MicroCloud Hologram Inc. Commitments Disclosure

NOTE 10 – COMMITMENTS AND CONTINGENCIES

 

Risks and Uncertainties

 

Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s future financial position, results of its operations and/or search for a target company, there has been a significant impact as of the date of these financial statements. The financial statements do not include any adjustments that might result from the future outcome of this uncertainty.

 

Registration Rights

 

Pursuant to a registration rights agreement entered into on June 24, 2021 the holders of the Founder Shares, Private Units (and their underlying securities) and any Units that may be issued upon conversion of the Working Capital Loans (and underlying securities) are entitled to registration rights. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

Underwriting Agreement

 

The underwriters are entitled to a deferred fee of two and one-half percent (2.5%) of the gross proceeds of the Initial Public Offering, or $1,437,500, of which the Company will have the right to pay up to 40% of such amount to other advisors retained by the Company to assist it in connection with a Business Combination. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.

 

Merger Agreement

 

On September 10, 2021, we, MC, and the Merger Sub entered into the Merger Agreement.

 

Pursuant to the Merger Agreement, upon the terms and subject to the conditions of the Merger Agreement and in accordance with the Cayman Islands Companies Act (As Revised), the parties intend to effect a business combination transaction whereby the Merger Sub will merge with and into MC, with MC being the surviving entity and becoming a wholly owned Subsidiary of the Company (the “Merger”) on the terms and subject to the conditions set forth in the Merger Agreement and simultaneously with the closing, the Company will change its name to “MicroCloud Hologram Inc.”

 

The Board of Directors of both the Company and MC and the stockholders of MC have approved the Merger Agreement and the transactions contemplated by it.

 

Pursuant to the Merger Agreement, the Merger is structured as a stock for stock transaction and is intended to be qualified as a tax-free reorganization. The terms of the Merger provide for a valuation of MC and its subsidiaries and businesses of $450,000,000. Based upon a per share value of $10.10 per share, the stockholders of MC will receive approximately 44,554,455 ordinary shares of the Company which will represent approximately 84.07% of the combined outstanding shares following the closing, assuming no redemptions by our stockholders and assuming conversion of our outstanding rights into 602,050 ordinary shares. 

 

Consummation of the transactions contemplated by the Merger Agreement is subject to customary conditions of the respective parties, including the approval of the Merger Agreement by our shareholders. Other than as specifically discussed, this report does not assume the closing of the business combination with MC.