F-4/A
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As filed with the Securities and Exchange Commission on January 20, 2023.

Registration No. 333-268857

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT No. 1

to

FORM F-4

 

 

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Zapp Electric Vehicles Group Limited

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Cayman Islands   3751   Not Applicable
(State or Other Jurisdiction of
Incorporation or Organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

87/1 Wireless Road

26/F Capital Tower

All Seasons Place

Lumpini, Patumwan

Bangkok 10330 Thailand

+66 2654 3550

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Puglisi & Associates

850 Library Avenue, Suite 204

Newark, Delaware 19711

+1 (302) 738-6680

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Sharon Lau

Posit Laohaphan

Latham & Watkins LLP

9 Raffles Place

#42-02 Republic Plaza

Singapore 048619

Tel: +65 6536 1161

 

Ackneil M. Muldrow III

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Tel: 212-310-8000

 

Alice Hsu

Albert W. Vanderlaan

Orrick, Herrington & Sutcliffe LLP

51 W 52nd Street

New York, NY 10019

Tel: 212-506-5000

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration for the share offering.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.


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Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This proxy statement/prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 

PRELIMINARY PROXY STATEMENT FOR SPECIAL MEETING OF CIIG CAPITAL PARTNERS II, INC.

AND PROSPECTUS FOR ORDINARY SHARES AND WARRANTS OF ZAPP ELECTRIC VEHICLES GROUP LIMITED

SUBJECT TO COMPLETION, DATED JANUARY 20, 2023

 

LOGO    LOGO

CIIG Capital Partners II, Inc.

40 West 57th Street

29th Floor

New York, New York 10019

Dear CIIG Capital Partners II, Inc. Stockholders:

You are cordially invited to attend the special meeting of stockholders of CIIG Capital Partners II, Inc., which we refer to as “we,” “us,” “our,” or “CIIG II,” at                Eastern time, on                2023, at                 . At the special meeting of stockholders, our stockholders will be asked to consider and vote upon a proposal, which we refer to as the “Business Combination Proposal,” to approve and adopt the Agreement and Plan of Merger, dated November 22, 2022 (as may be amended, supplemented, or otherwise modified from time to time, the “Merger Agreement”), by and among CIIG II, Zapp Electric Vehicles Limited, a private company limited by shares registered in England and Wales (“Zapp”), Zapp Electric Vehicles Group Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (“Pubco”) and Zapp Electric Vehicles, Inc., a Delaware corporation and direct, wholly owned subsidiary of Pubco (“Merger Sub”) and the Business Combination (as defined below) contemplated thereby.

Pursuant to the Merger Agreement, the parties thereto will enter into a business combination transaction (the “Business Combination”) pursuant to which, among other things, (i) Pubco, Zapp and certain shareholders of Zapp entered into an Investor Exchange and Support Agreement or Management Exchange and Support Agreement, in the forms attached hereto as Exhibit 10.1 and 10.2, respectively, pursuant to which such shareholders shall transfer their respective ordinary shares of Zapp to Pubco in exchange for ordinary shares of Pubco (“Pubco Ordinary Shares”, and such exchange, the “Company Exchange”) and (ii) immediately following the Company Exchange, Merger Sub will merge with and into CIIG II, with CIIG II being the surviving corporation in the merger (the “Merger”) and each outstanding share of common stock of CIIG II (other than certain excluded shares) will convert into the right to receive one Pubco Ordinary Share (collectively, the “Transactions”).

CIIG II’s class A common stock and CIIG II’s units and warrants are currently listed on The Nasdaq Stock Market (“Nasdaq”) under the symbols “CIIG,” “CIIGU” and “CIIGW,” respectively. Pubco intends to apply to list the Pubco Ordinary Shares and Pubco Public Warrants on Nasdaq in connection with the Closing. We cannot assure you that the Pubco Ordinary Shares or the Pubco Public Warrants will be approved for listing on Nasdaq.

We are providing this proxy statement/prospectus and accompanying proxy cards to our stockholders in connection with the solicitation of proxies to be voted at the special meeting of stockholders and at any adjournments or postponements of the special meeting of stockholders. Whether or not you plan to attend the special meeting, we urge you to read this proxy statement/prospectus (and any documents incorporated into this proxy statement/prospectus by reference) carefully. Please pay particular attention to the section entitled “Risk Factors,” beginning on page 45.

Our board of directors has unanimously approved and adopted the Merger Agreement and unanimously recommends that our stockholders vote FOR all of the proposals presented to our stockholders. When you consider the board of directors’ recommendation of these proposals, you should keep in mind that certain of our directors and our officers have interests in the Business Combination that may conflict with your interests as a stockholder. See the section entitled “The Business Combination—Interests of CIIG II’s Directors and Officers in the Business Combination.”


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

 

   Sincerely,
  

 

  

Gavin Cuneo

Co-Chief Executive Officer and Director

  

 

        , 2023

  

Michael Minnick

Co-Chief Executive Officer and Director

This proxy statement/prospectus is dated                , 2023 and is first being mailed to the stockholders of CIIG II on or about that date.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

 


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CIIG Capital Partners II, Inc.

40 West 57th Street

29th Floor

New York, New York 10019

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON                , 2023

To the Stockholders of CIIG Capital Partners II, Inc.:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “special meeting of stockholders”) of CIIG Capital Partners II, Inc., a Delaware corporation (“CIIG II”), will be held on                , 2023, at                , Eastern time, at    . You are cordially invited to attend the special meeting of stockholders for the following purposes:

 

  (1)

The Business Combination Proposal: to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of November 22, 2022, as may be amended, (the “Merger Agreement”), by and among CIIG II, Zapp Electric Vehicles Limited, a private company limited by shares registered in England and Wales (“Zapp”), Zapp Electric Vehicles Group Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (“Pubco”) and Zapp Electric Vehicles, Inc., a Delaware corporation and direct, wholly owned subsidiary of Pubco (“Merger Sub”), pursuant to which each of the following transactions occurred, or will occur, in the following order:

 

   

Pursuant to the Merger Agreement, the parties thereto will enter into a business combination transaction (the “Business Combination”) pursuant to which, among other things, (i) Zapp and its shareholders entered into an Investor Exchange and Support Agreement or Management Exchange and Support Agreement, in the forms attached hereto as Exhibit 10.1 and 10.2, respectively, pursuant to which such shareholders shall transfer their respective ordinary shares of Zapp to Pubco in exchange for ordinary shares of Pubco (“Pubco Ordinary Shares”, and such exchange, the “Company Exchange”) and (ii) immediately following the Company Exchange, Merger Sub will merge with and into CIIG II, with CIIG II being the surviving corporation in the merger (the “Merger”) and each outstanding share of common stock of CIIG II (other than certain excluded shares) will convert into the right to receive one Pubco Ordinary Share (collectively, the “Transactions”).

 

  (2)

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

Only holders of record of our common stock at the close of business on                , 2023 are entitled to notice of the special meeting of stockholders and to vote at the special meeting of stockholders and any adjournments or postponements of the special meeting of stockholders. A complete list of our stockholders of record entitled to vote at the special meeting of stockholders will be available for ten days before the special meeting of stockholders (i) on a reasonably accessible electronic network or (ii) at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting of stockholders.

Pursuant to CIIG II’s amended and restated certificate of incorporation (“the CIIG II Amended and Restated Certificate of Incorporation”), we are providing the holders of CIIG II’s Class A common stock (the “Public Stockholders”) with the opportunity to redeem their shares of CIIG II Class A Common Stock for cash equal to their pro rata share of the aggregate amount on deposit in the trust account which holds the proceeds of our initial public offering as of two business days prior to the consummation of the business combination contemplated by


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the Merger Agreement (the “Business Combination”), including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, upon the consummation of the Business Combination. For illustrative purposes, based on funds in the trust account of approximately $                on    , 2023, the record date, the estimated per share redemption price would have been approximately $                . The Public Stockholders may elect to redeem their shares even if they vote for the Business Combination Proposal and any of the other proposals presented. A Public Stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming his, her or its shares with respect to more than an aggregate of 15% of the CIIG II Class A Common Stock. Holders of our outstanding warrants to purchase shares of our CIIG II Class A Common Stock do not have redemption rights with respect to such warrants in connection with the Business Combination. The CIIG II Class B Common Stock will be excluded from the pro rata calculation used to determine the per-share redemption price.

Currently, CIIG Management II LLC (the “Sponsor”) owns approximately 20% of our issued and outstanding shares of common stock, consisting of 100% of the CIIG II Class B Common Stock. Peter Cuneo, CIIG II’s Executive Chairman, Gavin Cuneo, CIIG II’s Co-Chief Executive Officer and Director, and Michael Minnick, CIIG II’s Co-Chief Executive Officer and Director, are the managing members of the Sponsor. CIIG II’s other directors are also members of the Sponsor, and accordingly have an indirect, economic interest in the Sponsor.

In connection with the IPO, certain funds and accounts managed by subsidiaries of BlackRock, Inc. (the “direct anchor investors”), certain investment funds and accounts managed by Magnetar Financial LLC and certain investment funds and accounts managed by Atalaya Capital Management LP (the “indirect anchor investors”, and together with the direct anchor investors, the “anchor investors”) each purchased 2,156,250 Units, consisting of one share of Class A Common Stock (for each anchor investor, the “initial share allocation”) and one half of one Public Warrant. The direct anchor investors also purchased 2,010,417 Private Placement Warrants in connection with the IPO.

Separately, in connection with CIIG II’s IPO, each of the anchor investors entered into a separate agreement with the Sponsor pursuant to which (i) the direct anchor investor agreed to purchase Class B Common Stock from the Sponsor upon the closing of CIIG II’s initial business combination and (ii) the indirect anchor investors agreed to purchase an indirect interest in Class B Common Stock and Private Placement Warrants at the closing of the IPO (the “Anchor Investor Agreements”).

Pursuant to the Anchor Investor Agreements, the anchor investors agreed with the Sponsor that, if such anchor investor (a) does not own its initial share allocation (i) at the time of any stockholder vote with respect to an initial business combination or (ii) on the business day immediately prior to the consummation of CIIG II’s initial business combination or (b) redeems all or a portion of such shares of Class A Common Stock in connection with an initial business combination such that as of the time of such initial business combination it does not own a number of shares at least equal to its initial share allocation, or, in the case of the indirect anchor investors, (c) fails to vote its shares of Class A common stock in favor of our initial business combination, then the number of Class B Common Stock to be sold or distributed to each anchor investor shall be reduced by up to 70% (the “Anchor Forfeiture”). In the case of the direct anchor investors, such reduction is pro rata based on the amount of Class A Common Stock they elect to redeem in connection with CIIG II’s initial business combination. The indirect anchor investors will have their allocation of Class B Common Stock reduced by 70% regardless of the number of shares redeemed. Notwithstanding any of the above, any such reductions will not cause the number of Class B Common Stock to be sold or distributed to the direct or indirect anchor investors to be reduced by more than 70%. As such, our anchor investors may have different interests with respect to a vote on the Business Combination than other Public Stockholders. Up to 1,509,375 shares of Class B Common Stock in the aggregate are subject to forfeiture by the anchor investors to the Sponsor pursuant to the Anchor Forfeiture.

Assuming there is no Anchor Forfeiture, each anchor investor shall hold 718,750 Pubco Ordinary Shares, upon conversion of Class B Common Stock in connection with the consummation of the Business Combination.


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Aside from the Private Placement Warrants purchased separately by the direct anchor investors, the anchor investors have not been granted any material additional stockholder or other rights. The indirect anchor investors were only issued membership or economic interests in our Sponsor in connection with the IPO with no right to control our Sponsor or vote or dispose of their allocable Class B Common Stock or Private Placement Warrants (which will continue to be held by the Sponsor until following the closing of the Business Combination). Since our anchor investors will not receive the Class B Common Stock to which they are entitled until the closing of the Business Combination, they will not be able to vote such shares prior to the closing of the Business Combination. The anchor investors will have the same rights to the funds held in the Trust Account with respect to the Class A Common Stock they purchased in the IPO as the rights afforded to the other Public Stockholders.

The Sponsor has agreed to waive its redemption right with respect to the CIIG II Class B Common Stock for no consideration. For the avoidance of doubt, the anchor investors, conversely, have not agreed to waive their redemption rights, and accordingly have the right to redeem their Public Shares in connection with the Business Combination; however, as described below, pursuant to the Anchor Investor Agreements, if an anchor investor elects to redeem all or a portion of such Public Shares in connection with an initial business combination such that as of the time of such initial business combination it does not own a number of shares at least equal to its initial share allocation (as defined above), then the number of shares of Class B Common Stock to be sold or distributed to each anchor investor by the Sponsor in connection with the closing of the Business Combination shall be reduced. In the case of the direct anchor investors, such reduction is pro rata based on the amount of Class A Common Stock they elect to redeem in connection with CIIG II’s initial business combination. The indirect anchor investors will have their allocation of Class B Common Stock reduced by 70% regardless of the number of shares redeemed. Notwithstanding any of the above, any such reductions will not cause the number of Class B Common Stock to be sold or distributed to the direct or indirect anchor investors to be reduced by more than 70%.

CIIG II’s Sponsor, officers and directors have agreed to vote their CIIG II Class B Shares, which represent approximately 20% of the issued and outstanding shares of CIIG II common stock as of the date hereof, and any shares of CIIG II common stock acquired during or after our initial public offering in favor of the Business Combination Proposal. The anchor investors, conversely, have not agreed to vote their shares in favor of the Business Combination Proposal; however, as described above, if an indirect anchor investor fails to vote its shares of Class A Common Stock in favor of the Business Combination Proposal, then the number of shares of Class B Common Stock to be distributed to each indirect anchor investor by the Sponsor in connection with the closing of the Business Combination shall be reduced by 70%.

The Business Combination Proposal will be consummated only if a majority of the shares of CIIG II Common Stock are voted in favor of the Business Combination at the special meeting of stockholders. We have no specified maximum redemption threshold under our amended and restated certificate of incorporation.

Stockholders should be aware that Barclays Capital Inc., UBS Securities LLC and Liontree Advisors LLC (collectively, the “IPO Underwriters”), on October 14, 2022, November 2, 2022 and November 11, 2022, respectively, informed CIIG II that each IPO Underwriter has agreed to waive their deferred portion of the underwriting fees to which the IPO Underwriters would otherwise have been entitled under the Underwriting Agreement dated September 14, 2021, entered into at the time of CIIG II’s initial public offering by CIIG II and its IPO Underwriters, in connection with the Business Combination (the “Waiver”). Each of the IPO Underwriters has, or has indicated that they plan to, deliver notice of such Waiver to the U.S. Securities and Exchange Commission and has disclaimed any responsibility for any portion of this proxy statement/prospectus and no IPO Underwriter has been involved in the preparation of any disclosure that is included in the registration statement or material underlying disclosure in the registration statement. None of the IPO Underwriters has been engaged by CIIG II, the Sponsor, Zapp or Pubco in connection with the Business Combination. Stockholders should not place any reliance on the participation of any IPO Underwriter prior to the Waiver as underwriters in the CIIG II IPO. The consummation of the Business Combination is not contingent upon the services previously provided by the IPO Underwriters, and CIIG II does not expect to replace any of the IPO Underwriters prior to the expected closing of the Business Combination. As such, neither CIIG II, Zapp or Pubco believes that the Business Combination is adversely impacted by the Waivers.


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Your vote is very important, regardless of the number of shares you own. Please vote as soon as possible to ensure that your vote is counted, regardless of whether you expect to attend the special meeting of stockholders. Please complete, sign, date and return the enclosed proxy card in the postage-paid envelope provided. You may also submit a proxy by telephone or via the internet by following the instructions printed on your proxy card. If you are a holder of record of CIIG II’s class A common stock, you may also cast your vote virtually at the special meeting.

If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the special meeting. A failure to vote your shares will have the same effect as a vote “AGAINST” the Business Combination Proposal and will have no effect on the outcome of the vote on the Stockholder Adjournment Proposal.

If you sign and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the proposals presented at the special meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the special meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting of stockholders and, if a quorum is present, will have the same effect as a vote “AGAINST” the Business Combination Proposal but will have no effect on the other proposals.

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the financial statements and annexes attached thereto) for a more complete description of the proposed Business Combination and related transactions and each of our proposals. We encourage you to read this proxy statement/prospectus carefully. The special meeting will be completely virtual. There will be no physical meeting location and the special meeting will only be conducted via live webcast at the following address:                . If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC, at (800) 662-5200, and banks and brokers may reach Morrow Sodali LLC, at (203) 658-9400, or email at CIIG.info@investor.morrowsodali.com.

 

   By Order of the Board of Directors,
  

 

   Gavin Cuneo
   Co-Chief Executive Officer and Director
  

 

                , 2023

   Michael Minnick
   Co-Chief Executive Officer and Director


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TABLE OF CONTENTS

 

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     1  

MARKET AND INDUSTRY DATA

     1  

FREQUENTLY USED TERMS

     2  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

     6  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     22  

SELECTED HISTORICAL FINANCIAL DATA OF CIIG II

     39  

SELECTED HISTORICAL FINANCIAL DATA OF ZAPP

     40  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     42  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     44  

RISK FACTORS

     45  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     98  

COMPARATIVE PER SHARE DATA

     111  

THE SPECIAL MEETING OF CIIG II STOCKHOLDERS

     112  

THE BUSINESS COMBINATION

     118  

THE MERGER AGREEMENT

     132  

CERTAIN AGREEMENTS RELATED TO THE BUSINESS COMBINATION

     142  

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

     146  

MATERIAL CAYMAN ISLANDS TAX CONSIDERATIONS

     161  

CIIG II STOCKHOLDER PROPOSAL NO. 1—THE BUSINESS COMBINATION PROPOSAL

     162  

CIIG II STOCKHOLDER PROPOSAL NO. 2—THE STOCKHOLDER ADJOURNMENT PROPOSAL

     163  

INFORMATION ABOUT ZAPP

     164  

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

     180  

CERTAIN ZAPP AND PUBCO RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     194  

INFORMATION ABOUT CIIG II

     195  

CIIG II MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     212  

CERTAIN CIIG II RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     216  

INFORMATION RELATED TO PUBCO

     219  

MANAGEMENT OF PUBCO FOLLOWING THE BUSINESS COMBINATION

     221  

DESCRIPTION OF PUBCO SECURITIES

     228  

COMPARISON OF RIGHTS OF PUBCO SHAREHOLDERS AND CIIG II STOCKHOLDERS

     243  

SHARES ELIGIBLE FOR FUTURE SALE

     248  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     251  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     255  

ADDITIONAL INFORMATION

     256  

LEGAL MATTERS

     256  

EXPERTS

     256  

WHERE YOU CAN FIND MORE INFORMATION

     257  

INDEX TO FINANCIAL STATEMENTS

     F-1  

ANNEXES

     A-1  

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by Pubco, constitutes a prospectus of Pubco under Section 5 of the Securities Act, with respect to the Pubco Ordinary Shares to be issued to the CIIG II stockholders, the Pubco Public Warrants to be issued to CIIG II warrant holders and the Pubco Ordinary Shares underlying such Pubco Public Warrants, if the Business Combination described herein is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) with respect to the special meeting of CIIG II stockholders at which CIIG II stockholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Merger Agreement, among other matters.

This document does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction or to any person to whom it would be unlawful to make such offer.

This proxy statement/prospectus includes trademarks, tradenames and service marks, certain of which belong to us or Zapp and others that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this proxy statement/prospectus appear without the ®, TM and SM symbols, but the absence of those symbols is not intended to indicate, in any way, that we or Zapp will not assert our or their rights or that the applicable owner will not assert its rights to these trademarks, tradenames and service marks to the fullest extent under applicable law. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

MARKET AND INDUSTRY DATA

In this proxy statement/prospectus, we present industry data, information and statistics regarding Zapp’s industry, business and the markets in which Zapp competes as well as publicly available information, industry and general publications and research and studies conducted by third parties. This information is supplemented where necessary with Zapp’s own internal estimates and information obtained from discussions with its customers, taking into account publicly available information about other industry participants and Zapp’s management’s judgment where information is not publicly available. This information appears in “Summary of the Proxy Statement/Prospectus,” “Zapp Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Information About Zapp” and other sections of this proxy statement/prospectus.

Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires. While we have compiled, extracted and reproduced industry data from these sources, we have not independently verified the data. Industry publications, research, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this proxy statement/prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under “Risk Factors.” These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

 

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FREQUENTLY USED TERMS

Key Business and Business Combination Related Terms

Unless otherwise stated or unless the context otherwise requires in this document:

“anchor investors” are our direct anchor investors and indirect anchor investors, each as defined below.

“Anchor Forfeiture” means the reduction in the number of shares of Class B Common Stock to be sold or distributed to each anchor investor to 30% of such Class B Common Stock under certain conditions as described further herein.

“Anchor Forfeiture Shares” means the up to 1,509,375 shares of Class B Common Stock in the aggregate that are subject to forfeiture by the anchor investors to the Sponsor pursuant to the Anchor Forfeiture.

“Assignment, Assumption and Amendment Agreement” means that certain agreement attached to the Merger Agreement as Exhibit E.

“Barclays” means Barclays Capital Inc.

“Business Combination” means the business combination transaction pursuant to which, among other things, (i) Pubco, Zapp and certain shareholders of Zapp entered into an Investor Exchange and Support Agreement or Management Exchange and Support Agreement, in the forms attached hereto as Exhibit 10.1 and 10.2, respectively, pursuant to which such shareholders shall transfer their respective ordinary shares of Zapp to Pubco in exchange for ordinary shares of Pubco and (ii) immediately following the Company Exchange, Merger Sub will merge with and into CIIG II, with CIIG II being the surviving corporation in the merger and each outstanding share of common stock of CIIG II (other than certain excluded shares) will convert into the right to receive one Pubco Ordinary Share.

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

“CIIG II” refers to CIIG Capital Partners II, Inc., a Delaware corporation.

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

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

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

“CIIG II Warrants” means the Public Warrants, the Private Placement Warrants and the Working Capital Warrants, if issued.

“CIIG II Stockholder Redemption” means the opportunity of CIIG II public stockholders to redeem shares of CIIG II Class A Common Stock by tendering such shares for redemption in accordance with CIIG II’s organizational documents.

“Closing” means the consummation of the Business Combination.

“Closing Date” means the date upon which the Closing is to occur.

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

“Company Exchange” means the exchange in which each ordinary share of Zapp will be converted into one ordinary share of Pubco.

 

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“Continental” means Continental Stock Transfer & Trust Company, CIIG II’s transfer agent and warrant agent.

“direct anchor investors,” are to certain funds and accounts managed by subsidiaries of BlackRock, Inc.

“Director Nomination Agreement” means that certain agreement attached to the Merger Agreement as Exhibit F.

“DGCL” means the Delaware General Corporation Law.

“Effective Time” means the effective time of the Merger.

“EV” means electric vehicle.

“EVP2W” means electric vehicle powered-two-wheeler.

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

“Founder” means Mr. Swin Chatsuwan.

“GAAP” means United States generally accepted accounting principles.

“ICE” means internal combustion engine.

“ICEP2W” means internal combustion engine powered-two-wheeler.

“IFRS” means the International Financial Reporting Standards issued by the International Accounting Standards Board.

“indirect anchor investors,” are to (i) certain investment funds and accounts managed by Magnetar Financial LLC, a member of our sponsor, and (ii) certain investment funds and accounts managed by Atalaya Capital Management LP, a member of our sponsor.

“Investor Earnout Shares” means the additional Pubco Ordinary Shares issuable to certain Investors pursuant to the Investor Exchange and Support Agreement.

“Investor Exchange and Support Agreements” means the Exchange and Support Agreements, by and among Pubco, Zapp and certain shareholders of Zapp, a copy of which is included as Exhibit 10.1.

“IPO” means CIIG II’s initial public offering of units, consummated on September 17, 2021.

“IPO Underwriters” means, collectively, Barclays, UBS and Liontree.

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

“LionTree” means LionTree Advisors LLC.

“Merger Agreement” means the Agreement and Plan of Merger, dated as of November 22, 2022, as may be amended, by and among CIIG II, Zapp, Pubco and Merger Sub.

“Management Earnout Shares” means the additional Pubco Ordinary Shares issuable to certain Management Shareholders pursuant to the Management Exchange and Support Agreement.

“Merger Sub” means Zapp Electric Vehicles, Inc., a Delaware corporation and direct, wholly owned subsidiary of Pubco.

 

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“Nasdaq” means The Nasdaq Stock Market LLC.

“Novation, Assumption and Amendment Agreement” means the novation, assumption and amendment agreement, to be entered into prior to the closing of the Business Combination, pursuant to which, among other things, Pubco assumed all of Zapp’s obligations and responsibilities pursuant to or in connection with the Zapp Warrant Instrument.

“OEMs” means original equipment manufacturers.

“PCAOB” means the Public Company Accounting Oversight Board.

“Private Placement Warrants” means the warrants to purchase shares of Class A Common Stock purchased in a private placement in connection with the IPO.

“Pubco” means Zapp Electric Vehicles Group Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands.

“Pubco Exchange Options” means each Zapp option outstanding immediately prior to the Effective Time, whether vested or unvested, shall be released and cancelled by each holder of Zapp options in exchange for the grant by Pubco of an option to purchase Pubco Ordinary Shares.

“Pubco Exchange Warrants” means the warrants to be issued by Pubco, with such terms as are set out in the Novation, Assumption and Amendment Agreement.

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

“Pubco Public Warrants” means the former CIIG II Warrants converted at the Effective Time into a right to acquire one Pubco Ordinary Share on substantially the same terms as were in effect immediately prior to the Effective Time under the terms of the Warrant Agreement.

“Pubco Securities” means Pubco Ordinary Shares and Pubco Public Warrants, collectively.

“Public Shares” means shares of Class A Common Stock.

“Public Stockholders” means the holders of shares of Class A Common Stock.

“Public Warrants” means the warrants included in the Units sold in the IPO, each of which is exercisable for one share of Class A Common Stock, in accordance with its terms.

“P2W” means powered-two-wheeler.

“Registration Rights Agreement” means that certain agreement attached to the Merger Agreement as Exhibit D.

“SAP” means SPAC Advisory Partners LLC, a financial advisor to Zapp in connection with the Business Combination.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Sponsor” means CIIG Management II LLC, a Delaware limited liability company.

“Sponsor Earnout Shares” means 754,687 of Sponsor’s Pubco Ordinary Shares that will be unvested and shall vest at such time the closing price of Pubco Ordinary Shares equals or exceeds $14.00 for any 20 trading days during a 30 consecutive trading-day period; provided that, the Earnout Shares shall be forfeited on the date that is 5 years after the Closing Date if the vesting condition is not met. Such forfeited Sponsor Earnout Shares shall be transferred to Pubco for the purposes of Pubco equity compensation arrangements.

 

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

“Summit” means Summit Group, through one of their main entities, Summit Laemchabang Auto Body Work Co., Ltd.

“Thai EXIM” means the Export-Import Bank of Thailand.

“Treasury Regulations” means the regulations, including proposed and temporary regulations, promulgated under the Code.

“Trust Account” means the trust account that holds the net proceeds of the sale of the CIIG II Units in the initial public offering and the sale of the CIIG II Private Placement Warrants.

“UBS” means UBS Securities LLC.

“Units” means the 28,750,000 units issued in connection with the IPO, each of which consisted of one share of Class A Common Stock and one-half of one Public Warrant.

“Underwriting Agreement” means the Underwriting Agreement, dated September 14, 2021, entered into at the time of the IPO by CIIG II and its IPO Underwriters.

“Waiver” means the waiver by Barclays on October 14, 2022, by UBS on November 2, 2022 and by LionTree on November 11, 2022 of their deferred portion of the underwriting fees to which each IPO Underwriter would otherwise have been entitled under the Underwriting Agreement in connection with the Business Combination.

“Warrant Agreement” means the warrant agreement, dated September 14, 2021, by and between CIIG II and Continental Stock Transfer & Trust Company, as warrant agent, governing CIIG II’s outstanding warrants.

“Working Capital Warrants” means the warrants issuable upon conversion of the Promissory Note at a price of $1.00 per warrant, with such warrants being identical to the Private Placement Warrants.

“Zapp” means Zapp Electric Vehicles Limited, a private company limited by shares registered in England and Wales.

“Zapp Earnout Shares” means the Investor Earnout Shares and the Management Earnout Shares.

“Zapp Manufacturing” means Zapp Manufacturing (Thailand) Co., Ltd.

“Zapp Ordinary Shareholders” means holders of Zapp Ordinary Shares.

“Zapp Ordinary Shares” means the ordinary shares of Zapp.

“Zapp Warrants” means the 6,000,000 warrants to purchase 6,000,000 Zapp Ordinary Shares issued to Michael Joseph in accordance with the Zapp Warrant Instrument.

“Zapp Warrant Instrument” means the warrant instrument by way of deed poll executed by Zapp on May 28, 2020, providing for the issuance and terms of the Zapp Warrants.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the special meeting of stockholders, including with respect to the proposed Business Combination. The following questions and answers may not include all the information that is important to CIIG II’s stockholders. Stockholders are urged to read carefully this entire proxy statement/prospectus, including the financial statements and annexes attached hereto and the other documents referred to herein.

Questions and Answers About the Special Meeting of CIIG II’s Stockholders and the Related Proposals

 

Q.

Why am I receiving this proxy statement/prospectus?

 

A.

CIIG II has entered into the Merger Agreement with Pubco, Merger Sub and Zapp, which provides for the Business Combination in which, among other transactions, Zapp will become a direct wholly-owned subsidiary of Pubco, and CIIG II will become a direct wholly-owned subsidiary of Pubco. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A.

The consideration to be paid to the shareholders of Zapp (including holders of Zapp options and Zapp Warrants) subject to certain adjustments in accordance with the Merger Agreement, will be equal to an aggregate of (i) 50,000,000 Pubco Ordinary Shares plus (ii) a number of Pubco Ordinary Shares equal to the amount of any convertible financing received by Zapp in excess of $20,000,000 in the aggregate and actually converted to ordinary shares of Zapp in advance of the closing of the Business Combination divided by the effective conversion price. With respect to clause (ii) the effective conversion price shall be equal to the dollar amount raised in such convertible financing divided by the number of ordinary shares deliverable to the investor in connection with such financing. In addition, at the effective time of the Merger (the “Effective Time”), each share of CIIG II’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”) and CIIG II’s Class B common stock, par value $0.0001 per share (the “Class B Common Stock”, and together with the Class A Common Stock, the “Common Stock”) will be cancelled and automatically deemed for all purposes to represent the right to receive one Pubco Ordinary Share. At the Effective Time, each of CIIG II’s warrants that are outstanding immediately prior to the Effective Time will, pursuant to and in accordance with the Warrant Agreement dated September 14, 2021 with respect to CIIG II’s warrants (“Warrant Agreement”), automatically and irrevocably be modified to provide that such warrant will no longer entitle the holder thereof to purchase the amount of share(s) of CIIG II common stock set forth therein and in substitution thereof such warrant will entitle the holder thereof to acquire the same number of Pubco Ordinary Shares per warrant on the same terms. Please see “The Merger Agreement” for further information.

CIIG II stockholders are being asked to consider and vote upon the Business Combination Proposal to approve the adoption of the Merger Agreement and the Business Combination, among other proposals at a special stockholder meeting. You are receiving this proxy statement/prospectus because you hold CIIG II Common Stock as of the record date for the special meeting of stockholders.

The CIIG II Class A Common Stock, Public Warrants and CIIG II Units are currently listed on Nasdaq under the symbols “CIIG,” “CIIGW” and “CIIGU,” respectively. Pubco intends to apply to list its Pubco Ordinary Shares and Pubco Public Warrants on Nasdaq in connection with the Closing. All outstanding CIIG II Units will be separated into their underlying securities immediately prior to the Closing. Accordingly, Pubco will not have units outstanding following consummation of the Business Combination.

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

 

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Q.

When and where is the special meeting?

 

A.

The special meeting will be held at                , Eastern time, on                , 2023, via live webcast at                . The special meeting will be completely virtual.

 

Q.

What matters will stockholders consider at the special meeting of stockholders?

 

A.

At the CIIG II special meeting of stockholders, CIIG II will ask its stockholders to vote in favor of the following proposals:

 

   

The Business Combination Proposal—a proposal to approve and adopt the Merger Agreement and the Business Combination.

 

   

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

 

Q.

Are any of the proposals conditioned on one another?

 

A.

The Stockholder Adjournment Proposal does not require the approval of the Business Combination Proposal and Business Combination to be effective. It is important to note that in the event that the Business Combination Proposal is not approved, then CIIG II will not consummate the Business Combination. CIIG II will have until March 17, 2023 to consummate an initial business combination and the Sponsor and Zapp shall discuss in good faith a mutually beneficial alternative arrangement to incentivize CIIG II’s public stockholders to extend CIIG II’s period of time to consummate a Business Combination if needed. If the Sponsor and Zapp shall not have otherwise mutually agreed in writing pursuant to the preceding sentence, to a mutually beneficial alternative arrangement, then the Sponsor shall duly request CIIG II to, and CIIG II shall (i) duly extend CIIG II’s period of time to consummate a Business Combination until the date falling 24 months from the closing of CIIG II’s initial public offering and (ii) comply with all requirements with respect to the Trust Account in connection therewith, including without limitation the requirement to deliver an extension letter and to deposit into the Trust Account $2,875,000 on or prior to the date of the deadline for such extension. For more information about the Amended and Restated Sponsor Agreement, see the section entitled “Certain Agreements Related to the Business Combination—Amended and Restated Sponsor Agreement.”

 

Q.

What will happen in the Business Combination?

 

A.

In connection with the Business Combination:

 

   

Zapp shareholders (including holders of Zapp options and Zapp Warrants) will receive (i) an aggregate of 50,000,000 Pubco Ordinary Shares pursuant to the Company Exchange plus (ii) a number of Pubco Ordinary Shares equal to the amount of any convertible financing received by Zapp in excess of $20,000,000 in the aggregate and actually converted to ordinary shares of Zapp in advance of the closing of the business Combination divided by the effective conversion price. With respect to clause (ii) the effective conversion price shall be equal to the dollar amount raised in such convertible financing divided by the number of ordinary shares deliverable to the investor in connection with such financing;

 

   

each outstanding share of CIIG II Common Stock will be exchanged for one Pubco Ordinary Share;

 

   

each issued and outstanding CIIG II Warrant will cease to represent a right to acquire shares of CIIG II Common Stock and will instead represent the right to acquire the same number of Pubco Ordinary Shares, at the same exercise price and on the same terms as in effect immediately prior to the closing of the Business Combination; and

 

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As a result of the Business Combination, each of CIIG II and Zapp will become direct wholly-owned subsidiaries of Pubco.

 

Q.

Why is CIIG II proposing the Business Combination Proposal?

 

A.

CIIG II was organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. CIIG II is not limited to any particular industry or sector. Following the closing of CIIG II’s IPO on September 17, 2021, an amount of $291,812,500 ($10.15 per Unit) from the net proceeds of the sale of the CIIG II Units in the initial public offering and the sale of the CIIG II Private Placement Warrants was placed in a trust account (the “Trust Account”). In accordance with CIIG II’s Amended and Restated Certificate of Incorporation, the funds held in the Trust Account will be released upon the consummation of the Business Combination.

There currently are 35,937,500 shares of CIIG II Common Stock issued and outstanding, consisting of 28,750,000 shares of CIIG II Class A Common Stock originally sold as part of the CIIG II Units in CIIG II’s IPO and 7,187,500 shares of CIIG II Class B Common Stock. In addition, there currently are 26,437,500 CIIG II Warrants issued and outstanding, including 14,375,000 CIIG II Public Warrants and 12,062,500 CIIG II Private Placement Warrants that were sold by CIIG II to the Sponsor and subsidiaries of BlackRock, Inc. in a private sale simultaneously with CIIG II’s initial public offering.

Under CIIG II’s Amended and Restated Certificate of Incorporation, CIIG II must provide all holders of Public Shares with the opportunity to have their Public Shares redeemed upon the consummation of CIIG II’s initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote.

 

Q.

Who is Zapp?

 

A.

Zapp aims to redefine urban mobility and create a new product category with its high-performance EVP2W vehicles. Zapp’s vehicles combine the convenience and ease-of-use of a “step-through” form factor, with specifications and performance attributes usually associated with “step-over” models. Zapp’s proprietary exoskeleton architecture creates a brand DNA that Zapp believes is easily identifiable by consumers. Zapp’s first product, the i300, has won multiple international design awards, including the US Good Design Award, German Design Award, European Product Design Award, Australian Good Design Award, Korean Good Design Award, Muse Design Award, and A’ Design Award.

 

Q.

What equity stake will current CIIG II stockholders and Zapp Shareholders have in Pubco after the Closing?

 

A.

CIIG II Public Stockholders may vote in favor of the Business Combination and still exercise their redemption rights, although they are not required to vote in any way to exercise such redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of CIIG II Public Stockholders are substantially reduced as a result of redemptions by CIIG II Public Stockholders.

If a CIIG II Public Stockholder exercises his, her or its redemption rights, such exercise will not result in the loss of any warrants that such CIIG II Public Stockholder may hold. As a result, any non-redeeming CIIG II Public Stockholders would experience dilution to the extent such Public Warrants are exercised and additional Pubco Ordinary Shares are issued. In addition, to the extent of any redemptions, fewer funds from the Trust Account would be available to Pubco to be used in its business following the consummation of the Business Combination.

 

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

 

    Assuming No
Redemption
    Assuming 25%
Redemption(1)
    Assuming 50%
Redemption(2)
    Assuming 75%
Redemption(3)
    Assuming
Maximum
Redemption(4)
 
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership
in shares
    Equity
%
 

Shareholders

                   

CIIG II’s Class B Common Stockholders(5)

    6,432,813       8.3     6,432,813       9.2     6,432,813       10.2     6,432,813       11.5     6,432,813       13.2

CIIG II’s Class A Common Stockholders(6)

    28,750,000       37.2     21,562,500       30.7     14,375,000       22.8     7,187,500       12.9     0       0.0

Zapp’s existing shareholders(7)

    42,028,760       54.3     42,028,760       59.9     42,028,760       66.7     42,028,760       75.3     42,028,760       86.4

SAP

    173,000       0.2     173,000       0.2     173,000       0.3     173,000       0.3     173,000       0.4

Total Pubco Ordinary Shares outstanding at Closing not reflecting potential sources of dilution

    77,384,573       100.0     70,197,073       100.0     63,009,573       100.0     55,822,073       100.0     48,634,573       100.0

Total Pubco Ordinary Shares outstanding at Closing not reflecting potential sources of dilution

    77,384,573         70,197,073         63,009,573         55,822,073         48,634,573    

Potential sources of dilution:

                   

Shares underlying CIIG II Private Placement Warrants

    12,062,500       9.9     12,062,500       10.5     12,062,500       11.2     12,062,500       12.0     12,062,500       13.0

Shares underlying CIIG II Public Warrants

    14,375,000       11.8     14,375,000       12.5     14,375,000       13.4     14,375,000       14.3     14,375,000       15.5

Sponsor Earnout Shares

    754,687       0.6     754,687       0.7     754,687       0.7     754,687       0.8     754,687       0.8

Zapp Earnout Shares

    8,518,290       7.0     8,518,290       7.4     8,518,290       7.9     8,518,290       8.5     8,518,290       9.2

Shares underlying Pubco Exchange Warrants

    3,482,158       2.9     3,482,158       3.0     3,482,158       3.2     3,482,158       3.5     3,482,158       3.7

Shares underlying Pubco Exchange Options

    4,489,082       3.7     4,489,082       3.9     4,489,082       4.2     4,489,082       4.5     4,489,082       4.8

SAP(8)

    683,720       0.6     683,720       0.6     683,720       0.6     683,720       0.7     683,720       0.7

Total Pubco Ordinary Shares outstanding at Closing (including shares underlying CIIG II Private Placement Warrants and Public Warrants, Sponsor Earnout Shares, Zapp Earnout Shares, Pubco Exchange Warrants, Pubco Exchange Options and contingent consideration payable to SAP)

    121,750,010       100.0     114,562,510       100.0     107,375,010       100.0     100,187,510       100.0     93,000,010       100.0

 

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    Assuming No
Redemption
    Assuming 25%
Redemption(1)
    Assuming 50%
Redemption(2)
    Assuming 75%
Redemption(3)
    Assuming
Maximum
Redemption(4)
 
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership
in shares
    Equity
%
 

Holders of Pubco Ordinary Shares reflecting potential sources of dilution:

                   

CIIG II’s Class B Common Stockholders(9)

    7,187,500       5.9     7,187,500       6.3     7,187,500       6.7     7,187,500       7.2     7,187,500       7.7

Holders of CIIG II Public Warrants

    14,375,000       11.8     14,375,000       12.5     14,375,000       13.4     14,375,000       14.3     14,375,000       15.5

Holders of CIIG II Private Placement Warrants

    12,062,500       9.9     12,062,500       10.5     12,062,500       11.2     12,062,500       12.0     12,062,500       13.0

CIIG II’s Class A Common Stockholders(10)

    28,750,000       23.6     21,562,500       18.8     14,375,000       13.4     7,187,500       7.2     0       0.0

Zapp’s existing shareholders(11)

    50,547,050       41.5     50,547,050       44.1     50,547,050       47.1     50,547,050       50.5     50,547,050       54.4

Holder of Pubco Exchange Warrants

    3,482,158       2.9     3,482,158       3.0     3,482,158       3.2     3,482,158       3.5     3,482,158       3.7

Holders of Pubco Exchange Options

    4,489,082       3.7     4,489,082       3.9     4,489,082       4.2     4,489,082       4.5     4,489,082       4.8

SAP

    856,720       0.7     856,720       0.7     856,720       0.8     856,720       0.9     856,720       0.9

Total Pro Forma Equity Value of Pubco Ordinary Shares outstanding at Closing (including shares underlying CIIG II Private Placement Warrants and Public Warrants, Sponsor Earnout Shares, Zapp Earnout Shares, Pubco Exchange Warrants, Pubco Exchange Options and contingent consideration payable to SAP)(12)

    1,217,500,100         1,145,625,100         1,073,750,100         1,001,875,100         930,000,100    

Per Share Pro Forma Equity Value of Pubco Ordinary Shares outstanding at Closing(13)

    10.00         10.00         10.00         10.00         10.00    

Per Share Pro Forma Book Value of each Pubco Ordinary Share outstanding at Closing (including Pubco Exchange Warrants and Pubco Exchange Options)(13)

    3.29         2.70         1.99         1.13         (0.02  

 

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Footnotes

 

1

This scenario assumes that 7,187,500 shares of CIIG II Class A Common Stock are redeemed by the CIIG II Shareholders.

2

This scenario assumes that 14,375,000 shares of CIIG II Class A Common Stock are redeemed by the CIIG II Shareholders.

3

This scenario assumes that 21,562,500 shares of CIIG II Class A Common Stock are redeemed by the CIIG II Shareholders.

4

This scenario assumes that 28,750,000 shares of CIIG II Class A Common Stock are redeemed by the CIIG II Shareholders. CIIG II’s obligations under the Merger Agreement are subject to certain customary closing conditions.

5

Excluding 754,687 Sponsor Earnout Shares and 12,062,500 shares underlying the CIIG II Private Placement Warrants.

6

Excluding 14,375,000 shares underlying the CIIG II Public Warrants.

7

Excluding 3,482,158 fully vested Pubco Exchange Warrants, and 4,489,082 Pubco Exchange Options, of which 3,139,020 Pubco Exchange Options have been fully vested as of the date of this filing and assuming the aggregate principal amount raised pursuant to the Zapp Convertible Loan Notes does not exceed $20,000,000.

8

Comprises the maximum number of additional Pubco Ordinary Shares that may be issued to SAP pursuant to the SAP Management Earnout Fee and SAP Sponsor Earnout Fee set forth in the letter agreement between Zapp and SAP, assuming the Third Earnout Condition in the Management Exchange and Support Agreement is fulfilled following the closing of the Business Combination. Please refer to “Summary of the Proxy Statement/Prospectus—Other Agreements Related to the Merger Agreement—Engagement Letter between Zapp and SAP” for further details on the contingent consideration payable to SAP following the closing of the Business Combination.

9

Includes 754,687 Sponsor Earnout Shares, but excludes 12,062,500 shares underlying the CIIG II Private Placement Warrants which are shown separately above for ease of presentation.

10

Excluding 14,375,000 shares underlying the CIIG II Public Warrants, which are shown separately above for ease of presentation.

11

Including 8,518,290 Zapp Earnout Shares.

12

In each redemption scenario, the per share pro forma equity value of Pubco Ordinary Shares will be US$10.00 at Closing in accordance with the terms of the Merger Agreement.

13

The per share pro forma book value of Pubco Ordinary Shares is based on the pro forma book value of equity at Closing. See the row entitled “Total equity” from “Unaudited Pro Forma Condensed Combined Statement of Financial Position” in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The calculation of per share pro forma book value of Pubco Ordinary Shares does not take into account shares underlying CIIG II Public Warrants and Private Placement Warrants, Sponsor Earnout Shares, Zapp Earnout Shares and contingent consideration payable to SAP, for the reason that their inclusion will have an anti-dilutive impact on the per share pro forma book value of Pubco Ordinary Shares.

 

Q.

Who will be the officers and directors of Pubco if the Business Combination is consummated?

 

A.

At the consummation of the Business Combination, the directors of Pubco will be Anthony Posawatz, Swin Chatsuwan, Jeremy North,                 ,                 ,                  and                . Swin Chatsuwan is expected to serve as Founder and Chief Executive Officer, Jeremy North is expected to serve as Co-Founder and President, Warin Thanathawee is expected to serve as Co-Founder and Chief Design Officer, David McIntyre is expected to serve as Chief Commercial Officer, Kiattipong Arttachariya is expected to serve as Co-Founder and Acting Chief Financial Officer, Pongsatorn Sukhum is expected to serve as Chief Technology Officer, and Belinda Vinke is expected to serve as Chief Brand Officer of Pubco. See the section entitled “Management of Pubco Following the Business Combination.”

 

Q.

What conditions must be satisfied to complete the Business Combination?

 

A.

There are a number of closing conditions in the Merger Agreement, including that CIIG II’s stockholders have approved and adopted the Merger Agreement. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “The Merger Agreement.”

 

Q.

What happens if I sell my shares of CIIG II Common Stock before the special meeting of stockholders?

 

A.

The record date for the special meeting of stockholders will be earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of CIIG II Common Stock after the record date, but before the special meeting of stockholders, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting of stockholders. However, you will not be entitled to receive any Pubco Ordinary Shares following the Closing because only CIIG II’s stockholders on the date of the Closing will be entitled to receive Pubco Ordinary Shares in connection with the Closing.

 

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Q.

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

 

A.

The approval of the Business Combination Proposal requires the affirmative vote of the holders of at least a majority of all then outstanding shares of CIIG II Common Stock entitled to vote thereon at the special meeting of stockholders. Accordingly, a CIIG II stockholder’s failure to vote by proxy or to vote in person at the special meeting of stockholders, or an abstention from voting, will have the same effect as a vote “AGAINST” the Business Combination Proposal.

The approval of the Stockholder Adjournment Proposal requires the affirmative vote of the holders of a majority of the shares of CIIG II Common Stock that are voted thereon at the special meeting of stockholders. Accordingly, a CIIG II’s stockholder’s failure to vote by proxy or to vote in person at the special meeting of stockholders, or an abstention from voting, will have no effect on the outcome of any vote on the Stockholder Adjournment Proposal.

 

Q.

Do Zapp Shareholders need to approve the Business Combination?

 

A.

All of the Zapp Shareholders have executed an Investor Exchange and Support Agreement or Management Exchange and Support Agreement, as applicable, and therefore no further approval of the Business Combination by the Zapp Shareholders is required.

 

Q.

Will CIIG II, Zapp or Pubco issue additional equity securities in connection with the consummation of the Business Combination?

 

A.

Pubco or CIIG II may enter into equity financings in connection with the proposed Business Combination with their respective affiliates or any third parties if CIIG II determines that the issuance of additional equity is necessary or desirable in connection with the consummation of the Business Combination. Any equity issuances could result in dilution of the relative ownership interest of the non-redeeming Public Stockholders or the former equity holders of Zapp.

 

Q.

How many votes do I have at the special meeting of stockholders?

 

A.

CIIG II’s stockholders are entitled to one vote at the special meeting for each share of CIIG II Common Stock held of record as of the record date. As of the close of business on the record date, there were 35,937,500 outstanding shares of CIIG II Common Stock.

 

Q.

How will the CIIG II Sponsor, directors and officers vote?

 

A.

In connection with CIIG II’s IPO, CIIG II entered into agreements with CIIG II’s Sponsor, officers and directors, pursuant to which each agreed to vote their CIIG II Class B Common Stock and any other shares acquired during and after the IPO in favor of the Business Combination Proposal. Currently, the Sponsor holds approximately 20% of the issued and outstanding shares of CIIG II Common Stock.

 

Q.

What interests do CIIG II’s Sponsor, current officers and directors and anchor investors have in the Business Combination?

 

A.

CIIG II’s Sponsor, directors and executive officers and anchor investors may have interests in the Business Combination that are different from, in addition to, or in conflict with, yours. These interests include, among other things, the interests listed below:

 

   

The CIIG II Class B Common Stock was acquired in January 2021 for an aggregate purchase price of $25,000, and such shares would become worthless if CIIG II does not complete a business combination within the applicable time period, as the Sponsor has waived any right to redemption with respect to

 

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these shares for no consideration. Following the closing of the Business Combination, members of the Sponsor (excluding the indirect anchor investors) will beneficially own an aggregate of 4,276,563 Pubco Ordinary Shares upon conversion of their Class B Common Stock (assuming no redemptions and not including the Sponsor Earnout Shares) and, for illustrative purposes, up to 6,540,625 Pubco Ordinary Shares (including the Sponsor Earnout Shares and the Anchor Forfeiture Shares). Such shares have an aggregate market value of approximately $         and $        , respectively, based on the closing price of CIIG II Class A Common Stock of $         on Nasdaq on        , the record date for the special meeting of stockholders;

 

   

Each anchor investor will own 718,750 Pubco Ordinary Shares upon conversion of Class B Common Stock pursuant to the Anchor Investor Agreements (assuming no Anchor Forfeiture) following the closing of the Business Combination. Such shares would become worthless if CIIG II does not complete a business combination. Such shares have an aggregate market value of approximately $         and $        , respectively, based on the closing price of CIIG II Class A Common Stock of $         on Nasdaq on         , the record date for the special meeting of stockholders;

 

   

Members of the Sponsor (excluding the indirect anchor investors) will own 6,031,249 Pubco Public Warrants following the closing of the Business Combination and the conversion of Private Placement Warrants, which will expire worthless if CIIG II does not complete a business combination. Based on the closing price of CIIG II’s Public Warrants of $         on Nasdaq on         , 2023, the record date for the special meeting, the Pubco Public Warrants held by the Sponsor (excluding the indirect anchor investors) would be valued at approximately $        ;

 

   

Each anchor investor will own 2,010,417 Pubco Public Warrants following the closing of the Business Combination and the conversion of Private Placement Warrants, which will expire worthless if CIIG II does not complete a business combination. Based on the closing price of CIIG II’s Public Warrants of $         on Nasdaq on         , 2023, the record date for the special meeting, the Pubco Public Warrants held by each indirect anchor investor would be valued at approximately $        ;

 

   

Each anchor investor will own 1,078,125 Pubco Public Warrants following the closing of the Business Combination and the conversion of the CIIG Public Warrants, which will expire worthless if CIIG II does not complete a business combination. Based on the closing price of CIIG II’s Public Warrants of $         on Nasdaq on         , 2023, the record date for the special meeting, the Pubco Public Warrants held by each indirect anchor investor would be valued at approximately $        ;

 

   

CIIG II’s Sponsor, affiliates of the Sponsor, officers and directors may make loans from time to time to CIIG II to fund certain capital requirements. On December 15, 2022, CIIG II issued a promissory note to the Sponsor (the “Promissory Note”), pursuant to which CIIG II may borrow up to an aggregate principal amount of $100,000. The Promissory Note is non-interest bearing and payable upon the consummation of a business combination. Upon consummation of a business combination, the Sponsor shall have the option, but not the obligation, to convert the principal balance of the Promissory Note into Working Capital Warrants at a price of US$1.00 per Working Capital Warrant. Additional loans may be made after the date of this proxy statement/prospectus. If the Business Combination is not consummated, any outstanding loans will not be repaid and will be forgiven except to the extent there are funds available to CIIG II outside of the Trust Account;

 

   

CIIG II’s Sponsor, officers and directors and their affiliates will not receive reimbursement for any out-of-pocket expenses incurred by them on CIIG II’s behalf incident to identifying, investigating and consummating a business combination to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless a business combination is consummated. As of the record date, the Sponsor and CIIG II’s officers and directors and their affiliates had incurred no unpaid reimbursable expenses;

 

   

the potential continuation of certain of CIIG II’s directors as directors of Pubco;

 

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the continued indemnification of current directors and officers of CIIG II and the continuation of directors’ and officers’ liability insurance after the Business Combination; and

 

   

If CIIG II is unable to complete a business combination within the required time period, the aggregate dollar amount as of the record date of non-reimbursable funds of the Sponsor and the anchor investors would be approximately US$        , reflecting the market value of Class B Common Stock (including the Sponsor Earnout Shares), the market value of the Private Placement Warrants and Public Warrants and the amount loaned pursuant to the Promissory Note.

These financial interests may mean that the Sponsor (and accordingly CIIG II’s officers and directors who are members of the Sponsor) and the anchor investors may be incentivized to complete the Business Combination, or an alternative business combination, with a less favorable target company or on terms less favorable to stockholders than they would otherwise recommend or approve, as the case may be, rather than allow CIIG II to wind up having failed to consummate a business combination and lose their entire investment.

Further, because of these interests, the Sponsor (and CIIG II’s officers and directors who are members of the Sponsor) and the anchor investors could benefit from the completion of a business combination that is not favorable to its public stockholders and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public stockholders rather than liquidate. For example, if the share price of Pubco Ordinary Shares declined to $5.00 per share after the close of the Business Combination, CIIG II’s public stockholders that purchased shares in the IPO, would have a loss of $5.00 per share, while the Sponsor and the anchor investors would have a gain because they acquired their Class B Common Stock for a nominal amount. In other words, the Sponsor and the anchor investors can earn a positive rate of return on their investment even if public stockholders experience a negative rate of return in the post-combination company.

These interests may influence CIIG II’s directors in making their recommendation to vote in favor of the approval of the Business Combination Proposal. Please read the section entitled “The Business Combination—Interests of CIIG II’s Directors and Officers in the Business Combination.”

 

Q.

Did CIIG II’s board of directors obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A.

CIIG II’s board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. CIIG II’s board of directors believes that based upon the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders. The board of directors also determined, without seeking a valuation from a financial advisor, that Zapp’s fair market value was at least 80% of CIIG II’s net assets. Accordingly, investors will be relying on the judgment of CIIG II’s board of directors as described above in valuing the Zapp business and assuming the risk that the board of directors may not have properly valued such business.

 

Q.

What happens if the Business Combination Proposal is not approved?

 

A.

If the Business Combination Proposal is not approved, CIIG II will have until March 17, 2023, to consummate an initial business combination and the Sponsor and Zapp shall discuss in good faith a mutually beneficial alternative arrangement to incentivize CIIG II’s public stockholders to extend CIIG II’s period of time to consummate a Business Combination if needed. If the Sponsor and Zapp shall not have otherwise mutually agreed in writing pursuant to the preceding sentence, to a mutually beneficial alternative arrangement, then the Sponsor shall duly request CIIG II to, and CIIG II shall (i) duly extend CIIG II’s period of time to consummate a Business Combination until the date falling 24 months from the closing of CIIG II’s initial public offering and (ii) comply with all requirements with respect to the Trust Account in

 

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  connection therewith, including without limitation the requirement to deliver an extension letter and to deposit into the Trust Account $2,875,000 on or prior to the date of the deadline for such extension. For more information about the Amended and Restated Sponsor Agreement, see the section entitled “Certain Agreements Related to the Business Combination—Amended and Restated Sponsor Agreement.”

 

Q.

Do I have redemption rights?

 

A.

If you are a holder of Public Shares, you may redeem your Public Shares for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of CIIG II’s IPO, as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to CIIG II to pay its franchise and income taxes, upon the consummation of the Business Combination. Holders of the outstanding CIIG II Public Warrants do not have redemption rights with respect to such warrants in connection with the Business Combination. The Sponsor has agreed to waive its redemption right with respect to the CIIG II Class B Common Stock in connection with the completion of CIIG II’s initial business combination for no consideration. The CIIG II Class B Common Stock will be excluded from the pro rata calculation used to determine the per-share redemption price. For illustrative purposes, based on funds in the trust account of approximately $                on                 , the record date, the estimated per share redemption price would have been approximately $                . Additionally, Public Shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise, holders of such shares will only be entitled to a pro rata portion of the Trust Account in connection with the liquidation of the Trust Account.

 

Q.

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

 

A.

A Public Stockholder, together with any affiliate of his or hers or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption rights with respect to 15% or more of the Public Shares. Accordingly, all shares in excess of 15% of the Public Shares owned by a holder will not be redeemed. On the other hand, a Public Stockholder who holds less than 15% of the Public Shares may redeem all of the Public Shares held by him or her for cash.

 

Q.

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

 

A.

No. You may exercise your redemption rights whether you vote your Public Shares for or against the Business Combination Proposal or any other proposal described in this proxy statement/prospectus, or do not vote your shares. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their Public Shares and no longer remain stockholders, leaving stockholders who choose not to redeem their Public Shares holding shares in a company with a less liquid trading market, fewer stockholders, less cash and the potential inability to meet the listing standards of Nasdaq.

 

Q.

How do I exercise my redemption rights?

 

A.

In order to exercise your redemption rights, you must, prior to 4:30 p.m. Eastern time on                 , 2023 (two business days before the special meeting), (i) submit a written request to Continental Stock Transfer & Trust Company, CIIG II’s transfer agent, that CIIG II redeem your Public Shares for cash, and (ii) deliver your stock to CIIG II’s transfer agent physically or electronically through the Depository Trust Company (“DTC”). The address of CIIG II’s transfer agent is listed under the question “Who can help answer my questions?” below. CIIG II requests that any requests for redemption include the identity as to the beneficial owner making such request. Electronic delivery of your stock generally will be faster than delivery of physical stock certificates.

A physical stock certificate will not be needed if your stock is delivered to CIIG II’s transfer agent electronically. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker,

 

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DTC and CIIG II’s transfer agent will need to act to facilitate the request. It is CIIG II’s understanding that stockholders should generally allot at least one week to obtain physical certificates from the transfer agent. However, because CIIG II does not have any control over this process or over the brokers or DTC, it may take significantly longer than one week to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with CIIG II’s consent. If you delivered your shares for redemption to CIIG II’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that CIIG II’s transfer agent return the shares (physically or electronically). Such requests may be made by contacting CIIG II’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?”

 

Q.

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

 

A.

U.S. holders (as defined below in “Material U.S. Federal Income Tax Considerations”) of CIIG II Common Stock who exercise their redemption rights to receive cash from the Trust Account in exchange for their Public Shares generally will be required to treat the transaction as a sale of such shares and recognize gain or loss upon the redemption in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the shares of CIIG II Common Stock redeemed. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes, or as integrated with the Business Combination. Please see the section entitled “Material U.S. Federal Income Tax Considerations—Redemption of Class A Common Stock Pursuant to the CIIG II Stockholder Redemption” for a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights.

 

Q:

If I hold Public Warrants, can I exercise redemption rights with respect to my warrants?

 

A:

No. There are no redemption rights with respect to the Public Warrants.

 

Q.

If I hold Public Warrants, what are the U.S. federal income tax consequences of my Public Warrants converting into Pubco Public Warrants?

 

A.

In connection with the Business Combination, each issued and outstanding Public Warrant will cease to represent a right to acquire Public Shares and will instead represent the right to acquire the same number of Pubco Ordinary Shares, at the same exercise price and on the same terms as in effect immediately prior to the closing of the Business Combination.

Subject to the discussion in the section entitled “Material U.S. Federal Income Tax Considerations”, the surrender by Public Stockholders of Class A Common Stock (and, if such Public Stockholders also hold Public Warrants, the conversion of such Public Warrants into Pubco Public Warrants pursuant to the terms of the Public Warrants) and the acquisition of Pubco Ordinary Shares by holders of Class A Common Stock in exchange therefor resulting from the Merger, taken together with the related transactions, is expected to qualify as a transfer of property to a corporation in exchange for stock qualifying for non-recognition of gain or loss under Section 351(a) of the Code (a “Section 351 Exchange”).

It is uncertain whether the Merger also qualifies as a reorganization within the meaning of Section 368(a) of the Code (a “Reorganization”). To qualify as a Reorganization, a transaction must satisfy certain requirements, including that the acquiring corporation (or, in the case of certain reorganizations structured similarly to the Merger, its corporate parent) continue, either directly or indirectly through certain controlled

 

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corporations, to operate a significant line of the acquired corporation’s historic business or use a significant portion of the acquired corporation’s historic business assets in a business, in each case, as described in Treasury Regulations Section 1.368-1(d). However, due to the absence of guidance bearing directly on how the above rules apply in the case of an acquisition of a corporation with only investment-type assets, such as CIIG II, the qualification of the Merger as a Reorganization is not free from doubt, and the IRS or a court could take a position that the Merger does not qualify as a Reorganization. Accordingly, it is unclear whether the requirements for a Reorganization can be satisfied and such qualification is not a condition of the Business Combination.

If the Merger qualifies as a Section 351 Exchange, a U.S. holder of Public Warrants could be treated as transferring its Public Warrants to Pubco in exchange for Pubco Public Warrants in an exchange governed only by Section 351 of the Code. If so treated, a U.S. holder could be required to recognize gain (but not loss) in an amount equal to the lesser of (i) the amount of gain realized by such holder (generally, the excess of (x) the sum of the fair market values of the Pubco Public Warrants treated as received by such holder and the Pubco Ordinary Shares received by such holder, if any, over (y) such holder’s aggregate adjusted tax basis in the Public Warrants and CIIG II Common Stock, if any, exchanged therefor) and (ii) the fair market value of the Pubco Public Warrants received by such holder in such exchange. Alternatively, it is possible that a U.S. holder of Public Warrants could be treated as exchanging such Public Warrants for “new” warrants. If so treated, a U.S. holder could be required to recognize gain or loss in such deemed exchange in an amount equal to the difference between the fair market value of the Pubco Public Warrants held by such holder immediately following the Merger and the adjusted tax basis of the Public Warrants held by such holder immediately prior to the Merger. See the section entitled “Material U.S. Federal Income Tax Considerations” below for a more detailed discussion of the tax consequences to holders of Public Warrants.

If the Merger qualifies as a Reorganization, subject to Section 367(a) of the Code, a U.S. holder of Public Warrants generally is expected to not recognize any gain or loss upon the closing of the Business Combination; the aggregate tax basis of such U.S. holder’s basis in the Pubco Public Warrants will be the same as the aggregate tax basis of such U.S. holder’s Public Warrants immediately before the closing of the Business Combination; and the holding period of such warrants will continue; provided that the Public Warrants are held as capital assets on the effective date of the closing of the Business Combination.

Because of the legal and factual uncertainties described above, none of Weil, Gotshal & Manges LLP, Latham & Watkins LLP, Orrick, Herrington & Sutcliffe LLP nor Walkers (Singapore) Limited Liability Partnership is able to opine with respect to the Business Combination’s qualification as a Reorganization.

 

Q:

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

 

A:

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

 

Q:

What are the potential impacts on the Business Combination and related transactions resulting from the Waiver?

 

A:

Each of the IPO Underwriters has waived all rights to any deferred fees due under the Underwriting Agreement. The deferred fees were only payable to the IPO Underwriters upon completion of the Business Combination. In addition, the IPO Underwriters each delivered, or have indicated that they plan to deliver, notice of such Waiver to the Securities and Exchange Commission.

As a result of the Waiver, the transactions fees payable by CIIG II at the consummation of the Business Combination will be reduced by approximately $10.1 million. The IPO underwriting services being provided by the IPO Underwriters were substantially complete at the time of the Waiver, with any fees payable to the IPO Underwriters contingent upon the closing of the Business Combination.

We believe that such Waiver of fees for services that have already been substantially rendered or that were contingent upon the occurrence of an event that applicable persons expect will occur, is unusual. While the

 

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IPO Underwriters did not provide any additional detail in their letters related to the Waivers, stockholders should be aware that such Waivers indicate that none of the IPO Underwriters want to be associated with the disclosures in this proxy statement/prospectus or any underlying business analysis related to the transaction described herein. CIIG II public stockholders may be more likely to elect to redeem their shares as a result of such Waivers and the proceeds that the combined company receives as a result of the Business Combination may be reduced as a result of such Waivers.

 

Q:

What happens if the Business Combination is not consummated?

 

A:

There are certain circumstances under which the Merger Agreement may be terminated. See the section entitled “The Merger Agreement” for information regarding the parties’ specific termination rights.

If, as a result of the termination of the Merger Agreement or otherwise, CIIG II is unable to complete a business combination by March 17, 2023, or extend/amend such date in accordance with the CIIG II Amended and Restated Certificate of Incorporation, CIIG II will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of CIIG II’s remaining stockholders and CIIG II’s board of directors, dissolve and liquidate, subject in each case to CIIG II’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Holders of CIIG II Class B Common Stock have waived any right to any liquidation distribution with respect to those shares for no consideration.

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

 

Q:

When is the Business Combination expected to be completed?

 

A:

It is currently anticipated that the Business Combination will be consummated promptly following the special meeting of stockholders, provided that all other conditions to the consummation of the Business Combination have been satisfied or waived.

For a description of the conditions to the completion of the Business Combination, see the section entitled “The Merger Agreement.”

 

Q:

What do I need to do now?

 

A:

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

 

Q:

How do I vote?

 

A:

If you were a holder of record of CIIG II Common Stock on                , 2023, the record date for the special meeting of stockholders, you may vote with respect to the applicable proposals in person at the special meeting of stockholders or by completing, signing, dating and returning the enclosed proxy card in the

 

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  postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, your broker, bank or other nominee will send you separate instructions describing the procedure for voting your shares. If applicable, simply complete, sign and date your voting instruction card and return it in the postage-paid envelope provided to ensure that your vote is counted. Alternatively, you may vote by telephone or over the internet as instructed by your broker, bank or other nominee. If you wish to attend the special meeting of stockholders and vote in person, you must obtain a proxy from your broker, bank or nominee. Holders of CIIG II Common Stock are encouraged to vote in advance of the special meeting of stockholders.

If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC at (800) 662-5200 or email at CIIG.info@investor.morrowsodali.com.

 

Q:

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

 

A:

At the special meeting of stockholders, CIIG II will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, an abstention or failure to vote will have the same effect as a vote “AGAINST” the Business Combination Proposal and will have no effect on the Stockholder Adjournment Proposal. If you sign and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the proposals presented at the special meeting.

 

Q:

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

 

A:

Signed and dated proxies received by CIIG II without an indication of how the stockholder intends to vote on a proposal will be voted in favor of each proposal presented to the stockholders.

 

Q.

Do I need to attend the special meeting of stockholders to vote my shares?

 

A.

No. You are invited to attend the special meeting to vote on the proposals described in this proxy statement/prospectus. However, you do not need to attend the special meeting of stockholders to vote your shares. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card(s) in the pre-addressed postage-paid envelope. Your vote is important. CIIG II encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus.

 

Q.

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

 

A.

Yes. After carefully reading and considering the information contained in (and incorporated by reference into) this proxy statement/prospectus, please submit your proxy, as applicable, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q.

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

 

A.

No. If your broker holds your shares in its name and you do not give the broker voting instructions, under the applicable stock exchange rules, your broker may not vote your shares on any of the proposals.

 

Q.

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

 

A.

Yes. If you are a stockholder of record, you may change your vote by sending a later-dated, signed proxy card to Morrow Sodali LLC, at 333 Ludlow Street, 5th Floor, South Tower, Stamford, CT 06902 prior to the vote at the

 

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  special meeting of stockholders, or attend the special meeting and vote virtually. You also may revoke your proxy by sending a notice of revocation to Morrow Sodali LLC, 333 Ludlow Street, 5th Floor, South Tower, Stamford, CT 06902 provided such revocation is received prior to the vote at the special meeting. If your shares are held in street name by a broker or other nominee, you must contact the broker or nominee to change your vote.

 

Q.

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

 

A.

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

 

Q.

What is the quorum requirement for the special meeting of stockholders?

 

A.

A quorum will be present at the special meeting of stockholders if a majority of the CIIG II Common Stock outstanding and entitled to vote at the meeting is represented in person or by proxy. In the absence of a quorum, a majority of CIIG II’s stockholders, present in person or represented by proxy, and voting thereon will have the power to adjourn the special meeting.

Your shares will be counted towards the quorum only if you submit a valid proxy (or your broker, bank or other nominee submits one on your behalf) or if you vote in person at the special meeting of stockholders. Abstentions will be counted towards the quorum requirement. If there is no quorum, a majority of the shares represented by stockholders present at the special meeting or by proxy may authorize adjournment of the special meeting to another date.

 

Q.

What happens to CIIG II Warrants I hold if I vote my shares of CIIG II Class A Common Stock against approval of the Business Combination Proposal and validly exercise my redemption rights?

 

A.

Properly exercising your redemption rights as a CIIG II stockholder does not result in either a vote “FOR” or “AGAINST” the Business Combination Proposal or any of the other proposals described in this proxy statement/prospectus. If the Business Combination is completed, all of your CIIG II Warrants will automatically convert into warrants to purchase Pubco Ordinary Shares as described in this proxy statement/prospectus. If the Business Combination is not completed, you will continue to hold your CIIG II Warrants, and if CIIG II does not otherwise consummate an initial business combination by March 17, 2023, or extend/amend such date in accordance with the CIIG II Amended and Restated Certificate of Incorporation, CIIG II will be required to dissolve and liquidate, and your warrants will expire worthless.

 

Q.

Who will solicit and pay the cost of soliciting proxies?

 

A.

CIIG II will pay the cost of soliciting proxies for the special meeting. CIIG II has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the special meeting. CIIG II has agreed to pay Morrow Sodali LLC a fee of $25,000. CIIG II will reimburse Morrow Sodali LLC for reasonable out-of-pocket expenses and will indemnify Morrow Sodali LLC and its affiliates against certain claims, liabilities, losses, damages and expenses. CIIG II also will reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of CIIG II Common Stock for their expenses in forwarding soliciting materials to beneficial owners of CIIG II Common Stock and in obtaining voting instructions from those owners. CIIG II’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

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Q.

Who can help answer my questions?

 

A.

If you have questions about the stockholder proposals, or if you need additional copies of this proxy statement/prospectus, or the proxy cards you should contact CIIG II’s proxy solicitor:

Morrow Sodali LLC

333 Ludlow Street,

5th Floor, South Tower

Stamford, CT 06902

Telephone: (800) 662-5200

Banks and brokers: (203) 658-9400

Email: CIIG.info@investor.morrowsodali.com

You may also contact CIIG II at:

CIIG Capital Partners II, Inc.

40 West 57th Street

29th Floor

New York, New York 10019

info@ciigpartners.com

To obtain timely delivery, CIIG II’s stockholders and warrant holders must request the materials no later than five business days prior to the special meeting.

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

The accompanying proxy statement/prospectus incorporates important business and financial information about CIIG II and Zapp from documents that are not included in or delivered with the accompanying proxy statement/prospectus. This information is available to you without charge upon your request. You can obtain documents incorporated by reference into the accompanying proxy statement/prospectus (other than certain exhibits or schedules to these documents) by requesting them in writing or by telephone from the appropriate company. Requests made to CIIG II should be directed to the addresses and telephone numbers listed above. Requests made to Zapp should be directed to the address and telephone number noted below:

87/1 Wireless Road

26/F Capital Tower

All Seasons Place

Lumpini, Patumwan

Bangkok 10330 Thailand

+66 2654 3550

If you intend to seek redemption of your Public Shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to CIIG II’s transfer agent prior to 4:30 p.m., New York time, on the second business day prior to the special meeting of stockholders. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

Attention: Mark Zimkind

Email: Mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the Business Combination and the proposals to be considered at the special meeting, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section entitled “Where You Can Find More Information.” Certain figures included in this section have been rounded for ease of presentation and, as a result, percentages may not sum to 100%.

Parties to the Business Combination

CIIG Capital Partners II, Inc.

CIIG II is a blank check company formed in Delaware on January 6, 2021, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, without limitation as to business, industry or sector.

CIIG II’s units, class A common stock, and warrants trade on Nasdaq under the symbols “CIIGU,” “CIIG” and “CIIGW,” respectively. At the Closing, the outstanding shares of CIIG II Class A Common Stock will be converted into Pubco Ordinary Shares.

The mailing address of CIIG II’s principal executive office is 40 West 57th Street, 29th Floor, New York, New York 10019, and its telephone number is (212) 796-4796.

Zapp

Zapp aims to redefine urban mobility and create a new product category with its high-performance EVP2W vehicles. Zapp’s vehicles combine the convenience and ease-of-use of a “step-through” form factor, with specifications and performance attributes usually associated with “step-over” models. Zapp’s proprietary exoskeleton architecture creates a brand DNA that Zapp believes is easily identifiable by consumers. Zapp’s first product, the i300, has won multiple international design awards, including the US Good Design Award, German Design Award, European Product Design Award, Australian Good Design Award, Korean Good Design Award, Muse Design Award, and A’ Design Award.

Zapp Electric Vehicles Limited is a private company limited by shares registered in England and Wales. The mailing address of Zapp’s registered office is 5 Technology Park, Colindeep Lane, England, London NW9 6BX. Zapp’s corporate website address is zappev.com. The information contained on, or that can be accessed through, Zapp’s website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement/prospectus. After the consummation of the Business Combination, Zapp will become a wholly-owned subsidiary of Pubco.

Pubco

Immediately following the Business Combination, Pubco is expected to qualify as a foreign private issuer as defined in Rule 3b-4 under the Exchange Act. Pubco is an exempted company incorporated with limited liability under the laws of the Cayman Islands. Pubco was formed solely in contemplation of the Business Combination, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, nor any outstanding commitments other than in connection with the Business Combination. At the Effective Time, the number of directors of Pubco will be increased to seven, four of whom shall be independent directors. After the consummation of the Business Combination, the mailing address of Pubco will be 87/1 Wireless Road, 26/F Capital Tower, All Seasons Place, Lumpini, Patumwan, Bangkok 10330, Thailand. After the consummation of the Business Combination, Pubco will become the continuing public company.

 

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Merger Sub

Zapp Electric Vehicles, Inc. is a Delaware corporation and direct, wholly owned subsidiary of Pubco. Merger Sub was formed solely in contemplation of the Business Combination, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, nor any outstanding commitments other than in connection with the Business Combination.

The mailing address of Merger Sub’s principal executive office is 87/1 Wireless Road, 26/F Capital Tower, All Seasons Place, Lumpini, Patumwan, Bangkok 10330, Thailand.

The Business Combination

The Merger Agreement

Consideration Paid to the Shareholders of the Company

The consideration to be paid to the shareholders of Zapp (including holders of Zapp options and Zapp Warrants), subject to certain adjustments in accordance with the Merger Agreement, will be equal to an aggregate of (i) 50,000,000 Pubco Ordinary Shares plus (ii) a number of Pubco Ordinary Shares equal to the amount of any convertible financing received by Zapp in excess of $20,000,000 in the aggregate and actually converted to ordinary shares of Zapp in advance of the closing of the Business Combination divided by the effective conversion price. With respect to clause (ii) the effective conversion price shall be equal to the dollar amount raised in such convertible financing divided by the number of ordinary shares of Zapp deliverable to the investor in connection with such financing.

Consideration Paid to CIIG II Stockholders – Effects of the Merger

At the Effective Time, each share of Class A Common Stock and Class B Common Stock and together with the Class A Common Stock, the (“Common Stock”) will be cancelled and automatically deemed for all purposes to represent the right to receive one Pubco Ordinary Share. At the Effective Time, each of CIIG II’s warrants that are outstanding immediately prior to the Effective Time will, pursuant to and in accordance with the Warrant Agreement dated September 14, 2021 with respect to CIIG II’s warrants, automatically and irrevocably be modified to provide that such warrant will no longer entitle the holder thereof to purchase the amount of share(s) of CIIG II Common Stock set forth therein and in substitution thereof such warrant will entitle the holder thereof to acquire the same number of Pubco Ordinary Shares per warrant on the same terms as in effect immediately prior to the closing of the Business Combination.

Representations and Warranties

The Merger Agreement contains representations and warranties of the parties thereto with respect to, among other things, (i) corporate organization, (ii) authorization, performance and enforceability of the Merger Agreement and Transaction Agreements, (iii) capitalization, (iv) government approvals, consents, (v) financial statements, (vi) absence of undisclosed liabilities, (vii) litigation and proceedings, (viii) compliance with laws, (ix) material contracts and absence of defaults, (x) labor matters, (xi) tax matters, (xii) permits, (xiii) real property, (xiv) environmental matters, (xv) absence of material adverse effect and certain changes, (xvi) intellectual property, data privacy and IT Security, (xvii) customers and suppliers and (xviii) related party transactions. The representations and warranties of the parties contained in the Merger Agreement will terminate and be of no further force and effect as of the closing of the Business Combination, unless otherwise specified in the Merger Agreement.

 

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Covenants

The Merger Agreement contains customary covenants of the parties, including, among others, covenants providing for (i) the operation of the parties’ respective businesses prior to consummation of the Business Combination, (ii) CIIG II’s and Zapp’s efforts to satisfy conditions to consummation of the Business Combination, (iii) CIIG II and Zapp to cease discussions regarding alternative transactions (such as acquisition transactions or business combination proposals), (iv) CIIG II, Zapp and Pubco to prepare and file a registration statement on Form F-4, which will also contain a prospectus of Pubco and proxy statement of CIIG II for the purpose of soliciting proxies from CIIG II’s stockholders to vote in favor of certain matters (the “CIIG II Stockholder Matters”), including the adoption of the Merger Agreement, approval of the Business Combination and certain other matters at a special meeting called therefor, (v) the protection of, and access to, confidential information of the parties and (vi) the parties’ efforts to obtain necessary approvals from governmental agencies, to the extent applicable.

Conditions to Closing

The consummation of the Business Combination is subject to customary closing conditions for transactions involving special purpose acquisition companies, including, among others: (i) approval of the CIIG II Stockholder Matters by CIIG II’s stockholders, (ii) receipt of required regulatory approvals, to the extent applicable, (iii) no order, statute, rule or regulation enjoining or prohibiting the consummation of the Transactions being in force, (iv) CIIG II having at least $5,000,001 of net tangible assets as of the closing of the Transactions, (v) the Form F-4 having become effective, (vi) the Pubco Ordinary Shares having been approved for listing on Nasdaq, and (vii) customary bring down conditions. Additionally, the obligations of Pubco and Zapp to consummate the Transactions are also conditioned upon, among others, each of the covenants of the parties to the A&R Sponsor Agreement (as defined below) having been performed as of or prior to the closing of the Business Combination in all material respects.

Termination

The Merger Agreement may be terminated at any time, but not later than the closing of the Business Combination, as follows:

(i)     by mutual written consent of CIIG II and Zapp;

(ii)     by either CIIG II or Zapp if the transactions are not consummated on or before May 1, 2023 (the “Termination Date”);

(iii)     by either CIIG II or Zapp if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently enjoining or prohibiting the merger, which order, decree, judgment, ruling or other action is final and non-appealable;

(iv)     by either CIIG II or Zapp if the other party has breached any of its covenants, agreements, representations or warranties which would result in the failure of certain conditions to be satisfied at the closing and has not cured its breach within thirty days of the notice of an intent to terminate, provided that the terminating party’s failure to fulfill any of its obligations under the Merger Agreement is not the primary cause of the failure of the closing to occur;

(v)     by either CIIG II or Zapp if, at the special meeting, the Business Combination and the other CIIG II Stockholder Matters shall fail to be approved by holders of CIIG II’s stockholders, provided that CIIG II’s right to terminate for failure to obtain such approval shall not be available if, at the time of such termination, CIIG II is

 

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in breach of certain of its obligations under the Merger Agreement, including with respect to the preparation, filing and mailing of the registration statement and prospectus/proxy statement and convening the special meeting; or

(vi)     by the Company if CIIG II has changed, withdrawn, withheld, qualified or modified the SPAC Board Recommendation for any reason, or publicly proposes to do any of the foregoing.

The foregoing description of the Merger Agreement and the Business Combination does not purport to be complete and is qualified in its entirety by the terms and conditions of the Merger Agreement and any related agreements. The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of such agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The Merger Agreement has been included as an annex to this proxy statement/prospectus to provide investors with information regarding its terms. It is not intended to provide any other factual information about CIIG II, the Company, Pubco or any other party to the Merger Agreement or any related agreement. In particular, the representations, warranties, covenants and agreements contained in the Merger Agreement, which were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, are subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts) and are subject to standards of materiality applicable to the contracting parties that may differ from those applicable to investors and security holders. Investors and security holders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in CIIG II’s public disclosures.

A copy of the Merger Agreement is filed with this proxy statement/prospectus as Annex A and is incorporated herein by reference, and the foregoing description of the Merger Agreement is qualified in its entirety by reference thereto.

Other Agreements Related to the Merger Agreement

Investor Exchange and Support Agreement

In connection with the execution of the Merger Agreement, Zapp, Pubco and certain shareholders of Zapp (each an “Investor”) entered into an Investor Exchange and Support Agreement (the “Investor Exchange and Support Agreement”) pursuant to which each Investor has agreed (i) to transfer its respective Zapp Ordinary Shares and Zapp Warrants to Pubco in exchange for Pubco Ordinary Shares and Pubco Exchange Warrants respectively; and (ii) not to transfer, subject to certain limited exceptions, 80% of the Pubco Ordinary Shares received by such Investor pursuant to the Company Exchange for a period beginning on the Closing Date and ending on (A) with respect to the first third of such Pubco Ordinary Shares, the date of the issuance of Pubco’s first quarterly earnings release that occurs at least 60 days after the Closing Date, (B) with respect to the second third of such Pubco Ordinary Shares, the date of the issuance of Pubco’s second quarterly earnings release after the Closing Date and (C) with respect to the final third of such Pubco Ordinary Shares, the date of the issuance of Pubco’s third quarterly earnings release after the Closing Date. Pursuant to the Investor Exchange and Support Agreement, certain Investors shall be entitled to receive additional Pubco Ordinary Shares subject to the closing price of the Pubco Ordinary Shares equaling or exceeding for any 20 trading days during a 30 day consecutive trading period, $12.00 per share, $14.00 per share and $16.00 per share respectively.

 

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For more information about the Investor Exchange and Support Agreement, see the section entitled “Certain Agreements Related to the Business Combination—Investor Exchange and Support Agreements.”

Management Exchange and Support Agreement

In connection with the execution of the Merger Agreement, Zapp, Pubco and certain members of Zapp’s management (each a “Management Shareholder”) entered into a Management Exchange and Support Agreement (the “Management Exchange and Support Agreement”) pursuant to which each Management Shareholder agreed to (i) transfer its respective Zapp Ordinary Shares to Pubco in exchange for Pubco Ordinary Shares and (ii) not transfer, subject to certain limited exceptions, 80% of the Pubco Ordinary Shares received by such Management Shareholder pursuant to the Company Exchange for a period beginning on the Closing Date and ending (A) with respect to the first third of such Pubco Ordinary Shares, 360 days after the Closing Date, (B) with respect to the second third of such Pubco Ordinary Shares, 540 days after the Closing Date and (C) with respect to the final third of such Pubco Ordinary Shares, 720 days after the Closing Date. Pursuant to the Management Exchange and Support Agreement, each Management Shareholder shall be entitled to receive additional Pubco Ordinary Shares subject to the closing price of the Pubco Ordinary Shares equaling or exceeding for any 20 trading days during a 30 day consecutive trading period, $12.00 per share, $14.00 per share and $16.00 per share respectively.

For more information about the Management Exchange and Support Agreement, see the section entitled “Certain Agreements Related to the Business Combination—Management Exchange and Support Agreement.”

Amended and Restated Sponsor Agreement

In connection with the execution of the Merger Agreement, CIIG II amended and restated that certain letter agreement (the “Sponsor Agreement”), dated September 14, 2021, by and among CIIG II, CIIG Management II LLC (the “Sponsor”) and the other signatories thereto (certain of such signatories, the “Insiders”), pursuant to which, among other things, the Sponsor and the Insiders agreed (i) to vote any shares of CIIG II’s securities in favor of the Transactions and other CIIG II Stockholder Matters, (ii) not to redeem any shares of CIIG II’s Class A Common Stock or Class B Common Stock, (iii) not to vote in favor of an alternative business combination or any liquidation or other change in CIIG II’s corporate structure or business, (iv) not to transfer 80% its of Pubco Ordinary Shares for a period beginning on the Closing Date and ending on (A) with respect to the first third of such Pubco Ordinary Shares, the date of the issuance of Pubco’s first quarterly earnings release that occurs at least 60 days after the Closing Date, (B) with respect to the second third of such Pubco Ordinary Shares, the date of the issuance of Pubco’s second quarterly earnings release after the Closing Date and (C) with respect to the final third of such Pubco Ordinary Shares, the date of issuance of Pubco’s third quarterly earnings release after the Closing Date, and (v) to be bound to certain other obligations as described therein (the “Amended and Restated Sponsor Agreement”).

Following the Closing of the Transactions, 754,687 of Sponsor’s Pubco Ordinary Shares (the “Sponsor Earnout Shares”) will be unvested and shall vest at such time the closing price of Pubco Ordinary Shares equals or exceeds $14.00 for any 20 trading days during a 30 consecutive trading-day period; provided that, the Sponsor Earnout Shares shall be forfeited on the date that is 5 years after the Closing Date if the vesting condition is not met with such forfeited Sponsor Earnout Shares being transferred to Pubco for the purposes of Pubco equity compensation arrangements.

For more information about the Amended and Restated Sponsor Agreement, see the section entitled “Certain Agreements Related to the Business Combination—Amended and Restated Sponsor Agreement.”

Registration Rights Agreement

In connection with the Closing, Pubco, certain persons and entities holding CIIG II’s Class B Common Stock (the “Original Holders”) and certain shareholders of Zapp (the “New Holders”), will enter into a

 

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Registration Rights Agreement which provides customary demand and piggyback registration rights. Pursuant to the Registration Rights, Pubco agreed that, within 45 calendar days after the Closing Date, it will file with the SEC a registration statement registering the resale of certain Pubco Ordinary Shares held by the Original Holders and the New Holders, and Pubco will use its reasonable efforts to have the registration statement declared effective as soon as practicable after the filing thereof, but no later than 90th calendar day (or 120th calendar day if the SEC notifies Pubco that it will “review” the registration statement) following the Closing.

For more information about the Registration Rights, see the section entitled “Certain Agreements Related to the Business Combination—Registration Rights Agreement.”

Assignment, Assumption and Amendment Agreement

In connection with the Closing, Pubco will enter into an Assignment, Assumption and Amendment Agreement with CIIG II and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”) to assume CIIG II’s obligations under the existing Warrant Agreement, dated September 14, 2022 with respect to CIIG II’s public and private warrants.

For more information about the Assignment, Assumption and Amendment Agreement, see the section entitled “Certain Agreements Related to the Business Combination—Assignment, Assumption and Amendment Agreement.”

Director Nomination Agreement

In connection with the Merger Agreement, Pubco and Mr. Swin Chatsuwan (the “Founder”) will enter into a Director Nomination Agreement (the “Director Nomination Agreement”) pursuant to which the Founder will continue to have a right to representation on the board of directors of Pubco following consummation of the Transactions. Pursuant to the Direction Nomination Agreement, the Founder will, at every meeting of the board of directors of Pubco or a committee thereof, or action by written consent, at or by which directors of Pubco are appointed by the board of directors of Pubco or are nominated to stand for election and elected by shareholders of Pubco, have the right to nominate for election to the board of directors of Pubco:

 

  (i)

four (4) individuals, or such higher number of individuals as would (if duly elected) represent a bare majority of the directors then in office, at least two (2) (or such higher number as is from time to time required for compliance with the listing rules of the stock exchange on which the shares are listed) of which would qualify as an independent director under applicable independence criteria for purposes of Nasdaq and SEC rules (“Independent Director”) and one of which would qualify to serve on the audit committee; provided, that the Founder holds in aggregate at least 80% of the number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as of the closing of the Transaction, as equitably adjusted for subdivisions, share splits, consolidations, reorganizations and recapitalizations;

 

  (ii)

three (3) individuals, at least one (1) of which would qualify as an Independent Director; provided, that the Founder holds in aggregate at least 50% of the number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as of the closing of the Transaction, but less than 80% of the number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as of the closing of the Transaction, in each case, as equitably adjusted for subdivisions, share splits, consolidations, reorganizations and recapitalizations; or

 

  (iii)

two (2) individuals, none of which are required to qualify as an Independent Director; provided, that the Founder holds in aggregate at least 30% of number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as of the closing of the Transaction, as equitably adjusted for subdivisions, share splits, consolidations, reorganizations and recapitalizations, (the “Founder Directors” and each a “Founder Director”).

 

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For so long as Pubco maintains an Audit Committee, Compensation Committee or Nominating Committee, and the Founder holds the requisite number of Pubco Ordinary Shares as described in the Director Nomination Agreement, such committees shall each include at least one (1) Founder Director (but only to the extent such director (A) qualifies as an Independent Director and (B) with respect to membership on the Audit Committee or Compensation Committee, meets the heightened independence requirements applicable to audit committees and compensation committees, as applicable, under the SEC and within the context of the criteria applicable to Pubco as established by the listing rules of the stock exchange on which the Pubco Ordinary Shares are listed).

The Director Nomination Agreement terminates: (a) on the earlier of (i) the third anniversary of the closing of the Transactions, and (ii) the first date that the Founder holds less than 30% of the number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as the closing of the Transactions, as equitably adjusted for subdivisions, share splits, consolidations, reorganizations and recapitalizations, or upon the mutual written agreement of the parties there; or (b) upon mutual written agreement of the parties.

For more information about the Director Nomination Agreement, see the section entitled “Certain Agreements Related to the Business Combination—Director Nomination Agreement.”

Engagement Letter between Zapp and SAP

Zapp has entered into a letter agreement with SAP pursuant to which SAP would provide financial advisory services to Zapp in connection with the Business Combination (“SAP Fee Letter”).

Upon the closing of the Business Combination, SAP is entitled to receive a transaction fee in the form of cash and 173,000 Pubco Ordinary Shares. Following the closing of the Business Combination, if the relevant Earnout Conditions set out in the Management Exchange and Support Agreement are fulfilled, SAP will be entitled to receive additional Pubco Ordinary Shares comprising 10% of the number of any additional Pubco Ordinary Shares issued to the Management Shareholders pursuant to the Earnout Conditions in the Management Exchange and Support Agreement (“SAP Management Earnout Fee”), which may be payable in cash at Zapp’s option. Fees described in this paragraph that are payable in cash by Zapp to SAP may be paid in newly-issued Pubco Ordinary Shares in full or in part at Zapp’s option at the Issue Price, subject to such Pubco Ordinary Shares having been registered for resale on an effective registration statement and so long as the issuance of such Pubco Ordinary Shares to SAP would not require the prior approval of the holders of Pubco Ordinary Shares pursuant to Rule 5635 of the Nasdaq Stock Market Rules. For the purposes of this paragraph, “Issue Price” refers to (x) any portion of the dollar amount payable by Zapp to SAP divided by (y) the average closing price of Pubco Ordinary Shares during the five trading day period prior to the date of issuance of such Pubco Ordinary Shares to SAP. In addition, SAP is entitled to receive options to purchase Pubco Ordinary Shares comprising 10% of the number of such options to be granted to Mr. Swin Chatsuwan, Mr. Jeremy North, Mr. Kiattipong Arttachariya and Mr. Warin Thanathawee prior to December 31, 2023 pursuant to the Pubco Equity Incentive Plan, on the same terms and conditions applicable to each optionholder (including with respect to expiration date, vesting conditions and exercise provisions).

In addition, if any of the Sponsor Earnout Shares are forfeited on the date falling 5 years after the Closing pursuant to the Amended and Restated Sponsor Agreement, SAP will be entitled to receive 10% of the value of such number of forfeited Sponsor Earnout Shares (“SAP Sponsor Earnout Fee”), which may be payable in newly-issued Pubco Ordinary Shares or in cash at Zapp’s option.

Interests of Certain Persons in the Business Combination

In considering the recommendation of CIIG II’s board of directors to vote in favor of the Business Combination, CIIG II’s stockholders should be aware that, aside from their interests as stockholders, the Sponsor, CIIG II’s directors and officers and the anchor investors have interests in the Business Combination that are different from, or in addition to, those of other stockholders and warrantholders generally. CIIG II’s directors

 

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were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things:

 

   

The CIIG II Class B Common Stock was acquired in January 2021 for an aggregate purchase price of $25,000, and such shares would become worthless if CIIG II does not complete a business combination within the applicable time period, as the Sponsor has waived any right to redemption with respect to these shares for no consideration. Following the closing of the Business Combination, members of the Sponsor (excluding the indirect anchor investors) will beneficially own an aggregate of 4,276,563 Pubco Ordinary Shares upon conversion of their Class B Common Stock (assuming no redemptions and not including the Sponsor Earnout Shares) and, for illustrative purposes, up to 6,540,625 Pubco Ordinary Shares (including the Sponsor Earnout Shares and the Anchor Forfeiture Shares). Such shares have an aggregate market value of approximately $         and $        , respectively, based on the closing price of CIIG II Class A Common Stock of $         on Nasdaq on        , the record date for the special meeting of stockholders;

 

   

Each anchor investor will own 718,750 Pubco Ordinary Shares upon conversion of Class B Common Stock pursuant to the Anchor Investor Agreements (assuming no Anchor Forfeiture) following the closing of the Business Combination. Such shares would become worthless if CIIG II does not complete a business combination. Such shares have an aggregate market value of approximately $         and $        , respectively, based on the closing price of CIIG II Class A Common Stock of $         on Nasdaq on         , the record date for the special meeting of stockholders;

 

   

Members of the Sponsor (excluding the indirect anchor investors) will own 6,031,249 Pubco Public Warrants following the closing of the Business Combination and the conversion of Private Placement Warrants, which will expire worthless if CIIG II does not complete a business combination. Based on the closing price of CIIG II’s Public Warrants of $         on Nasdaq on         , 2023, the record date for the special meeting, the Pubco Public Warrants held by the Sponsor (excluding the indirect anchor investors) would be valued at approximately $        ;

 

   

Each anchor investor will own 2,010,417 Pubco Public Warrants following the closing of the Business Combination and the conversion of Private Placement Warrants, which will expire worthless if CIIG II does not complete a business combination. Based on the closing price of CIIG II’s Public Warrants of $         on Nasdaq on         , 2023, the record date for the special meeting, the Pubco Public Warrants held by each indirect anchor investor would be valued at approximately $        ;

 

   

Each anchor investor will own 1,078,125 Pubco Public Warrants following the closing of the Business Combination and the conversion of the CIIG Public Warrants, which will expire worthless if CIIG II does not complete a business combination. Based on the closing price of CIIG II’s Public Warrants of $         on Nasdaq on         , 2023, the record date for the special meeting, the Pubco Public Warrants held by each indirect anchor investor would be valued at approximately $        ;

 

   

CIIG II’s Sponsor, affiliates of the Sponsor, officers and directors may make loans from time to time to CIIG II to fund certain capital requirements. On December 15, 2022, CIIG II issued a promissory note to the Sponsor (the “Promissory Note”), pursuant to which CIIG II may borrow up to an aggregate principal amount of $100,000. The Promissory Note is non-interest bearing and payable upon the consummation of a business combination. Upon consummation of a business combination, the Sponsor shall have the option, but not the obligation, to convert the principal balance of the Promissory Note, into Working Capital Warrants, at a price of US$1.00 per Working Capital Warrant. Additional loans may be made after the date of this proxy statement/prospectus. If the Business Combination is not consummated, any outstanding loans will not be repaid and will be forgiven except to the extent there are funds available to CIIG II outside of the Trust Account;

 

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CIIG II’s Sponsor, officers and directors and their affiliates will not receive reimbursement for any out-of-pocket expenses incurred by them on CIIG II’s behalf incident to identifying, investigating and consummating a business combination to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless a business combination is consummated. As of the record date, the Sponsor and CIIG II’s officers and directors and their affiliates had incurred no unpaid reimbursable expenses;

 

   

the potential continuation of certain of CIIG II’s directors as directors of Pubco;

 

   

the continued indemnification of current directors and officers of CIIG II and the continuation of directors’ and officers’ liability insurance after the Business Combination; and

 

   

If CIIG II is unable to complete a business combination within the required time period, the aggregate dollar amount as of the record date of non-reimbursable funds of the Sponsor and the anchor investors would be approximately US$        , reflecting the market value of Class B Common Stock (including the Sponsor Earnout Shares), the market value of the Private Placement Warrants and Public Warrants and the amount loaned pursuant to the Promissory Note.

These financial interests may mean that the Sponsor (and accordingly CIIG II’s officers and directors who are members of the Sponsor) and the anchor investors may be incentivized to complete the Business Combination, or an alternative business combination, with a less favorable target company or on terms less favorable to stockholders than they would otherwise recommend or approve, as the case may be, rather than allow CIIG II to wind up having failed to consummate a business combination and lose their entire investment.

Further, because of these interests, the Sponsor (and CIIG II’s officers and directors who are members of the Sponsor) and the anchor investors could benefit from the completion of a business combination that is not favorable to its public stockholders and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public stockholders rather than liquidate. For example, if the share price of Pubco Ordinary Shares declined to $5.00 per share after the close of the Business Combination, CIIG II’s public stockholders that purchased shares in the IPO, would have a loss of $5.00 per share, while the Sponsor and the anchor investors would have a gain because they acquired their Class B Common Stock for a nominal amount. In other words, the Sponsor and the anchor investors can earn a positive rate of return on their investment even if public stockholders experience a negative rate of return in the post-combination company.

Reasons for the Approval of the Business Combination

After careful consideration, CIIG II’s board of directors recommends that CIIG II’s stockholders vote “FOR” each proposal being submitted to a vote of the CIIG II stockholders at the special meeting. For a description of CIIG II’s reasons for the approval of the Business Combination and the recommendation of CIIG II’s board of directors, see the section entitled “The Business Combination—CIIG II’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Redemption Rights

Pursuant to CIIG II’s Amended and Restated Certificate of Incorporation, any holders of Public Shares may demand that such shares be redeemed in exchange for a pro rata share of the aggregate amount on deposit in the Trust Account, less franchise and income taxes payable, calculated as of two business days prior to the consummation of the Business Combination. If demand is properly made and the Business Combination is consummated, these shares, immediately prior to the Business Combination, will cease to be outstanding and will represent only the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account which

 

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holds the proceeds of CIIG II’s IPO as of two business days prior to the consummation of the Business Combination, less franchise and income taxes payable, upon the consummation of the Business Combination. For illustrative purposes, based on funds in the trust account of approximately $                on                , 2023, the record date, the estimated per share redemption price would have been approximately $                .

If you exercise your redemption rights, your shares of CIIG II Class A Common Stock will cease to be outstanding immediately prior to the Business Combination and will only represent the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account. You will no longer own those shares. You will be entitled to receive cash for these shares only if you properly demand redemption. See the section entitled “The Special Meeting of CIIG II Stockholders—Redemption Rights.”

Impact of the Business Combination on Pubco’s Public Float

CIIG II Public Stockholders may vote in favor of the Business Combination and still exercise their redemption rights, although they are not required to vote in any way to exercise such redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of CIIG II Public Stockholders are substantially reduced as a result of redemptions by CIIG II Public Stockholders.

If a CIIG II Public Stockholder exercises his, her or its redemption rights, such exercise will not result in the loss of any warrants that such CIIG II Public Stockholder may hold. As a result, any non-redeeming CIIG II Public Stockholders would experience dilution to the extent such Public Warrants are exercised and additional Pubco Ordinary Shares are issued. In addition, to the extent of any redemptions, fewer funds from the Trust Account would be available to Pubco to be used in its business following the consummation of the Business Combination.

 

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The sensitivity table below shows the potential impact of redemptions on the ownership of current CIIG II stockholders and Zapp shareholders, and the pro forma book value per share of the shares owned by CIIG II Public Stockholders under different redemption scenarios, taking into account certain potential sources of dilution as detailed below.

 

    Assuming No
Redemption
    Assuming 25%
Redemption(1)
    Assuming 50%
Redemption(2)
    Assuming 75%
Redemption(3)
    Assuming
Maximum
Redemption(4)
 
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership
in shares
    Equity
%
 

Shareholders

                   

CIIG II’s Class B Common Stockholders(5)

    6,432,813       8.3     6,432,813       9.2     6,432,813       10.2     6,432,813       11.5     6,432,813       13.2

CIIG II’s Class A Common Stockholders(6)

    28,750,000       37.2     21,562,500       30.7     14,375,000       22.8     7,187,500       12.9     0       0.0

Zapp’s existing shareholders(7)

    42,028,760       54.3     42,028,760       59.9     42,028,760       66.7     42,028,760       75.3     42,028,760       86.4

SAP

    173,000       0.2     173,000       0.2     173,000       0.3     173,000       0.3     173,000       0.4

Total Pubco Ordinary Shares outstanding at Closing not reflecting potential sources of dilution

    77,384,573       100.0     70,197,073       100.0     63,009,573       100.0     55,822,073       100.0     48,634,573       100.0

Total Pubco Ordinary Shares outstanding at Closing not reflecting potential sources of dilution

    77,384,573         70,197,073         63,009,573         55,822,073         48,634,573    

Potential sources of dilution:

                   

Shares underlying CIIG II Private Placement Warrants

    12,062,500       9.9     12,062,500       10.5     12,062,500       11.2     12,062,500       12.0     12,062,500       13.0

Shares underlying CIIG II Public Warrants

    14,375,000       11.8     14,375,000       12.5     14,375,000       13.4     14,375,000       14.3     14,375,000       15.5

Sponsor Earnout Shares

    754,687       0.6     754,687       0.7     754,687       0.7     754,687       0.8     754,687       0.8

Zapp Earnout Shares

    8,518,290       7.0     8,518,290       7.4     8,518,290       7.9     8,518,290       8.5     8,518,290       9.2

Shares underlying Pubco Exchange Warrants

    3,482,158       2.9     3,482,158       3.0     3,482,158       3.2     3,482,158       3.5     3,482,158       3.7

Shares underlying Pubco Exchange Options

    4,489,082       3.7     4,489,082       3.9     4,489,082       4.2     4,489,082       4.5     4,489,082       4.8

SAP(8)

    683,720       0.6     683,720       0.6     683,720       0.6     683,720       0.7     683,720       0.7

Total Pubco Ordinary Shares outstanding at Closing (including shares underlying CIIG II Private Placement Warrants and Public Warrants, Sponsor Earnout Shares, Zapp Earnout Shares, Pubco Exchange Warrants, Pubco Exchange Options and contingent consideration payable to SAP )

    121,750,010       100.0     114,562,510       100.0     107,375,010       100.0     100,187,510       100.0     93,000,010       100.0

 

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    Assuming No
Redemption
    Assuming 25%
Redemption(1)
    Assuming 50%
Redemption(2)
    Assuming 75%
Redemption(3)
    Assuming
Maximum
Redemption(4)
 
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership in
shares
    Equity
%
    Ownership
in shares
    Equity
%
 

Holders of Pubco Ordinary Shares reflecting potential sources of dilution:

                   

CIIG II’s Class B Common Stockholders(9)

    7,187,500       5.9     7,187,500       6.3     7,187,500       6.7     7,187,500       7.2     7,187,500       7.7

Holders of CIIG II Public Warrants

    14,375,000       11.8     14,375,000       12.5     14,375,000       13.4     14,375,000       14.3     14,375,000       15.5

Holders of CIIG II Private Placement Warrants

    12,062,500       9.9     12,062,500       10.5     12,062,500       11.2     12,062,500       12.0     12,062,500       13.0

CIIG II’s Class A Common Stockholders(10)

    28,750,000       23.6     21,562,500       18.8     14,375,000       13.4     7,187,500       7.2     0       0.0

Zapp’s existing shareholders(11)

    50,547,050       41.5     50,547,050       44.1     50,547,050       47.1     50,547,050       50.5     50,547,050       54.4

Holder of Pubco Exchange Warrants

    3,482,158       2.9     3,482,158       3.0     3,482,158       3.2     3,482,158       3.5     3,482,158       3.7

Holders of Pubco Exchange Options

    4,489,082       3.7     4,489,082       3.9     4,489,082       4.2     4,489,082       4.5     4,489,082       4.8

SAP

    856,720       0.7     856,720       0.7     856,720       0.8     856,720       0.9     856,720       0.9

Total Pro Forma Equity Value of Pubco Ordinary Shares outstanding at Closing (including shares underlying CIIG II Private Placement Warrants and Public Warrants, Sponsor Earnout Shares, Zapp Earnout Shares, Pubco Exchange Warrants, Pubco Exchange Options and contingent consideration payable to SAP)(12)

    1,217,500,100         1,145,625,100         1,073,750,100         1,001,875,100         930,000,100    

Per Share Pro Forma Equity Value of Pubco Ordinary Shares outstanding at Closing(13)

    10.00         10.00         10.00         10.00         10.00    

Per Share Pro Forma Book Value of each Pubco Ordinary Share outstanding at Closing (including Pubco Exchange Warrants and Pubco Exchange Options)(13)

    3.29         2.70         1.99         1.13         (0.02  

 

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Footnotes

 

1

This scenario assumes that 7,187,500 shares of CIIG II Class A Common Stock are redeemed by the CIIG II Shareholders.

2

This scenario assumes that 14,375,000 shares of CIIG II Class A Common Stock are redeemed by the CIIG II Shareholders.

3

This scenario assumes that 21,562,500 shares of CIIG II Class A Common Stock are redeemed by the CIIG II Shareholders.

4

This scenario assumes that 28,750,000 shares of CIIG II Class A Common Stock are redeemed by the CIIG II Shareholders. CIIG II’s obligations under the Merger Agreement are subject to certain customary closing conditions.

5

Excluding 754,687 Sponsor Earnout Shares and 12,062,500 shares underlying the CIIG II Private Placement Warrants.

6

Excluding 14,375,000 shares underlying the CIIG II Public Warrants.

7

Excluding 3,482,158 fully vested Pubco Exchange Warrants, and 4,489,082 Pubco Exchange Options, of which 3,139,020 Pubco Exchange Options have been fully vested as of the date of this filing and assuming the aggregate principal amount raised pursuant to the Zapp Convertible Loan Notes does not exceed $20,000,000.

8

Comprises the maximum number of additional Pubco Ordinary Shares that may be issued to SAP pursuant to the SAP Management Earnout Fee and SAP Sponsor Earnout Fee set forth in the letter agreement between Zapp and SAP, assuming the Third Earnout Condition in the Management Exchange and Support Agreement is fulfilled following the closing of the Business Combination. Please refer to “Summary of the Proxy Statement/Prospectus—Other Agreements Related to the Merger Agreement—Engagement Letter between Zapp and SAP” for further details on the contingent consideration payable to SAP following the closing of the Business Combination.

9

Includes 754,687 Sponsor Earnout Shares, but excludes 12,062,500 shares underlying the CIIG II Private Placement Warrants which are shown separately above for ease of presentation.

10

Excluding 14,375,000 shares underlying the CIIG II Public Warrants, which are shown separately above for ease of presentation.

11

Including 8,518,290 Zapp Earnout Shares.

12

In each redemption scenario, the per share pro forma equity value of Pubco Ordinary Shares will be US$10.00 at Closing in accordance with the terms of the Merger Agreement.

13

The per share pro forma book value of Pubco Ordinary Shares is based on the pro forma book value of equity at Closing. See the row entitled “Total equity” from “Unaudited Pro Forma Condensed Combined Statement of Financial Position” in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The calculation of per share pro forma book value of Pubco Ordinary Shares does not take into account shares underlying CIIG II Public Warrants and Private Placement Warrants, Sponsor Earnout Shares, Zapp Earnout Shares and contingent consideration payable to SAP, for the reason that their inclusion will have an anti-dilutive impact on the per share pro forma book value of Pubco Ordinary Shares.

For more information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

Board of Directors of Pubco Following the Business Combination

The board of directors of Pubco will initially consist of seven directors immediately after the consummation of the Business Combination and shall include at least four independent directors or such higher number of independent directors as may be required by the rules of the Nasdaq corporate governance rules to the extent applicable to Pubco from time to time.

In connection with the Merger Agreement, Pubco and Mr. Swin Chatsuwan will enter into a Director Nomination Agreement pursuant to which the Founder will continue to have a right to representation on the board of directors of Pubco following consummation of the Transactions. For more information, see the section entitled “Certain Agreements Related to the Business Combination—Director Nomination Agreement.”

Material Tax Consequences

For a detailed discussion of certain U.S. federal income tax consequences and Cayman Islands tax consequences of the Business Combination, see the sections titled “Material U.S. Federal Income Tax Considerations” and “Material Cayman Islands Tax Considerations” in this proxy statement/prospectus.

 

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Accounting Treatment

The Business Combination will be accounted for as a reverse recapitalization in accordance with IFRS. Under this method of accounting, CIIG II will be treated as the acquired company and Zapp will be treated as the acquirer for financial reporting purposes. Zapp has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

   

Zapp stockholders will hold the majority ownership interest in the Pubco;

 

   

The Pubco Board will have seven members, and Zapp stockholders will have the ability to nominate the majority of the members of the Pubco Board;

 

   

Zapp’s senior management will comprise the senior management roles of Pubco and be responsible for the day-to-day operations; and

 

   

The intended strategy and operations of Pubco will continue Zapp’s current strategy and operations.

Accordingly, for accounting purposes, the financial statements of Zapp will represent a continuation of the financial statements of Pubco with the Business Combination treated as the equivalent of Zapp issuing common stock for the net assets of CIIG II, accompanied by a recapitalization, which is accounted for within the scope of IFRS 2, Share-based payment. The net assets of CIIG II will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be presented as those of Zapp in future reports of Pubco.

Other Stockholder Proposals

In addition to the Business Combination Proposal, CIIG II stockholders will be asked to vote on the Stockholder Adjournment Proposal. For more information about these proposals, see the section entitled “CIIG II Stockholder Proposal No. 2—The Stockholder Adjournment Proposal.”

Appraisal or Dissenters’ Rights

No appraisal or dissenters’ rights are available to holders of shares of CIIG II Common Stock or CIIG II Warrants in connection with the Business Combination.

Date, Time and Place of Special Meeting

The special meeting of stockholders of CIIG II will be held at                a.m., Eastern time, on                , 2023, at                , or such other date, time and place to which such meetings may be adjourned or postponed, for the purpose of considering and voting upon the proposals. The special meeting will be completely virtual.

Record Date and Voting

You will be entitled to vote or direct votes to be cast at the special meeting of stockholders if you owned shares of CIIG II Common Stock at the close of business on                , 2023, which is the record date for the special meeting of stockholders. You are entitled to one vote for each share of CIIG II Common Stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 35,937,500 shares of CIIG II Common

 

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Stock outstanding, of which 28,750,000 are shares of CIIG II Class A Common Stock and 7,187,500 are CIIG II Class B Common Stock held by CIIG II’s holders of CIIG II’s Class B Common Stock and 14,375,000 outstanding Public Warrants.

CIIG II’s Sponsor, officers and directors have agreed to vote all of their CIIG II Class B Common Stock and any Public Shares acquired by them in favor of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus. CIIG II’s issued and outstanding warrants do not have voting rights at the special meeting of stockholders.

IPO Underwriter Waiver

Barclays, UBS and LionTree each delivered a waiver letter to CIIG II on October 14, 2022, November 2, 2022 and November 11, 2022, respectively, waiving any entitlement to the payment of any deferred compensation (in an aggregate amount of $10,062,500) in connection with their roles as underwriters in the IPO. Each of the IPO Underwriters has informed CIIG II that they are not responsible for any portion of this proxy statement/prospectus which forms a part of this registration statement, and no IPO Underwriter has been involved in the preparation of any disclosure that is included in the registration statement, or material underlying disclosure in the registration statement.

Proxy Solicitation

Proxies may be solicited by mail. CIIG II has engaged Morrow Sodali LLC to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the special meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section entitled “The Special Meeting of CIIG II Stockholders—Revocability of Proxies.”

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of CIIG II’s stockholders is necessary to hold a valid meeting. A quorum will be present at the special meeting of stockholders if a majority of the CIIG II Common Stock outstanding and entitled to vote at the meeting is represented in person or by proxy.

The approval of the Business Combination Proposal requires the affirmative vote of the holders of at least a majority of all then outstanding shares of CIIG II Common Stock entitled to vote thereon at the special meeting of stockholders. The Stockholder Adjournment Proposal, if presented, requires the affirmative vote of the holders of a majority of the shares of CIIG II Common Stock that are voted thereon at the special meeting of stockholders. Accordingly, a CIIG II stockholder’s failure to vote by proxy or to vote in person at the special meeting of stockholders, or an abstention from voting, will have the same effect as a vote “AGAINST” the Business Combination Proposal and will have no effect on the outcome of the Stockholder Adjournment Proposal.

Recommendation to CIIG II Stockholders

CIIG II’s board of directors believes that each of the Business Combination Proposal and the Stockholder Adjournment Proposal, is in the best interests of CIIG II and its stockholders and recommends that its stockholders vote “FOR” each of the proposals to be presented at the special meeting.

 

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Risk Factors

In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.” Some of the risks related to CIIG II and Zapp are summarized below:

CIIG II

 

   

CIIG II may not be able to complete its initial business combination within the prescribed time frame, in which case CIIG II would cease all operations except for the purpose of winding up and would redeem its public shares and liquidate, in which case its public stockholders would receive their pro rata portion of the Trust Account and our warrants will expire worthless.

 

   

If a stockholder fails to receive notice of CIIG II’s offer to redeem its Public Shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

 

   

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

 

   

The Sponsor and CIIG II’s directors, officers, advisors or their affiliates may elect to purchase shares from Public Stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of CIIG II Class A Common Stock.

 

   

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

 

   

CIIG II’s stockholders cannot be sure of the market value of the Pubco Ordinary Shares to be issued upon completion of the Business Combination.

 

   

The Pubco Ordinary Shares to be received by CIIG II’s stockholders as a result of the Business Combination will have different rights from shares of CIIG II Common Stock.

 

   

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

 

   

CIIG II’s board of directors did not obtain a fairness opinion in determining whether or not to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the Public Stockholders.

 

   

The Sponsor and CIIG II’s executive officers and directors have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in the Registration Statement of which this proxy statement/prospectus is a part.

 

   

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

 

   

CIIG II’s stockholders will have a reduced ownership and voting interest after consummation of the Business Combination and will exercise less influence over management.

 

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Zapp

 

   

Zapp is an early-stage company with a history of losses and expects to incur significant expenses and losses for at least the near and medium term, and may not achieve or maintain profitability in the future.

 

   

Zapp is a new entrant into an early-stage industry and may not be able to adequately control the costs of its operations as it scales and expands its business.

 

   

The global P2W market is highly competitive. Specifically, the EVP2W sector is rapidly growing and Zapp’s products and services are and will be subject to strong competition from a growing list of established and new competitors.

 

   

Zapp’s future growth and success is highly dependent upon consumers’ adoption of, and their demand for EVP2Ws and Zapp’s battery solutions in a sector that is generally competitive, cyclical and volatile.

 

   

Zapp’s business and prospects depend significantly on its ability to build the Zapp brand and consumers’ recognition, acceptance, and adoption of the Zapp brand, and Zapp may not succeed in continuing to maintain and strengthen the Zapp brand.

 

   

Zapp may experience delays in the design, manufacture, production, and launch of its vehicles, which could harm its business, prospects, financial condition and operating results.

 

   

Zapp may be unable to develop and manufacture vehicles of sufficient quality, and on schedule and scale, that would appeal to a large customer base.

 

   

Zapp’s limited operating history makes evaluating its business and future prospects difficult and may increase the risk of your investment.

 

   

As Zapp continues to grow, it may not be able to effectively manage its growth, including with respect to design, research, development and maintenance capabilities, which could negatively impact its brand and financial performance.

 

   

Zapp’s receivables financing credit line with the Thai EXIM, which Zapp uses to finance customer orders, is cancellable by Thai EXIM at any time, and Zapp may be unable to secure financing at similar rates.

 

   

Zapp depends on suppliers, including critical and single sourced suppliers, to deliver components according to schedules, prices, quality, and volumes that are acceptable, and may be unable to effectively manage these suppliers.

 

   

Uncertainties in the global economy may negatively impact suppliers and other business partners, which may interrupt the supply chain and require other changes to operations. These and other factors may adversely impact revenues and operating income.

 

   

Increases in costs, as a result of inflation or otherwise, disruption of supply or shortage of materials, in particular for lithium-ion battery cells and electronics subcomponents could harm Zapp’s business.

 

   

Leveraging contract manufacturers, including Summit, to manufacture Zapp’s vehicles is subject to risks, including costs, manufacturing footprint, and manufacturing capabilities. If Zapp is unable to maintain a relationship with Summit to manufacture its vehicles, its manufacturing costs may be adversely affected.

 

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SELECTED HISTORICAL FINANCIAL DATA OF CIIG II

The following tables summarize the relevant financial data for CIIG II’s business and should be read in conjunction with the section entitled “CIIG II Management’s Discussion and Analysis of Financial Condition and Results of Operations” and CIIG II’s audited financial statements, and the notes related thereto, which are included elsewhere in this proxy statement/prospectus.

CIIG II’s balance sheet data as of September 30, 2022 and statement of operations data for the nine months ended September 30, 2022 are derived from CIIG II’s unaudited financial statements. CIIG II’s balance sheet data as of December 31, 2021, and statement of operations data for the period from January 6, 2021 (inception) through December 31, 2021 are derived from CIIG II’s audited financial statements included elsewhere in this proxy statement/prospectus.

The historical results presented below are not necessarily indicative of the results to be expected for any future period. You should read the following selected financial information in conjunction with CIIG II’s financial statements and related notes and the section entitled “CIIG II Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement/prospectus.

 

     Nine months
ended
September 30,
2022
     For the
Period from
January 6,
2021

(Inception)
through
September 30,
2021
     For the
Period from
January 6,
2021
(Inception)
through

December 31,
2021
 

Income Statement Data:

        

Loss from operations

   $ (1,806,142    $ (59,157    $ (1,548,562

Net loss

   $ (144,942    $ (56,593    $ (1,518,280

Weighted average Class A common
stock outstanding, basic and diluted

     28,750,000        1,507,491        8,488,858  

Basic and diluted net income (loss) per share, Class A common stock

   $ (0.00    $ (0.01    $ (0.10

Weighted average Class B common
stock outstanding, basic and diluted

     7,187,500        7,187,500        6,524,199  

Basic and diluted net income (loss) per share, Class B common stock

   $ (0.00    $ (0.01    $ (0.10

 

     September 30,
2022
     December 31,
2021
 

Balance Sheet Data:

     

Cash and marketable securities held in Trust Account

   $ 293,579,019      $ 291,842,782  

Total assets

   $ 294,139,992      $ 293,122,157  

Total liabilities

   $ 12,558,146      $ 11,395,369  

Class A common stock subject to possible redemption

   $ 293,156,722      $ 291,812,500  

Total stockholders’ (deficit) equity

   $ (11,574,876    $ (10,085,712

 

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SELECTED HISTORICAL FINANCIAL DATA OF ZAPP

The following tables present Zapp’s selected consolidated financial and other data. The consolidated statement of profit or loss for the years ended September 30, 2022 and 2021 and consolidated statement of financial position as of September 30, 2022 and 2021, have been derived from Zapp’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus.

The financial data set forth below should be read in conjunction with, and is qualified by reference to, “Zapp Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and notes thereto included elsewhere in this proxy statement/prospectus. Zapp’s audited consolidated financial statements are prepared and presented in accordance with IFRS. IFRS differs from U.S. GAAP in certain material respects and thus may not be comparable to financial information presented by U.S. companies. The historical results included below and elsewhere in this proxy statement/ prospectus are not indicative of the future performance of Zapp following the Business Combination.

Consolidated statement of profit or loss data

 

     Years Ended September 30,  
     2022     2021  
     ($)  

Income

    

Other income

     3,944       6,261  
  

 

 

   

 

 

 

Total income

     3,944       6,261  
  

 

 

   

 

 

 

Expenses

    

Selling and distribution expenses

     423,123       45,103  

General and administrative expenses

     3,187,006       1,167,406  

Unrealized loss (gain) on derivatives

     62,687       (60,274

Foreign exchange loss (gain), net

     (394,072     127,463  
  

 

 

   

 

 

 

Total expenses

     3,278,744       1,279,698  
  

 

 

   

 

 

 

Operating loss

     (3,274,800     (1,273,437
  

 

 

   

 

 

 

Finance income

     2,693       1,051  

Finance costs

     (305,483     (289,046
  

 

 

   

 

 

 

Net finance costs

     (302,790     (287,995

Share of profit (loss) of associate, net of tax

     —         (526
  

 

 

   

 

 

 

Loss before income tax

     (3,577,590     (1,561,958

Income tax

     —         —    
  

 

 

   

 

 

 

Loss for the year

     (3,577,590     (1,561,958
  

 

 

   

 

 

 

Earnings per share

    

Basic and diluted loss

     (0.05     (0.02

 

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Consolidated statement of financial position data

 

       As at September 30,    
     2022      2021  
     ($)  

Assets

     

Total current assets

     2,270,009        486,559  

Total non-current assets

     1,955,399        1,553,217  

Total assets

     4,225,408        2,039,776  

Liabilities

     

Total current liabilities

     1,303,229        2,106,786  

Total non-current liabilities

     409,739        156,741  

Total liabilities

     1,712,968        2,263,527  

Total equity

     2,512,440        (223,751

Total liabilities and equity

     4,225,408        2,039,776  

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

CIIG II is providing the following selected unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination.

The following selected unaudited pro forma condensed combined statement of position combines the historical statement of financial position of CIIG II as of September 30, 2022 with the historical statement of financial position of Zapp as of September 30, 2022, giving effect to the Business Combination as if it had been consummated as September 30, 2022.

The following selected unaudited pro forma condensed combined statement of profit or loss for the year ended September 30, 2022 combines the historical statement of profit or loss of CIIG II for the year ended September 30, 2022 with the historical statement of profit or loss of Zapp for the year ended September 30, 2022, giving effect to the Business Combination as if it had occurred on October 1, 2021, the beginning of the earliest period presented.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below:

 

   

Scenario 1—Assuming No Redemptions: This presentation assumes that no stockholders of CIIG II elect to have their CIIG II Class A Common Stock redeemed for cash in connection with the Business Combination as permitted by CIIG II’s amended and restated certificate of incorporation.

 

   

Scenario 2—Assuming Maximum Redemptions: This presentation assumes that CIIG II stockholders exercise their redemption rights with respect to all of CIIG II Class A Common Stock upon consummation of the Business Combination at a redemption price of approximately $10.21 per share based on cash and marketable securities held in the trust account as of September 30, 2022.

The adjustments presented in the selected unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the Business Combination.

The historical financial statements of CIIG II have been prepared in accordance with U.S. GAAP. The historical financial statements of Zapp have been prepared in accordance with IFRS. The historical financial information of CIIG II has been adjusted to give effect to the differences between U.S. GAAP and IFRS for the purposes of the presentation of the unaudited pro forma condensed combined financial information. No adjustments were required to convert CIIG II’s financial statements from U.S. GAAP to IFRS, except for the reclassification of CIIG II Class A common stock from temporary equity to loans and borrowings and the reclassification of CIIG II public and private placement warrants from equity to financial liability.

The selected unaudited pro forma condensed combined financial information is presented for illustrative purposes only. Such information is only a summary and should be read in conjunction with the section titled “Unaudited Pro Forma Condensed Combined Financial Information.” The financial results may have been different had the companies always been combined. You should not rely on the selected unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience.

 

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     No redemption
scenario
     Maximum
redemption
scenario
 
     ($)  

Selected unaudited pro forma condensed combined statement of financial position data as of September 30, 2022

     

Assets

     

Total current assets

     285,601,050        3,242,501  

Total non-current assets

     1,955,399        1,955,399  

Total assets

     287,556,449        5,197,900  

Liabilities

     

Total current liabilities

     3,475,011        3,475,011  

Total non-current liabilities

     3,052,489        3,052,489  

Total liabilities

     6,527,500        6,527,500  

Total equity

     281,028,949        (1,329,600)  

Total liabilities and equity

     287,556,449        5,197,900  

Selected unaudited pro forma condensed combined statement of profit or loss data for the year ended September 30, 2022

     

Total expenses

     184,802,466        173,623,515  

Operating loss

     (184,798,522)        (173,619,571)  

Loss for the year

     (185,458,659)        (174,279,708)  

Loss per share – basic and diluted

     (2.40)        (3.58)  

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking statements within the meaning of U.S. federal securities laws with respect to the Business Combination between Zapp, CIIG II and Pubco, including statements regarding the benefits of the transaction, the anticipated timing of the transaction, the anticipated growth in the industry in which Zapp operates and anticipated growth in demand for Zapp’s products, projections of Zapp’s future financial results and possible growth opportunities for Zapp. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “budget,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of CIIG II’s securities, (ii) the risk that the transaction may not be completed by CIIG II’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by CIIG II, (iii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the Merger Agreement by the stockholders of CIIG II, (iv) the lack of a third party valuation in determining whether or not to pursue the proposed Business Combination, (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (vi) the effect of the announcement or pendency of the transaction on Zapp’s business relationships, performance, and business generally, (vii) risks that the proposed Business Combination disrupts current plans of Zapp or diverts management’s attention from Zapp’s ongoing business operations and potential difficulties in Zapp’s employee retention as a result of the proposed Business Combination, (viii) the outcome of any legal proceedings that may be instituted against Zapp, Pubco, CIIG II or their respective directors or officers related to the proposed Business Combination, (ix) the ability of Pubco, CIIG II or a successor thereto to maintain the listing of its securities on The Nasdaq Stock Market LLC, (x) volatility in the price of the securities of Pubco, CIIG II or a successor thereto due to a variety of factors, including changes in the competitive and highly regulated industries in which Zapp plans to operate, variations in performance across competitors, changes in laws and regulations affecting Zapp’s business and changes in the combined capital structure, (xi) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed Business Combination, and identify and realize additional opportunities, (xii) the risk of downturns in the highly competitive electric vehicle industry, (xiii) the ability of Zapp to build the Zapp brand and consumers’ recognition, acceptance and adoption of the Zapp brand, (xiv) the risk that Zapp may be unable to develop and manufacture electric vehicles of sufficient quality and on schedule and scale, that would appeal to a large customer base, (xv) the risk that Zapp has a limited operating history, has not yet released a commercially available electric vehicle and does not have experience manufacturing or selling a commercial product at scale and (xvi) the risk that Zapp may not be able to effectively manage its growth, including its design, research, development and maintenance capabilities.

The foregoing list of factors is not exhaustive. Forward-looking statements are not guarantees of future performance. You should carefully consider the foregoing factors and the other risks and uncertainties described in CIIG II’s Annual Report on Form 10-K and Quarterly Report on Form 10-Q and other documents filed by Pubco, CIIG II or a successor thereto from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. The forward-looking statements in this document represent the views of Pubco and CIIG II and Zapp as of the date of this document. Subsequent events and developments may cause that view to change. Readers are cautioned not to put undue reliance on forward-looking statements, and all forward-looking statements in this document are qualified by these cautionary statements. Zapp, Pubco and CIIG II assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. None of Zapp, Pubco nor CIIG II gives any assurance that Zapp, Pubco or CIIG II will achieve its expectations. The inclusion of any statement in this document does not constitute an admission by Zapp, Pubco or CIIG II or any other person that the events or circumstances described in such statement are material.

 

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RISK FACTORS

You should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before you decide whether to vote or instruct your vote to be cast to approve the proposals described in this proxy statement/prospectus. Certain of the following risk factors apply to the business and operations of Zapp and will also apply to the business and operations of Pubco following the completion of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect on the business, financial condition, results of operations, prospects and trading price of Pubco following the Business Combination. The risks discussed below may not prove to be exhaustive and are based on certain assumptions made by Pubco, CIIG II and Zapp, which later may prove to be incorrect or incomplete. Pubco, CIIG II and Zapp may face additional risks and uncertainties that are not presently known to such entity, or that are currently deemed immaterial, but which may also ultimately have an adverse effect on any such party.

Risks Related to Zapp’s Business and Industry

Unless the context otherwise requires, all references in this section to the “Company,” “we,” “us” or “our” refer to Zapp Electric Vehicles Limited and its subsidiaries prior to the consummation of the Business Combination, which will be the business of Pubco and its subsidiaries following the consummation of the Business Combination.

We are an early-stage company with a history of losses and expect to incur significant expenses and losses for at least the near and medium term. We may not achieve or maintain profitability in the future.

We have not generated revenue and have incurred net losses since our inception, including losses of $3.9 million and $1.4 million for the years ended September 30, 2022, and 2021, respectively. We believe that we will continue to incur operating and net losses in the future until at least the time we begin significant deliveries of our vehicles which may occur later than we expect or not at all. We may not be profitable for at least the near and medium term as we invest in our business, build capacity and ramp-up operations, and we cannot assure you that we will ever achieve or be able to maintain profitability in the future. Even if we are able to successfully develop our vehicles and attract customers, there can be no assurance that we will be financially successful. For example, as we expand internationally and expand our vehicle portfolio, including the introduction of lower-priced vehicles, we will need to manage costs effectively to sell those products at our expected margins. Failure to become profitable could materially and adversely affect the value of your investment. If we are ever to achieve profitability, it will be dependent upon the successful development and commercial introduction and acceptance of our vehicles, such as the i300, and our services, which may not occur. Our business also will at times require significant amounts of working capital to support the development of additional vehicle models and service platforms. An inability to generate positive cash flow for the near term may adversely affect our ability to raise needed capital for our business on reasonable terms, diminish supplier or customer willingness to enter into transactions with us, and have other adverse effects that may decrease our long-term viability. There can be no assurance that we will achieve positive cash flow in the near future or at all.

We are a new entrant into an early-stage industry. As we scale and expand our business, we may not be able to adequately control the costs of our operations.

We have a short operating history in the EVP2W industry, which is continuously evolving. We have not yet delivered commercially available vehicle and do not yet have experience as an organization in high volume manufacturing, distribution and sale of vehicles. We intend to utilize business partners such as Summit and other retailers with extensive experience in manufacturing and sale of vehicles at scale. Despite this experience, the EVP2W industry is in its early stages and there are no guarantees that this experience will result in sales of our vehicles at a comparable scale. We will require significant capital to develop and grow our business, including developing and producing our vehicles, establishing or expanding design, research and development, production

 

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and building our brand. We have incurred and expect to continue incurring significant expenses, including research and development expenses, sales and distribution expenses as we build our brand and market our vehicles, and general and administrative expenses as we scale our operations, identify and commit resources to investigate new areas of demand and incur costs as a public company, which will impact our profitability. Our ability to become profitable in the future is dependent on the design, development and marketability of our product portfolio, while also controlling costs to achieve expected margins. If we are unable to efficiently design, develop, market, deploy, distribute and service our vehicles, our margins, profitability and prospects could be materially and adversely affected.

The global P2W market is highly competitive. Specifically, the EVP2W sector is rapidly growing and our products and services are and will be subject to strong competition from a growing list of established and new competitors.

Both the ICEP2W and EVP2W industries generally are highly competitive, and we will be competing for sales with both ICE-focused companies and EV-focused companies. Several major P2W companies have EVP2Ws available today and other current and prospective motorcycle manufacturers are also developing EVP2Ws. Factors affecting competition include product performance and quality, technological innovation, customer experience, brand differentiation, product design, pricing and manufacturing scale and efficiency. Increased competition may lead to lower vehicle unit sales and downward price pressure and adversely affect our business, prospects, financial condition and operating results. We also expect competition for EVs to intensify due to increased demand and a regulatory push for alternative fuel vehicles, continuing globalization and consolidation in the worldwide automotive industry. Further, as a result of new entrants in the EV market, we may experience increased competition for components and other parts of our vehicles, which may have limited or single-source supply.

Our future growth and success are highly dependent upon consumers’ adoption of, and their demand for EVP2Ws and our battery solutions in a sector that is generally competitive, cyclical and volatile.

Our future growth is dependent on the demand for, and upon consumers’ willingness to adopt EVP2Ws, and even if EVP2Ws become more mainstream, consumers choosing us over other EVP2W manufacturers. Demand for EVP2Ws may be affected by factors directly impacting EVP2W prices or the cost of purchasing and operating EVP2Ws such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes. Volatility in demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect our business, prospects, financial condition and operating results.

In addition, the demand for our vehicles will highly depend upon the adoption by consumers of new energy vehicles in general and EVs in particular. The market for new energy vehicles is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards, and changing consumer demands and behaviors.

Other factors that may influence the adoption of alternative fuel vehicles, and specifically EVs, include:

 

   

perceptions about EVs quality, safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of EVs, whether or not such EVs are produced by us or other manufacturers;

 

   

perceptions about EVs safety in general, in particular safety issues that may be attributed to the use of advanced technology, including EVs systems;

 

   

range anxiety, including the decline of an EV’s range resulting from deterioration over time in the battery’s ability to hold a charge;

 

   

the availability of new energy vehicles;

 

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the availability of service and charging stations for EVs;

 

   

the costs and challenges of installing home charging equipment, including for multi-family, rental and densely populated urban housing;

 

   

the environmental consciousness of consumers, and their adoption of EVs;

the occurrence of negative incidents, or perception that negative incidents have occurred, with respect to our or our competitors’ EVs resulting in adverse publicity and harm to consumer perceptions in electric vehicles generally;

 

   

the higher initial upfront purchase price of EVs, despite lower cost of ongoing operating and maintenance costs, compared to ICE vehicles;

perceptions about and the actual cost of alternative fuel;

 

   

regulatory, legislative and political changes; and

 

   

macroeconomic factors.

Furthermore, our vehicles utilize portable battery packs which do not require a designated charging network or swapping kiosk that our competitors currently on the market make use. While we believe that our portable battery packs differentiate our vehicles, there can be no assurance that consumers will adopt our battery solutions. If potential customers do not find our battery solutions attractive or are unwilling to adopt our battery solutions, it could impact the competitiveness of our vehicles and the rate of growth of our business and market penetration, and in turn, our business, prospects, financial condition and operating results.

Our business and prospects depend significantly on our ability to build the Zapp brand and consumers’ recognition, acceptance, and adoption of the Zapp brand. We may not succeed in continuing to maintain and strengthen the Zapp brand.

Our business and prospects are heavily dependent on our ability to develop, maintain and strengthen the Zapp brand. If we do not continue to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers. Promoting and positioning our brand will likely depend significantly on our ability to provide high-quality vehicles and engage with our customers as intended. In addition, our ability to develop, maintain and strengthen the Zapp brand will depend heavily on the success of our customer development and branding efforts. Such efforts mainly include building a community of customers engaged with our branding initiatives, including through our authorized resellers, at automotive shows and events, city pop-up stores and guerilla roadshows, as well as engaging celebrity talent, social media influencers or brand ambassadors or other brand partnerships. Such efforts may not achieve the desired results and we may be required to change our customer development and branding practices, which could result in substantially increased expenses. There is no assurance that such efforts would yield brand awareness or consumer adoption of our vehicles. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating results may be materially and adversely impacted.

In addition, if negative incidents occur or are perceived to have occurred, whether or not such incidents are our fault, we could be subject to adverse publicity. In particular, given the popularity of social media, any negative publicity, whether true or not, could quickly proliferate and harm consumer perceptions and confidence in the Zapp brand. Furthermore, there is the risk of potential adverse publicity related to our manufacturing partners or other partners whether or not such publicity is related to their collaboration with us. Our ability to successfully position our brand could also be adversely affected by perceptions about the quality of our competitors’ vehicles.

In addition, from time to time, our vehicles may be evaluated and reviewed by third parties. Any negative reviews or reviews which compare us unfavorably to competitors could adversely affect consumer perception about our vehicles.

 

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We may experience delays in the design, manufacture, production, and launch of our vehicles, which could harm our business, prospects, financial condition and operating results.

Our future business depends in large part on our ability to execute on our plans to develop, produce, market and sell our vehicles. EV companies experience delays in the design, production and commercial release of new products. To the extent we delay the launch of future models of vehicles, our growth prospects could be adversely affected as we may fail to establish or grow our market share. Furthermore, we rely on contract manufacturers for the manufacturing of vehicles. We could experience delays if our contract manufacturers do not meet agreed upon timelines or experience capacity constraints. Additionally, we and our contract manufactures rely on third-party suppliers for the provision and development of the key components and materials used in our vehicles. To the extent our suppliers experience any delays in providing us or our contract manufacturer with or developing necessary components, we could experience delays in delivering on our timelines. See “—Increases in costs, as a result of inflation or otherwise, disruption of supply or shortage of materials, in particular for lithium-ion battery cells and electronics subcomponents could harm our business.”

We may be unable to develop and manufacture vehicles of sufficient quality, and on schedule and scale, that would appeal to a large customer base.

Our business depends in large part on our ability to develop, market, produce and sell our vehicles. The continued development of and the ability to sell our vehicles at scale, including the i300 and future vehicles are and will be subject to risks, including with respect to:

 

   

our ability to maintain and scale necessary funding;

 

   

our ability to develop and launch lower-priced vehicles at scale and at attractive profit margins for our business;

 

   

our ability to negotiate and execute definitive agreements, and maintain arrangements on reasonable terms, with our various suppliers for hardware or services necessary to engineer or manufacture parts or components of our vehicles, with our resellers to sell our vehicles and with our franchisees to deliver and service our vehicles;

 

   

securing necessary components, services or licenses on acceptable terms and in a timely manner;

 

   

delays by us in delivering final component designs to our suppliers;

 

   

our ability to accurately produce vehicles within specified design tolerances;

 

   

quality controls that prove to be ineffective or inefficient;

 

   

defects in design and/or manufacture that cause our vehicles not to perform as expected or that require repair, field actions, product recalls or design changes;

 

   

delays, disruptions or increased costs in our, third-party outsourcing partners’ and our third-party suppliers’ supply chain, including raw material supplies;

 

   

other delays, backlog in manufacturing and research and development of new models, and cost overruns;

 

   

obtaining required regulatory approvals and certifications;

 

   

compliance with environmental, safety and similar regulations; and

 

   

our ability to attract, recruit, hire, retain and train skilled employees.

Historically, P2W customers have expected manufacturers to periodically introduce new and improved vehicle models. To meet these expectations, we intend to introduce new vehicle models and enhanced versions of existing models. The EVP2W market is in its early stages and quickly evolving. As a new entrant in a young industry, we inherently have limited experience, as a company, designing, testing, manufacturing, marketing,

 

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selling and servicing vehicles and therefore cannot assure you that we will be able to meet customer expectations. Any of the foregoing could have a material adverse effect on our business, prospects, financial condition and operating results.

If we fail to achieve unit sales expectations, our business, prospects, financial condition and operating results could be adversely impacted.

While we have received interests and reservations for our vehicles, there is no guarantee that such interests will translate into unit sales. We have received only a limited number of reservations for our vehicles, all of which are subject to cancellation until delivery of the vehicle. The wait from the time a reservation is made until the time the vehicle is delivered could also impact user decisions on whether to ultimately make a purchase, due to potential changes in preferences, competitive developments and other factors. If we encounter delays in the delivery of our current or future vehicle models, we believe that a significant number of reservations may be cancelled. As a result, no assurance can be made that reservations will not be cancelled and will ultimately result in the final purchase, delivery, and sale of the vehicle.

Our ability to successfully achieve unit sales expectations will be fundamental to our future success in existing and new markets and our market share. We cannot assure you that we will be able to achieve unit sales expectations. If we are unable to achieve unit sales expectations our business, prospects, financial condition and operating results could be adversely impacted.

Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment.

We are a company with an extremely limited operating history and have not generated revenue from sales of our vehicles or other products and services to date. We plan to begin delivering our i300 model during the third quarter of 2023. As an entirely new product, there is no historical basis for making judgments on the demand for our vehicles, our ability to develop, produce and deliver vehicles, or our profitability in the future. It is difficult to predict our future revenues and appropriately budget for our expenses, and trends that may emerge in this quickly evolving industry that may be outside our visibility and may affect our business. You should consider our business and prospects in light of the risks and challenges we face as a new entrant in an early-stage industry, including with respect to our ability to continuously advance our vehicle technologies; develop safe, reliable and quality vehicles that appeal to customers; deliver and service a large volume of vehicles; turn profitable; build a globally recognized and respected brand cost-effectively; expand our vehicles lineup; navigate the evolving regulatory environment; improve and maintain our operational efficiency; manage supply chain effectively; adapt to changing market conditions, including technological developments and changes in competitive landscape; and manage our growth effectively.

While we currently focus on the i300, we expect our product roadmap to expand beyond the i300 and introduce new models in other categories or using other technologies that we have less experience in as we may adjust our strategies and plans from time to time to remain competitive.

If we fail to address any or all of these risks and challenges, our business may be materially and adversely affected.

As we continue to grow, we may not be able to effectively manage our growth, including with respect to our design, research, development and maintenance capabilities, which could negatively impact our brand and financial performance.

We intend to expand our operations significantly, which will require hiring, retaining and training new personnel, controlling expenses, establishing facilities, and implementing administrative infrastructure, systems,

 

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and processes. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully. Risks that we face in undertaking this expansion include, among others:

 

   

attracting and hiring skilled and qualified personnel to support our expanded operations at existing facilities or operations at any facilities we may construct or acquire in the future;

 

   

managing a larger organization with a great number of employees in different divisions and geographies;

 

   

training and integrating new employees into our operations to meet the growing demands of our business;

 

   

controlling expenses and investments in anticipation of expanded operations;

 

   

establishing or expanding design, research, development, contract manufacturing, sales, servicing and maintenance capabilities;

 

   

managing regulatory requirements, permits and labor issues and controlling costs in connection with the construction of additional facilities or the expansion of existing facilities; and

 

   

implementing and enhancing administrative infrastructure, systems and processes.

Furthermore, we have limited experience to date in high volume production of our vehicles and we cannot ensure that we will be able to continue to partner with reliable contract manufacturers and reliable sources of component supply, that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully market our vehicles as our operations expand. Any failure to effectively manage our growth could negatively impact our brand and financial performance.

The relationship of the UK and the EU could impact our ability to operate efficiently in certain jurisdictions or in certain markets.

On January 31, 2020, the UK exited the EU, an action referred to as Brexit. This was followed by an implementation period, during which EU law continued to apply in the UK and the UK maintained its EU single market access rights and EU customs union membership. The implementation period expired December 31, 2020. Consequently, the UK has become a third country vis-à-vis the EU, without access to the single market or membership of the EU customs union.

The UK and the EU have signed an EU-UK Trade and Cooperation Agreement, or TCA, which was formally approved by Parliament on April 28, 2021. This agreement provides details on how some aspects of the UK’s and EU’s relationship will operate going forward; however, there are still many uncertainties, and how the TCA will take effect in practice is still largely unknown. This lack of clarity on future UK laws and regulations and their interaction with the EU laws and regulations may negatively impact foreign direct investment in the UK, increase costs, depress economic activity, and restrict access to capital.

The uncertainty concerning the UK’s legal, political, and economic relationship with the EU after Brexit may be a source of instability in the international markets, create significant currency fluctuations, and/or otherwise adversely affect trading agreements or similar cross-border cooperation arrangements (whether economic, tax, fiscal, legal, regulatory, or otherwise) beyond the date of Brexit.

We have employees and intend to operate in the UK and other European countries. We cannot predict whether or not the UK will significantly alter its current laws and regulations in respect of the automotive and EVP2W industries and, if so, what impact any such alteration would have on our business. Moreover, we cannot predict the impact that Brexit will have on the marketing of our vehicles or the process to obtain regulatory approval in the UK and EU for our vehicles. As a result of the developments in the relationship between the UK and the EU, we may experience adverse impacts on customer demand and profitability in the UK and other markets.

 

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Additional Brexit-related impacts on our business could include potential inventory shortages in the UK, increased regulatory burdens and costs to comply with UK-specific regulations, and higher transportation costs for our products coming into and out of the UK. Any of these effects, among others, could materially and adversely affect our business and consolidated financial position and results of operations.

Our receivables financing credit line with Thai EXIM, which we will use to finance customer orders is cancellable by Thai EXIM at any time, and we may be unable to secure financing at similar rates.

We have entered into a revolving loan agreement with Thai EXIM (the “Thai EXIM Facility”) providing for the issuance of short-term letters of credit and/or trust receipts for the purposes of purchase orders and production orders, and will depend on Thai EXIM to finance our customer orders and the manufacturing of our vehicles. The Thai EXIM Facility may be terminated by Thai EXIM at any time. Termination of the Thai EXIM Facility for any reason would have a material adverse effect on our business, including the delay in the production and delivery of our vehicles. We may have to obtain new financing, which may not be available on commercially reasonable terms or on terms that are acceptable to us or at all. If we cannot find new financing when we need them, our business, prospects, financial condition and operating results could be materially adversely affected.

We depend on suppliers, including critical and single sourced suppliers, to deliver components according to schedules, prices, quality, and volumes that are acceptable to us. We may be unable to effectively manage these suppliers. Uncertainties in the global economy may negatively impact suppliers and other business partners, which may interrupt the supply chain and require other changes to operations. These and other factors may adversely impact revenues and operating income.

Our success will be dependent upon our or our contract manufacture’s ability to enter into supplier agreements and maintain our relationships with existing suppliers who are critical to the output and production of our vehicles. The supply agreements we may enter into with suppliers in the future may have provisions where such agreements can be terminated in various circumstances, including potentially without cause. If our suppliers become unable to provide, or experience delays in providing components or if the supply agreements we enter into are terminated, it may be difficult to find replacement components. Additionally, our products contain parts that we purchase from single-source or limited-source suppliers, for which no immediate or readily available alternative supplier exists. While we believe that we would be able to establish alternate supply relationships and can obtain or engineer replacement components for our single-source components, we may be unable to do so in the short-term (or at all) at prices or quality levels that are acceptable to us. In addition, as we evaluate opportunities and take steps to insource certain components and parts, supply arrangements with current or future suppliers (with respect to other components and parts offered by such suppliers) may be available on less favorable terms or not at all, especially in light of the increases in materials pricing. Unexpected changes in business conditions, materials pricing, including inflation of raw material costs, labor issues, wars, trade policies, natural disasters, health epidemics such as the global COVID-19 pandemic, trade and shipping disruptions, port congestions and other factors beyond our or our suppliers’ control could also affect these suppliers’ ability to deliver components to us or to remain solvent and operational. Additionally, if our suppliers do not accurately forecast and effectively allocate production or if they are not willing to allocate sufficient production to us, it may reduce our access to components and require us to search for new suppliers. The unavailability of any component or supplier could result in production delays, product design changes and loss of access to important technology and tools for producing and supporting our products, as well as impact our capacity expansion and our ability to fulfill our obligations under customer contracts. Moreover, significant increases in our production or product design changes by us may in the future require us to procure additional components in a short amount of time. Our suppliers may not be willing or able to sustainably meet our timelines or our cost, quality and volume needs, or to do so may cost us more, which may require us to replace them with other sources.

In addition, if our suppliers experience substantial financial difficulties, cease operations or otherwise face business disruptions, we would be required to take measures to ensure components and materials remain available. Any disruption could affect our ability to deliver vehicles and could increase our costs and negatively affect our liquidity and financial performance.

 

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Also, if a supplied vehicle component becomes the subject of a product recall, we may be required to find an alternative component, which could increase our costs and cause vehicle production delays. Additionally, we may become subject to costly litigation surrounding the component.

If we or our contract manufacturer do not enter into long-term supply agreements with guaranteed pricing for our parts or components, we and our contract manufacturer may be exposed to fluctuations in prices of components, materials and equipment. Agreements for the purchase of battery cells contain or are likely to contain pricing provisions that are subject to adjustments based on changes in market prices of key commodities. Substantial increases in the prices for such components, materials and equipment would increase our operating costs and could reduce our margins if we cannot recoup the increased costs. Any attempts to increase the announced or expected prices of our vehicles in response to increased costs could be viewed negatively by our potential customers and could adversely affect our business, prospects, financial condition and operating results.

Increases in costs, as a result of inflation or otherwise, disruption of supply or shortage of materials, in particular for lithium-ion battery cells and electronics subcomponents could harm our business.

We and our suppliers may experience increases in the cost of or a sustained interruption in the supply or shortage of materials. Any such cost increase, supply interruption or shortage could materially and negatively impact our business, prospects, financial condition and operating results. We and our suppliers use various materials in our businesses and products, including, for example, lithium-ion battery cells, semiconductor chips and steel, and the prices for these materials fluctuate. The available supply of these materials may be unstable, depending on market conditions and global demand. For example, COVID-19, including associated variants, and the recent conflict in the Ukraine, may cause disruptions to and delays in our operations, including shortages and delays in the supply of certain parts, including materials and equipment necessary for the production of our vehicles, and the various internal designs and processes we may adopt in an effort to remedy or mitigate impacts of such disruptions and delays may result in higher costs. There have been very sizable increases in recent months in the cost of key metals, including lithium, nickel, aluminum and cobalt with volatility in pricing expected to persist for the foreseeable future. In addition, our business also depends on the continued supply of battery cells for the battery packs used in our vehicles. We are exposed to multiple risks relating to lithium-ion battery cells. These risks include, but are not limited to:

 

   

an increase in the cost, or decrease in the available supply, of materials used in the cells;

 

   

disruption in the supply of cells due to quality issues or recalls by battery cell manufacturers; and

 

   

fluctuations in the value of any foreign currencies in which battery cell and related raw material purchases are or may be denominated against the U.S. dollar.

Our business is dependent on the continued supply of battery cells for the battery packs used in our vehicles. We may have limited flexibility to immediately change suppliers in the event of any disruption in the supply of those cells, which could then disrupt production of our vehicles. However, we continually leverage relationships with several battery cell suppliers to monitor their developments and assess and characterize their cells.

Semiconductor chips are also an important input component to the electrical architecture of our vehicles, controlling wide aspects of the electric vehicles’ operations. Many of the key semiconductor chips used in our vehicles come from single-source or limited-source suppliers, and therefore a disruption with any one manufacturer or supplier in our supply chain would have an adverse effect on our ability to effectively produce and timely deliver our vehicles. Due to our reliance on these semiconductor chips, we are subject to the risk of shortages and long lead times in their supply. Furthermore, our manufacturers may experience temporary or permanent disruptions in their manufacturing operations due to equipment breakdowns, labor strikes or shortages, natural disasters, component or material shortages, cost increases, acquisitions, insolvency, changes in legal or regulatory requirements, or other similar problems.

 

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In particular, increased demand for semiconductor chips in 2020, due in part to the COVID-19 pandemic and increased demand for consumer electronics that use these chips, has resulted in a severe global shortage of chips in 2021 and 2022, which we expect to continue as a consequence of the continuing COVID-19 pandemic, inflation of raw material costs and the conflict in Ukraine. As a result, our ability to source semiconductor chips used in our vehicles could be adversely affected. This shortage may result in increased chip delivery lead times, delays in the production of our vehicles, and increased costs to source available semiconductor chips. To the extent this semiconductor chip shortage continues, and we are unable to mitigate the effects of this shortage, our ability to deliver sufficient quantities of our vehicles could be adversely affected. In addition, we may be required to incur additional costs and expenses in managing ongoing semiconductor chip shortages, including additional research and development expenses, engineering design and development costs in the event that new suppliers must be onboarded on an expedited basis.

Furthermore, fluctuations or shortages in petroleum and other economic conditions may cause us to experience significant increases in freight charges and material costs. Substantial increases in the prices for our materials or prices charged to us, such as those charged by battery cell or semiconductor chip suppliers, would increase our operating costs and could reduce our margins. For example, due to the recent global semiconductor supply shortage, other supply chain issues including the COVID-19 pandemic and the conflict in Ukraine, and the current inflationary environment in the United States and globally, the cost of input materials, components and processes required to produce our vehicles is expected to increase, and we may need to increase the prices of our vehicles in response to these cost pressures. Price increases and other measures taken by us to offset higher costs could materially and adversely affect our reputation and brand, result in negative publicity and loss of customers and sales, and adversely affect our business, prospects, financial condition and operating results. In addition, a growth in popularity of EVs without a significant expansion in battery cell production capacity could result in shortages which would result in increased materials costs to us, and would impact our projected manufacturing and delivery timelines, and adversely affect our business, prospects, financial condition and operating results.

Leveraging contract manufacturers, including Summit, to manufacture our vehicles is subject to risks, including costs, manufacturing footprint, and manufacturing capabilities. If we are unable to maintain a relationship with Summit to manufacture our vehicles, our manufacturing costs may be adversely affected.

A key financial benefit to our business is our asset-light operating model in which we rely on a contract manufacturer to produce our vehicles. We have secured the experience and expertise of Summit to serve as our long-term contract manufacturing partner to provide manufacturing, procurement, logistics and distribution services for vehicles. If our contract manufacturing agreement terminate or expire, or if Summit fail to perform or meet our expected quality standards, timelines, capacity requirements, costs, manufacturing capabilities or manufacturing footprint, we may need to engage another third-party contract manufacturer or build our own in-house manufacturing capabilities, which could cause us to incur significant cost and expense. As we do not currently have alternate manufacturing arrangements in place, it may take time to transition to another contract manufacturer and there is no guarantee that they would be able to meet our capacity, capability or quality requirements, or otherwise be an effective and acceptable manufacturing solution. Any of the foregoing could adversely affect our business, prospects, financial condition and operating results.

We do not yet have a distribution network and do not have experience distributing directly to consumers. If we are unable to establish or maintain relationships with resellers or other retail partners or our authorized resellers or other retail partners are unable or ineffective in establishing or maintaining relationships with customers for our vehicles, our business may be adversely affected.

We employ a go-to-market business model whereby our revenue is generated by sales through our online platform, authorized resellers and online resellers. We have received approximately 200 reseller applications by authorized resellers globally and have signed multiple letters of intent with certain authorized resellers as of the date of this proxy statement/prospectus. However, all of these arrangements will require renegotiation at later

 

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stages as we begin our global rollout and some or all of these arrangements may be terminated or may not materialize into next-stage contracts or long-term contract arrangements. In addition, we do not currently have arrangements in place that will allow us to fully realize our global expansion plans. If we are unable to enter into acceptable contract arrangements with resellers in a timely manner, or at all, or maintain such arrangements, our business, prospects, financial condition and operating results may be materially and adversely affected.

We will depend on the capability of these retail partners to develop and implement effective retail sales plans to create demand among retail purchasers for our vehicles and related products and services that the retail partners may purchase from us. We intend to provide our retail partners with specific training and programs to assist them in selling our products, but there can be no assurance that these steps will be effective, and that restrictions on travel and other limitations as a result of the COVID-19 pandemic or future events may undermine our efforts to provide training and build relationships. If our retail partners are not able to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers. Our retail partners ability to develop, maintain and strengthen their relationships with customers for vehicles will depend heavily on our ability to provide high-quality vehicles and engage with our customers as intended, as well as the success of our customer development and marketing efforts. See “—Our business and prospects depend significantly on our ability to build the Zapp brand and consumers’ recognition, acceptance, and adoption of the Zapp brand. We may not succeed in continuing to maintain and strengthen the Zapp brand.”

Some of these retail partners may also market, sell and support offerings that may be competitive with ours, may devote more resources to the marketing, sales and support of such competitive offerings or may have incentives to promote other offerings to the detriment of our own. Our retail partners could subject us to lawsuits, potential liability, and reputational harm if, for example, any of our retail partners misrepresents the functionality of our vehicles to customers or violates laws or our or their corporate policies. Our ability to achieve revenue growth in the future will depend, in part, on our success in maintaining successful relationships with our retail partners, identifying additional retail partners, including in new markets, and training our retail partners to independently sell our vehicles. If our retail partners are unsuccessful in selling EVs, or if we are unable to enter into arrangements with or retain a sufficient number of high-quality retail partners in each of the regions in which we sell our vehicles and keep them motivated to sell our vehicles, our business, prospects, financial condition and operating results could be adversely affected.

Furthermore, we intend to deliver our vehicles directly through “Zappers” who are franchised, independent delivery and service agents. We do not have experience in distributing directly to customers nor do we currently have franchisee arrangements in place. Our failure to enter into acceptable franchisee arrangements in a timely manner, or at all, could result in delivery delays and adversely affect our business, prospects, financial condition and operating results.

Our ability to attract, train and retain executives and other qualified employees, including key members of management, is critical to our business, results of operations and future growth.

Our business and future success is substantially dependent on the continued services and performance of our key executives, senior management and personnel, including personnel with relevant experience or expertise in the automotive industries and engineering. Any of these individuals may choose to terminate their employment with us at any time. The loss of the services of any of our key employees or any significant portion of our workforce could disrupt our operations or delay the development, introduction and ramp of our products and services. We cannot assure you that we will be able to retain these employees or find adequate replacements. A lengthy period of time may be required to hire and train replacement personnel when skilled personnel leave us. Our ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees. We may be required to increase our levels of employee compensation more rapidly than in the past to remain competitive in attracting the quality of employees that our business requires. If we do not succeed in attracting well-qualified employees or retaining or motivating existing employees, our business and prospects for growth would be adversely affected.

 

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Employees may leave us or choose other employers over us due to various factors, such as a very competitive labor market for talented individuals with automotive or technology experience, or any negative publicity related to us. In regions where we have or will have operations, there is strong competition for individuals with skill sets needed for our business, including specialized knowledge of EVs, engineering, design and other expertise. We also compete with both mature and prosperous companies that have large financial resources and start-ups and emerging companies that promise short-term growth opportunities.

We expect to incur research and development costs and devote significant resources to developing new products, which could significantly reduce our profitability and may never result in revenue to us.

Our future growth depends on penetrating new markets, adapting existing products to customer requirements, and introducing new products that achieve market acceptance. If we are unable to anticipate technological changes in the industry by introducing new or enhanced products and services in a timely and cost-effective manner, if we fail to introduce products and services that meet market demand, or we do not successfully expand into adjacent markets, we may lose our competitive position, our products may become obsolete, and our business, financial condition or results of operations could be adversely affected.

Our success in these new markets depends on a variety of factors, including but not limited to our ability to develop new products, new product features and services that address the customer requirements for these markets, attract a customer base in markets in which we have less experience, compete with new and existing competitors in these adjacent markets, and gain market acceptance of our new products.

Developing our products is expensive, and the investment in product development may involve a long payback cycle. Our results of operations will be impacted by the timing and size of these investments. These investments may take several years to generate positive returns, if ever.

Additionally, future market share gains may take longer than planned and cause us to incur significant costs. Difficulties in any of our new product development efforts or our efforts to enter adjacent markets could adversely affect our operating results and financial condition.

We may face challenges in expanding our business and operations internationally and our ability to conduct business in markets may be adversely affected by legal, regulatory, political, and economic risks.

Our business plan includes operations in the UK and other countries in Europe, and eventual expansion into other international markets including North America and the Asia Pacific. We will face risks associated with any potential international operations, including possible unfavorable legal, regulatory, political and economic risks, which could harm our business. We anticipate having international operations and subsidiaries that are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions. Furthermore, conducting and launching operations on an international scale requires close coordination of activities across multiple jurisdictions and time zones and consumes significant management resources. We will be subject to a number of risks associated with international business activities that may increase our costs, impact our ability to sell our vehicles and require significant management attention. These risks include:

 

   

conforming our vehicles to various international regulatory requirements where our vehicles are sold and serviced, which requirements may change over time;

 

   

expenditures related to foreign lawsuits and liability;

 

   

difficulties in staffing and managing foreign operations;

 

   

difficulties establishing relationships with, or disruption in the supply chain from, international suppliers;

 

   

difficulties attracting customers in new jurisdictions;

 

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difficulties in attracting effective distributors, dealers or sales agents, as the case may be;

 

   

foreign government taxes, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in jurisdictions where we operate, and foreign tax and other laws limiting our ability to repatriate funds to the Cayman Islands;

 

   

fluctuations in foreign currency exchange rates and interest rates, including risks related to any foreign currency swap or other hedging activities we may undertake;

 

   

government trade policies, restrictions, tariffs and price or exchange controls;

 

   

foreign labor laws, regulations and restrictions;

 

   

changes in diplomatic and trade relationships, including the potential trade war between China and the United States;

 

   

laws and business practices favoring local companies;

 

   

difficulties protecting or procuring intellectual property;

 

   

the adoption of the Zapp brand versus competitive foreign brands;

 

   

political instability, natural disasters, war or events of terrorism and health epidemics, such as the COVID-19 pandemic or the conflict in Ukraine; and

 

   

the strength of international economies.

In addition, our associate in Thailand is subject to restrictions on foreign ownership in Thailand. The laws and regulations in Thailand place restrictions on foreign investment in, control over, management of, ownership of and ability to obtain licenses for entities engaged in a number of business activities. Pursuant to the Thai Foreign Business Operations Act, B.E. 2542 (1999), or the FBOA, a person or entity that is “Non-Thai” (as defined in the FBOA) cannot conduct certain restricted businesses in Thailand, including businesses which could be categorized as “service businesses” that our Thai entity, Zapp Manufacturing, operates, unless an appropriate license is obtained. Mr. Swin Chatsuwan (“Mr. Chatsuwan”), our Co-Founder and CEO, who is a Thai individual, owns 50.98% of the shares in Zapp Manufacturing and Mr. Kiattipong Arttachariya (“Mr. Arttachariya”) and Mrs. Siriwaree Patravanich each hold one share, while we own approximately 49.00%. At present, Thai law requires that a limited company must maintain at least three shareholders at all times. However, if these regulations change or are interpreted different in the future, or if the relevant Thai authorities take the view that the shareholding arrangements of Zapp Manufacturing do not comply with applicable laws and regulations, including the requirements, prohibitions or restrictions on foreign investment and ownership in our lines of business or with respect to necessary registrations, permits or licenses to operate our business, or if these regulations change or are interpreted differently in the future, we may face a range of consequences, including civil and criminal penalties against our local entities and their shareholders, monetary penalties, restrictions or suspension on operations and the need to reorganize our ownership arrangements in Thailand.

If we fail to successfully address these risks, our business, prospects, financial condition and operating results could be materially harmed.

If our vehicle owners modify our vehicles regardless of whether third-party aftermarket products are used, the vehicle may not operate properly, which may create negative publicity and could harm our business.

Automotive enthusiasts may seek to alter our vehicles to modify their performance which could compromise vehicle safety and security systems. Also, customers may customize their vehicles with aftermarket parts that can compromise driver safety. We do not test, nor do we endorse, such changes or products. In addition, customers may attempt to modify our vehicles’ charging systems that can compromise the vehicle systems or expose our customers to injury. Such unauthorized modifications could reduce the safety and security of our vehicles and any injuries resulting from such modifications could result in adverse publicity, which may negatively affect our brand and thus harm our business, prospects, financial condition and operating results.

 

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If we are unable to establish and maintain confidence in our long-term business prospects among customers and analysts and within our industry or are subject to negative publicity, then our business, prospects, financial condition and operating results may suffer materially.

Customers may be less likely to purchase our vehicles if they are not convinced that our business will succeed or that our service and support and other operations will continue in the long-term. Similarly, suppliers and other third parties may be less likely to invest time and resources in developing business relationships with us if they are not convinced that our business will succeed. Accordingly, in order to build and maintain our business, we must maintain confidence among customers, suppliers, analysts, ratings agencies and other parties in our vehicles, long-term financial viability and business prospects. Maintaining such confidence may be complicated by certain factors, including those that are largely outside of our control, such as our limited operating history; customer unfamiliarity with our vehicles and EVP2Ws in general; any delays in scaling production, delivery and service operations to meet demand; competition and uncertainty regarding the future of our vehicles and EVP2Ws in general; and our production and sales performance compared with market expectations.

Our financial results may vary significantly from period to period due to fluctuations in our operating costs, product demand, and other factors.

We expect our period-to-period financial results to vary based on our operating costs and product demand, which we anticipate will fluctuate as we continue to design, develop, produce and distribute new vehicles. Additionally, our revenue from period to period may fluctuate as we build out global distribution, add new product derivates based on market demand and margin opportunities and introduce new or existing EVs to new markets.

Moreover, our revenue from period to period may fluctuate due to seasonality. As a seller of P2Ws, we expect to be impacted by seasonality, primarily by weather. During winter or colder months, sales of vehicles tend to slow while during warmer months, sales increase. In Europe we expect revenue to be higher in the months of March through September, correlating with high deliveries and when we plan to offer most of our potential customer ride experiences. During the months of October through February, we will be focused on order bank building. Such seasonality may cause our revenue to vary from quarter to quarter which can make forecasting more difficult and may adversely affect our ability to predict financial results accurately.

As a result of these factors, we believe that quarter-to-quarter comparisons of our financial results, may not necessarily be meaningful and that these comparisons cannot be relied upon as indicators of future performance. Moreover, our financial results may not meet the expectations of equity research analysts, ratings agencies or investors, who may be focused only on quarterly financial results. If any of this occurs, the trading price of Pubco Ordinary Shares could fall substantially, either suddenly or over time.

We collect and process certain information about our customers and their vehicles and are subject to various privacy and consumer protection laws.

We collect, receive, store, transmit and otherwise process different types of information about or related to a range of individuals, including our customers, website visitors, our employees, job applicants and employees of other companies that we do business with (such as our vendors and suppliers). In addition to the information we collect from our customers to complete a sale or transaction, we may in the future use our vehicles’ onboard electronic systems to capture information about each EV’s use, such as location, charge time, battery usage, mileage and driving behavior, among other things, to aid us in providing services including EV diagnostics, repair, maintenance, insurance, roadside assistance and vehicle emergency services. Our customers may choose not to provide this data, which may harm our business and prospects. Possession and use of our customers’ vehicle use and other information may subject us to legislative and regulatory burdens and risks that could require notification of data breach, restrict our use of such information, and hinder our ability to acquire new

 

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customers or market to existing customers. If customers allege that we have improperly released or disclosed their sensitive personal data, we could face legal claims, lawsuits and reputational harm. If third parties improperly obtain and use sensitive personal data of our customers, we may be required to expend significant resources to resolve these problems.

As we expand our operations internationally, we will be required to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal information in the U.S., Europe, Asia-Pacific and elsewhere. Such regulations may impose additional regulatory obligations regarding the handling of personal information and further provide certain individual privacy rights to persons whose data is processed.

Data protection and privacy-related laws and regulations are evolving and may result in ever increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions. For example, the EU adopted the General Data Protection Regulation (EU) 2016/679 (the “GDPR”). These laws (and other laws that have since been enacted) impose additional regulatory obligations regarding the handling of personal data and further provide certain individual privacy rights to persons whose data is processed by covered organizations.

We are subject to the GDPR and the UK data protection regime consisting primarily of the UK General Data Protection Regulation and the UK Data Protection Act 2018 (together referred to as the “UK GDPR”). The GDPR, the national implementing legislation in EU member states, and the UK GDPR impose stringent data protection requirements, some of which are different from requirements under existing data privacy laws in other jurisdictions.

The GDPR/UK GDPR also generally prohibits the transfer of personal data subject to those regimes outside of the EU/UK unless a lawful data transfer solution has been implemented or a data transfer derogation applies. Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal information from the EU and the UK to other countries. In addition, as supervisory authorities in the EEA and UK continue to issue further guidance relating to the processing of personal information, including the transfer of data, we could suffer additional costs or be subject to complaints or regulatory investigations or fines if there are allegations of non-compliance, and if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results. Loss, retention or misuse of certain information and alleged violations of laws and regulations relating to privacy and data security, and any relevant claims, may expose us to potential liability and may require us to expend significant resources on data security and in responding to and defending such allegations and claims.

We may also become subject to evolving EU and UK privacy laws on cookies and e-marketing. In the EU and the UK, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive may be replaced by an EU regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance. In the EU and the UK, informed consent is required for the placement of most cookies or similar technologies that store information, or access information stored, on a user’s device and for direct electronic marketing. The GDPR also imposes conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. While the text of the ePrivacy Regulation is still under development, a recent European court decision, regulators’ recent guidance and recent campaigns by a not-for-profit organization are driving increased attention to cookies and tracking technologies. There is also a general increasing awareness of how Internet user data is being used by companies, in particular, focused on the use of cookies to collect or aggregate information about Internet users’ online browsing activity. If regulators start to enforce the strict approach in recent guidance, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and

 

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impairments on our marketing and personalization activities, may require significant changes to our business and may negatively impact our efforts to understand users.

Additionally, other countries outside of Europe and the United States, including countries we either operate or may in the future operate within, are considering enacting legislation implementing data protection requirements or imposing cross-border data transfer restrictions or laws requiring local data residency. For example, on May 27, 2019, the Personal Data Protection Act B.E. 2562 (2019) (the “PDPA”) was published in the royal gazette of Thailand. The PDPA came into effect on June 1, 2022. There are uncertainties as to how the PDPA will be implemented in practice and how compliance with the PDPA will affect our operations. Compliance with additional laws and regulations could be expensive and result in significant penalties (for example, fines for certain breaches of the GDPR or the UK GDPR are up to the greater of €20 million/£17.5 million or 4% of total global annual turnover), and may place restrictions on the conduct of our business and the manner in which we interact with our customers. Failure to comply with applicable laws and regulations could result in lawsuits, regulatory enforcement actions against us or other liability. For example, our misuse of or failure to secure personal information could result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, and/or result in significant liability and damage to our reputation and credibility. In addition, we may also face civil claims including representative actions and other class action type litigation (where individuals have alleged to suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm. These possibilities, if borne out, could have a negative impact on revenues and profits. If a third party alleges that we have violated applicable data privacy laws, we could face legal claims and damages as well as reputational harm among consumers, investors, and strategic partners.

Although we make reasonable efforts to comply with all applicable data protection laws and regulations, our interpretations and efforts may have been or may prove to be insufficient or incorrect. We also make public statements about our use and disclosure of personal information through our privacy policy, information provided on our website and other public statements. Although we endeavor to ensure that our public statements are complete, accurate and fully implemented, we may at times fail to do so or be alleged to have failed to do so. We may be subject to potential regulatory or other legal action if such policies or statements are found to be deceptive, unfair or misrepresentative of our actual practices. In addition, from time to time, concerns may be expressed about whether our products and services compromise the privacy of our customers and others. Any concerns about our data privacy and security practices (even if unfounded), or any failure, real or perceived, by us to comply with our posted privacy policies or with any legal or regulatory requirements, standards, certifications or orders or other privacy or consumer protection-related laws and regulations applicable to us, could cause our customers, riders and users to reduce their use of our products and services.

In addition, the regulatory framework for data privacy issues worldwide is currently evolving and is likely to remain uncertain for the foreseeable future, and it is possible that applicable laws and regulations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules, or our practices. Any failure or perceived failure by us to comply with applicable privacy and data security laws and regulations, our privacy policies, or our privacy-related obligations to users or other third parties, or any compromise of security that results in the unauthorized access to or transfer of personal information or other customer data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause our customers and users to lose trust in us, which would have an adverse effect on our reputation and business. We may also incur significant expenses to comply with privacy, consumer protection and security standards and controls imposed by laws, regulations, industry standards or contractual obligations.

Any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of our users’ data, or regarding the manner in which the express or implied consent of users for the use and disclosure of such data is obtained-or in how these applicable laws, regulations or industry practices are interpreted and enforced by state, federal and international privacy regulators-could require us to modify our

 

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services and features, possibly in a material and costly manner, may subject us to legal claims, regulatory enforcement actions and fines, and may limit our ability to develop new services and features that make use of the data that our users voluntarily share with us.

If we fail to offer high-quality customer service covering the delivery and after-sales care of our vehicles, or fail to maintain a superior customer support experience, our business and reputation will suffer.

We aim to provide consumers with a high-quality customer service experience, including providing our customers with the ability to order via our single e-commerce platform and after-sales services. Our services may fail to meet our customers’ expectations, which could adversely affect our business, reputation and results of operations.

We intend to make deliveries and provide after-sale services primarily by franchised, independent service agents, “Zappers.” However, we cannot assure you that we will be able to enter into acceptable arrangements with any such third-party agents. We and our Zappers, have no experience or limited experience in servicing our vehicles. Servicing EVP2Ws is different from servicing ICE vehicles and requires specialized skills, including high voltage training and servicing techniques. There can be no assurance that our after-sale service arrangements will adequately address the service requirements of our customers to their satisfaction, or that we and our franchisees will have sufficient resources to meet these service requirements in a timely manner as the volume of vehicles we deliver increases. Any failure to quickly resolve issues and provide effective support, or a market perception that we do not maintain effective and responsive support, could adversely affect our brand and reputation, our ability to retain customers or sell additional products and services to existing customers, and our business, financial condition, and results of operations.

Our industry and its technology are rapidly evolving and may be subject to unforeseen changes. Developments in alternative technologies or improvements in current and future enabling and competitive technologies, including alternatives to electricity as a fuel source, may adversely affect the demand for our vehicles.

We may be unable to keep up with changes in EV technology or alternatives to electricity as a fuel source and, as a result, our competitiveness may suffer. Developments in alternative technologies, such as advanced diesel, hydrogen, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the ICE or the cost of gasoline, may materially and adversely affect our business and prospects in ways we do not currently anticipate. Existing and other battery cell technologies, fuels or sources of energy may emerge as customers’ preferred alternative to our vehicles. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced alternative fuel vehicles and EVs, which could result in the loss of competitiveness of our vehicles, decreased revenue and a loss of market share to competitors. Our research and development efforts may not be sufficient to adapt to changes in alternative fuel and EV technology. As technologies change, we plan to upgrade or adapt our vehicles with the latest technology. However, our vehicles may not compete effectively with alternative systems if we are not able to source and integrate the latest technology into our vehicles. Additionally, the introduction and integration of new technologies into our vehicles may increase our costs and capital expenditures required for the production and manufacture of our vehicles and, if we are unable to cost efficiently implement such technologies, our business, prospects, financial condition and operating results could be materially and adversely affected.

Our business may suffer if our products or features contain defects or fail to perform as expected. We may choose to or be compelled to undertake product recalls or take other similar actions, which could adversely affect our brand image, business, and results of operations.

If our vehicles or battery packs contain design or manufacturing defects that cause them not to perform as expected or that require repair, our ability to develop, market and sell our products and services may be harmed, and we may experience delivery delays, product recalls, product liability, breach of warranty and consumer

 

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protection claims and significant warranty and other expenses. Although we are protected under back-to-back warranties by our contract manufacturer and all of our suppliers and will maintain warranty reserves to cover warranty-related claims on our vehicles and battery packs once our vehicles enter production, we cannot be certain that the terms of these warranties can sufficiently shield us from potential liabilities when they arise or our reserve will be sufficient to cover future warranty claims.

Furthermore, our vehicles utilizes software in their dashboards, which may contain latent defects or errors or be subject to external attacks. Although we attempt to remedy any issues we observe in our vehicles as effectively and rapidly as possible, such efforts may not be timely, may hamper production or may not completely satisfy our customers. While we perform extensive internal testing on our vehicles and features, we currently have a limited frame of reference by which to evaluate their long-term quality, reliability, durability and performance characteristics when operating in the field. There can be no assurance that we will be able to detect and fix all defects in our vehicles prior to their sale to or installation for customers.

Any product recall in the future, whether initiated by us or a supplier, and whether the product recall involves our or a competitor’s product, may result in adverse publicity, damage our brand image, and adversely affect our business, prospects, financial condition and operating results. Such recalls, whether caused by systems or components engineered or manufactured by us or our suppliers, may involve significant expense, the possibility of lawsuits, and diversion of management’s attention and other resources, which could adversely affect our brand image and our business, prospects, financial condition and operating results.

We are subject to cybersecurity risks to our various systems and software and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent us from effectively operating our business.

We are at risk for interruptions, outages and breaches of (a) operational systems, including business, financial, accounting, product development, data processing or production processes, owned by us or our third-party vendors or suppliers; (b) facility security systems, owned by us or our third-party vendors or suppliers; (c) in-product technology, owned by us or our third-party vendors or suppliers; (d) the integrated software in our vehicles; (e) our website; or (f) customer data that we process or our third-party vendors or suppliers process on our behalf. In addition, we and our third-party vendors or suppliers that host our data may encounter attempted attacks on their networks that may take a variety of forms, including denial of service attacks, infrastructure attacks, botnets, malicious file attacks, cross-site scripting, credential abuse, ransomware, bugs, viruses, worms, and malicious software programs. All of these types of cyber incidents can give rise to a variety of losses and costs, including legal exposure and regulatory fines, damages to reputation, and others. These incidents could also materially disrupt operational systems; result in loss of intellectual property, trade secrets, other proprietary or competitively sensitive information and data generally (including personal information); compromise certain information of customers, employees, suppliers, riders, users or others; harm our reputation or brand; or affect the performance of our in-product technology and the integrated software in our vehicles.

A cyber incident could be caused by disasters, insiders (through inadvertence or with malicious intent) or malicious third parties (including nation-states or nation-state supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, fraud, trickery or other forms of deception. The techniques used by cyber attackers change frequently, are becoming increasingly diverse and sophisticated, and may be difficult to detect for long periods of time. Although we maintain information technology measures designed to protect us against intellectual property theft, data breaches and other cyber incidents, such measures will require updates and improvements, and we cannot guarantee that such measures will be adequate to detect, prevent or mitigate cyber incidents. The implementation, maintenance, segregation and improvement of these systems requires significant management time, support and cost. Moreover, there are inherent risks associated with developing, improving, expanding and updating current systems, including the disruption of our data management, procurement, production execution, finance, supply

 

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chain and sales and service processes. These risks may affect our ability to manage our data and inventory, procure parts or supplies or produce, sell, deliver and service our vehicles and battery solutions, adequately protect our intellectual property or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. We cannot be sure that these systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned. If we do not successfully implement, maintain or expand these systems as planned, our operations may be disrupted, our ability to accurately and timely report our financial results could be impaired, and deficiencies may arise in our internal control over financial reporting, which may impact our ability to certify our financial results. Moreover, our proprietary information, intellectual property or personal information that we hold could be compromised or misappropriated and our reputation may be adversely affected. If these systems do not operate as we expect them to, we may be required to expend significant resources to make corrections or find alternative sources for performing these functions.

A significant cyber incident could impact production capability, disrupt our operations, harm our reputation, cause us to breach our contracts with other parties or subject us to regulatory actions or litigation, any of which could materially affect our business, prospects, financial condition and operating results.

We also work with partners and third-party service providers or vendors that collect, store and process such data on our behalf and in connection with our products and services. There can be no assurance that any security measures that we or our third-party service providers or vendors have implemented will be effective against current or future security threats. While we have developed systems and processes designed to protect the availability, integrity, confidentiality and security of us and our customers’, website visitors’, employees’ and others’ data, our security measures or those of our third-party service providers or vendors could fail and result in security incidents, including unauthorized access to or disclosure, acquisition, encryption, modification, misuse, loss, destruction or other compromise of such data. If a compromise of such data were to occur, we may have liability under our contracts with other parties and under applicable law for damages and incur penalties and other costs to respond to, investigate and remedy such an incident. Various laws require us to provide notice to customers, regulators, or other agencies when certain sensitive information has been compromised as a result of a security breach. There are significant differences between the laws of the various jurisdictions, and as a result compliance in the event of a widespread data breach could be complicated, in addition to being costly. Depending on the facts and circumstances of such an incident, these damages, penalties, fines and costs could be significant. Such an event could harm our reputation and result in litigation against us. Any of these results could materially adversely affect our business, prospects, financial condition and operating results.

Vehicle retail sales depend heavily on affordable interest rates, credit risk, and availability of credit for vehicle financing and a substantial increase in interest rates or decrease in availability of credit could materially and adversely affect our business, prospects, financial condition and operating results.

In certain regions, including Europe and North America, financing for new vehicle sales has been available at relatively low interest rates for several years due to, among other things, expansive government monetary policies. As interest rates rise, market rates for new vehicle financing will generally be expected to rise as well, which may make our vehicles less affordable to customers or steer customers to less expensive vehicles that would be less profitable for us, adversely affecting our financial condition and results of operations. Additionally, if consumer interest rates increase substantially or if financial service providers tighten lending standards or restrict their lending to certain classes of credit, customers may not desire or be able to obtain financing to purchase our vehicles. As a result, a substantial increase in customer interest rates or tightening of lending standards could have a material adverse effect on our business, prospects, financial condition and operating results.

 

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Our vehicles make use of lithium-ion battery cells; lithium-ion battery cells have been observed to catch fire or vent smoke and flame, which could, among other things, cause harm to others, result in property damage and reputational damage, and subject us to lawsuits that could have a negative effect on our financial condition and the battery’s range and life will deteriorate with usage and time.

The battery packs of our vehicles make use of lithium-ion cells. If not properly managed or subject to environmental stresses, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells. While the battery pack is designed to include measures that prevent overheating that would result in such incidents, a field or testing failure of battery packs could occur, which could result in bodily injury or death and could subject us to lawsuits, product recalls or redesign efforts, all of which would be time consuming and expensive and could harm our brand image and results of operation. Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications, the social and environmental impacts of mineral mining or procurement associated with the constituents of lithium-ion cells, or any future incident involving lithium-ion cells, such as a vehicle or other fire, could materially and adversely affect our reputation and business.

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.

We may become subject to product liability claims, which could harm our financial condition and liquidity. The P2W and EVP2W industries experience an abundance of product liability claims. We face the risk of significant monetary exposure to claims in the event our vehicles do not perform as expected or contain design, manufacturing, or warning defects, and to claims without merit, or in connection with malfunctions resulting in personal injury or death. Moreover, a product liability claim could generate substantial negative publicity about our vehicles and business and inhibit or prevent commercialization of other future vehicles, which would have a material adverse effect on our financial condition and liquidity. Any insurance coverage might not be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of our coverage, or outside of our coverage, may have a material adverse effect on our reputation and financial condition and liquidity. We may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if we face liability for our products and are forced to make a claim under our policies.

Our insurance coverage strategy may not be adequate to protect us from all business risks.

We may be subject, in the ordinary course of business, to losses resulting from product liability, accidents, acts of God and other claims against us, for which we may have no insurance coverage. Our policies may include significant deductibles or self-insured retentions, policy limitations and exclusions, and we cannot be certain that our insurance coverage will be sufficient to cover all future losses or claims against us. A loss that is uninsured or which exceeds policy limits may require us to pay substantial amounts, which may harm our financial condition and operating results.

We may be involved in legal proceedings in the ordinary course of our business. If the outcomes of these proceedings are adverse to us, it could have a material adverse effect on our business, results of operations, and financial condition.

We may be involved in various litigation matters from time to time, the outcome of which could have a material adverse effect on our business, prospects, financial condition and operating results. Claims arising out of actual or alleged violations of law could be asserted against us by individuals, either individually or through class actions, by governmental entities in civil or criminal investigations and proceedings or by other entities. These claims could be asserted under a variety of laws, including but not limited to consumer finance laws, consumer protection laws, tort laws, environmental laws, intellectual property laws, privacy laws, labor and employment laws, securities laws and employee benefit laws. We may also become subject to allegations of discrimination or

 

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other similar misconduct, which, regardless of the ultimate outcome, may result in adverse publicity that could harm our brand, reputation and operations. Claims may also arise out of actual or alleged breaches of contract or other actual or alleged acts or omissions by or on behalf of us. These actions could expose us to adverse publicity and to substantial monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties, including but not limited to suspension or revocation of licenses to conduct business. Even if we are successful in defending against legal claims, litigation could result in substantial costs and demand on management resources. See “Information about Zapp—Legal Proceedings.”

We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and noncompliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition, and reputation.

We are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act 2010 (the “U.K. Bribery Act”), and other anti-corruption laws and regulations. The FCPA and the U.K. Bribery Act prohibit us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The U.K. Bribery Act also prohibits non-governmental “commercial” bribery and soliciting or accepting bribes. A violation of these laws or regulations could adversely affect our business, results of operations, financial condition and reputation. Our policies and procedures designed to ensure compliance with these regulations may not be sufficient and our directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be held responsible.

Our business also must be conducted in compliance with applicable economic and trade sanctions laws and regulations, such as those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council and other relevant sanctions authorities. Our global operations expose us to the risk of violating, or being accused of violating, anti-corruption laws and economic and trade sanctions laws and regulations. Our failure to comply with these laws and regulations may expose us to reputational harm as well as significant penalties, including criminal fines, imprisonment, civil fines, disgorgement of profits, injunctions and debarment from government contracts, as well as other remedial measures. Investigations of alleged violations can be expensive and disruptive. Despite our compliance efforts and activities we cannot assure compliance by our employees or representatives for which we may be held responsible, and any such violation could materially adversely affect our reputation, business, prospects, financial condition and operating results.

Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, prospects, financial condition and operating results. In addition, changes in economic sanctions laws in the future could adversely impact our business and investments in Pubco Ordinary Shares.

We and our supply chain partners are subject to numerous regulations. Unfavorable changes to, or failure by us, or our supply chain partners to comply with these regulations could substantially harm our business, prospects, financial condition and operating results.

We and our vehicles, and vehicles in general, as well as our third-party outsourcing partners and our suppliers are or will be subject to substantial regulation under foreign, federal, state and local laws. We continue

 

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to evaluate requirements for licenses, approvals, certificates and governmental authorizations necessary to manufacture, sell, deploy or service our vehicles in the jurisdictions in which we plan to operate and, to the extent we have not already, intend to take such actions necessary to comply. We may experience difficulties in obtaining or complying with various licenses, approvals, certifications and other governmental authorizations necessary to manufacture, sell, deploy or service our vehicles in any of these jurisdictions. If we, our third-party outsourcing partners or our suppliers are unable to obtain or comply with any of the licenses, approvals, certifications or other governmental authorizations necessary to carry out our operations in the jurisdictions in which we or they currently operate, or those jurisdictions in which we or they plan to operate in the future, our business, prospects, financial condition and operating results could be materially adversely affected. We expect to incur significant costs in complying with these regulations. Regulations related to the electric and alternative energy vehicle industry are evolving and we face risks associated with changes to these regulations, including, but not limited to, increased support for other alternative fuel systems, which could have an impact on the acceptance of our vehicles and increased sensitivity by regulators to the needs of established automobile and motorcycle manufacturers, which could lead them to pass regulations that could reduce the compliance costs of such established manufacturers or mitigate the effects of government efforts to promote alternative fuel vehicles.

To the extent the laws change, our vehicles may not comply with or be positioned to take advantage of applicable laws and regulations, which may have an adverse effect on our business. Compliance with changing regulations could be burdensome, time consuming and expensive. To the extent compliance with new regulations is cost prohibitive, our business, prospects, financial condition and operating results could be adversely affected.

We are or may be subject to risks associated with strategic alliances or acquisitions, which could require significant management attention, disrupt the business, dilute shareholder value and adversely affect our operating results.

We may from time to time consider entering into strategic alliances, including joint ventures, minority equity investments or other transactions, with various third parties to further our business purpose. These alliances could subject us to a number of risks, including risks associated with sharing proprietary information, with non-performance by the third party and with increased expenses in establishing new strategic alliances, any of which may materially and adversely affect our business. We may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffers negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.

When appropriate opportunities arise, we may acquire additional assets, products, technologies or businesses that are complementary to our existing business. In addition to possible shareholder approval, we may need approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay and costs, and may disrupt our business strategy if we fail to do so. Furthermore, acquisitions and the subsequent integration of new assets and businesses into our own require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations. Acquired assets or businesses may not generate the financial results we expect. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.

Any financial or economic crisis, or perceived threat of such a crisis, including a significant decrease in consumer confidence, may materially and adversely affect our business, financial condition, and results of operations.

The global macroeconomic environment is facing challenges. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial

 

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authorities of some of the world’s leading economies, including the United States. There have been concerns over the downturn in economic output caused by the COVID-19 pandemic and the conflict in Ukraine. It is unclear whether these challenges will be contained and what effects they each may have. Any prolonged slowdown in economic growth might lead to tighter credit markets, increased market volatility, sudden drops in business and consumer confidence and dramatic changes in business and consumer behaviors. Credit risks of customers and suppliers and other counterparty risks may also increase.

Sales of our vehicles depend in part on discretionary consumer spending and are even more exposed to adverse changes in general economic conditions. In response to their perceived uncertainty in economic conditions, consumers might delay, reduce or cancel purchases of our vehicles and our results of operations may be materially and adversely affected.

We have identified significant deficiencies in our internal control over financial reporting. If we fail to implement and maintain effective internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.

Although we are not yet subject to the certification or attestation requirements of Section 404 of the Sarbanes-Oxley Act, in connection with the audit of our consolidated financial statements as of and for the years ended September 30, 2022 and 2021, our management and our independent registered public accounting firm identified deficiencies such as (a) a lack of formal records relating to internal control procedures, key management estimates and judgments, significant business decisions and the monitoring of related party transactions, (b) a lack of formal inventory management procedures, and (c) a lack of formal review procedures relating to asset impairment and intercompany transactions, that we concluded represented significant deficiencies in our internal control over financial reporting. A deficiency in internal controls exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company’s financial reporting. The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.

While we plan to take measures to remedy these significant deficiencies, we have not yet implemented these measures and cannot predict the success of such measures or the outcome of our assessment of these measures or the time it will take to remedy such deficiencies, assuming we are able to do so. We may incur significant costs in the implementation of such measures, and can give no assurance that these measures will remediate the significant deficiencies in internal control or that additional significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that may lead to a restatement of our financial statements or cause us to fail to meet our reporting obligations. It is important to note that we did not undertake a comprehensive assessment of our internal controls for purposes of identifying and reporting control deficiencies as we will be required to do so after we are a public company. Had we undertaken such an assessment, additional significant deficiencies and/or material weaknesses may have been identified.

Our management may in the future conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it concludes that we have not maintained, in all material respects, effective internal control over financial reporting based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). During the

 

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course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we may identify other weaknesses and deficiencies in our internal control over financial reporting. If we fail to maintain the adequacy of our internal control over financial reporting, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ordinary shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.

After we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. Section 404 of the Sarbanes-Oxley Act requires that Pubco include a report from management on the effectiveness of Pubco’s internal control over financial reporting in Pubco’s annual report on Form 20-F beginning with its second annual report on Form 20-F after becoming a public company. In addition, once Pubco ceases to be an “emerging growth company” as such term is defined in the JOBS Act, Pubco’s independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. We may be unable to timely complete our evaluation testing and any required remediation. In addition, because Pubco will be an “emerging growth company” and intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that Pubco’s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting, any remedial measures that we take to remedy material weaknesses and control deficiencies may not be independently verified by an independent third party.

The growth and expansion of our business may place a significant strain on its operational and financial resources in the future. Further growth of our operations to support its customer base, its platform and its internal controls and procedures may not be adequate to support our operations. As we continue to grow, we may not be able to successfully implement requisite improvements to our internal control systems, controls and processes, such as system access and change management controls, in a timely or efficient manner. Our failure to improve our systems and processes, or their failure to operate in the intended manner, whether as a result of the growth of our business or otherwise, may result in our inability to accurately forecast our revenue and expenses, or to prevent certain losses. Moreover, the failure of our systems and processes could undermine our ability to provide accurate, timely and reliable reports on our financial and operating results and could impact the effectiveness of our internal control over financial reporting.

Unexpected termination of leases, failure to renew the lease of our existing premises or to renew such leases at acceptable terms could materially and adversely affect our business.

We currently lease the premises for our research and development facility, offices and Paris boutique. We cannot assure you that we would be able to renew the relevant lease agreements without substantial additional cost or increase in the rental cost payable by us. If a lease agreement is renewed at a rent substantially higher than the current rate, or currently existing favorable terms granted by the lessor are not extended, our business and results of operations may be adversely affected.

 

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Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results of operations and financial condition.

We may be subject to taxes by tax authorities in the markets in which we operate. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

 

   

allocation of expenses to and among different jurisdictions;

 

   

changes in the valuation of our deferred tax assets and liabilities;

 

   

expected timing and amount of the release of any tax valuation allowances;

 

   

tax effects of share-based compensation;

 

   

costs related to intercompany restructurings;

 

   

changes in tax laws, tax treaties, regulations or interpretations thereof; or

 

   

lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.

In addition, we may be subject to audits of our income, sales and other taxes by foreign and U.S. federal, state, and local taxing authorities. Outcomes from these audits could have an adverse effect on our operating results and financial condition.

As a result of our plans to expand operations, including to jurisdictions in which the tax laws may not be favorable, our tax rate may fluctuate, our tax obligations may become significantly more complex and subject to greater risk of examination by taxing authorities or we may be subject to future changes in tax law, the impacts of which could adversely affect our after-tax profitability and financial results.

Because we do not have a long history of operating at our present scale and we have significant expansion plans, our effective tax rate may fluctuate in the future. Future effective tax rates could be affected by our operating results before taxes, changes in the composition of operating income and earnings in countries or jurisdictions with differing tax rates, including as we expand into additional jurisdictions, changes in deferred tax assets and liabilities, changes in accounting and tax standards or practices, changes in tax laws, changes in the tax treatment of share-based compensation, and our ability to structure our operations in an efficient and competitive manner.

Due to the complexity of multinational tax obligations and filings, we may have a heightened risk related to audits, examinations or administrative appeals by taxing authorities. Outcomes from current and future tax audits, examinations or administrative appeals could have an adverse effect on our after-tax profitability and financial condition. Additionally, several tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangibles. Tax authorities could disagree with our intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. If we do not prevail in any such disagreements, our profitability may be affected.

Our after-tax profitability and financial results may also be adversely impacted by changes in the relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect. For example, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS recently entered into force among the jurisdictions that have ratified it. Additionally, many countries and organizations, such as the Organization for Economic Cooperation and Development, are also actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business. These recent changes and proposals could negatively impact our taxation, especially as we expand our relationships and operations internationally.

 

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We may seek to obtain future financing through the issuance of debt or equity, and such financing may not be available on commercially reasonable terms or at all, which may have an adverse effect on our shareholders or may otherwise adversely affect our business.

If we raise funds through the issuance of additional equity or debt, including convertible debt or debt secured by some or all of our assets, holders of any debt securities or preferred shares issued will have rights, preferences and privileges senior to those of holders of our ordinary shares in the event of liquidation. If additional debt is issued, there is a possibility that once all senior claims are settled, there may be no assets remaining to pay out to the holders of ordinary shares. In addition, if we raise funds through the issuance of additional equity, whether through private placements or public offerings, such an issuance would dilute ownership of our current shareholders that do not participate in the issuance. There can be no assurance that, we will be able to obtain debt financing or access the capital markets in a timely manner and on terms that are acceptable to us or at all. If we are unable to obtain any needed additional funding, we may be required to reduce the scope of, delay or eliminate some or all of, our planned research, development, production and marketing activities, any of which could materially harm our business.

Furthermore, the terms of any additional debt securities we may issue in the future may impose restrictions on our operations, which may include limiting our ability to incur additional indebtedness, pay dividends on or repurchase our share capital or make certain acquisitions or investments. In addition, we may be subject to covenants requiring us to satisfy certain financial tests and ratios, and our ability to satisfy such covenants may be affected by events outside of our control.

We may grant options and other types of awards under our share incentive plan, which may result in increased share-based compensation expenses.

We have granted and intend to grant share-based compensation to employees, directors and consultants to incentivize their performance and align their interests with ours. We believe the granting of share-based compensation may be important to our ability to attract and retain key personnel and employees, and we will evaluate whether to grant additional share-based compensation to employees in the future. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our operating results.

We may be unable to complete ESG initiatives, in whole or in part, which could lead to less opportunity for us to have ESG investors and partners and could negatively impact ESG-focused investors when evaluating our business.

There has been increased focus, including by consumers, investors, employees and other shareholders, as well as by governmental and non-governmental organizations, on environmental, social and governance matters generally and with regard to our industry specifically. We have undertaken, and plan to continue undertaking, ESG initiatives. Any failure by us to meet our commitments or loss of confidence on the part of customers, investors, employees, brand partners and other shareholders as it relates to our ESG initiatives could negatively impact our brand, our business, prospects, financial condition and operating results. These impacts could be difficult and costly to overcome, even if such concerns were based on inaccurate or misleading information.

In addition, achieving our ESG initiatives may result in increased costs in our supply chain, fulfillment, and/or corporate business operations, and could deviate from our initial estimates and have a material adverse effect on our business and financial condition. In addition, standards and research regarding ESG initiatives could change and become more onerous both for us and our third-party suppliers and vendors to meet successfully. Evolving data and research could undermine or refute our current claims and beliefs that we have made in reliance on current research, which could also result in costs, a decrease in revenue, and negative market perception that could have a material adverse effect on our business and financial condition.

A variety of organizations measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized. In addition, investment in funds that specialize in companies that

 

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perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of such ESG measures to their investment decisions. Topics taken into account in such assessments include, among others, the company’s efforts and impacts on climate change and human rights, ethics and compliance with law and the role of the company’s board of directors in supervising various sustainability issues. In light of investors’ increased focus on ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet society’s ESG expectations or achieve our financial goals.

Finally, while we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith. Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved in measuring and reporting on many ESG matters.

Certain data and information in this presentation were obtained from third-party sources and were not independently verified by us. Accordingly, you should not place undue reliance on such information.

Industry data, projections and estimates in this proxy statement/prospectus are subject to inherent uncertainty as they necessarily require certain assumptions and judgments. Certain facts, forecasts and other statistics relating to the industries in which we compete have been derived from various public data sources and other third-party industry reports and surveys. The industries that we operate in may not grow at the rate projected by market data, or at all. Any failure of the industries that we operate in to grow at the projected rate may have a material adverse effect on our business, financial condition and results of operations. Furthermore, if any one or more of the assumptions underlying the market data is later found to be incorrect, actual results may differ from the projections based on these assumptions. Data and information contained in such third-party publications and reports may be collected using third-party methodologies, which may differ from the data collection methods used by us. In addition, these industry publications and reports generally indicate that the information contained therein is believed to be reliable, but do not guarantee the accuracy and completeness of such information.

Our business prospects, financial condition and operating results may be adversely affected by pandemics (including COVID-19) and epidemics, natural disasters, actual or threatened war (including the conflict in Ukraine), terrorist activities, political unrest, and other outbreaks.

We face various risks related to public health issues, including epidemics, pandemics and other outbreaks, including the recent pandemic of respiratory illness caused by a novel coronavirus known as COVID-19 and associated variants. We also face various risks related to natural disasters, including hurricanes, earthquakes, tsunamis or other natural disasters. Such public health issues or natural disasters could disrupt our business operations, reduce or restrict our supply of materials and services, result in us incurring significant costs to protect our employees and facilities or result in regional or global economic distress, which may materially and adversely affect our business, financial condition and operating results. Actual or threatened war, including the conflict in Ukraine, terrorist activities, political unrest, civil strife and other geopolitical uncertainty could have a similar adverse effect on our business, prospects, financial condition and operating results. Any one or more of these events may impede our production and delivery efforts and adversely affect our sales results, which could materially and adversely affect our business, financial condition and operating results.

The impact of COVID-19 and associated variants, including changes in consumer and business behavior, pandemic fears, market downturns and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. The spread of COVID-19 and associated variants (some of which may be more transmissible, such as the Delta and Omicron variants) has also created a disruption in the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers and has led to a global decrease in vehicle sales in markets around the world.

 

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The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders and business shutdowns. These measures may adversely impact our employees and operations, the operations of our suppliers, vendors and business partners, the activities of our retail customers and may negatively impact our production plans, sales and marketing activities, business and results of operations. In addition, various aspects of our business cannot be conducted remotely. These measures by government authorities may remain in place for a significant period of time and they are likely to continue to adversely affect our sales and marketing activities, and our business, prospects, financial condition and operating results. There is no certainty that actions we take as may be required by government authorities or that we determine is in the best interests of our employees, customers, suppliers, vendors and business partners will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities. If significant portions of our workforce are unable to work effectively, including due to illness, quarantines, social distancing, government actions or other restrictions in connection with the COVID-19 pandemic, our operations may be adversely impacted.

The extent to which the COVID-19 pandemic impacts our business, prospects, financial condition and operating results will depend on future developments, which are highly uncertain and cannot be predicted, including the duration and spread of the pandemic, its severity, the existence and severity of COVID-19 variants, the actions to contain the virus or treat its impact (including the availability of vaccines and the speed and extent of vaccine distribution and acceptance), how quickly and to what extent normal economic and operating activities can resume and whether and to what extent COVID-19 or variants thereof, including the Delta and Omicron variant which has become widespread globally, re-emerge, spread and impact us and our suppliers after normal activities resume. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of its global economic impact, including any recession that has occurred or may occur in the future.

Specifically, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment, or a decline in consumer confidence as a result of the COVID-19 pandemic and the conflict in Ukraine could have a material adverse effect on the demand for our vehicles. Under difficult economic conditions, potential customers may seek to reduce spending by forgoing our vehicles for other traditional options, increase use of public and mass transportation options or choose to keep their existing vehicles.

There are no comparable recent events that may provide guidance as to the effect of the spread and duration of COVID-19 (and associated variants) and pandemics in general, and, as a result, the ultimate impact of the COVID-19 pandemic or other pandemics is highly uncertain.

We are also vulnerable to natural disasters and other calamities. Although we use third party service providers to host our data offsite, our backup system does not capture data on a real-time basis and we may be unable to recover certain data in the event of a server failure. We cannot assure you that any backup systems will be adequate to protect us from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, damage to our property, delays in production, breakdowns, system failures, technology platform failures or Internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our business, prospects, financial condition and operating results.

We may need to defend ourselves against intellectual property right infringement claims, which may be time-consuming and would cause us to incur substantial costs. We may incur significant costs and expenses in connection with protecting and enforcing its intellectual property rights, including through litigation.

Companies, organizations, or individuals, including our competitors, may currently hold or obtain in the future patents, trademarks or other proprietary or intellectual property that would prevent, limit or interfere with our ability to make, use, develop, sell or market our vehicles, components or other goods and services, which

 

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could make it more difficult for us to operate our business. From time to time, we may receive communications from holders of patents, trademarks, trade secrets or other intellectual property or proprietary rights alleging that we are infringing, misappropriating, diluting or otherwise violating such rights. Such parties may bring suits against us alleging infringement or other violation of such rights, or otherwise assert their rights and urge us to take licenses to their intellectual property. While we try to avoid infringing the rights of others, we may unknowingly do so. In the event that a claim relating to intellectual property is asserted against us, our suppliers or our third-party licensors, or if third parties not affiliated with us hold patents that relate to our products or technology, we may need to seek licenses to such intellectual property or seek to challenge those patents. Even if we are able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us. In addition, we may be unable to obtain these licenses on commercially reasonable terms, if at all, and our challenge of third-party patents may be unsuccessful. Litigation or other legal proceedings relating to intellectual property claims, regardless of merit, may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. Further, if we are determined to have infringed upon a third party’s intellectual property, we may be required to do one or more of the following:

 

   

cease selling, incorporating certain components into, or using vehicles or offering goods or services that incorporate or use the intellectual property that we allegedly infringe, misappropriate, dilute or otherwise violate;

 

   

pay substantial royalty or license fees or other damages;

 

   

seek a license from the holder of the allegedly infringed intellectual property, which license may not be available on reasonable terms, or at all;

 

   

redesign or reengineer our vehicles or other technology, goods or services, which may be costly, time-consuming or impossible; or

 

   

establish and maintain alternative branding for our products and services.

In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property on acceptable terms, our business, prospects, financial condition and operating results could be materially and adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

If we are unable to maintain, protect or enforce our rights in our proprietary technology, brands or other intellectual property, our competitive advantage, business, financial condition and results of operations could be harmed.

Our failure to obtain or maintain adequate protection of, or prevent others from unauthorized use of, our intellectual property could harm our competitive advantage, business, financial condition and results of operations. We rely on a combination of patent, trade secret, trademark and other intellectual property laws, employee and third-party nondisclosure agreements, intellectual property licenses, and other contractual rights, to establish and protect our rights in our technology and intellectual property.

We have applied for patent protection relating to certain of our existing and proposed products. However, we cannot assure you that any of our patent applications will issue as patents, or if they do issue, that they will be of sufficient scope or strength to provide our technologies with any meaningful protection or our business with any commercial protection. Further, once issued, the patents we own could be challenged, invalidated or circumvented by others. Further, we cannot assure you that competitors will not infringe our patents, or that we will have adequate resources to enforce our patents.

We also rely on unpatented proprietary technology. It is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology. To protect our trade secrets

 

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and other proprietary information, our policy is to require that relevant employees, consultants, advisors and collaborators enter into confidentiality agreements. We cannot assure you that these agreements will provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. If we are unable to maintain the proprietary nature of our technologies, our competitive position, business, financial condition and results of operations could be harmed.

We rely on our trademarks, trade names, and brand names to distinguish our products from those of our competitors, and have registered or applied to register certain of these trademarks. We cannot assure you that our trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of our trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing new brands. Further, we cannot assure you that competitors will not infringe our trademarks, or that we will have adequate resources to enforce our trademarks.

Despite our efforts to protect our intellectual property, third parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that our intellectual property is invalid or unenforceable, or that they do not infringe upon our intellectual property. Monitoring unauthorized use of our intellectual property is difficult and costly, and the steps we have taken or may take in the future in an effort to prevent infringement or misappropriation may not be successful. From time to time, we may have to resort to litigation to enforce our intellectual property, which could result in substantial costs and diversion of our resources. We have registered the “Zapp” logo as trademarks in the UK and EU, as well as certain other jurisdictions that we anticipate expanding into. Additionally we are the registered proprietors of the registered EU and UK trademarks for the word mark “ZAPP.” We have been involved in a number of opposition proceedings in the relevant intellectual property offices in the UK and certain countries in Europe regarding third parties’ registrations of the Zapp name as a trademark. As of the date of this proxy statement/prospectus, we have threatened legal action against a UK-based entity due to their alleged infringing use of a logo containing the word “Zapp” in the UK in connection with their business, as well as on their vehicles and numerous other items upon which the logo appears. We have also filed opposition proceedings against their trademark applications for such logo in the UK. If we are unable to resolve such dispute in an amicable manner or on terms acceptable to us, the value of our trade mark could diminish and we may be required to litigate to protect our intellectual property rights, which may be expensive, could cause a diversion of resources, and may not be successful, even when our rights have been infringed, misappropriated, or otherwise violated.

Patent, trademark, trade secret and other intellectual property laws vary significantly throughout the world. Further, policing the unauthorized use of our intellectual property in foreign jurisdictions may be costly, difficult or even impossible. Failure to adequately protect our intellectual property could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue which would adversely affect our business, prospects, financial condition and operating results.

Our use of “open source” software could subject our proprietary software to general release, adversely affect our ability to sell our products and services, and subject us to possible litigation, claims or proceedings.

We use open source software in connection with the development and deployment of our products and services, and we expect to continue to use open source software in the future. Companies that use open source software in connection with their products have, from time to time, faced claims challenging the use of open source software and/or compliance with open source license terms. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source licensing terms. Some open source software licenses may require users who distribute proprietary software containing or linked to open source software to publicly disclose all or part of the source code to such proprietary software and/or make available any derivative works of the open source code under the same open source license, which could include proprietary source code. In such cases, the open source software license may

 

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also restrict us from charging fees to licensees for their use of our software. While we monitor the use of open source software and try to ensure that open source software is not used in a manner that would subject our proprietary source code to these requirements and restrictions, such use could inadvertently occur, in part because open source license terms are often ambiguous and have generally not been interpreted by U.S. or foreign courts.

We will depend initially on revenue generated from one model of the EVP2W, and in the foreseeable future, we will continue to be significantly dependent on a limited number of models.

Initially, our business will depend substantially on the sales and success of the i300, which is our only model in production. For the foreseeable future, we will depend on revenue generated from a limited number of models. Historically, motorcycle customers have come to expect a variety of vehicle models offered in a company’s fleet and new and improved vehicle models to be introduced frequently. Given that for the foreseeable future our business will depend on a limited number of models, to the extent a particular model is not well received by the market, our sales volume, business, prospects, financial condition and operating results could be materially and adversely affected.

The unavailability, reduction or elimination of government and economic incentives or government policies which are favorable for EVs or the imposition of new or additional regulations, including local, municipal or country-specific regulations, on EVs or components contained in our vehicles could have a material adverse effect on our business, prospects, financial condition and operating results.

Any reduction, elimination, ineligibility, unavailability or discriminatory application of government subsidies, favorable trade policies and free trade agreements and economic incentives that we currently or expect to receive because of policy changes, or the reduced need for such subsidies and incentives due to the perceived success of the EV or other reasons, may result in the diminished competitiveness of the alternative fuel and EV industry generally or our vehicles in particular. Conversely, applicable laws and regulations, including local, municipal or country-specific laws and regulations, may impose additional barriers to EV adoption, including additional costs. Any of the foregoing could materially and adversely affect the growth of the alternative fuel P2W markets and our business, prospects, financial condition and operating results.

While certain tax credits and other incentives for alternative energy production, alternative fuel, and EVs have been available in the past, there is no guarantee these programs will be available in the future. If current tax incentives are not available in the future, our business, prospects, financial condition and operating results could be harmed.

Fluctuations in foreign currency exchange rates will affect our financial results, which we report in U.S. Dollars.

We operate in multiple jurisdictions and plan to expand to additional jurisdictions, which exposes us to the effects of fluctuations in currency exchange rates. We expect to earn revenue denominated in Pounds Sterling, Euros and U.S. dollars, among other currencies, while some of our costs and expenses are also paid in other foreign currencies, including Thai Baht. Fluctuations in the exchange rates between the various currencies that we use could result in expenses being higher and revenue being lower than would be the case if exchange rates were stable or if we were operating and reporting in one currency. We have not but may in the future choose to enter into hedging arrangements to manage foreign currency translation, but such activity may not completely eliminate fluctuations in our operating results due to currency exchange rate changes. Hedging arrangements are inherently risky, and could expose us to additional risks that could adversely affect our business, prospects, financial condition and operating results. We cannot assure you that movements in foreign currency exchange rates will not have a material adverse effect on our results of operations in future periods.

 

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Risks Related to Ownership of Pubco Securities

Nasdaq may not list the Pubco Ordinary Shares, which could limit investors’ ability to transact in Pubco Ordinary Shares and could subject Pubco to additional trading restrictions.

Pubco intends to apply to have the Pubco Ordinary Shares listed on Nasdaq upon consummation of the Business Combination. Pubco will be required to meet the initial listing requirements to be listed. Pubco may not be able to meet those initial listing requirements. Even if the Pubco Ordinary Shares are so listed, it may be unable to maintain the listing of such securities in the future.

If Pubco fails to meet the initial listing requirements and Nasdaq does not list the Pubco Ordinary Shares, and if the related closing condition is waived by the parties in order to consummate the Business Combination, thereafter Pubco could face significant material adverse consequences, including a limited availability of market quotations for the Pubco Ordinary Shares, a limited amount of news and analyst coverage on the company, and a decreased ability to issue additional Pubco Ordinary Shares or obtain additional financing in the future.

Concentration of ownership among our existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions.

As of the closing of the Business Combination, our directors, executive officers and their affiliates as a group beneficially own approximately 33.3% of the issued and outstanding Pubco Ordinary Shares (assuming no redemptions by CIIG II stockholders). As a result, these shareholders will be able to exercise a significant level of control over all matters requiring shareholder approval, including the election of directors, any amendment of the articles of association and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control or changes in management and will make the approval of certain transactions difficult or impossible without the support of these shareholders.

The market price and trading volume of the Pubco Ordinary Shares may be volatile and could decline significantly following the Business Combination.

The stock markets, including Nasdaq on which Pubco intends to list the Pubco Ordinary Shares to be issued in the Business Combination, have from time to time experienced significant price and volume fluctuations. Even if an active, liquid and orderly trading market develops and is sustained for the Pubco Ordinary Shares following the Business Combination, the market prices of the Pubco Ordinary Shares may be volatile and could decline significantly. In addition, the trading volumes in the Pubco Ordinary Shares may fluctuate and cause significant price variations to occur. If the market prices of the Pubco Ordinary Shares decline significantly, you may be unable to resell your Pubco Ordinary Shares at or above the market price of the Pubco Ordinary Shares as of the date immediately following the consummation of the Business Combination. There can be no assurance that the market prices of the Pubco Ordinary Shares will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:

 

   

the realization of any of the risk factors presented in this proxy statement/prospectus;

 

   

actual or anticipated differences in our estimates, or in the estimates of analysts, for Pubco’s revenues, results of operations, cash flows, liquidity or financial condition;

 

   

announcements by Pubco or its competitors of significant business developments;

 

   

changes in customers;

 

   

acquisitions or expansion plans;

 

   

Pubco’s involvement in litigation;

 

   

sale of Pubco Ordinary Shares or other securities in the future;

 

   

market conditions in Pubco’s industry;

 

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changes in key personnel;

 

   

the trading volume of Pubco Ordinary Shares;

 

   

actual, potential or perceived control, accounting or reporting problems;

 

   

changes in accounting principles, policies and guidelines;

 

   

other events or factors, including but not limited to those resulting from infectious diseases, health epidemics and pandemics (including but not limited to the ongoing COVID-19 pandemic), natural disasters, war, acts of terrorism or responses to these events; and

 

   

general economic and market conditions.

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

We do not know whether a market will develop for the Pubco Ordinary Shares or what the market price of the Pubco Ordinary Shares will be and, as a result, it may be difficult for holders of Pubco Ordinary Shares to sell their Pubco Ordinary Shares.

Before this offering, there was no public trading market for Pubco Ordinary Shares. Although we have applied to list the Pubco Ordinary Shares on the Nasdaq, an active trading market for the Pubco Ordinary Shares may never develop or be sustained following this offering. If a market for the Pubco Ordinary Shares does not develop or is not sustained, it may be difficult for holders of Pubco Ordinary Shares to sell their Pubco Ordinary Shares at an attractive price, if at all. This risk will be exacerbated if there is a high level of redemptions of CIIG II Public Shares in connection with the closing of the Business Combination.

There will be material differences between your current rights as a holder of CIIG II Class A Common Stock and the rights one will have as a holder of Pubco Ordinary Shares, some of which may adversely affect you.

Upon completion of the Business Combination, CIIG II stockholders will no longer be stockholders of CIIG II, but will be shareholders of Pubco. There will be material differences between the current rights of CIIG II stockholders and the rights you will have as a holder of the Pubco Ordinary Shares, some of which may adversely affect you. For a more detailed discussion of the differences in the rights of CIIG II stockholders and the Pubco shareholders, see the section of this proxy statement/prospectus titled “Comparison of Rights of Pubco Shareholders and CIIG II Stockholders.”

Upon completion of the Business Combination, CIIG II stockholders will become Pubco shareholders, CIIG II warrant holders will become holders of Pubco Public Warrants and the market price for the Pubco Ordinary Shares may be affected by factors different from those that historically have affected CIIG II securities.

Upon completion of the Business Combination, CIIG II stockholders will become Pubco shareholders and CIIG II’s warrant holders will become holders of Pubco Public Warrants, which may be exercised to acquire Pubco Ordinary Shares. Pubco’s business will materially differ from that of CIIG II, and, accordingly, the results of operations of Pubco will be affected by numerous factors that are different from those currently affecting the results of operations of CIIG II. CIIG II is a special purpose acquisition company incorporated in Delaware that is not engaged in any operating activity, directly or indirectly. Pubco is a holding company incorporated as an exempt company in the Cayman Islands and, after the consummation of the Business Combination, its subsidiaries will be engaged in the businesses of Zapp. Pubco’s business and results of operations will be

 

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affected by regional, country and industry risks and operating risks to which CIIG II was not exposed. For a discussion of the future business of Pubco currently conducted and proposed to be conducted by Zapp, see the sections of this proxy statement/prospectus titled “Information about Zapp” and “Risk Factors—Risks Related to Zapp’s Business and Industry.”

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

We have the ability to redeem outstanding warrants (other than the Private Placement Warrants) at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our shares equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in this offering. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants.

In addition, we have the ability to redeem the outstanding warrants (including the Private Placement Warrants) at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, provided that the last reported sales price of our shares equals or exceeds $10.00 per share and is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met, including that holders will be able to exercise their warrants on a “cashless” basis prior to redemption for a number of shares of Class A common stock determined based on the redemption date and the fair market value of the shares. The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of shares received is capped at 0.361 shares per whole warrant (subject to adjustment) irrespective of the remaining life of the warrants.

For context regarding the thresholds above, historical trading prices for our shares of Class A Common Stock have varied between a low of approximately $         per share in             , to a high of approximately $         per share in             . For illustrative purposes, the closing price of CIIG II Class A Common Stock was $         on Nasdaq on             , the record date for the special meeting of stockholders.

Notice of redemption shall be mailed by first class mail, postage prepaid, by us not less than thirty (30) days prior to the Redemption Date to the registered holders of the public warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered holder received such notice. In addition, beneficial owners of the warrants will be notified of such redemption by our posting of the redemption notice to DTC.

 

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Pubco Public Warrants will become exercisable for Pubco Ordinary Shares, which would increase the number of shares eligible for future resale in the public market and result in dilution to its shareholders.

Pubco Public Warrants to purchase an aggregate of 26,437,500 Pubco Ordinary Shares (not including any Working Capital Warrants or extension loan warrants that may be issued as described further herein) will become exercisable in accordance with the terms of the Assignment, Assumption and Amendment Agreement and the existing Warrant Agreement governing those securities. Assuming the Business Combination closes, these warrants will become exercisable 30 days after the completion of the Business Combination. The exercise price of these warrants will be $11.50 per share. To the extent such warrants are exercised, additional Pubco Ordinary Shares will be issued, which will result in dilution to the holders of Pubco Ordinary Shares and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of Pubco Ordinary Shares.

In addition, under the Novation, Assumption and Amendment Agreement, all Zapp Warrants outstanding immediately prior to the closing shall cease to be warrants with respect to Zapp Ordinary Shares and be assumed by Pubco and converted into 3,482,158 Pubco Exchange Warrants to be issued by Pubco to purchase 3,482,158 Pubco Ordinary Shares at an exercise price per Pubco Ordinary Share equal to: (i) $0.77 in relation to 2,321,439 Pubco Exchange Warrants; and (ii) $4.41 in relation to 1,160,719 Pubco Exchange Warrants, in each case subject to certain adjustments set forth in the Assignment, Assumption and Amendment Agreement. To the extent such warrants are exercised, additional Pubco Ordinary Shares will be issued, which will result in dilution to the holders of Pubco Ordinary Shares and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of Pubco Ordinary Shares.

If securities or industry analysts do not publish research, publish inaccurate or unfavorable research or cease publishing research about Pubco, its share price and trading volume could decline significantly.

The trading market for Pubco Ordinary Shares will depend, in part, on the research and reports that securities or industry analysts publish about Pubco or its business. Pubco may be unable to sustain coverage by well-regarded securities and industry analysts. If either none or only a limited number of securities or industry analysts maintain coverage of Pubco, or if these securities or industry analysts are not widely respected within the general investment community, the demand for Pubco Ordinary Shares could decrease, which might cause its share price and trading volume to decline significantly. In the event that Pubco obtains securities or industry analyst coverage or, if one or more of the analysts who cover Pubco downgrade their assessment of Pubco or publish inaccurate or unfavorable research about Pubco’s business, the market price and liquidity for Pubco Ordinary Shares could be negatively impacted.

The requirements of being a public company may strain Pubco’s resources, divert Pubco management’s attention and affect Pubco’s ability to attract and retain qualified board members.

Pubco will incur additional legal, accounting and other expenses following completion of the Business Combination. Pubco will be subject to the reporting requirements of the Securities Exchange Act of 1934, the Sarbanes-Oxley Act, the Dodd-Frank Act, the Nasdaq listing requirements and other applicable securities rules and regulations. These expenses may increase even more if Pubco no longer qualifies as an “emerging growth company,” as defined in Section 2(a) of the Securities Act. The Exchange Act requires, among other things, that Pubco file annual and current reports with respect to its business and operating results. The Sarbanes-Oxley Act requires, among other things, that Pubco maintains effective disclosure controls and procedures and internal control over financial reporting. Pubco may need to hire more employees post-Business Combination or engage outside consultants to comply with these requirements, which will increase its post-Business Combination costs and expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some

 

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activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Pubco expects these laws and regulations to increase its legal and financial compliance costs after the Business Combination and to render some activities more time-consuming and costly, although Pubco is currently unable to estimate these costs with any degree of certainty.

Pubco’s management team has limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. Pubco’s management team may not successfully or efficiently manage the transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and regulations and the continuous scrutiny of securities analysts and investors. The need to establish the corporate infrastructure demanded of a public company may divert the management’s attention from implementing its growth strategy, which could prevent Pubco from improving its business, financial condition and results of operations. Furthermore, Pubco expects these rules and regulations to make it more difficult and more expensive for Pubco to obtain director and officer liability insurance, and consequently Pubco may be required to incur substantial costs to obtain such coverage. These additional obligations could have a material adverse effect on its business, financial condition, results of operations and prospects. These factors could also make it more difficult for Pubco to attract and retain qualified members of its board of directors, particularly to serve on Pubco’s audit committee, remuneration committee and nominating committee, and qualified executive officers.

As a result of disclosure of information in this proxy statement/prospectus and in filings required of a public company, Pubco’s business and financial condition will become more visible, which may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, Pubco’s business and operating results could be adversely affected, and, even if the claims do not result in litigation or are resolved in Pubco’s favor, these claims, and the time and resources necessary to resolve them, could have an adverse effect on its business, financial condition, results of operations and prospects.

Pubco will be an “emerging growth company” and it cannot be certain if the reduced SEC reporting requirements applicable to emerging growth companies will make Pubco’s Ordinary Shares less attractive to investors, which could have a material and adverse effect on Pubco, including its growth prospects.

Upon consummation of the Business Combination, Pubco will be an “emerging growth company” as defined in the JOBS Act. Pubco will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Business Combination, (b) in which Pubco has total annual gross revenue of at least $1.235 billion or (c) in which Pubco is deemed to be a large accelerated filer, which means the market value of Pubco Ordinary Shares held by non-affiliates exceeds $700 million as of the last business day of Pubco’s prior second fiscal quarter, and (ii) the date on which Pubco issued more than $1.0 billion in non-convertible debt during the prior three-year period. Pubco intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as “emerging growth companies,” including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that Pubco’s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting and reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Furthermore, even after Pubco no longer qualifies as an “emerging growth company,” as long as Pubco continues to qualify as a foreign private issuer under the Exchange Act, Pubco will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including, but not limited to, the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of

 

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a security registered under the Exchange Act; the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, and current reports on Form 8-K, upon the occurrence of specified significant events. In addition, Pubco will not be required to file annual reports and financial statements with the SEC as promptly as U.S. domestic companies whose securities are registered under the Exchange Act, and are not required to comply with Regulation FD, which restricts the selective disclosure of material information.

As a result, Pubco shareholders may not have access to certain information they deem important. Pubco cannot predict if investors will find Pubco Ordinary Shares less attractive because it relies on these exemptions. If some investors do find Pubco Ordinary Shares less attractive as a result, there may be a less active trading market and share price for Pubco Ordinary Shares may be more volatile.

Pubco will qualify as a foreign private issuer within the meaning of the rules under the Exchange Act, and as such Pubco is exempt from certain provisions applicable to United States domestic public companies.

Because Pubco will qualify as a foreign private issuer under the Exchange Act immediately following the consummation of the Business Combination, Pubco is exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: (i) the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q and current reports on Form 8-K with the SEC; (ii) the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; (iii) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iv) the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

Pubco will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information Pubco is required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. Accordingly, after the Business Combination, if you continue to hold Pubco Ordinary Shares, you may receive less or different information about Pubco than you currently receive about CIIG II or that you would receive about a U.S. domestic public company.

The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to Pubco on March 31, 2023.

In the future, Pubco could lose its status as a foreign private issuer under current SEC rules and regulations if more than 50% of Pubco’s outstanding voting securities become directly or indirectly held of record by U.S. holders and any one of the following is true: (i) the majority of Pubco’s directors or executive officers are U.S. citizens or residents; (ii) more than 50% of Pubco’s assets are located in the United States; or (iii) Pubco’s business is administered principally in the United States. If Pubco loses its status as a foreign private issuer in the future, it will no longer be exempt from the rules described above and, among other things, will be required to file periodic reports and annual and quarterly financial statements as if it were a company incorporated in the United States. If this were to happen, Pubco would likely incur substantial costs in fulfilling these additional regulatory requirements, including costs related to the preparation of financial statements in accordance with U.S. GAAP, and members of Pubco’s management would likely have to divert time and resources from other responsibilities to ensuring these additional regulatory requirements are fulfilled.

 

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Zapp currently reports and Pubco will report financial results under IFRS, which differs in certain significant respect from U.S. GAAP.

Zapp currently reports and Pubco will report financial results under IFRS. There are and there may in the future be certain significant material differences between IFRS and U.S. GAAP. As a result, financial information and reported earnings of Zapp and Pubco for historical or future periods could be significantly different if they were prepared in accordance with U.S. GAAP. In addition, Pubco does not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under applicable law. As a result, you may not be able to meaningfully compare our financial statements under IFRS with those of companies that prepare financial statements under U.S. GAAP.

As an exempted company incorporated in the Cayman Islands, Pubco is permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards applicable to domestic U.S. companies; these practices may afford less protection to shareholders than they would enjoy if Pubco complied fully with the Nasdaq corporate governance listing standards.

Pubco is a foreign private issuer as such term is defined in Rule 405 under the Securities Act and is an exempted company incorporated in the Cayman Islands, and, after the consummation of the Business Combination, will be listed on the Nasdaq. The Nasdaq listing rules permit a foreign private issuer like Pubco to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is Pubco’s home country, may differ significantly from the Nasdaq corporate governance listing standards applicable to domestic U.S. companies.

Among other things, Pubco is not required to have: (i) a majority of the board of directors consisting of independent directors; (ii) a compensation committee consisting of independent directors; (iii) a nominating committee consisting of independent directors; or (iv) regularly scheduled executive sessions with only independent directors each year.

Pubco may rely on the exemptions listed above. As a result, you may not be provided with the benefits of certain corporate governance requirements of the Nasdaq applicable to U.S. domestic public companies.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because Pubco is incorporated under the law of the Cayman Islands, Pubco conducts substantially all of its operations and a majority of its directors and executive officers reside outside of the United States.

Pubco is an exempted company incorporated with limited liability under the laws of the Cayman Islands, and following the Business Combination, will conduct a majority of its operations through its subsidiary, Zapp, outside the United States. Substantially all of Pubco’s assets are located outside the United States. A majority of Pubco’s officers and directors reside outside the United States and a substantial portion of the assets of those persons are located outside of the United States. As a result, it could be difficult or impossible for you to bring an action against Pubco or against these individuals outside of the United States in the event that you believe that your rights have been infringed upon under the applicable securities laws or otherwise and it will be difficult to effect service of process within the United States upon Pubco’s officers or directors, or enforce judgments obtained in United States courts against Pubco’s officers or directors. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the jurisdictions in Europe or Thailand in which Pubco’s operations are substantially conducted could render you unable to enforce a judgment against Pubco’s assets or the assets of Pubco’s directors and officers.

In addition, Pubco’s corporate affairs will be governed by the amended and restated memorandum and articles of association of Pubco (the “Amended Pubco Articles”), the Cayman Islands Companies Act and the

 

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common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of Pubco’s directors to Pubco under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England and Wales, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of Pubco’s shareholders and the fiduciary duties of Pubco’s directors under Cayman Islands law may not be as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws than the United States. Some U.S. states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like Pubco have no general rights under Cayman Islands law to inspect corporate records (other than the memorandum and articles of association, a list of the current directors of the company and the register of mortgages and charges) or to obtain copies of lists of shareholders of these companies. Pubco’s directors will have discretion under the Amended Pubco Articles to determine whether or not, and under what conditions, Pubco’s corporate records may be inspected by its shareholders, but Pubco is not obliged to make them available to the shareholders (subject to limited circumstances in which an inspector may be appointed to report on the affairs of Pubco). This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest. See “Description of Pubco Securities—Special Considerations for Exempted Companies—Inspection of Books.”

The courts of the Cayman Islands are unlikely (i) to recognize or enforce judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state securities laws; and (ii) in original actions brought in the Cayman Islands, to impose liabilities predicated upon the civil liability provisions of the federal securities laws of the United States or any state securities laws, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

Certain corporate governance practices in the Cayman Islands, which is Pubco’s home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent Pubco chooses to follow home country practice with respect to corporate governance matters, its shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, Pubco’s shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

 

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The Amended Pubco Articles that will be in effect upon the Closing will designate the Cayman Islands as the exclusive forum for certain litigation that may be initiated by Pubco’s shareholders and the federal district courts of the United States as the exclusive forum for litigation arising under the Securities Act, which could limit Pubco’s shareholders’ ability to obtain a favorable judicial forum for disputes with Pubco.

Pursuant to the Amended Pubco Articles which Pubco will adopt upon the closing of the Business Combination, unless Pubco consents in writing to the selection of an alternative forum, the courts of the Cayman Islands shall, to the maximum extent permitted by law, have exclusive jurisdiction over any dispute, controversy or claim arising out of or in connection with the Amended Pubco Articles or otherwise related in any way to each shareholder’s shareholding in Pubco, including but not limited to (i) any derivative action or proceeding brought on Pubco’s behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of Pubco’s directors, officers or other employees or Pubco’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Companies Act or the Amended Pubco Articles, or (iv) any action asserting a claim against Pubco concerning its internal affairs; provided that, for the avoidance of doubt, the foregoing forum selection provision will not apply to claims or causes of action brought to enforce a duty or liability created by the Securities Act or the Exchange Act or any other claim based on securities laws for which the federal district courts of the United States have exclusive jurisdiction.

The Amended Pubco Articles will also provide that, unless Pubco consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. The Amended Pubco Articles will further provide that any person or entity purchasing or otherwise acquiring any interest in shares of Pubco is deemed to have notice of and consented to the provisions of the Amended Pubco Articles described above.

The forum selection provisions in the Amended Pubco Articles may increase a shareholder’s cost and limit the shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Pubco or Pubco’s directors, officers or other employees, which may discourage lawsuits against Pubco and Pubco’s directors, officers and other employees. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation, memorandum and articles of association and/or equivalent constitutional documents has been challenged in legal proceedings and there is uncertainty as to whether a court would enforce such provisions. In addition, investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find this provision in the Amended Pubco Articles to be inapplicable or unenforceable in an action, Pubco may incur additional costs associated with resolving the dispute in other jurisdictions, which could have adverse effect on Pubco’s business, financial conditions and results of operations.

It is not expected that Pubco will pay dividends in the foreseeable future after the Business Combination.

It is expected that Pubco will retain most, if not all, of its available funds and any future earnings after the Business Combination to fund the development and growth of its business. In addition, Pubco is a holding company and its subsidiaries after the consummation of the Business Combination will be located in the UK, Europe and Thailand. Part of Pubco’s primary internal sources of funds to meet its cash needs will be its share of the dividends, if any, paid by Pubco’s subsidiaries. The distribution of dividends to Pubco from the subsidiaries in certain markets where Pubco operates is subject to restrictions imposed by the applicable laws and regulations in these markets. As a result, it is not expected that Pubco will pay any cash dividends in the foreseeable future.

Following completion of the Business Combination, Pubco’s board of directors will have complete discretion as to whether to distribute dividends. Even if the board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on the future results of operations and cash flow, capital requirements and surplus, the amount of distributions, if any, received by Pubco from subsidiaries, Pubco’s financial condition, contractual restrictions and other factors deemed relevant by the board

 

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of directors. There is no guarantee that the shares of Pubco will appreciate in value after the Business Combination or that the trading price of the shares will not decline. Holders of the Pubco Ordinary Shares should not rely on an investment in Pubco Ordinary Shares as a source for any future dividend income.

If Pubco Ordinary Shares are not eligible for deposit and clearing within the facilities of the Depository Trust Company, then transactions in the Pubco Ordinary Shares may be disrupted.

The facilities of DTC are a widely used mechanism that allow for rapid electronic transfers of securities between the participants in the DTC system, which include many large banks and brokerage firms. Pubco expects that Pubco Ordinary Shares will be eligible for deposit and clearing within the DTC system. DTC is not obligated to accept Pubco Ordinary Shares for deposit and clearing within its facilities in connection with the listing and, even if DTC does initially accept Pubco Ordinary Shares, it will generally have discretion to cease to act as a depository and clearing agency for Pubco Ordinary Shares.

If DTC determines prior to the completion of the transactions that Pubco Ordinary Shares are not eligible for clearance within the DTC system, then Pubco would not expect to complete the transactions and the listing contemplated by this proxy statement/prospectus in its current form. However, if DTC determines at any time after the completion of the transactions and the listing that Pubco Ordinary Shares were not eligible for continued deposit and clearance within its facilities, then Pubco believes Pubco Ordinary Shares would not be eligible for continued listing on a U.S. securities exchange and trading in the shares would be disrupted. While Pubco would pursue alternative arrangements to preserve its listing and maintain trading, any such disruption could have a material adverse effect on the market price of Pubco Ordinary Shares.

Pursuant to the Founder’s rights under the Director Nomination Agreement, the Founder will be able to maintain the ability to nominate a majority of the directors to Pubco’s board of directors for so long as the Founder maintains certain investment thresholds.

In connection with the Closing, Pubco and the Founder will enter into the Director Nomination Agreement pursuant to which the Founder will continue to have a right to representation on the board of directors of Pubco following consummation of the Business Combination. Pursuant to the Director Nomination Agreement, the Founder will have the right to nominate for election to the board of directors of Pubco: (i) four (4) individuals (or more individuals as would represent a bare majority of the directors then in office), at least two (2) of which would qualify as Independent Directors for so long as the Founder holds in aggregate at least 80% of the number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as of the Closing of the Business Combination; (ii) three (3) individuals, at least one (1) of which would qualify as an Independent Director, for so long as the Founder holds in aggregate at least 50% of the number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as of the closing of the Business Combination, but less than 80% of the number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as of the Closing of the Business Combination, or (iii) two (2) individuals, none of which are required to qualify as an Independent Director, for so long as the Founder holds in aggregate at least 30% of the number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as of the Closing of the Business Combination. Our business and future success is substantially dependent on the services and guidance offered by our directors, and the Founder’s ability to nominate the majority of the directors to Pubco’s board of directors may prohibit potential candidates from being nominated. Our obligations under the Director Nomination Agreement end upon the earlier of (a) the third anniversary of the Closing of the Business Combination and (b) the first date that the Founder holds less than 30% of the number of issued and outstanding Pubco Ordinary Shares that were held by the Founder as of the Closing of the Business Combination.

 

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Risks Related to CIIG II and the Business Combination

CIIG II may not be able to complete its initial business combination within the prescribed time frame, in which case it would cease all operations except for the purpose of winding up and it would redeem its public shares and liquidate, in which case its public stockholders would receive their pro rata portion of the Trust Account and its warrants will expire worthless.

CIIG II’s amended and restated certificate of incorporation provides that it must complete its initial business combination within 18 months from the closing of this offering (or within 24 months if we extend the period of time to consummate our initial business combination in accordance with the terms described in this prospectus). CIIG II may not be able complete its initial business combination within such time period. CIIG II’s ability to complete its initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If CIIG II has not completed its initial business combination within such time period, it will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to CIIG II to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and CIIG II’s board of directors, dissolve and liquidate, subject in each case to CIIG II’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, CIIG II’s public stockholders may only receive their pro rata portion of the Trust Account, and its warrants will expire worthless.

If a stockholder fails to receive notice of CIIG II’s offer to redeem its Public Shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

This proxy statement/prospectus describes the various procedures that must be complied with in order for a Public Stockholder to validly redeem its Public Shares. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed.

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

The CIIG II public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (a) the completion of CIIG II’s initial business combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend CIIG II’s amended and restated certificate of incorporation (i) to modify the substance or timing of CIIG II’s obligation to allow redemption in connection with its initial business combination or to redeem 100% of CIIG II’s Public Shares if it does not complete its initial business combination within 18 months from the closing of CIIG II’s initial public offering (or within 24 months if it extends the period of time to consummate its initial business combination in accordance with the terms described in its prospectus) or (ii) with respect to any other provisions relating to stockholders’ rights or pre-initial business combination activity and (c) the redemption of CIIG II’s public shares if CIIG II is unable to complete its business combination within 18 months from the closing of its initial public offering (or within 24 months if it extends the period of time to consummate its initial business combination in accordance with the terms described in this prospectus), subject to applicable law. Stockholders who do not exercise their rights to the funds in connection with an amendment to the certificate of incorporation would still have rights to the funds in connection with a subsequent business combination. In no other circumstances will a Public Stockholder have any right or interest of any kind in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

 

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The Sponsor and CIIG II’s directors, officers, advisors or their affiliates may elect to purchase shares from Public Stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of CIIG II Class A Common Stock.

The Sponsor and CIIG II’s directors, officers, advisors or their affiliates may purchase shares of CIIG II Common Stock in privately negotiated transactions or in the open market prior to the completion of the Business Combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of such shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor and CIIG II’s directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination. This may result in the completion of the Business Combination that may not otherwise have been possible.

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

Each of the IPO Underwriters were to be compensated in connection with the Business Combination but have instead waived such compensation and disclaimed any responsibility for this proxy statement/prospectus.

Barclays, UBS and LionTree delivered a waiver letter to CIIG II on October 14, 2022, November 2, 2022 and November 11, 2022, respectively, waiving any entitlement to the payment of any deferred underwriting fees (in an aggregate amount of $10,062,500) in connection with their roles as underwriters in the IPO. Each IPO Underwriter has informed CIIG II that they are not responsible for any portion of this proxy statement/prospectus which forms a part of this registration statement, and no IPO Underwriter has been involved in the preparation of any disclosure that is included in the registration statement, or material underlying disclosure in the registration statement. Such deferred underwriting fee was agreed between CIIG II and the IPO Underwriters in the Underwriting Agreement and the payment of such fee was conditioned upon closing of the Business Combination.

As a result of the Waiver, the transactions fees payable by CIIG II at the consummation of the Business Combination will be reduced by approximately $10.1 million. The IPO underwriting services being provided by the IPO Underwriters prior to such Waivers were substantially complete at the time of the Waiver, with any fees payable to the IPO Underwriters for such services contingent upon the closing of the Business Combination.

We believe that the Waiver of fees for services that have already been substantially rendered or that were contingent upon the occurrence of an event that applicable persons expect will occur, is unusual. While the IPO Underwriters did not provide any additional detail in their Waiver letters, stockholders should be aware that such Waivers indicate that none of the IPO Underwriters wants to be associated with the disclosures in this proxy statement/prospectus or any underlying business analysis related to the transaction described herein. CIIG II will not speculate about the reasons why the IPO Underwriters forfeited fees after performing substantially all the work to earn such fees. Accordingly, stockholders should not place any reliance on the fact that the IPO Underwriters were previously engaged by CIIG II to serve as an underwriter in CIIG II’s IPO and should not assume that the IPO Underwriters are involved in this transaction. None of the IPO Underwriters has been engaged by CIIG II, the Sponsor, Zapp or Pubco in connection with the Business Combination.

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

CIIG II’s Amended and Restated Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a

 

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“group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in CIIG II’s IPO, which CIIG II refers to as the “Excess Shares.” However, CIIG II would not be restricting its stockholders’ ability to vote all of their shares (including Excess Shares) for or against its business combination. The inability of a stockholder to redeem the Excess Shares will reduce its influence over CIIG II’s ability to complete its business combination and such stockholder could suffer a material loss on its investment in CIIG II if it sells Excess Shares in open market transactions. Additionally, such stockholder will not receive redemption distributions with respect to the Excess Shares if CIIG II completes its business combination. And as a result, such stockholder will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell its stock in open market transactions, potentially at a loss.

CIIG II may not have sufficient funds to consummate the Business Combination.

As of September 30, 2022, CIIG II had cash of $213,892 held outside of the Trust Account. If CIIG II is required to seek additional capital, it may need to borrow funds from the Sponsor, directors, officers, their affiliates or other third parties to operate or may be forced to liquidate. CIIG II believes that the funds available to it outside of the Trust Account, together with funds available from loans from Sponsor, its affiliates or members of CIIG II’s management team, will be sufficient to allow it to operate for at least the period ending on March 17, 2023 or such later date as may be extended in accordance with the CIIG II Amended and Restated Certificate of Incorporation; however, CIIG II cannot assure you that its estimate is accurate.

If, before distributing the proceeds in the Trust Account to the Public Stockholders, CIIG II files a voluntary bankruptcy petition or an involuntary bankruptcy petition is filed against CIIG II that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of CIIG II’s stockholders and the per-share amount that would otherwise be received by CIIG II’s stockholders in connection with CIIG II’s liquidation may be reduced.

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

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

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

 

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Because CIIG II will not be complying with Section 280, Section 281(b) of the DGCL requires CIIG II to adopt a plan, based on facts known to CIIG II at such time that will provide for its payment of all existing and pending claims or claims that may be potentially brought against CIIG II within the 10 years following its dissolution. However, because CIIG II is a blank check company, rather than an operating company, and CIIG II’s operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from CIIG II’s vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If CIIG II’s plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. CIIG II cannot assure you that it will properly assess all claims that may be potentially brought against it. As such, CIIG II’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of CIIG II’s stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of the Trust Account distributed to the Public Stockholders upon the redemption of the Public Shares in the event CIIG II does not complete its initial business combination by the date prescribed herein, or such later date that may be approved by CIIG II’s stockholders, is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution.

CIIG II’s stockholders cannot be sure of the market value of the Pubco Ordinary Shares to be issued upon completion of the Business Combination.

The holders of shares of CIIG II Common Stock issued and outstanding immediately prior to the effective time of the Business Combination (other than any redeemed shares) will receive one Pubco Ordinary Share in exchange for each share of CIIG II Class A Common Stock or CIIG II Class B Common Stock held by them, rather than a number of shares with a particular fixed market value. The market value of CIIG II Common Stock at the time of the Business Combination may vary significantly from its price on the date the Merger Agreement was executed, the date of the Registration Statement of which this proxy statement/prospectus is a part or the date on which CIIG II stockholders vote on the Business Combination. Because the exchange ratio of the shares will not be adjusted to reflect any changes in the market prices of CIIG II Common Stock, the market value of the Pubco Ordinary Shares issued in the Business Combination and the CIIG II Common Stock surrendered in the Business Combination may be higher or lower than the value of these shares on earlier dates. 100% of the consideration to be received by CIIG II’s stockholders will be Pubco Ordinary Shares. Following consummation of the Business Combination, the market price of Pubco’s securities may be influenced by many factors, some of which are beyond its control, including those described above and the following:

 

   

changes in financial estimates by analysts;

 

   

announcements by it or its competitors of significant contracts, productions, acquisitions or capital commitments;

 

   

fluctuations in its quarterly financial results or the quarterly financial results of companies perceived to be similar to it;

 

   

general economic conditions;

 

   

changes in market valuations of similar companies;

 

   

terrorist acts;

 

   

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

 

   

future sales of Pubco Ordinary Shares;

 

   

regulatory developments in the United States, foreign countries or both;

 

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litigation involving Pubco, its subsidiaries or its general industry; and

 

   

additions or departures of key personnel.

In addition, it is possible that the Business Combination may not be completed until a significant period of time has passed after the special meeting of CIIG II’s stockholders. As a result, the market value of CIIG II Common Stock may vary significantly from the date of the special meeting to the date of the completion of the Business Combination. You are urged to obtain up-to-date prices for CIIG II Common Stock. There is no assurance that the Business Combination will be completed, that there will not be a delay in the completion of the Business Combination or that all or any of the anticipated benefits of the Business Combination will be obtained.

The process of taking a company public by means of a business combination with a SPAC is different from taking a company public through an underwritten offering and may create risks for our unaffiliated investors.

An underwritten offering involves a company engaging underwriters to purchase its shares and resell them to the public. An underwritten offering imposes statutory liability on the underwriters for material misstatements or omissions contained in the registration statement unless they are able to sustain the burden of providing that they did not know and could not reasonably have discovered such material misstatements or omissions. This is referred to as a “due diligence” defense and results in the underwriters undertaking a detailed review of the company’s business, financial condition and results of operations. Going public via a business combination with a SPAC does not involve any underwriters and does not generally necessitate the level of review required to establish a “due diligence” defense as would be customary in an underwritten offering.

In addition, going public via a business combination with a SPAC does not involve a book-building process as is the case in an underwritten public offering. In any underwritten public offering, the initial value of a company is set by investors who indicate the price at which they are prepared to purchase shares from the underwriters. In the case of a SPAC transaction, the value of the company is established by means of negotiations between the target company and the SPAC. The process of establishing the value of a company in a SPAC business combination may be less effective than the book building process in an underwritten public offering and also does not reflect events that may have occurred between the date of the merger agreement and the closing of the transaction. In addition, underwritten public offerings are frequently oversubscribed resulting in additional potential demand for shares in the aftermarket following the underwritten public offering. There is no such book of demand built up in connection with a SPAC transaction and no underwriters with the responsibility of stabilizing the share price which may result in the share price being harder to sustain after the transaction.

Beginning in January 2022, there has been a precipitous drop in the market values of growth-oriented companies. Accordingly, securities of growth companies such as Zapp may be more volatile than other securities and may involve special risks.

Beginning in January 2022, there has been a precipitous drop in the market values of growth-oriented companies like CIIG II and Zapp. In recent months, inflationary pressures, increases in interest rates and other adverse economic and market forces have contributed to these drops in market value. As a result, CIIG II securities are subject to potential downward pressures, which may result in high redemptions of the cash available from the Trust Account. If there are substantial redemptions, there will be a lower float of Pubco Ordinary Shares outstanding, which may cause further volatility in the price of Pubco securities and adversely impact Pubco’s ability to secure financing following the closing of the Business Combination. Moreover, a loss of investor confidence in the market for the stocks of other growth-oriented companies which investors perceive to be similar to Zapp could depress the prices of CIIG II and Pubco securities, regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

 

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Securities of companies formed through SPAC mergers such as ours may experience a material decline in price relative to the share price of the SPAC prior to the merger.

As with most SPAC initial public offerings in recent years, CIIG II issued shares for $10.00 per share upon the closing of its initial public offering. As with other SPACs, the $10.00 per share price of CIIG II reflected each share having a one-time right to redeem such share for a pro rata portion of the proceeds held in the Trust Account equal to approximately $10.00 per share prior to the closing of the Business Combination. Following Closing, the shares outstanding will no longer have any such redemption right and will be solely dependent upon the fundamental value of the combined company, which, like the securities of other companies formed through SPAC mergers in recent years, may be significantly less than $10.00 per share.

The Pubco Ordinary Shares to be received by CIIG II’s stockholders as a result of the Business Combination will have different rights from shares of CIIG II Common Stock.

Following completion of the Business Combination, the Public Stockholders will no longer be stockholders of CIIG II but will instead be shareholders of Pubco. There will be important differences between your current rights as a CIIG II stockholder and your rights as a Pubco shareholder. See “Comparison of Rights of Pubco Shareholders and CIIG II Stockholders” for a discussion of the different rights associated with the securities.

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

Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the Public Stockholders in connection with an initial business combination, CIIG II’s Sponsor, officers and directors have agreed to vote their CIIG II Class B Common Stock, as well as any Public Shares purchased during or after CIIG II’s initial public offering, in favor of the Business Combination, and own 20% of the outstanding shares of CIIG II Common Stock. Accordingly, it is more likely that the necessary stockholder approval to complete the Business Combination will be received than would be the case if CIIG II’s Sponsor, officers and directors agreed to vote their CIIG II Class B Common Stock in accordance with the majority of the votes cast by the Public Stockholders.

The exercise of discretion by CIIG II’s directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the Merger Agreement may result in a conflict of interest when determining whether such changes to the terms of the Merger Agreement or waivers of conditions are appropriate and in the best interests of CIIG II stockholders.

In the period leading up to the Closing, other events may occur that, pursuant to the Merger Agreement, would require CIIG II to agree to amend the Merger Agreement, to consent to certain actions or to waive rights that CIIG II is entitled to under those agreements. Such events could arise because of changes in the course of Zapp’s business, a request by Zapp to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Zapp’s business and would entitle us to terminate the Merger Agreement. In any of such circumstances, it would be in CIIG II’s discretion, acting through its board of directors, to grant CIIG II’s consent or waive its rights. The existence of the financial and personal interests of the directors described elsewhere in this proxy statement/prospectus may result in a conflict of interest on the part of one or more of the directors between what he may believe is best for CIIG II and its securityholders and what he may believe is best for himself or his affiliates in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, CIIG II does not believe there will be any changes or waivers that its directors and officers would be likely to make after stockholder approval of the Business Combination has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the transaction that would have a material impact on the stockholders, CIIG II will be required to circulate a new or amended proxy statement/prospectus or supplement thereto and resolicit the vote of its stockholders with respect to the Business Combination Proposal.

 

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CIIG II’s board of directors did not obtain a fairness opinion in determining whether or not to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the Public Stockholders.

In analyzing the Business Combination, the CIIG II board of directors conducted significant due diligence on Zapp. The CIIG II board of directors believes because of the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders and that Zapp’s fair market value was at least 80% of CIIG II’s net assets. Notwithstanding the foregoing, CIIG II’s board of directors did not obtain a fairness opinion to assist it in its determination. Accordingly, CIIG II’s board of directors may be incorrect in its assessment of the Business Combination.

The Sponsor and CIIG II’s executive officers and directors have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in the Registration Statement of which this proxy statement/prospectus is a part.

When you consider the recommendation of CIIG II’s board of directors in favor of approval of the Business Combination Proposal, you should keep in mind that CIIG II’s directors and officers, the Sponsor and the anchor investors have interests in the Business Combination that are different from, or in addition to, your interests as a stockholder. These interests include, among other things:

 

   

The CIIG II Class B Common Stock was acquired in January 2021 for an aggregate purchase price of $25,000, and such shares would become worthless if CIIG II does not complete a business combination within the applicable time period, as the Sponsor has waived any right to redemption with respect to these shares for no consideration. Following the closing of the Business Combination, members of the Sponsor (excluding the indirect anchor investors) will beneficially own an aggregate of 4,276,563 Pubco Ordinary Shares upon conversion of their Class B Common Stock (assuming no redemptions and not including the Sponsor Earnout Shares) and, for illustrative purposes, up to 6,540,625 Pubco Ordinary Shares (including the Sponsor Earnout Shares and the Anchor Forfeiture Shares). Such shares have an aggregate market value of approximately $         and $        , respectively, based on the closing price of CIIG II Class A Common Stock of $         on Nasdaq on        , the record date for the special meeting of stockholders;

 

   

Each anchor investor will own 718,750 Pubco Ordinary Shares upon conversion of Class B Common Stock pursuant to the Anchor Investor Agreements (assuming no Anchor Forfeiture) following the closing of the Business Combination. Such shares would become worthless if CIIG II does not complete a business combination. Such shares have an aggregate market value of approximately $         and $        , respectively, based on the closing price of CIIG II Class A Common Stock of $         on Nasdaq on         , the record date for the special meeting of stockholders;

 

   

Members of the Sponsor (excluding the indirect anchor investors) will own 6,031,249 Pubco Public Warrants following the closing of the Business Combination and the conversion of Private Placement Warrants, which will expire worthless if CIIG II does not complete a business combination. Based on the closing price of CIIG II’s Public Warrants of $         on Nasdaq on         , 2023, the record date for the special meeting, the Pubco Public Warrants held by the Sponsor (excluding the indirect anchor investors) would be valued at approximately $        ;

 

   

Each anchor investor will own 2,010,417 Pubco Public Warrants following the closing of the Business Combination and the conversion of Private Placement Warrants, which will expire worthless if CIIG II does not complete a business combination. Based on the closing price of CIIG II’s Public Warrants of $         on Nasdaq on         , 2023, the record date for the special meeting, the Pubco Public Warrants held by each indirect anchor investor would be valued at approximately $        ;

 

   

Each anchor investor will own 1,078,125 Pubco Public Warrants following the closing of the Business Combination and the conversion of the CIIG Public Warrants, which will expire worthless if CIIG II

 

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does not complete a business combination. Based on the closing price of CIIG II’s Public Warrants of $         on Nasdaq on         , 2023, the record date for the special meeting, the Pubco Public Warrants held by each indirect anchor investor would be valued at approximately $        ;

 

   

CIIG II’s Sponsor, affiliates of the Sponsor, officers and directors may make loans from time to time to CIIG II to fund certain capital requirements. On December 15, 2022, CIIG II issued a promissory note to the Sponsor (the “Promissory Note”), pursuant to which CIIG II may borrow up to an aggregate principal amount of $100,000. The Promissory Note is non-interest bearing and payable upon the consummation of a business combination. Upon consummation of a business combination, the Sponsor shall have the option, but not the obligation, to convert the principal balance of the Promissory Note, into Working Capital Warrants, at a price of US$1.00 per Working Capital Warrant. Additional loans may be made after the date of this proxy statement/prospectus. If the Business Combination is not consummated, any outstanding loans will not be repaid and will be forgiven except to the extent there are funds available to CIIG II outside of the Trust Account;

 

   

CIIG II’s Sponsor, officers and directors and their affiliates will not receive reimbursement for any out-of-pocket expenses incurred by them on CIIG II’s behalf incident to identifying, investigating and consummating a business combination to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless a business combination is consummated. As of the record date, the Sponsor and CIIG II’s officers and directors and their affiliates had incurred no unpaid reimbursable expenses;

 

   

the potential continuation of certain of CIIG II’s directors as directors of Pubco;

 

   

the continued indemnification of current directors and officers of CIIG II and the continuation of directors’ and officers’ liability insurance after the Business Combination; and

 

   

If CIIG II is unable to complete a business combination within the required time period, the aggregate dollar amount as of the record date of non-reimbursable funds of the Sponsor and the anchor investors would be approximately US$        , reflecting the market value of Class B Common Stock (including the Sponsor Earnout Shares), the market value of the Private Placement Warrants and Public Warrants and the amount loaned pursuant to the Promissory Note.

These financial interests may mean that the Sponsor (and accordingly CIIG II’s officers and directors who are members of the Sponsor) and the anchor investors may be incentivized to complete the Business Combination, or an alternative business combination, with a less favorable target company or on terms less favorable to stockholders than they would otherwise recommend or approve, as the case may be, rather than allow CIIG II to wind up having failed to consummate a business combination and lose their entire investment.

Further, because of these interests, the Sponsor (and CIIG II’s officers and directors who are members of the Sponsor) and the anchor investors could benefit from the completion of a business combination that is not favorable to its public stockholders and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public stockholders rather than liquidate. For example, if the share price of Pubco Ordinary Shares declined to $5.00 per share after the close of the Business Combination, CIIG II’s public stockholders that purchased shares in the IPO, would have a loss of $5.00 per share, while the Sponsor and the anchor investors would have a gain because they acquired their Class B Common Stock for a nominal amount. In other words, the Sponsor and the anchor investors can earn a positive rate of return on their investment even if public stockholders experience a negative rate of return in the post-combination company.

These interests may influence CIIG II’s directors in making their recommendation to vote in favor of the Business Combination Proposal and the other proposals described in the Registration Statement of which this proxy statement/prospectus is a part. You should also read the section entitled “The Business Combination.”

 

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Subsequent to the completion of the Business Combination, Pubco may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on Pubco’s financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.

Although CIIG II has conducted due diligence on Zapp, we cannot assure you that our diligence surfaced all material issues that may be present inside Zapp, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of Zapp and outside of CIIG II’s control will not later arise. As a result of these factors, Pubco may be forced to later write-down or write off assets, restructure its operations, or incur impairment or other charges that could result in Pubco reporting losses. Even if CIIG II’s due diligence successfully identified certain risks, unexpected risks may arise and previously known risks may

materialize in a manner not consistent with CIIG II’s preliminary risk analysis. Even though these charges may be non-cash items and would not have an immediate impact on CIIG II’s liquidity, the fact that CIIG II reports charges of this nature could contribute to negative market perceptions about CIIG II or its securities. Accordingly, any stockholders who choose to remain stockholders following the Business Combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by CIIG II’s officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

CIIG II’s stockholders will have a reduced ownership and voting interest after consummation of the Business Combination and will exercise less influence over management.

After the completion of the Business Combination, CIIG II’s stockholders will own a smaller percentage of Pubco than they currently own of CIIG II. Upon completion of the Business Combination, it is anticipated that CIIG II’s stockholders (including the holders of Class B Common Stock), will own approximately 40%, of the Pubco Ordinary Shares issued and outstanding immediately after the consummation of the Business Combination, assuming that none of the Public Stockholders exercise their redemption rights and excluding potential sources of dilution associated the consummation of the Business Combination. Consequently, CIIG II’s stockholders, as a group, will have reduced ownership and voting power in Pubco compared to their ownership and voting power in CIIG II. For an illustrative summary of CIIG II stockholder ownership under different redemption and dilution scenarios, please see the section titled “What equity stake will current CIIG II stockholders and Zapp Shareholders have in Pubco after the Closing?”

CIIG II’s and Zapp’s ability to consummate the Business Combination, and the operations of Pubco following the Business Combination, may be materially adversely affected by the coronavirus (COVID-19) pandemic.

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, the U.S. Department of Health and Human Services declared a public health emergency for the United States to aid the U.S., and on March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as a “pandemic.”

The COVID-19 pandemic has resulted, and other infectious diseases could result, in a widespread health crisis that has and could continue to adversely affect the economies and financial markets worldwide, which may delay or prevent the consummation of the Business Combination, and the business of Zapp or Pubco following the Business Combination could be materially and adversely affected. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. The disruptions posed by COVID-19 have continued, and other matters of global concern may continue, for an extensive period of time, and CIIG II’s and Zapp’s ability to consummate the Business Combination and

 

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Pubco’s financial condition and results of operations following the Business Combination may be materially adversely affected. Each of CIIG II, Zapp and Pubco may also incur additional costs due to delays caused by COVID-19, which could adversely affect Pubco’s financial condition and results of operations.

The securities in which CIIG II invests the funds held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by Public Stockholders may be less than $10.15 per share.

The proceeds held in the Trust Account are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that CIIG II is unable to complete its initial business combination or make certain amendments to the CIIG II Amended and Restated Certificate of Incorporation, its Public Stockholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income not released to us, net of taxes payable. Negative interest rates could impact the per-share redemption amount that may be received by Public Stockholders.

Cyber incidents or attacks directed at CIIG II could result in information theft, data corruption, operational disruption and/or financial loss.

CIIG II depends on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which they may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of CIIG II’s assets, proprietary information and sensitive or confidential data. As an early-stage company without significant investments in data security protection, CIIG II may not be sufficiently protected against such occurrences. CIIG II may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on CIIG II’s business and lead to financial loss.

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

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

Risks Related to the U.S. Federal Income Tax Treatment of the Merger

There may be tax consequences of the Merger that adversely affect holders of Public Shares and Public Warrants.

Subject to the limitations and qualifications described in the section entitled “Material U.S. Federal Income Tax Considerations” below, the Merger, is expected to, when taken together with the related transactions in the Business Combination, qualify as a transaction described in Section 351 of the Code for U.S. federal income tax purposes. It is uncertain, however, whether the Merger also qualifies as a reorganization within the meaning of Section 368(a) of the Code (a “Reorganization”). If the Merger does not qualify as a Reorganization, then the

 

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exchange of Public Warrants for Pubco Public Warrants in the Merger would not qualify for tax-deferred treatment and would be taxable as further described in the section entitled “Material U.S. Federal Income Tax Considerations—U.S. Holders.” To qualify as a Reorganization, a transaction must satisfy certain requirements, including, among others, that the acquiring corporation (or, in the case of certain reorganizations structured similarly to the Merger, its corporate parent) continue, either directly or indirectly through certain controlled corporations, either a significant line of the acquired corporation’s historic business or use a significant portion of the acquired corporation’s historic business assets in a business, in each case, within the meaning of Treasury Regulations Section 1.368-1(d). However, due to the absence of guidance bearing directly on how the above rules apply in the case of an acquisition of a corporation with only investment-type assets, such as CIIG II, the qualification of the Merger as a Reorganization is not free from doubt and the IRS or a court could take a different position. Moreover, qualification of the Merger as a Reorganization is based on facts which will not be known until the closing of the Business Combination. The closing of the Business Combination is not conditioned upon the receipt of an opinion of counsel that the Business Combination so qualifies for such tax-deferred treatment, and neither CIIG II nor Pubco intends to request a ruling from the IRS regarding the U.S. federal income tax treatment of the Business Combination. Accordingly, no assurance can be given that the IRS will agree with any position taken that the exchange of Public Warrants for Pubco Public Warrants in the Merger qualifies for tax-deferred treatment or that a court will not sustain a challenge by the IRS to such position, if taken. Furthermore, because of the legal and factual uncertainties described above, no opinion of counsel has or will be provided regarding the qualification of the Merger as a Reorganization. You are strongly urged to consult with a tax advisor to determine the particular U.S. federal, state or local or foreign income or other tax consequences of the Business Combination to you. See the section entitled “Material U.S. Federal Income Tax Considerations” below for a more detailed discussion of the tax consequences to holders of Public Shares and the Public Warrants.

IRS may not agree that Pubco (i) should be treated as a non-U.S. corporation for U.S. federal income tax purposes and (ii) should not be treated as a “surrogate foreign corporation” for U.S. federal income tax purposes.

Under current U.S. federal income tax law, a corporation generally will be considered to be a U.S. corporation for U.S. federal income tax purposes only if it is created or organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia. Accordingly, under generally applicable U.S. federal income tax rules, Pubco, which is not created or organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia but is instead incorporated under the laws of the Cayman Islands, would generally be classified as a non-U.S. corporation. Section 7874 of the Code and the Treasury Regulations promulgated thereunder, however, contain specific rules that may cause a non-U.S. corporation to be treated as a U.S. corporation for U.S. federal income tax purposes. If it were determined that Pubco is treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code and the Treasury Regulations promulgated thereunder, Pubco would be liable for U.S. federal income tax on its income just like any other U.S. corporation and certain distributions made by Pubco to non-U.S. holders of Pubco’s securities would be subject to U.S. withholding tax. In addition, even if Pubco is not treated as a U.S. corporation, it may be subject to unfavorable treatment as a “surrogate foreign corporation” in the event that ownership attributable to former CIIG II stockholders exceeds a threshold amount. If it were determined that Pubco is treated as a surrogate foreign corporation for U.S. federal income tax purposes under Section 7874 of the Code and the Treasury Regulations promulgated thereunder, dividends by Pubco would not qualify for “qualified dividend income” treatment.

As more fully described in “Material U.S. Federal Income Tax Considerations—Tax Treatment of Pubco—Treatment of Pubco as a Non-U.S. Corporation for U.S. Federal Income Tax Purposes, Pubco believes it is not to be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code or otherwise be subject to unfavorable treatment as a surrogate foreign corporation under Section 7874 of the Code. However, whether the requirements for such treatment have been satisfied must be finally determined after the completion of the Business Combination, by which time there could be adverse changes to the relevant facts and circumstances. No IRS ruling has been requested or will be obtained in connection with the Business Combination. Furthermore, the interpretation of Treasury Regulations relating to the required ownership of

 

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Pubco is subject to uncertainty and there is limited guidance regarding their application. Accordingly, there can be no assurance that the IRS will not take a contrary position to those described above or that a court will not agree with a contrary position of the IRS in the event of litigation.

The IRS may take the position that Section 367(a) of the Code requires a U.S. holder to recognize gain (but not loss) with respect to the exchange of CIIG II Common Stock for Pubco Ordinary Shares pursuant to the Merger.

The parties expect that the surrender by CIIG II stockholders of CIIG II Common Stock and the acquisition of Pubco Ordinary Shares by CIIG II stockholders solely in exchange therefor resulting from the Merger, taken together with the related transactions, is to qualify as a transfer of property to a corporation in exchange for stock qualifying for non-recognition of gain or loss under Section 351(a) of the Code. In addition, the parties expect that Section 367(a) of the Code is inapplicable and that, as a result, Pubco is expected to be treated as a corporation for purposes of non-recognition of gain under Section 351(a) of the Code. If the IRS successfully determines that the transfer is not a transaction described in Section 351(a) of the Code, or that the transfer is a transaction described in Section 351(a) of the Code, but that Section 367(a) of the Code applies to the transfer, then a U.S. holder would generally recognize gain, if any, in an amount equal to the excess of (i) the fair market value of the Pubco Ordinary Shares (and, if such U.S. holder is also surrendering CIIG II Warrants, Pubco Public Warrants) received over (ii) such U.S. holder’s adjusted tax basis in such CIIG II Common Stock (and CIIG II Warrants, if any). Any such gain would be capital gain and generally would be long-term capital gain if the U.S. holder’s holding period for the CIIG II Common Stock (and CIIG II Warrants, if any) exceeded one year at the time of the Merger.

U.S. holders of CIIG II Common Stock should consult their tax advisors regarding the qualification of the Merger, taken together with the related transactions, as a transfer described in Section 351 of the Code. In addition, U.S. holders are cautioned that the potential application of Section 367(a) of the Code to the Merger and related transactions is complex and depends on factors that cannot be determined until the closing of the Merger. There can be no assurance that the IRS will not take a position contrary to those described above or that a court will not agree with a contrary position of the IRS in the event of litigation. Accordingly, U.S. holders should consult with their tax advisor regarding the potential application of Section 367(a) of the Code in their particular situation. For additional discussion of material federal U.S. federal income tax considerations of the Merger, please see “Material U.S. Federal Income Tax Considerations.”

If a U.S. person is treated as owning at least 10% of Pubco Ordinary Shares, such person may be subject to adverse U.S. federal income tax consequences.

If a U.S. person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of Pubco Ordinary Shares, such person may be treated as a “U.S. shareholder” with respect to each of Pubco and its direct and indirect subsidiaries (the “Pubco Group”) that is a “controlled foreign corporation.” If the Pubco Group includes one or more U.S. subsidiaries certain of Pubco’s non-U.S. subsidiaries could be treated as controlled foreign corporations regardless of whether Pubco is treated as a controlled foreign corporation. Immediately following the Business Combination, the Pubco Group will include a U.S. subsidiary.

A U.S. shareholder of a controlled foreign corporation may be required to report annually and include in its U.S. taxable income its pro rata share of the controlled foreign corporation’s “Subpart F income” and (in computing its “global intangible low-taxed income”) “tested income” and a pro rata share of the amount of U.S. property (including certain stock in U.S. corporations and certain tangible assets located in the U.S.) held by the controlled foreign corporation regardless of whether such controlled foreign corporation makes any distributions. Failure to comply with these reporting obligations (or related tax payment obligations) may subject such U.S. shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such U.S. shareholder’s U.S. federal income tax return for the year for which reporting (or payment of tax) was due from starting. An individual that is a U.S. shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a U.S. shareholder that is a U.S. corporation. Pubco cannot provide any assurances that it will assist holders in determining whether any of

 

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its non-U.S. subsidiaries are treated as a controlled foreign corporation or whether any holder is treated as a U.S. shareholder with respect to any of such controlled foreign corporations or furnish to any holder information that may be necessary to comply with reporting and tax paying obligations. U.S. persons should consult with their tax advisor regarding the potential application of these rules.

If Pubco were a passive foreign investment company for U.S. federal income tax purposes for any taxable year, U.S. holders of Pubco Ordinary Shares or Pubco Public Warrants could be subject to adverse U.S. federal income tax consequences.

If Pubco is or becomes a “passive foreign investment company,” or a PFIC, within the meaning of Section 1297 of the Code for any taxable year during which a U.S. holder (as defined in “Material U.S. Federal Income Tax Considerations—U.S. Holders—Passive Foreign Investment Company Rules”) holds Pubco Ordinary Shares or Pubco Public Warrants, certain adverse U.S. federal income tax consequences may apply to such U.S. holder. PFIC status depends on the composition of a company’s income and assets and the fair market value of its assets from time to time, as well as on the application of complex statutory and regulatory rules that are subject to potentially varying or changing interpretations. Based on the projected composition of Pubco’s income and assets, including goodwill, Pubco may be classified as a PFIC for its taxable year that includes the date of the Merger or in the foreseeable future. There can be no assurance that Pubco will not be treated as a PFIC for any taxable year.

If Pubco were treated as a PFIC, a U.S. holder of Pubco Ordinary Shares or Pubco Public Warrants may be subject to adverse U.S. federal income tax consequences, such as taxation at the highest marginal ordinary income tax rates on capital gains and on certain actual or deemed distributions, interest charges on certain taxes treated as deferred, and additional reporting requirements. Certain elections (including a qualified electing fund (“QEF”) or a mark-to-market election) may be available to U.S. holders of Pubco Ordinary Shares to mitigate some of the adverse tax consequences resulting from PFIC treatment, but U.S. holders will not be able to make similar elections with respect to the Pubco Public Warrants. See “Material U.S. Federal Income Tax Considerations—U.S. Holders—Passive Foreign Investment Company Rules.”

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

The unaudited pro forma condensed combined financial information of Pubco has been prepared in accordance with Article 11 of Regulation S-X, as amended by the final rule, Release No. 33-10786, and presents the combination of the historical financial information of CIIG II and Zapp adjusted to give effect to the Business Combination and other related events contemplated by the Merger Agreement.

The unaudited pro forma condensed combined statement of financial position as of September 30, 2022 combines the historical statement of financial position of CIIG II as of September 30, 2022 with the historical consolidated statement of financial position of Zapp as of September 30, 2022 on a pro forma basis as if the Business Combination and the other related events had been consummated on September 30, 2022.

The unaudited pro forma condensed combined statement of profit or loss for the year ended September 30, 2022 combines the historical statement of profit or loss of CIIG II for the year ended September 30, 2022 and the historical consolidated statement of profit or loss of Zapp for the year ended September 30, 2022 on a pro forma basis as if the Business Combination and the other related events had been consummated on October 1, 2021, the beginning of the earliest period presented.

The unaudited pro forma condensed combined financial information was derived from and should be read in conjunction with the following historical financial statements and the accompanying notes, which are included elsewhere in this proxy statement/prospectus:

 

   

the historical audited financial statements of CIIG II for the period from January 6, 2021 to December 31, 2021;

 

   

the historical unaudited financial statements of CIIG II for the nine months ended September 30, 2022 and for the period from January 6, 2021 to September 30, 2021; and

 

   

the historical audited consolidated financial statements of Zapp for the year ended September 30, 2022.

The unaudited pro forma condensed combined financial information should also be read together with the sections entitled “CIIG II Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Zapp Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other financial information included elsewhere in this proxy statement/prospectus.

Description of the Business Combination

On November 22, 2022, CIIG II entered into the Merger Agreement by and among Zapp, Pubco and Merger Sub. Merger Sub will merge with and into CIIG II, with CIIG II being the surviving corporation in the merger.

Upon the consummation of the Business Combination, each share of CIIG Class A Common Stock and CIIG II Class B Common Stock will be cancelled and automatically deemed for all purposes to represent the right to receive one Pubco Ordinary Share (other than certain excluded shares). The consideration paid to CIIG II’s Class A stockholder will be equal to 28,750,000 Pubco Ordinary Shares and the consideration paid to CIIG II’s Class B stockholder will be equal to 7,187,500 Pubco Ordinary Shares, 754,687 Pubco Ordinary Shares of which will be unvested. Such unvested Pubco Ordinary Shares will vest at such time as the closing price of Pubco Ordinary Shares equals or exceeds, for any 20 trading days during a 30 consecutive trading day period, $14.00 per share, subject to certain adjustments. Additionally, prior to the fifth anniversary of the Closing, there is a bona fide third party transaction that results in the Pubco Ordinary Shares being converted into the right to receive cash or other consideration having a per share value equal to or in excess of $14.00, subject to certain adjustments, then the Pubco Ordinary Shares shall vest as of immediately prior to the consummation of such transaction, or otherwise treated as so vested in connection therewith. In the event that a vesting condition is not satisfied prior to the fifth anniversary of the closing, the unvested Pubco Ordinary Shares shall be forfeited and cease to exist.

 

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Upon the consummation of the Business Combination, the consideration paid to Zapp’s shareholders, subject to certain adjustments in accordance with the Merger Agreement, will be equal to an aggregate of (i) 50,000,000 Pubco Ordinary Shares plus (ii) a number of Pubco Ordinary Shares equal to the amount of any convertible financing received by Zapp in excess of $20,000,000 in the aggregate and actually converted to ordinary common shares of Zapp in advance of the closing of the Business Combination divided by the effective conversion price. With respect to clause (ii) the effective conversion price shall be equal to the dollar amount raised in such convertible financing divided by the number of common shares deliverable to the investor in connection with such financing.

Additionally, certain Zapp’s shareholders will be entitled to receive an earnout of 8,518,290 Pubco Ordinary Shares. The earnout is subject to the closing price of Pubco Ordinary Shares equaling or exceeding, for any 20 trading days during a 30 consecutive trading day period, (i) $12.00 per share (the “First Earnout Condition”), (ii) $14.00 per share (the “Second Earnout Condition”) or (iii) $16.00 per share (the “Third Earnout Condition”; and each of the First, Second and Third Earnout Conditions an “Earnout Condition”), as applicable, in each case as equitably adjusted for share splits, share dividends, reorganizations and recapitalizations. In the event that an Earnout Condition is not satisfied prior to the fifth anniversary of the closing, the earnout shares shall be forfeited and cease to exist.

Accordingly, upon the consummation of the Business Combination, CIIG II and Zapp will become wholly-owned subsidiaries of Pubco.

The other related events that are contemplated to occur in connection with the Business Combination are summarized below:

 

   

each CIIG II warrant will automatically and irrevocably be modified to provide that such warrant will no longer entitle the holder thereof to purchase the amount of share(s) of CIIG II Common Stock and in substitution such warrant will entitle the holder to acquire the same number of Pubco Ordinary Shares per warrant on the same terms;

 

   

each Zapp Warrant will cease to be a warrant with respect to Zapp Ordinary Shares and be assumed by Pubco and converted into a warrant to purchase Pubco Ordinary Shares, subject to substantially the same terms and conditions as were applicable to such Zapp Warrant; and

 

   

each Zapp option, whether vested or unvested, will be released and cancelled in exchange for the grant by Pubco of an option to purchase Pubco Ordinary Shares of equivalent value and on equivalent terms as regards vesting, exercise, indemnities and other provisions relating to tax as the Company Options pursuant to appropriate release, exchange and grant instruments among Zapp, Pubco and the relevant holder of such options.

The Business Combination is expected to close in the first half of 2023, following the receipt of the required approval by CIIG II’s stockholders and Zapp’s shareholders and the fulfilment of other customary closing conditions.

Engagement Letter between Zapp and SAP

Zapp has entered into a letter agreement with SAP pursuant to which SAP would provide financial advisory services to Zapp in connection with the Business Combination.

Upon the closing of the Business Combination, SAP is entitled to receive a transaction fee in the form of cash and 173,000 Pubco Ordinary Shares. Following the closing of the Business Combination, if the relevant Earnout Conditions set out in the Management Exchange and Support Agreement are fulfilled, SAP will be entitled to receive additional Pubco Ordinary Shares comprising 10% of the number of any additional Pubco Ordinary Shares issued to the Management Shareholders pursuant to the Earnout Conditions in the Management

 

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Exchange and Support Agreement, which may be payable in cash at Zapp’s option. Fees described in this paragraph that are payable in cash by Zapp to SAP may be paid in newly-issued Pubco Ordinary Shares in full or in part at Zapp’s option at the Issue Price, subject to such Pubco Ordinary Shares having been registered for resale on an effective registration statement and so long as the issuance of such Pubco Ordinary Shares to SAP would not require the prior approval of the holders of Pubco Ordinary Shares pursuant to Rule 5635 of the Nasdaq Stock Market Rules. For the purposes of this paragraph, “Issue Price” refers to (x) any portion of the dollar amount payable by Zapp to SAP divided by (y) the average closing price of Pubco Ordinary Shares during the five trading day period prior to the date of issuance of such Pubco Ordinary Shares to SAP. In addition, SAP is entitled to receive options to purchase Pubco Ordinary Shares comprising 10% of the number of such options to be granted to Mr. Swin Chatsuwan, Mr. Jeremy North, Mr. Kiattipong Arttachariya and Mr. Warin Thanathawee prior to December 31, 2023 pursuant to the Pubco Equity Incentive Plan, on the same terms and conditions applicable to each optionholder (including with respect to expiration date, vesting conditions and exercise provisions).

In addition, if any of the Sponsor Earnout Shares are forfeited on the date falling 5 years after the Closing pursuant to the Amended and Restated Sponsor Agreement, SAP will be entitled to receive 10% of the value of such number of forfeited Sponsor Earnout Shares, which may be payable in newly-issued Pubco Ordinary Shares or in cash at Zapp’s option.

Accounting Treatment of the Business Combination

The Business Combination will be accounted for as a reverse recapitalization in accordance with IFRS. Under this method of accounting, CIIG II will be treated as the acquired company and Zapp will be treated as the acquirer for financial reporting purposes. Zapp has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

   

Zapp stockholders will hold the majority ownership interest in the Pubco;

 

   

The Pubco Board will have seven members, and Zapp stockholders will have the ability to nominate the majority of the members of the Pubco Board;

 

   

Zapp’s senior management will comprise the senior management roles of Pubco and be responsible for the day-to-day operations; and

 

   

The intended strategy and operations of Pubco will continue Zapp’s current strategy and operations.

Accordingly, for accounting purposes, the financial statements of Zapp will represent a continuation of the financial statements of Pubco with the Business Combination treated as the equivalent of Zapp issuing common stock for the net assets of CIIG II, accompanied by a recapitalization, which is accounted for within the scope of IFRS 2, Share-based payment. The net assets of CIIG II will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be presented as those of Zapp in future reports of Pubco.

Basis of Pro Forma Presentation

The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Business Combination occurred on the dates indicated, and does not reflect adjustments for any anticipated synergies, operating efficiencies, tax savings or cost savings. Any cash proceeds remaining after the consummation of the Business Combination and the other related events contemplated by the Merger Agreement are expected to be used for general corporate purposes. The unaudited pro forma condensed combined financial information does not purport to project the future operating results or financial position of Pubco following the completion of the Business Combination. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analyses are performed. CIIG II and Zapp have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

 

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The unaudited pro forma condensed combined financial information contained herein assumes that CIIG II’s stockholders approve the Business Combination. CIIG II cannot predict how many of the public CIIG II stockholders will exercise their right to have their CIIG II Class A Common Stock redeemed for cash. As a result, Pubco has elected to provide the unaudited pro forma condensed combined financial information under two different redemption scenarios, which produce different allocations of total Pubco equity between holders of Pubco Ordinary Shares.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below:

 

   

Scenario 1—Assuming No Redemptions: This presentation assumes that no stockholders of CIIG II elect to have their CIIG II Class A Common Stock redeemed for cash in connection with the Business Combination as permitted by CIIG II’s amended and restated certificate of incorporation.

 

   

Scenario 2—Assuming Maximum Redemptions: This presentation assumes that CIIG II stockholders exercise their redemption rights with respect to all of CIIG II Class A Common Stock upon consummation of the Business Combination at a redemption price of approximately $10.21 per share based on cash and marketable securities held in the trust account as of September 30, 2022.

The actual results will likely be within the parameters described by the two scenarios, however, there can be no assurance regarding which scenario will be closest to the actual results. Under both scenarios, Zapp is considered to be the accounting acquirer, as further discussed in section entitled “Accounting Treatment of the Business Combination” above.

The following summarizes the pro forma Pubco Ordinary Share issued and outstanding immediately at the completion of the Business Combination, presented under the two assumed redemption scenarios:

 

     Share Ownership in Pubco
(Pro Forma Combined)(1)(4)
 
     No Redemption Scenario     Maximum Redemption
Scenario
 
     No. of shares      %
Ownership
    No. of shares      %
Ownership
 

CIIG’s Class B Common stockholders

     6,432,813        8.3     6,432,813        13.2

CIIG’s public stockholders

     28,750,000        37.2     —          —    

Zapp’s existing shareholders(2)(3)(5)

     42,028,760        54.3     42,028,760        86.4

SAP(6)

     173,000        0.2     173,000        0.4
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Pubco Ordinary Shares outstanding as at Closing not reflecting potential sources of dilution

     77,384,573        100.0     48,634,573        100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

Potential sources of dilution:

          

Shares underlying CIIG II Private Placement Warrants

     12,062,500        —         12,062,500        —    

Shares underlying CIIG II Public Warrants

     14,375,000        —         14,375,000        —    

Sponsor Earnout Shares

     754,687        —         754,687        —    

Zapp Earnout Shares

     8,518,290        —         8,518,290        —    

Shares underlying Pubco Exchange Warrants

     3,482,158        —         3,482,158        —    

Shares underlying Pubco Exchange Options

     4,489,082        —         4,489,082        —    

Contingent consideration payable to SAP(7)

     683,720        —         683,720        —    
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Pubco Ordinary Shares outstanding at Closing including potential sources of dilution

     121,750,010        —         93,000,010        —    
  

 

 

    

 

 

   

 

 

    

 

 

 

 

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(1)

The share amounts and ownership percentages set forth above are not indicative of voting percentages and do not take into account CIIG II warrants, and Zapp Warrants and Zapp options, which will remain outstanding immediately following the Business Combination and may be exercised thereafter. If the actual facts are different than the assumptions set forth above, the share amounts and percentage ownership numbers set forth above will be different.

(2)

Excluding 3,482,158 fully vested Pubco Exchange Warrants, and 4,489,082 Pubco Exchange Options, of which 3,139,020 Pubco Exchange Options have been fully vested as of the date of this filing.

(3)

Includes Pubco Ordinary Shares to be issued to holders of an aggregate amount of up to $20,000,000 in Zapp Convertible Loan Notes. Prior to the closing of the Business Combination, Zapp may sell and issue up to $20,000,000 in Zapp Convertible Loan Notes as part of the overall pool of 50,000,000 Pubco Ordinary Shares to be issued to Zapp’s existing shareholders (including Pubco Ordinary Shares underlying the Pubco Exchange Warrants and Pubco Exchange Options). The Zapp Convertible Loan Notes will be automatically redeemed at the principal amount by conversion into Zapp Ordinary Shares, either prior to or simultaneously with the closing of the Business Combination. Prior and as a condition to the conversion of the Zapp Convertible Loan Notes and allotment of Zapp Ordinary Shares, investors are obligated to execute and deliver an agreement to exchange the Zapp Ordinary Shares for Pubco Ordinary Shares on substantially similar terms as those set out in the Investor Exchange and Support Agreement (other than with respect to any earn-out, contingent consideration or lock-ups). For further details of the Zapp Convertible Loan Notes, see “Zapp Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments.”

(4)

For a more detailed description of share ownership upon consummation of the Business Combination, see “Security Ownership of Certain Beneficial Owners and Management.”

(5)

Excluding the earnout of up to 8,518,290 Pubco Ordinary Shares, which certain Zapp’s shareholders will be entitled to receive upon the satisfaction of certain earnout conditions.

(6)

Represents the share component of the transaction fee payable to SAP upon closing of the Business Combination pursuant to the engagement letter between Zapp and SAP. For further details of the fees payable to SAP in connection with the Business Combination, see “Summary of the Proxy statement/Prospectus – Other Agreements Related to the Merger Agreement – Engagement Letter between Zapp and SAP.”

(7)

For further details on the contingent consideration payable to SAP following the closing of the Business Combination, see “Summary of the Proxy statement/Prospectus – Other Agreements Related to the Merger Agreement – Engagement Letter between Zapp and SAP.”

The deferred underwriting fee of $10,062,500 has been eliminated as the underwriters have opted out of participating in the backend of the Business Combination.

The following unaudited pro forma condensed combined statement of financial position as of September 30, 2022 under the no redemption scenario and maximum redemption scenario and unaudited pro forma condensed combined statement of profit or loss for the year ended September 30, 2022 are based on the historical financial statements of CIIG II and Zapp. The unaudited pro forma adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION

September 30, 2022

(in U.S. dollar)

 

                            No redemption scenario     Maximum redemption
scenario
 
    CIIG II as of
September 30,
2022
    Zapp as of
September 30,
2022
    IFRS
conversion
and
presentation
alignment
    Note     Transaction
accounting
adjustments
    Note     Pro forma
combined
    Transaction
accounting
adjustments
    Note     Pro
forma
combined
 

Assets

                   

Current assets

                   

Cash and cash equivalents

    213,892       1,963,087       —           293,579,019       4(C)       284,947,047       293,579,019       4(C)       2,588,498  
            (30,808,951     4(E)         (19,630,000     4(E)    
            20,000,000       4(N)         (293,537,500     4(G)    
                  20,000,000       4(N)    
                   

Inventories

    —         111,734       —           —           111,734       —           111,734  

Prepaid expenses and other current assets

    347,081       195,188       —           —           542,269       —           542,269  

Restricted cash

    —         —         —           —           —         —           —    
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total current assets

    560,973       2,270,009       —           282,770,068         285,601,050       411,519         3,242,501  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Non-current assets

                   

Cash and marketable securities held in trust account

    293,579,019       —         —           (293,579,019     4(C)       —         (293,579,019     4(C)       —    

Property, plant and equipment

    —         803,881       —           —           803,881       —           803,881  

Intangible assets

    —         1,018,878       —           —           1,018,878       —           1,018,878  

Loans to related parties

    —         21,407       —           —           21,407       —           21,407  

Other non-current assets

    —         111,233       —           —           111,233       —           111,233  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total non-current assets

    293,579,019       1,955,399       —           (293,579,019       1,955,399       (293,579,019       1,955,399  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total assets

    294,139,992       4,225,408       —           (10,808,951       287,556,449       (293,167,500       5,197,900  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Liabilities and Equity

                   

Current liabilities

                   

Trade payables and other current liabilities

    —         905,132       —           —           905,132       —           905,132  

Accrued expenses

    2,138,299       —         —           —           2,138,299       —           2,138,299  

Income taxes payable

    357,347       —         —           —           357,347       —           357,347  

Loans and borrowings

    —         74,233       —           —           74,233       —           74,233  

Convertible note, current

    —         —         —           —           —         —           —    

Derivative liabilities, current

    —         323,864       —           (323,864     4(J)       —         (323,864     4(J)       —    
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total current liabilities

    2,495,646       1,303,229       —           (323,864       3,475,011       (323,864       3,475,011