Xos, Inc (XOS)

[WeTheMarket]

Form 8-K
January 11, 2024
https://ih.advfn.com/stock-market/NASDAQ/xos-XOS/stock-news/93020796/xos-and-electrameccanica-announce-proposed-combina

Item 1.01. Entry into a Material Definitive Agreement.

Arrangement Agreement

On January 11, 2024, Xos, Inc., a Delaware corporation (“Xos”), and ElectraMeccanica Vehicles Corp., a corporation existing under the laws of the Province of British Columbia (“ElectraMeccanica”), entered into an arrangement agreement (the “Arrangement Agreement”), pursuant to which Xos will acquire all of the issued and outstanding common shares of ElectraMeccanica (the “ElectraMeccanica Shares”) pursuant to a plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (British Columbia) (the “Arrangement”). The board of directors of each of Xos and ElectraMeccanica have unanimously approved the Arrangement and the Arrangement Agreement.

Consideration

Subject to the terms and conditions set forth in the Arrangement Agreement and the Plan of Arrangement, each ElectraMeccanica Share outstanding immediately prior to the effective time of the Arrangement (the “Effective Time”) (other than the shares held by ElectraMeccanica shareholders who have exercised rights of dissent in respect of the Arrangement) will be transferred to Xos in exchange for such number of shares of Xos common stock, $0.0001 par value per share (the “Consideration Shares”), as is provided for in the Arrangement Agreement. Upon completion of the Arrangement, Xos stockholders and ElectraMeccanica shareholders will own approximately 79% and 21% of the combined company, respectively, subject to certain adjustments set forth in the Arrangement Agreement. The exact number of Consideration Shares to be issued to ElectraMeccanica shareholders will be determined prior to the closing of the Arrangement.

At the Effective Time, (i) each ElectraMeccanica deferred share unit, performance share unit and restricted share unit that is outstanding immediately prior to the Effective Time will vest and be settled by ElectraMeccanica in exchange for one ElectraMeccanica Share, subject to applicable withholdings; (ii) each ElectraMeccanica option to purchase ElectraMeccanica Shares that is in-the-money and outstanding immediately prior to the Effective Time, will be cancelled in exchange for a number of ElectraMeccanica Shares equal to the in-the-money value of such option, as calculated in accordance with the Plan of Arrangement, subject to applicable withholdings; (iii) each ElectraMeccanica option to purchase ElectraMeccanica Shares that is out-of-the-money and outstanding immediately prior to the Effective Time will be cancelled without any payment therefor; and (iv) each outstanding purchase warrant to acquire ElectraMeccanica Shares will remain outstanding following the closing of the Arrangement and will remain exercisable pursuant to the terms and conditions of the warrant certificates representing such ElectraMeccanica warrants.

Governance

The Arrangement Agreement provides that Xos will take all necessary action to ensure that immediately following the Effective Time, (i) if at such time the Xos board of directors is comprised of eight or fewer directors, two of such directors will be individuals who currently serve as directors of ElectraMeccanica who are identified by ElectraMeccanica to Xos; and (ii) if at such time the Xos board of directors is comprised of nine or 10 directors, three of such directors will be individuals who currently serve as directors of ElectraMeccanica who are identified by ElectraMeccanica to Xos.

Conditions to the Arrangement

The obligations of Xos and ElectraMeccanica to consummate the Arrangement are subject to customary conditions, including, but not limited to, (i) obtaining the required approvals of Xos’ stockholders and ElectraMeccanica’s shareholders, (ii) obtaining an interim order and final order (the “Final Order”) from the Supreme Court of British Columbia approving the Arrangement, (iii) the issuance of the Consideration Shares being exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 3(a)(10) thereof and the prospectus requirements of applicable securities laws in Canada, (iv) the Consideration Shares being listed on Nasdaq, (v) the absence of any law or order prohibiting or making illegal the consummation of the Arrangement or any of the other transactions contemplated by the Arrangement Agreement, (vi) the absence of any pending or threatened proceeding that would reasonably likely to prevent or materially delay the consummation of the Arrangement, (vii) the determination of the amount of net cash of ElectraMeccanica pursuant to the Arrangement Agreement, (viii) subject to certain materiality exceptions, the accuracy of the representations and warranties of each party, (ix) the performance in all material respects by each party of its obligations under the Arrangement Agreement, (x) no material adverse effect having occurred that is continuing, (xi) the number of ElectraMeccanica Shares in respect of which ElectraMeccanica shareholders have validly exercised dissent rights not exceeding 7.5% of the ElectraMeccanica Shares issued and outstanding and (xii) certain consents being obtained.

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