to Yorkville Advisors for establishment of the committed equity facility which takes effect at closing of the Business Combination. This has been recognized as part of the pro-forma adjustments in the year ended June 30, 2022. |
• | (1J) Represents a reclassification of transaction expenses comprising existing staff costs to administrative expenses in order to meet IFRS requirements. |
• | (1K) Represents the pro forma adjustment for the 70.6% Twin Ridge Class A Ordinary Shares, the holders of which exercised their redemption rights in connection with the Extension Meeting totaling A$225.1 million in redemptions. |
• | (1L) The pro forma presentation gives effect to financing entered into subsequent to December 31, 2022 that is not contingent on consummation of the merger. The financing adjustments amounts give effect to |
○ | A$88.6 million equivalent in 4 year borrowings pursuant to the PIUS Financing; |
○ | associated transaction costs and financing fees of A$19.4 million paid out of proceeds; |
○ | cash reserves required to be maintained of A$14.3 million – classified as restricted cash; |
○ | The repayment of existing debt outstanding at December 31, 2022 of A$14.7 million; and |
○ | Net cash proceeds of A$40.2 million |
| | A$’000 | |
Restricted Cash | | | 14,347 |
Transaction costs and financing fees | | | 19,380 |
Repayment of borrowings | | | 14,658 |
Cash (Net proceeds) | | | 40,176 |
Total | | | 88,561 |
• | (1M) Reflects coupon interest at 8.5% per annum and the amortization of transaction related costs on the drawdown of borrowings under the PIUS Financing as if it had been drawn down on July 1, 2021 concurrent with the Business Combination as presented in the pro forma statement of operations. |
• | (1N) Reflects the A$103 million consideration under the OIC securities purchase agreement for the issuance of preferred shares and warrants effective upon consummation of the Business Combination. The adjustment gives effect to amounts immediately available to MergeCo on issuance of an initial tranche of preferred shares, the issuance of MergeCo warrants, transaction expenses and financing fees of A$3.4 million and A$51.6 million restricted in escrow subject to release upon satisfaction of certain future conditions |
| | A$’000 | |
Restricted Cash | | | 51,661 |
Transaction costs and financing fees | | | 3,395 |
Cash (Net proceeds) | | | 48,266 |
Total | | | 103,322 |
- | Scenario 1: No Redemptions - 5,633,321 |
- | Scenario 2: 25% Redemptions - 5,586,348 |
- | Scenario 3: 75% Redemptions - 5,492,403 |
- | Scenario 4: 100% Redemptions – 5,445,431 |
• | (1O) Reflects a 12% coupon due on the initial issuance of preferred shares to OIC investors, the accretion of the preferred share liability on an effective interest basis and the amortization of transaction related costs as if the preferred shares had been issued on July 1, 2021 concurrent with the Business Combination as presented in the proforma statements of operations. |
4. | Loss per Share |
• | Class A Ordinary Shares, par value $0.0001 per share, all of which were subject to possible redemption at approximately $10.00 per share: 500,000,000 shares authorized, 21,308,813 shares issued and outstanding; and |
• | Class B Ordinary Shares, par value $0.0001 per share: 50,000,000 shares authorized, 5,327,203 shares issued and outstanding (0.3 million of which will be forfeited). |
• | None of Carbon Revolution’s outstanding vested or unvested options were exercised immediately prior to the Business Combination; and |
• | None of the MergeCo OIC investor warrants were exercised immediately upon consummation of the Business Combination. |
| | Net Earnings (loss) per share-basic and diluted | ||||||||||
| | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |
Year ended June 30, 2022 | | | | | | | | | ||||
Pro forma net loss (in thousands) | | | (128,210) | | | (128,900) | | | (130,604) | | | (147,497) |
Net loss per share-basic and diluted | | | (5.14) | | | (5.52) | | | (6.44) | | | (7.88) |
6 months ended December 31, 2022 | | | | | | | | | ||||
Pro forma net loss (in thousands) | | | (40,696) | | | (40,687) | | | (40,670) | | | (40,661) |
Net loss per share-basic and diluted | | | (1.63) | | | (1.74) | | | (2.01) | | | (2.17) |
Number of Shares | | | | | | | | | ||||
Twin Ridge shareholders* | | | 11,266,645 | | | 9,699,984 | | | 6,566,661 | | | 5,000,000 |
Carbon Revolution Shareholders | | | 13,638,284 | | | 13,653,943 | | | 13,685,260 | | | (13,700,919) |
Yorkville Advisors Global, LP | | | 15,000 | | | 15,000 | | | 15,000 | | | 15,000 |
| | 24,919,929 | | | 23,368,927 | | | 20,266,921 | | | 18,715,919 |
(*) | The historical shares of MergeCo outstanding prior to the Business Combination will be cancelled. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the closing price of the MergeCo Ordinary Shares equals or exceeds $18.00 per share (as adjusted for adjustments described under “—Anti-dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which notice of the redemption is sent to the warrant holders. |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” (as defined below) of the MergeCo Ordinary Shares, except as otherwise described below; |
• | if, and only if, the closing price of the MergeCo Ordinary Shares equals or exceeds $10.00 per public share (as adjusted for adjustments described under “—Anti-dilution Adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders; and |
• | if the closing price of the MergeCo Ordinary Shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments described under “—Anti-dilution Adjustments”), the MergeCo Founder Warrants must also be concurrently called for redemption on the same terms as the outstanding MergeCo Public Warrants, as described above. |
Redemption Date (period to expiration of warrants) | | | Fair Market Value of MergeCo Ordinary Shares | ||||||||||||||||||||||||
| ≤$10.00 | | | $11.00 | | | $12.00 | | | $13.00 | | | $14.00 | | | $15.00 | | | $16.00 | | | $17.00 | | | ≥$18.00 | ||
60 months | | | 0.261 | | | 0.281 | | | 0.297 | | | 0.311 | | | 0.324 | | | 0.337 | | | 0.348 | | | 0.358 | | | 0.361 |
57 months | | | 0.257 | | | 0.277 | | | 0.294 | | | 0.310 | | | 0.324 | | | 0.337 | | | 0.348 | | | 0.358 | | | 0.361 |
54 months | | | 0.252 | | | 0.272 | | | 0.291 | | | 0.307 | | | 0.322 | | | 0.335 | | | 0.347 | | | 0.357 | | | 0.361 |
51 months | | | 0.246 | | | 0.268 | | | 0.287 | | | 0.304 | | | 0.320 | | | 0.333 | | | 0.346 | | | 0.357 | | | 0.361 |
48 months | | | 0.241 | | | 0.263 | | | 0.283 | | | 0.301 | | | 0.317 | | | 0.332 | | | 0.344 | | | 0.356 | | | 0.361 |
45 months | | | 0.235 | | | 0.258 | | | 0.279 | | | 0.298 | | | 0.315 | | | 0.330 | | | 0.343 | | | 0.356 | | | 0.361 |
42 months | | | 0.228 | | | 0.252 | | | 0.274 | | | 0.294 | | | 0.312 | | | 0.328 | | | 0.342 | | | 0.355 | | | 0.361 |
39 months | | | 0.221 | | | 0.246 | | | 0.269 | | | 0.290 | | | 0.309 | | | 0.325 | | | 0.340 | | | 0.354 | | | 0.361 |
36 months | | | 0.213 | | | 0.239 | | | 0.263 | | | 0.285 | | | 0.305 | | | 0.323 | | | 0.339 | | | 0.353 | | | 0.361 |
33 months | | | 0.205 | | | 0.232 | | | 0.257 | | | 0.280 | | | 0.301 | | | 0.320 | | | 0.337 | | | 0.352 | | | 0.361 |
30 months | | | 0.196 | | | 0.224 | | | 0.250 | | | 0.274 | | | 0.297 | | | 0.316 | | | 0.335 | | | 0.351 | | | 0.361 |
27 months | | | 0.185 | | | 0.214 | | | 0.242 | | | 0.268 | | | 0.291 | | | 0.313 | | | 0.332 | | | 0.350 | | | 0.361 |
24 months | | | 0.173 | | | 0.204 | | | 0.233 | | | 0.260 | | | 0.285 | | | 0.308 | | | 0.329 | | | 0.348 | | | 0.361 |
21 months | | | 0.161 | | | 0.193 | | | 0.223 | | | 0.252 | | | 0.279 | | | 0.304 | | | 0.326 | | | 0.347 | | | 0.361 |
18 months | | | 0.146 | | | 0.179 | | | 0.211 | | | 0.242 | | | 0.271 | | | 0.298 | | | 0.322 | | | 0.345 | | | 0.361 |
15 months | | | 0.130 | | | 0.164 | | | 0.197 | | | 0.230 | | | 0.262 | | | 0.291 | | | 0.317 | | | 0.342 | | | 0.361 |
12 months | | | 0.111 | | | 0.146 | | | 0.181 | | | 0.216 | | | 0.250 | | | 0.282 | | | 0.312 | | | 0.339 | | | 0.361 |
9 months | | | 0.090 | | | 0.125 | | | 0.162 | | | 0.199 | | | 0.237 | | | 0.272 | | | 0.305 | | | 0.336 | | | 0.361 |
6 months | | | 0.065 | | | 0.099 | | | 0.137 | | | 0.178 | | | 0.219 | | | 0.259 | | | 0.296 | | | 0.331 | | | 0.361 |
3 months | | | 0.034 | | | 0.065 | | | 0.104 | | | 0.150 | | | 0.197 | | | 0.243 | | | 0.286 | | | 0.326 | | | 0.361 |
0 months | | | — | | | — | | | 0.042 | | | 0.115 | | | 0.179 | | | 0.233 | | | 0.281 | | | 0.323 | | | 0.361 |
Corporate Law Differences | |||
Cayman Islands | | | Ireland |
Principal Applicable Legislation | |||
| | ||
The Cayman Islands Companies Act | | | The Irish Companies Act (“ICA”) |
| | ||
Shareholder Meetings | |||
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Held at a time and place as determined by the directors. | | | Held at a time and place as determined by the directors subject to at least one shareholder meeting being held in each year, being the company’s annual general meeting. Shareholders holding not less than 10% of the paid-up share capital in MergeCo may also require the directors to convene a shareholder meeting. |
| | ||
May be held within or outside the Cayman Islands. | | | May be held within or outside Ireland. |
| | ||
Notice: | | | Notice: |
| | ||
A copy of the notice of any meeting shall be given not fewer than five clear days before the date of the proposed meeting to those persons whose names appear in the register of members on the record date of the proposed meeting. | | | A copy of the notice of any meeting shall be given at least 21 days before the date of the proposed meeting to the members, directors and auditors. In certain limited circumstances, a meeting may be called by 14 days’ notice, but this shorter notice period shall not apply to the annual general meeting. |
| |
Corporate Law Differences | |||
Cayman Islands | | | Ireland |
Shareholders’ Voting Rights | |||
| | ||
Any person authorized to vote may be represented at a meeting by a proxy who may vote on behalf of the shareholder. | | | Every shareholder entitled to attend, speak, ask questions and vote at a general meeting may appoint a proxy or proxies to attend, speak, ask questions and vote on behalf of the shareholder. |
| | ||
Quorum is fixed by the Existing Organizational Documents to consist of the holder or holders of a majority of Twin Ridge’s shares present in person or by proxy. | | | Quorum is fixed by the MergeCo Amended and Restated Memorandum and Articles of Association, to consist of at least two shareholders present in person or by proxy entitled to exercise more than fifty percent (50%) of the voting rights of the shares |
| | ||
Resolutions put to the vote of a meeting shall be decided on a poll, which shall be taken in such manner as the chairperson of the meeting directs. Subject to the provisions of the Existing Organizational Documents and any rights or restrictions attached to any shares, every shareholder of record present in person or by proxy shall have one vote for each share registered in his or her name. | | | Resolutions put to the vote of a meeting shall be decided on a poll, which shall be taken in such manner as the chairperson of the meeting directs. Subject to the provisions of the MergeCo Amended and Restated Memorandum and Articles of Association and any rights or restrictions attached to any shares (including the formula for calculating the votes of the Preferred Shareholders), every shareholder of record present in person or by proxy shall have one vote for each share registered in his or her name. |
| | ||
Where the rights attaching to shares are set out in the Existing Organizational Documents, any changes to these rights will need to be effected by way of special resolution (passed by at least two-thirds of the votes cast by shareholders attending and voting at the meeting in person or by proxy) amending the Memorandum and Articles of Association. Additionally, the rights attaching to a particular class of shares may only be varied with the consent in writing of the holders of not less than two thirds of the issued shares of that class or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the holders of shares of that class. | | | Where the rights attaching to shares are set out in the MergeCo Amended and Restated Memorandum and Articles of Association, any changes to these rights will need to be effected by way of (i) a special resolution (passed by 75% of the votes cast by shareholders attending and voting at the meeting) amending the MergeCo Amended and Restated Memorandum and Articles of Association; and (ii) a Class A Majority where there are Preferred Shares in issue. Additionally, the rights attaching to a particular class of shares may only be varied if (a) the holders of 75% of the nominal value of the issued shares of that class consent in writing to the variation, or (b) a special resolution, passed at a separate general meeting of the holders of that class, sanctions the variation. |
| | ||
The directors may issue preference shares from time to time and may fix the rights attaching to such preference shares. The rights attaching to the preference shares may (once such shares are in issue) be changed by way of a resolution passed by a majority of not less than two-thirds of the votes attending and voting at the relevant meeting or class meeting. | | | Subject to the Structured Voting Rights, the MergeCo board of directors is empowered to cause preferred shares to be issued from time to time and may fix the rights attaching to such preferred shares. The MergeCo board of directors may change the rights of any series of preferred shares that has been created but not yet issued. Once issued, the rights attaching to a series of preferred shares may only be varied with the consent in writing of 75% of the holders of those shares or by a special resolution passed by that class. |
| | ||
The creation, designation or issue of preference shares with rights and privileges ranking in priority to an existing class of shares shall be deemed not to be a | | | The creation, issue and allotment of preferred shares shall not constitute a variation of rights of any existing class of shares. |
Corporate Law Differences | |||
Cayman Islands | | | Ireland |
variation of the rights of such existing class. | | | |
| | ||
Cumulative voting in the election of directors is not provided for. | | | Cumulative voting in the election of directors is not provided for. |
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Shareholder approval in respect of the consummation of Twin Ridge’s initial Business Combination requires a majority vote of the Twin Ridge shareholders who, being so entitled, attend and vote at the general meeting (whether in person or by proxy). | | | MergeCo’s Board has approved entry into and consummation of the Business Combination by MergeCo. Shareholder approval of the Business Combination is not required. |
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All other matters to be decided upon by the shareholders require a majority vote of shareholders who, being so entitled, attend and vote at the general meeting, unless the Cayman Islands Companies Act or the Twin Ridge Memorandum and Articles of Association requires a higher majority. | | | Subject to the Structured Voting Rights, all other matters to be decided upon by the shareholders require a majority vote of shareholders who, being so entitled, attend and vote at the general meeting, unless the ICA or MergeCo’s constitution requires a higher majority, in which case a special resolution must be passed by not less than 75% of the votes cast by those attending and voting. By way of example only, matters that require a special resolution include any amendments to the MergeCo Amended and Restated Memorandum and Articles of Association, the acquisition by MergeCo of its own shares, the variation of class rights attaching to classes of shares, and the re-registration of MergeCo as a different company form. |
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| | The MergeCo Amended and Restated Memorandum and Articles of Association may not be amended by resolution of directors, but the directors when issuing preference shares may fix the rights attaching to such shares (subject to the Structured Voting Rights). | |
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Shareholder Rights Plan | |||
| | ||
No equivalent provisions | | | Subject to applicable law, the MergeCo Amended and Restated Memorandum and Articles of Association provide the MergeCo board of directors with the power to adopt a shareholder rights plan upon such terms as the MergeCo board of directors deems expedient in the best interests of MergeCo, and to exercise any power of MergeCo to grant rights (including approving the execution of any documents relating to the grant of such rights) to subscribe for MergeCo Ordinary Shares or preference shares in the capital of MergeCo in accordance with the terms of such rights plan. MergeCo’s ability to adopt a rights plan or to take other anti-takeover measures after the MergeCo board of directors has received an approach which may lead to an offer or has reason to believe an offer is, or may be, imminent would be restricted by the frustrating actions prohibition of the Irish Takeover Rules. |
| |
Corporate Law Differences | |||
Cayman Islands | | | Ireland |
Shareholder Consent to Action without Meeting | |||
| | ||
The Cayman Islands Companies Act allows an ordinary resolution signed by all the shareholders entitled to vote on such resolution and authorized by the articles of association. The Existing Organizational Documents authorize such unanimous written resolutions. | | | As set out in the MergeCo Amended and Restated Memorandum and Articles of Association, for so long as MergeCo has more than one shareholder, unanimous consent of the holders of MergeCo Ordinary Shares is required before the shareholders may act by way of written resolution in lieu of holding a general meeting. |
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Directors | |||
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The Twin Ridge Board must consist of at least one director. | | | The MergeCo board of directors must consist of at least two directors. |
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Maximum and minimum number of directors can be changed by an ordinary resolution of shareholders being a majority vote of shareholders who, being so entitled, attend and vote at the general meeting. | | | Maximum and minimum number of directors can be changed by an amendment to the MergeCo Amended and Restated Memorandum and Articles of Association, with such amendment being passed by a special resolution of shareholders (75% of those attending and voting) and a Class A Majority where there are Preferred Shares in issue, but not a resolution of the directors. |
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The directors shall be divided into three classes, designated Class I, Class II and Class III. | | | The directors (other than any directors appointed by the Class A Majority) shall be divided into three classes, designated Class I, Class II and Class III. |
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The term of the initial Class I directors shall terminate at Twin Ridge’s first annual general meeting; the term of the initial Class II directors shall terminate at Twin Ridge’s second annual general meeting; and the term of the initial Class III directors shall terminate at Twin Ridge’s third annual general meeting. | | | The term of the initial Class I directors shall terminate at the conclusion of MergeCo’s 2024 annual general meeting; the term of the initial Class II directors shall terminate on the conclusion of MergeCo’s 2025 annual general meeting; and the term of the initial Class III directors shall terminate on the conclusion of MergeCo’s 2026 annual general meeting. Directors are eligible to stand for re-election at the relevant annual general meeting. Directors shall be re-elected for a three-year term. In the event of a contested election (i.e., where the number of MergeCo director nominees exceeds the number of MergeCo directors to be elected), each of those nominees shall be voted upon as a separate resolution and the directors of MergeCo shall be elected by a plurality of the votes cast in person or by proxy at any such meeting. “Elected by a plurality” means the election of those of the MergeCo director nominees equaling in number the number of positions to be filled at the relevant general meeting that receive the highest number of votes. Directors appointed by the Class A Majority will remain in office until they resign or are removed by the Class A Majority. |
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Corporate Law Differences | |||
Cayman Islands | | | Ireland |
The directors may by resolution appoint a replacement director to fill a casual vacancy arising on the resignation, disqualification or death of a director. The replacement director will then hold office until the next annual general meeting at which the director he replaces would have been subject to retirement by rotation. | | | Any vacancy on the board shall be deemed a casual vacancy, which shall be filled by the decision of a majority of the board then in office (save in the case of directors appointed by the Class A Majority). The replacement director will hold office until the next annual general meeting at which the director he replaces would have been subject to retirement by rotation. |
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Directors do not have to be independent under the Existing Organizational Documents. | | | Directors do not have to be independent under the MergeCo Amended and Restated Memorandum and Articles of Association. |
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Under the Existing Organizational Documents, a director may be removed from office by a resolution of the holders of Twin Ridge Class B Ordinary Shares only prior to the consummation of Twin Ridge’s initial Business Combination. | | | Under Section 146 of the ICA, a director may be removed before the expiration of his or her period of office by way of ordinary resolution of the shareholders (i.e., a simple majority of the members attending and voting), provided that at least 28 clear days’ notice of the resolution is given to MergeCo, and the shareholders comply with the relevant procedural requirements of the ICA. Under Irish law, one or more MergeCo shareholders representing not less than 10% of the paid-up share capital of MergeCo carrying voting rights may requisition the holding of an extraordinary general meeting at which a resolution to remove a director and appoint another person in his or her place may be proposed. |
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There are no share ownership qualifications for directors. | | | There are no share ownership qualifications for directors. |
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Meetings of the Twin Ridge Board may be convened at any time by any of Twin Ridge’s directors. A quorum will be present at a meeting of the Twin Ridge Board if at least a majority of the directors are present or represented by an alternate director. At any meeting of Twin Ridge’s directors, each director, whether by his or her presence or by his or her alternate, is entitled to one vote. Questions arising at a meeting of the Twin Ridge Board shall be decided by a majority vote. In the case of a tie vote, the chairperson of the meeting shall have a second or casting vote. | | | Meetings of the MergeCo board of directors may be convened at such time and place as the directors determine. The quorum may be fixed by the directors and unless so fixed shall be a majority of the directors in office. The directors (other than directors appointed by the Class A Majority) are entitled to appoint alternates. Questions arising at a meeting of the MergeCo board of directors are required to be decided by a simple majority of the directors present, with each director entitled to one vote (save where MergeCo has failed to redeem the Preferred Shares on the mandatory date for their redemption or otherwise breached certain provisions of the Securities Purchase Agreement, in which case the directors appointed by the Class A Majority shall be deemed to have a majority of votes in respect of certain specified matters). In the case of a tie vote, the chairperson of the meeting shall not have a second or casting vote. |
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The Twin Ridge Board may pass resolutions without a meeting by unanimous written consent. | | | The MergeCo board of directors may pass resolutions without a meeting where such resolution is signed by all the directors. |
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Corporate Law Differences | |||
Cayman Islands | | | Ireland |
Fiduciary Duties of Directors | | | |
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Under Cayman Islands law, all of our directors owe three types of duties to us: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. Cayman Islands law imposes a number of fiduciary duties on a director. A Cayman Islands director’s fiduciary duties are not codified; however, the courts of the Cayman Islands have held that a director owes the following fiduciary duties: (a) a duty to act in what the director bona fide considers to be in the best interests of the company; (b) a duty to exercise their powers for the purposes they were conferred; (c) a duty to avoid fettering his or her discretion in the future; (d) a duty to exercise powers fairly as between different sections of shareholders; (e) a duty to exercise independent judgment; and (f) a duty to avoid conflicts of interest. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. Under the Existing Organizational Documents, so long as a director has disclosed any interests in a transaction entered into or to be entered into by the company to the board, he/she may: (i) vote on a matter relating to the transaction; (ii) attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes of a quorum; and sign a document on behalf of the company, or do any other thing in his capacity as a director, that relates to the transaction. | | | Directors and officers owe fiduciary duties at both common law and under statute. These duties include those listed below. A director shall: (a) act in good faith in what the director considers to be the interests of the company; (b) act honestly and responsibly in relation to the conduct of the affairs of the company; (c) act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law; (d) not use the company’s property, information or opportunities for his or her own or anyone else’s benefit unless expressly permitted by the company’s constitution or approved by a resolution of the company in general meeting; (e) not agree to restrict the director’s power to exercise an independent judgement, unless expressly permitted by the company’s constitution or approved by a resolution of the company in general meeting; (f) avoid any conflict between the director’s duties to the company and the director’s other (including personal) interests unless released from this duty by the company’s constitution or by resolution of the company in general meeting; (g) exercise the care, skill and diligence which would be exercised in the same circumstances by a reasonable person having both the knowledge and experience that may reasonably be expected of a person in the same position as the director and the knowledge and experiences that the director has; and (h) in addition to having a general duty to have regard to the interests of the company’s employees, have regard to the interests of its members. Under the MergeCo Amended and Restated Memorandum and Articles of Association, so long as a director has disclosed to the MergeCo board of directors any interests he/she may have in a contract or proposed contract with MergeCo, he/she may vote in respect of any contract, appointment or arrangement in which he/she is interested and be counted in the quorum present at the meeting. |
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Corporate Law Differences | |||
Cayman Islands | | | Ireland |
Under the laws of the Cayman Islands, a transaction entered into by the company in respect of which a director is interested will not be voidable by the company where the members have approved or ratified the transaction in knowledge of the material facts of the interest of the director in the transaction, or if the company received fair value for the transaction. | | | Under the laws of Ireland, certain transactions entered into by MergeCo with a director will be voidable by MergeCo unless MergeCo’s shareholders have approved or ratified the transaction in knowledge of the material facts of the interest of the director in the transaction. Shareholder approval will be required even where MergeCo receives fair value for the transaction. There is a de minimis threshold in terms of transaction value that needs to be reached before shareholder approval is required. |
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Indemnification of Directors | |||
| | ||
The Existing Organizational Documents provides that, subject to certain limitations, Twin Ridge shall indemnify its directors and officers against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. Such indemnity does not apply in respect of any incurred by reason of such person’s own actual fraud, willful neglect or willful default. | | | The MergeCo Amended and Restated Memorandum and Articles of Association provide that, subject to certain limitations and so far as may be permitted by the ICA, each director and officer shall be entitled to be indemnified by MergeCo against all costs and expenses incurred in the execution and discharge of his or her duties, including any liability incurred in defending any proceedings relating to his or her office where judgment is given in his or her favor or the proceedings disposed of without any finding against him or her. It is expected that MergeCo will purchase and maintain directors and officers insurance on behalf of its directors, secretary and employees. A director shall not be indemnified in respect of any claim where he or she has been adjudged to be liable for fraud or dishonesty, unless otherwise directed by the court. |
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Committees | |||
| | ||
Under the Existing Organizational Documents, the directors of Twin Ridge may delegate any of their powers, authorities and discretions, including the power to sub-delegate, to any committee consisting of one or more of Twin Ridge’s directors and subject to any conditions that the Twin Ridge’s directors may impose. Furthermore, under Twin Ridge’s Memorandum and Articles of Association, the directors of Twin Ridge may establish any committees, local boards or agencies or appoint any person to be a manager or agent for managing the affairs of Twin Ridge and may appoint any person to be a member of such committees, local boards or agencies and subject to any conditions that the Twin Ridge’s directors may impose. | | | Under the MergeCo Amended and Restated Memorandum and Articles of Association, the directors of MergeCo may establish one or more committees consisting in whole or in part of members of the MergeCo board of directors. The composition, function, power and obligations of any such committee will be determined by the MergeCo board of directors from time to time. |
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Limited Liability of Directors | |||
| | ||
Under Cayman Islands law, directors owe certain fiduciary duties to the company and may be liable where they act in breach of such duties. | | | Under the ICA, a director of MergeCo may be liable to MergeCo where such director acts in breach of certain of his or her fiduciary duties. |
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Corporate Law Differences | |||
Cayman Islands | | | Ireland |
Dissenters’ Rights | |||
| | ||
The Cayman Islands Companies Act prescribes that: 238. (1) A member of a constituent company incorporated under this Act shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation. 239. (1) No rights under Section 238 shall be available in respect of the shares of any class for which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under Section 238(5), but this section shall not apply if the holders thereof are required by the terms of a plan of merger or consolidation pursuant to Section 233 or 237 to accept for such shares anything except — (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognized interdealer quotation system or held of record by more than two thousand holders; (c) cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a) and (b); or (d) any combination of the shares, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a), (b) and (c). Generally any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by the company’s Memorandum and Articles of Association. | | | Generally, under Irish law, shareholders of an Irish company do not have dissenters’ or appraisal rights. Under the European Communities (Cross-Border Mergers) Regulations 2008 governing the merger of an Irish public limited company such as MergeCo and a company incorporated in the European Economic Area, a shareholder (i) who voted against the special resolution approving a merger or (ii) of a company in which 90% of the shares are held by the other party to the merger, has the right to request that the company acquire his or her shares for cash at a price determined in accordance with the share exchange ratio set out in the transaction. Under the ICA, which governs the merger of Irish companies limited by shares, such as MergeCo, a shareholder of either of the merging companies who voted against the special resolution approving the merger, or any shareholder, other than the successor company, where the successor company held 90% or more of the voting shares in the transferor company, may, not later than 15 days after the shareholder meeting of the relevant merging company at which the merger was approved, request in writing that the successor company acquire his, her or its shares for cash. |
Share Issues | |||
| | ||
Under the Existing Organizational Documents, Twin Ridge’s directors may allot, issue, grant options over or otherwise dispose of shares (including fractions of a share) with or without preferred, deferred or other rights or restrictions, whether in regard to dividends or other distributions, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they think proper, and may also (subject to the Cayman Islands Companies Act and its Articles of Association) vary such rights. | | | Irish law generally provides that a board of directors may allot and issue shares (or rights to subscribe for or convert into shares) if authorized to do so by a company’s constitution or by an ordinary resolution. Such authorization may be granted for up to the maximum of a company’s authorized but unissued share capital and for a maximum period of five years, at which point it must be renewed by another ordinary resolution. The MergeCo Amended and Restated Memorandum and Articles of Association authorize the MergeCo board of directors to allot shares up to the |
Corporate Law Differences | |||
Cayman Islands | | | Ireland |
There are generally no statutory pre-emptive rights under Cayman Islands law and there are no preemptive rights under Twin Ridge’s memorandum and Articles. | | | maximum of MergeCo’s authorized but unissued share capital until the fifth anniversary of the adoption of the MergeCo Amended and Restated Memorandum and Articles of Association (i.e., five years after completion of the Transactions). This authorization will need to be renewed by ordinary resolution (typically at the company’s annual general meeting) upon its expiration and at periodic intervals thereafter. Under Irish law, an allotment authority may be given for up to five years at each renewal, but governance considerations may result in renewals for shorter periods or for less than the maximum permitted number of shares being sought or approved. |
| | ||
| | While Irish law also generally provides shareholders with pre-emptive rights when new shares are issued for cash, it is possible for the MergeCo Amended and Restated Memorandum and Articles of Association, or for shareholders of MergeCo in a general meeting, to exclude such pre-emptive rights. The MergeCo Amended and Restated Memorandum and Articles of Association exclude pre-emptive rights until the fifth anniversary of the adoption of the MergeCo Amended and Restated Memorandum and Articles of Association (i.e., five years after completion of the Transactions). This exclusion will need to be renewed by special resolution (typically at the company’s annual general meeting) upon its expiration and at periodic intervals thereafter. Under Irish law, a disapplication of pre-emption rights may be authorized for up to five years at each renewal, but governance considerations may result in renewals for shorter periods or for less than the maximum permitted number of unissued shares being sought or approved. | |
| | ||
Share Repurchases and Redemptions | |||
| | ||
A Cayman Islands company may, if authorized to do so in its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the holder thereof or the company, or purchase its own shares, whether issued as redeemable or not. Shares may be purchased in the manner set out in the articles of association. If no such manner is provided for, approval of the members in general meeting must be obtained. | | | Shares may be redeemed or repurchased by MergeCo. Any share in MergeCo shall be deemed to be a redeemable share as and from the time of existence of an agreement or transaction between MergeCo and any person pursuant to which MergeCo will acquire a share or shares. Any acquisition by MergeCo of shares in MergeCo other than a surrender for nil value shall constitute a redemption. Any redemption or repurchase must be funded out of MergeCo’s distributable reserves or from the proceeds of a fresh issue of shares. Redemptions and repurchases are governed by the applicable provisions of the ICA and the MergeCo Amended and Restated Memorandum and Articles of Association. |
Corporate Law Differences | |||
Cayman Islands | | | Ireland |
| | Preferred Shares shall be redeemable at the election of MergeCo for five years after the Initial Closing, and be required to be redeemed on the fifth anniversary of the Initial Closing. | |
| | ||
Dividends | |||
| | ||
Subject to the Cayman Islands Companies Act and Twin Ridge’s Memorandum and Articles of Association, Twin Ridge’s directors may declare dividends at a time and amount they think fit if they are satisfied, on reasonable grounds, that, immediately after distribution of the dividend, the value of its assets will exceed its liabilities and Twin Ridge will be able to pay its debts as they fall due in the ordinary course of business. No dividend shall carry interest against Twin Ridge. | | | Subject to the right of the Preferred Shareholders to receive a quarterly dividend with a specified return in priority to other distributions, the directors may from time to time pay such dividends as appear justified by the profits of MergeCo, provided that dividends may only be made out of MergeCo’s distributable reserves and if the dividend will not cause MergeCo’s net assets to fall below the aggregate of its called up share capital and undistributable reserves (as such terms are calculated in accordance with the ICA). No dividend shall bear interest against MergeCo. The MergeCo board of directors may also recommend a dividend to be approved and declared by MergeCo shareholders at a general meeting, provided that no such dividend may exceed the amount recommended by the Board. |
| | ||
Rights of Non-resident or Foreign Shareholders and Disclosure of Substantial Shareholdings | |||
| | ||
There are no limitations imposed by the Existing Organizational Documents on the rights of non-resident or foreign shareholders to hold or exercise voting rights on Twin Ridge’s shares. There are no provisions in the Existing Organizational Documents governing the ownership threshold above which shareholder ownership must be disclosed. | | | There are no limitations imposed by the MergeCo Amended and Restated Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on MergeCo’s shares. Under the ICA, shareholders must notify MergeCo if, as a result of a transaction, the shareholder will become interested in 3% or more of MergeCo’s voting shares, or if as a result of a transaction a shareholder who was interested in 3% or more of MergeCo’s voting shares ceases to be so interested. Where a shareholder is interested in 3% or more of MergeCo’s voting shares, the shareholder must notify MergeCo of any alteration to his or her interest that brings his or her total through the nearest whole percentage number, whether an increase or a reduction. Where a person fails to comply with these notification requirements no right or interest of any kind whatsoever in respect of any shares in the company concerned, held by such person, shall be enforceable by such person, whether directly or indirectly, by action or legal proceeding. However, such person may apply to the High Court of Ireland to have the rights attaching to the shares concerned reinstated. |
Corporate Law Differences | |||
Cayman Islands | | | Ireland |
Shareholder Inspection of Books and Records | |||
| | ||
Under Cayman Islands law, shareholders have no right to inspect the books of the company but are entitled to an up-to-date copy of the memorandum and articles of association. Standard articles provide that directors may determine whether and to what extent the books of the company shall be open to inspection. | | | Under Irish law, MergeCo’s shareholders have the rights to: (i) receive a copy of MergeCo’s Memorandum and Articles of Association; (ii) inspect and obtain copies of the minutes of general meetings and resolutions of MergeCo; (iii) inspect and receive a copy of MergeCo’s register of members, register of directors and secretaries, register of directors’ interests, register of directors’ service contracts and memoranda and other statutory registers maintained by MergeCo; (iv) receive copies of balance sheets and directors’ and auditors’ reports that have previously been sent to MergeCo’s shareholders prior to an annual general meeting; and (v) receive balance sheets of any subsidiary of MergeCo that have previously been sent to MergeCo’s shareholders prior to an annual general meeting for the preceding 10 years. |
| | ||
Anti-Money Laundering Laws | |||
| | ||
In order to comply with legislation or regulations aimed at the prevention of money laundering, Twin Ridge is required to adopt and maintain anti-money laundering procedures, and may require investors to provide evidence to verify their identity. If any person in the Cayman Islands knows or suspects or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering or is involved with terrorism or terrorist financing and property and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report shall not | | | Under Irish law, the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) (the “2010 Act”) sets down the law in relation to money laundering and the proceeds of crime and its application to MergeCo. MergeCo does not fall within the definition of a “designated person” under the 2010 Act and is therefore not obliged to report suspicious transactions in the same manner as a “designated person” but it can make a voluntary disclosure. MergeCo is required to hold “adequate, accurate and current” information on its beneficial owners. MergeCo must set up a beneficial ownership register, where a beneficial owner is a corporate or individual that directly (or indirectly through other companies) holds over 25% of the shares in MergeCo or otherwise directly (or indirectly through other companies) controls over 25% of MergeCo. |
Corporate Law Differences | |||
Cayman Islands | | | Ireland |
be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise. | | | |
| | ||
Governing Law and Jurisdiction | |||
| | ||
| | The MergeCo Amended and Restated Memorandum and Articles of Association provide that the courts of Ireland are to have exclusive jurisdiction to settle any dispute arising out of the MergeCo Amended and Restated Memorandum and Articles of Association except that (unless MergeCo consents in writing to the selection of an alternative forum) the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Exchange Act or the Securities Act. |
• | changes in domestic and foreign business, market, financial, political and legal conditions; |
• | the inability of the parties to successfully or timely consummate the Business Combination, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the Post-Combination Company or the expected benefits of the Business Combination, or that the approval of the shareholders of Twin Ridge or Carbon Revolution is not obtained; |
• | conditions to the completion of the OIC Financing may not be satisfied or the occurrence of any event, change or other circumstance that could give rise to the termination of the OIC Purchase Agreement; |
• | the ability of Carbon Revolution to obtain financing, equity, debt, or convertible debt financings, to fund its operations on favorable terms or at all, including in the short term, the ability of Carbon Revolution to obtain bridge financing necessary to continue as a going concern until consummation of the Business Combination; |
• | growth in demand for Carbon Revolution’s wheels being lower than expected, or eventuating later than expected (including but not limited to delay in commencement of wheel programs); |
• | increase in prices of labor or materials, or adverse movements in foreign exchange; |
• | disruption to global supply chains; |
• | Carbon Revolution’s relationships with suppliers and technical partners may deteriorate; |
• | risks relating to Carbon Revolution’s bespoke equipment and production process to create a highly complex and innovative product; |
• | downward pricing pressure from customers |
• | changes in Carbon Revolution’s competitive position or market share; |
• | the inability to maintain the listing of MergeCo’s securities on a U.S. securities exchange; |
• | the inability to complete any private placement financing, the amount of any private placement financing or the completion of any private placement financing with terms unfavorable to us; |
• | the risk that the Business Combination and related transactions disrupts current plans and operations Carbon Revolution or Twin Ridge; |
• | the risk that any of the conditions to closing of the Business Combination are not satisfied in the anticipated manner or on the anticipated timeline or are waived by any of the parties thereto; |
• | the failure to realize the anticipated benefits of the Business Combination and related transactions; |
• | risks relating to the uncertainty of the costs related to the Business Combination; |
• | risks related to the rollout of Carbon Revolution’s business strategy and the timing of expected business milestones; |
• | the effects of competition on Carbon Revolution’s future business and the ability of the Post-Combination Company to grow and manage growth, establish and maintain relationships with customers, and retain Carbon Revolution’s management and key employees; |
• | risks related to domestic and international political and macroeconomic uncertainty, including the Russia-Ukraine conflict; |
• | the outcome of any legal proceedings that may be instituted against Twin Ridge, Carbon Revolution or any of their respective directors or officers; |
• | the amount of redemption requests made by Public Shareholders; |
• | the ability of Twin Ridge to issue equity, if any, in connection with the Business Combination or to otherwise obtain financing in the future; |
• | the impact of the global COVID-19 pandemic and governmental responses on any of the foregoing risks; |
• | risks related to Carbon Revolution’s industry; |
• | changes in laws and regulations; and |
• | other risks and uncertainties described in this Supplement and the proxy statement/prospectus, including those under the section entitled “Risk Factors”. |
Term | | | Section |
“Acquired Interests” | | | Recitals |
“Agreement” | | | Preamble |
“Approved Budget” | | | 2.05(e) |
“Australia Plant Investment” | | | 2.03(a) |
“Availability Period” | | | 2.03(a) |
“Balance Sheets” | | | 3.07(a) |
“Balance Sheet Date” | | | 3.07(a) |
“Business” | | | Recitals |
“Buyer” | | | Preamble |
“Claim” | | | 12.04 |
“Claim Notice” | | | 12.04 |
“Class A Preferred Shares” | | | Recitals |
“Confidential Information” | | | 5.03 |
“Contingency Funds” | | | 2.01(a) |
“Covered Persons” | | | 3.12 |
“Draw Right” | | | 2.09 |
“Easements” | | | 3.15(c) |
“e-mail” | | | 14.01 |
“Employee List” | | | 3.17(a) |
“Enforceability Exceptions” | | | 3.02 |
“Escrow Agent” | | | 2.02(a) |
“Escrow Agreement” | | | 2.02(a) |
“Execution Date” | | | Preamble |
“Financial Statements” | | | 3.07(a) |
“Forum” | | | 14.06 |
“Indemnitee” | | | 12.04 |
“Indemnitor” | | | 12.04 |
“Initial Acquired Interests” | | | 2.01(a) |
“Initial Closing” | | | 2.01(b) |
“Initial Securities” | | | 2.01(a) |
“Initial Subscription Price” | | | 2.01(a) |
“Interim Balance Sheet” | | | 3.07(a) |
“Issuer” | | | Preamble |
“Issuer Disclosure Schedules” | | | 14.12 |
“Issuer Representative” | | | 3.14(c)(i) |
“Material Contracts” | | | 3.11(a) |
“Subsequent Plant Investment” | | | 2.03(a) |
“Non-Reimbursable Damages” | | | 12.07 |
“Offer” | | | 5.10 |
“OIC Reserve Recovery Event” | | | 2.09 |
“Outside Date” | | | 13.01(b) |
“Ordinary Rep Basket” | | | 12.03(c) |
“Ordinary Rep Losses” | | | 12.03(c) |
“Ordinary Shares” | | | Recitals |
“Party” | | | Preamble |
“Parties” | | | Preamble |
“Permitted Liens” | | | 3.15(h) |
“Personal Property” | | | 3.25 |
“Policies” | | | 3.16 |
Term | | | Section |
“Real Property Leases” | | | 3.15(b) |
“Reserve Account” | | | 2.02(a) |
“Reserve Funds” | | | 2.02(a) |
“Reserve Funds Balance” | | | 2.07(a) |
“Reserve Release Acquired Interests” | | | 2.07(a) |
“Reserve Release Closing” | | | 2.07(b) |
“ROFO” | | | 5.10 |
“ROFO Notice” | | | 5.10 |
“Sanctioned Person” | | | Section 3.14(c) |
“Subsequent Acquired Interests” | | | 2.03(a) |
“Subsequent Closing” | | | 2.03(b) |
“Subsequent Subscription Price” | | | 2.03(a) |
“Subsidiary and Subsidiaries” | | | 3.03 |
“Third-Party Claim” | | | 12.05(a) |
“Transfer Taxes” | | | 14.14 |
“Vesting Instruments” | | | 3.15(e) |
“Warrant” | | | Recitals |
“Year-End Balance Sheet” | | | 3.07(a) |
| | ISSUER: | ||||
| | | | |||
| | CARBON REVOLUTION PUBLIC LIMITED COMPANY | ||||
| | | | |||
| | By: | | | /s/ Jacob Dingle | |
| | | | Name: Jacob Dingle | ||
| | | | Title: Director |
| | BUYER: | ||||
| | | | |||
| | OIC STRUCTURED EQUITY FUND I RANGE, LLC | ||||
| | | | |||
| | By: OIC Structured Equity Fund I AUS, L.P., its sole member | ||||
| | By: OIC Structured Equity Fund I GP, L.P., its general partner | ||||
| | By: OIC Structured Equity Fund I Upper GP, LLC, its general partner | ||||
| | | | |||
| | By: | | | /s/ Nazar Massouh | |
| | Name: | | | Nazar Massouh | |
| | Title: | | | CEO and Managing Partner | |
| | | | |||
| | BUYER: | ||||
| | | | |||
| | OIC STRUCTURED EQUITY FUND I GPFA RANGE, LLC | ||||
| | | | |||
| | By: OIC Structured Equity Fund I GPFA, L.P., its sole member | ||||
| | By: OIC Structured Equity Fund I GP, L.P., its general partner | ||||
| | By: OIC Structured Equity Fund I Upper GP, LLC, its general partner | ||||
| | | | |||
| | By: | | | /s/ Nazar Massouh | |
| | Name: | | | Nazar Massouh | |
| | Title: | | | CEO and Managing Partner |
| | Solely for purposes of Sections 3.01, 3.02, 3.04 and 13.03 and Article 14 | ||||
| | | | |||
| | CARBON REVOLUTION OPERATIONS | ||||
| | | | |||
| | By: | | | /s/ Jacob Dingle | |
| | | | Name: Jacob Dingle | ||
| | | | Title: Director | ||
| | | | |||
| | By: | | | /s/ David Nock | |
| | | | Name: David Nock | ||
| | | | Title: General Counsel and Company Secretary |
Warrant No. [ ] | | | Original Issue Date: [ ], 2023 |
X = | | | Y(A - B) | | | |
| A | | |
X= | The number of Ordinary Shares to be issued to the Holders; |
Y= | The number of Ordinary Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being cancelled (at the date of such calculation); |
A= | the VWAP (as defined below) on the trading day immediately preceding the date of the applicable Notice of Exercise; and |
B= | The Exercise Price (as adjusted to the date of such calculations) minus the nominal value of an Ordinary Share. |
If to the Company: | | | Carbon Revolution Public Limited Company |
| | Ten Earlsfort Terrace | |
| | Dublin 2, D02 T380, Ireland | |
| | E-mail: connor.manning@arthurcox.com | |
| | Attention: Connor Manning | |
| | ||
with a copy to: | | | Goodwin Procter LLP |
| | 620 Eighth Avenue | |
| | New York, New York 10018 | |
| | E-mail: jletalien@goodwinlaw.com; jarel@goodwinlaw.com | |
| | Attention: Jeffrey Letalien; Jocelyn Arel | |
| | ||
If to the Holders: | | | OIC Structured Equity Fund I GPFA Range, LLC |
| | OIC Structured Equity Fund I Range, LLC | |
| | 292 Madison Avenue, Suite 2500 | |
| | New York, NY 10017 | |
| | Email: Team_Range@OIC.com; CLE@OIC.com | |
| | Attention: Equity Team | |
| | ||
with a copy to: | | | Latham & Watkins LLP |
| | 811 Main Street, Suite 3700 | |
| | Houston, Texas 77002 | |
| | E-mail: jeffrey.greenberg@lw.com; ryan.maierson@lw.com | |
| | Attention: Jeffrey Greenberg; Ryan Maierson |
| | CARBON REVOLUTION PUBLIC LIMITED COMPANY | ||||
| | | | |||
| | By: | | | /s/ Jacob Dingle | |
| | Name: | | | Jacob Dingle | |
| | Title: | | | Director |
| | HOLDERS: | |||||||
| | | | | | ||||
| | OIC STRUCTURED EQUITY FUND I RANGE, LLC | |||||||
| | | | | | ||||
| | BY: OIC STRUCTURED EQUITY FUND I AUS, L.P., its sole member | |||||||
| | By: OIC Structured Equity Fund I GP, L.P., its general partner | |||||||
| | By: OIC Structured Equity Fund I Upper GP, LLC, its general partner | |||||||
| | | | | | ||||
| | By: | | | /s/ Nazar Massouh | | | ||
| | Name: | | | Nazar Massouh | | | ||
| | Title: | | | CEO and Managing Partner | | |||
| | | | | | ||||
| | OIC STRUCTURED EQUITY FUND I GPFA RANGE, LLC | |||||||
| | | | | | ||||
| | BY: OIC STRUCTURED EQUITY FUND I GPFA, L.P, its sole member | |||||||
| | By: OIC Structured Equity Fund I GP, L.P., its general partner | |||||||
| | By: OIC Structured Equity Fund I Upper GP, LLC, its general partner | |||||||
| | | | | | ||||
| | By: | | | /s/ Nazar Massouh | | | ||
| | Name: | | | Nazar Massouh | | | ||
| | Title: | | | CEO and Managing Partner | | |
| | Name: | | | | | |||
| | | | | | ||||
| | Address: | | | | | |||
| | | | | |
| | |||||
| | WARRANTHOLDER | ||||
| | | | |||
| | By: | | | ||
| | | | |||
| | Title: | | | ||
| | | | |||
| | Date: | | |
1 | To be deleted when exercised by the original Holders - see Section 6(d). |
2 | To be included for cash exercise of Warrant. |
3 | To be deleted when exercised by the original Holders - see Section 6(d). |
4 | To be included for cashless exercise of Warrant. |
| | if to OIC, to: | |||||||
| | | | | | ||||
| | | | OIC Structured Equity Fund I GPFA Range, LLC | |||||
| | | | OIC Structured Equity Fund I Range, LLC | |||||
| | | | 292 Madison Avenue, Suite 2500 | |||||
| | | | New York, NY 10017 | |||||
| | | | Email: | | | Team_Range@OIC.com; CLE@OIC.com | ||
| | | | Attention: | | | Equity Team |
| | | | | | ||||
| | with a copy (which will not constitute notice to OIC) to: Latham & Watkins LLP | |||||||
| | | | | | ||||
| | | | 811 Main Street, Suite 3700 | |||||
| | | | Houston, TX 77002 | |||||
| | | | E-mail: | | | jeffrey.greenberg@lw.com; ryan.maierson@lw.com | ||
| | | | Attention: | | | Jeffrey Greenberg; Ryan Maierson | ||
| | | |||||||
| | if to the Company, to: | |||||||
| | | | | | ||||
| | | | Carbon Revolution Public Limited Company | |||||
| | | | Ten Earlsfort Terrace | |||||
| | | | Dublin 2, D02 T380, Ireland | |||||
| | | | E-mail: | | | connor.manning@arthurcox.com | ||
| | | | Attention: | | | Connor Manning | ||
| | | | | | ||||
| | with a copy (which will not constitute notice to Company) to: | |||||||
| | | | | | ||||
| | | | Goodwin Procter LLP | |||||
| | | | 620 Eighth Avenue | |||||
| | | | New York, New York 10018 | |||||
| | | | E-mail: | | | JLetalien@goodwinlaw.ocm; | ||
| | | | | | JArel@goodwinlaw.com | |||
| | | | Attention: | | | Jeffrey Letalien, Jocelyn Arel |
| | CARBON REVOLUTION PUBLIC LIMITED COMPANY | ||||
| | | | |||
| | By: | | | /s/ Jacob Dingle | |
| | Name: | | | Jacob Dingle | |
| | Title: | | | Director |
| | OIC STRUCTURED EQUITY FUND I RANGE, LLC | ||||
| | | | |||
| | By: | | | OIC Structured Equity Fund I AUS, L.P., its sole member | |
| | By: | | | OIC Structured Equity Fund I GP, L.P., its general partner | |
| | By: | | | OIC Structured Equity Fund I Upper GP, LLC, its general partner | |
| | | | |||
| | By: | | | /s/ Nazar Massouh | |
| | Name: | | | Nazar Massouh | |
| | Title: | | | CEO and Managing Partner | |
| | | | |||
| | OIC STRUCTURED EQUITY FUND I GPFA RANGE, LLC | ||||
| | | | |||
| | By: | | | OIC Structured Equity Fund I GPFA, L.P., its sole member | |
| | By: | | | OIC Structured Equity Fund I GP, L.P., its general partner | |
| | By: | | | OIC Structured Equity Fund I Upper GP, LLC, its general partner | |
| | | | |||
| | By: | | | /s/ Nazar Massouh | |
| | Name: | | | Nazar Massouh | |
| | Title: | | | CEO and Managing Partner |
Carbon Revolution | | | Carbon Revolution Limited ACN 128 274 653 of 75 Pigdons Road, Waurn Ponds VIC 3126 (Carbon Revolution) | |||
SPAC | | | Twin Ridge Capital Acquisition Corp, a Cayman Islands Corporation of 999 Vanderbilt Beach Road, Suite 200 Naples, Florida (SPAC) | |||
MergeCo | | | Carbon Revolution plc Irish registration number 607450 of 10 Earlsfort Terrace, Dublin 2, Ireland (MergeCo) | |||
Merger Sub | | | Poppettell Merger Sub of 10 Earlsfort Terrace, Dublin 2, Ireland (Merger Sub) | |||
Recitals | | | 1 | | | Carbon Revolution, the SPAC and MergeCo entered into a scheme implementation deed on 30 November 2022 (SID). |
| | 2 | | | The parties entered into a business combination agreement on 29 November 2022 (BCA). | |
| | 3 | | | Clause 16.6 of the SID and section 9.04 of the BCA provide that a variation of any term of the SID and the BCA must be in writing and executed by the parties. | |
| | 4 | | | The parties want to agree certain matters in relation to the SID and the BCA in the manner set out in this deed. | |
This deed witnesses as follows: | ||||||
1 | Definitions, interpretation and deed components |
1.1 | Definitions |
1.2 | Interpretation |
1.3 | Deed components |
2 | Agreements in respect of the SID and BCA |
2.1 | Agreed matters |
(a) | to MergeCo and Carbon Revolution entering into transaction documents with OIC Structured Equity Fund I GPFA Range, LLC, OIC Structured Equity Fund I Range, LLC (being the securities purchase agreement, the shareholder’s agreement, the Carbon Revolution warrant to purchase ordinary shares, the escrow agreement and the MergeCo warrant to purchase ordinary shares) for a ‘structured equity facility’ in substantially the same terms as attached hereto at Attachment 1 (Structured Equity Facility); |
(b) | that the fees and expenses of advisers in relation to the Transaction will be paid, if applicable to particular advisers, as set out in the series of documents titled “Agreement to defer costs (unsecured trade payable)” entered into on or around the date of this deed in each case between the relevant adviser, Carbon Revolution, MergeCo and the SPAC; |
(c) | to figure N in the definition of ‘Scheme Consideration’ in the Scheme being amended (as soon as reasonably practicable once the final redemption rate of class A SPAC shares is known) to a final amount that ensures that the shareholders of the SPAC are not be diluted at the Implementation Date by the issuance of warrants in MergeCo pursuant to the Structured Equity Facility and in a manner that is consistent with the spreadsheet attached hereto as Attachment 2 (Revised Figure N), subject to any necessary order of the Court and any alterations or conditions made or required by the Court under subsection 411(6) of the Corporations Act. For the avoidance of doubt, the parties hereto agree that the Revised Figure N will result in figure NMS in the definition of ‘Scheme Consideration’ in the Scheme equalling a figure no lower than 0.0640 (assuming no redemptions of class A SPAC shares) and no higher than 0.0643 (assuming 100% redemptions of class A SPAC shares); and |
(d) | that for the purposes of paragraph 2 of the definition of “End Date” the relevant date shall be 30 November 2023, |
2.2 | Agreement not to affect validity, rights, obligations |
(a) | This deed is intended only to vary the SID and the BCA and not to terminate, discharge, rescind or replace the SID and the BCA. |
(b) | Any amendments to the SID and the BCA do not affect the validity or enforceability of the SID and the BCA. |
(c) | Nothing in this deed: |
(1) | prejudices or adversely affects any right, power, authority, discretion or remedy which arose under or in connection with the SID and the BCA before the date of this deed; or |
(2) | discharges, releases or otherwise affects any liability or obligation which arose under or in connection with the SID and the BCA before the date of this deed. |
2.3 | Confirmation |
2.4 | Acknowledgement |
3 | General |
3.1 | Governing law and dispute resolution |
3.2 | Further action to be taken at each party’s own expense |
3.3 | Counterparts |
(a) | This deed may be executed in any number of counterparts. |
(b) | All counterparts, taken together, constitute one instrument. |
(c) | A party may execute this deed by signing any counterpart. |
3.4 | Attorneys |
| | Carbon Revolution | | | | | |||
| | | | | | ||||
| | Signed sealed and delivered by Carbon Revolution Limited By | | | | | |||
| | | | | | ||||
sign here | | | /s/ David Nock | | | sign here | | | /s/ James Douglas |
| | Company Secretary/Director | | | | | Director | ||
| | | | | | ||||
print name | | | David Nock | | | print name | | | James Douglas |
| | | | | | ||||
| | SPAC | | | | | |||
| | | | | | ||||
| | Signed sealed and delivered by Twin Ridge Capital Acquisition Corp in the presence of | | | | | |||
| | | | | | ||||
sign here | | | /s/ William P. Russell Jr. | | | sign here | | | /s/ Daniel Zlotnitsky |
| | Authorised signatory | | | | | Witness | ||
| | | | | | ||||
print name | | | William P. Russell Jr. | | | print name | | | Daniel Zlotnitsky |
| | | | | | ||||
| | MergeCo | | | | | |||
| | | | | | ||||
| | Signed sealed and delivered by Carbon Revolution plc in the presence of | | | | | |||
| | | | | | ||||
sign here | | | /s/ Ronan Donohoe | | | sign here | | | /s/ Fiachra O Ciardha |
| | Authorised signatory | | | | | Witness | ||
| | | | | | ||||
print name | | | Ronan Donohoe | | | print name | | | Fiachra O Ciardha |
| | | | | | ||||
| | Merger Sub | | | | | |||
| | | | | | ||||
| | Signed sealed and delivered by Poppettell Merger Sub in the presence of | | | | | |||
| | | | | | ||||
sign here | | | /s/ Robert Duggan | | | sign here | | | /s/ Justin Pearce |
| | Authorised signatory | | | | | Witness | ||
| | | | | | ||||
print name | | | Robert Duggan | | | print name | | | Justin Pearce |
1. | Amendment to Disbursing Agreement. |
| Fiscal Months Ending | | | Multiplier | |
| June 30, 2023 through November 30, 2023 | | | 6.00 | |
| December 31, 2023 and on the last day of each month thereafter | | | 9.00 | |
| Signed, sealed and delivered by Carbon Revolution Operations Pty Ltd ACN 154 435 355 in accordance with section 127 of the Corporations Act 2001 (Cth) by: | | | | |
| | | | ||
| /s/ Jacob Dingle | | | /s/ David Nock | |
| Signature of director | | | Signature of Company Secretary | |
| | | | ||
| Jacob Dingle, Managing Director | | | David Nock, Company Secretary | |
| Name of director (print) | | | Name of Company Secretary (print) | |
| Signed, sealed and delivered by Carbon Revolution Technology Pty Ltd ACN 155 413 219 in accordance with section 127 of the Corporations Act 2001 (Cth) by: | | | | |
| | | | ||
| /s/ Jacob Dingle | | | /s/ David Nock | |
| Signature of director | | | Signature of Company Secretary | |
| | | | ||
| Jacob Dingle, Managing Director | | | David Nock, Company Secretary | |
| Name of director (print) | | | Name of Company Secretary (print) | |
| Signed, sealed and delivered by Carbon Revolution Limited ACN 128 274 653 in accordance with section 127 of the Corporations Act 2001 (Cth) by: | | | | |
| | | | ||
| /s/ Jacob Dingle | | | /s/ David Nock | |
| Signature of director | | | Signature of Company Secretary | |
| | | | ||
| Jacob Dingle, Managing Director | | | David Nock, Company Secretary | |
| Name of director (print) | | | Name of Company Secretary (print) | |
| | Disbursing Agent: | ||||
| | | | |||
| | UMB BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee, solely in its capacity as Disbursing Agent | ||||
| | | | |||
| | By: | | | /s/ Ray Haniff | |
| | Name: | | | Ray Haniff | |
| | Title: | | | Vice President | |
| | | | |||
| | Servicer: | ||||
| | | | |||
| | NEWLIGHT CAPITAL LLC | ||||
| | | | |||
| | By: | | | /s/ Joseph Agiato | |
| | Name: | | | Joseph Agiato | |
| | Title: | | | CEO – PIUS Division |
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