Pegasus Digital Mobility Amends Deal Terms with Schmid

Pegasus Digital Mobility Acquisition announced that it has made several amendments to its business combination agreement with Gebr. Schmid Group. Among the changes, the parties agreed to extend the closing to April 30 and also agreed to reduce the number of shares to be issued to the shareholders of Schmid at the closing to 28.725 million shares.

The target is a global solutions provider for the high-tech electronic, photovoltaics, glass, and energy systems industries.

Ahead of a successful extension vote last month, the SPAC had said 503,201 shares were redeemed for about $5.55 million. That left 4,500,017 shares outstanding.

Pegasus Digital raised $200 million in an October 2021 IPO. 

In connection with the new amendements to the deal, an earn-out agreement has been reached, which awards 2.5 million shares of the merged company to Anette Schmid and Christian Schmid should the share price of the combined company reach or exceed $15 after the closing and an additional 2.5 million shares should the share price reach or exceed $18 at some point after the closing. The earn-out agreement has a three-year term.

In addition, the SPAC’s sponsor agreed to transfer 2 million private placement warrants to Anette Schmid and Christian Schmid (in equal parts) at the date of the closing.

The sponsor and certain Pegasus directors and officers agreed that, post-closing they will only exercise the remaining 7.75 million private placement warrants on a “cashless basis” in accordance with the terms of the warrants, and exercise the warrants on a “cashless basis” when the reference price as defined in the warrant agreement reaches $18 (unless the private placement warrants have been exercised or redeemed before).

Pegasus and Schmid entered into a subscription agreement with XJ Harbour HK, in which XJ agreed to in stages transfer its 24.1% equity interest in Schmid Technology (Guangdong) Co., Ltd., a subsidiary of Schmid, to the merged company for 1,406,361 shares, and a EUR 10 million payment to XJ at the completion of the business combination, a EUR 5 million payment to XJ within 270 days from the day of the completion of the business combination and a EUR 15 million payment (plus interest at an annual rate of 6% from the completion of the business combination to the date of payment) to XJ within 455 days from the day of the completion of the business combination.

The deal is expected to close toward the end of the first quarter. Read more.

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