UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2) ) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
JAGUAR GLOBAL GROWTH CORPORATION I
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| ☐ | No fee required. | |||
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☒ |
Fee paid previously with preliminary materials. | |||
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☐ |
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
PROXY STATEMENT FOR EXTRAORDINARY GENERAL MEETING OF JAGUAR GLOBAL GROWTH CORPORATION I
AND
PROSPECTUS FOR UP TO 37,264,787 ORDINARY SHARES, 23,950,000 WARRANTS,
AND 23,950,000 ORDINARY SHARES UNDERLYING WARRANTS
OF
CAPTIVISION INC.
NOTICE OF EXTRAORDINARY GENERAL MEETING OF JAGUAR GLOBAL GROWTH CORPORATION I TO BE HELD ON SEPTEMBER 27, 2023
Dear Shareholders of Jaguar Global Growth Corporation I:
You are cordially invited to attend the extraordinary general meeting (the “Extraordinary General Meeting”) of Jaguar Global Growth Corporation I (“JGGC”), to be held at 601 Brickell Key Drive, Suite 700, Miami, FL 33131, United States, and online via live webcast, at 12:00 p.m., Eastern Time, on September 27, 2023, or at such other time, on such other date and at such other place to which the meeting may be adjourned or postponed. To attend and participate in the Extraordinary General Meeting virtually, you must register at the JGGC meeting website, which is accessible through the following link: https://www.cstproxy.com/jaguarglobalgrowth/2023. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Extraordinary General Meeting and to vote and submit questions during the Extraordinary General Meeting.
At the Extraordinary General Meeting, JGGC’s shareholders will be asked to consider and vote upon a proposal to approve, by ordinary resolution, a business combination (the “Business Combination”) by the approval of:
| (1) | that certain Business Combination Agreement, dated as of March 2, 2023 (as the same has been amended as of June 16, 2023, July 7, 2023, July 18, 2023 and September 7, 2023 and may be further amended, supplemented, or otherwise modified from time to time, the “Business Combination Agreement”), that JGGC has entered into with Captivision Inc., a Cayman Islands exempted company limited by shares (“New PubCo”), Jaguar Global Growth Korea Co., Ltd., a stock corporation (chusik hoesa) organized under the laws of the Republic of Korea and wholly owned direct subsidiary of JGGC (“Exchange Sub”), and GLAAM Co., Ltd., a corporation (chusik hoesa) organized under the laws of the Republic of Korea (“GLAAM”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, Annex A-1, Annex A-2, Annex A-3 and Annex A-4 pursuant to which, among other things: |
| (i) | JGGC shall be merged with and into New PubCo, with New PubCo surviving the merger (the “Merger”), |
| (ii) | immediately thereafter, New PubCo shall issue 17,607,160 ordinary shares, par value $0.0001 per share, of New PubCo (the “New PubCo Ordinary Shares”), equal to the quotient of (1) $186,635,893, divided by (2) $10.60 (i.e., 17,607,160 New PubCo Ordinary Shares issued in exchange for 21,986,398 GLAAM Common Shares at an exchange ratio of 0.800820612130561) (such number of shares, the “Aggregate Share Swap Consideration”), to Exchange Sub, and |
| (iii) | all shareholders of GLAAM (the “GLAAM Shareholders”) will transfer their respective common
shares, par value |
| (2) | the transactions contemplated by the Business Combination Agreement, and the other agreements entered into or to be entered into by JGGC in connection with the Business Combination (collectively, the “Transactions”) (such proposal, the “Business Combination Proposal”). |
As further described in the accompanying proxy statement/prospectus, subject to the terms and conditions of the Business Combination Agreement, the transactions described below will occur.
At the effective time of the Merger: (i) each unit of JGGC (each, a “JGGC Unit”) will be automatically separated and each holder will be deemed to hold one Class A ordinary share of JGGC (each, a “JGGC Class A Ordinary Share”), one right entitling the holder thereof to receive one-twelfth of one JGGC Class A Ordinary Share upon the consummation by JGGC of a business combination (each, a “JGGC Right”) and one-half of one warrant, per JGGC Unit, (ii) all ordinary shares of JGGC that are owned by JGGC or any wholly owned subsidiary of JGGC immediately prior to the Merger shall automatically be canceled, and no New PubCo Ordinary Shares or other consideration shall be delivered in exchange therefor, (iii) each JGGC Class A Ordinary Share and each Class B ordinary share of JGGC (each, a “JGGC Class B Ordinary Share”) that is issued and outstanding immediately prior to the Merger will be converted into and shall for all purposes represent only the right to receive one issued, fully paid and non-assessable New PubCo Ordinary Share, (iv) all outstanding warrants to purchase ordinary shares of JGGC (the “JGGC Warrants”) will be converted into warrants to purchase the same number of New PubCo Ordinary Shares and all rights with respect to JGGC ordinary shares under such JGGC Warrants will be converted into rights with respect to the applicable New PubCo Ordinary Shares (the “New PubCo Converted Warrants”), (v) each JGGC Right that is issued and outstanding immediately prior to the Merger will be converted into the number of New PubCo Ordinary Shares that would have been received by the holder thereof if such JGGC Right had been converted upon the consummation of a business combination into JGGC Class A Ordinary Shares, no fractional shares will be issued upon conversion of JGGC Rights, so holders must hold rights in denominations of 12 in order to receive a New PubCo Ordinary Share and all JGGC Rights shall no longer be outstanding and shall automatically be canceled by virtue of the Merger and each former holder of JGGC Rights shall thereafter cease to have any rights with respect thereto, except the right to receive New PubCo Ordinary Shares and (vi) all of the issued share capital in New PubCo as of immediately prior to the Merger will be cancelled.
At the effective time of the Share Swap, (i) the right to each GLAAM Common Share held by the GLAAM Shareholders in connection with and immediately prior to the Share Swap shall be converted into and shall for all purposes represent only the right to receive a number of validly issued, fully paid and non-assessable New PubCo Ordinary Shares equal to the quotient of (a) the Aggregate Share Swap Consideration divided by (b) the sum of (x) the aggregate number of GLAAM Common Shares that are issued and outstanding as of immediately prior to the effective time of the Share Swap and (y) the number of GLAAM Common Shares issuable upon full exercise, exchange or conversion of all options to purchase GLAAM Common Shares (the “GLAAM Options”) (calculated using the treasury method of accounting on a cashless exercise basis), and assuming conversion of all such GLAAM Options in accordance with the terms of the Business Combination Agreement, outstanding as of immediately prior to the effective time of the Share Swap (such quotient, which shall be 0.800820612130561, the “GLAAM Exchange Ratio”); and (ii) each GLAAM Option shall be converted into an option to acquire, subject to substantially the same terms and conditions as were applicable under such GLAAM Option, the number of New PubCo Ordinary Shares (rounded down to the nearest whole share), determined by multiplying the number of GLAAM Common Shares subject to such GLAAM Option as of immediately prior to the Share Swap by the GLAAM Exchange Ratio, at an exercise price per New PubCo Ordinary Share (rounded up to the nearest whole cent) equal to (x) the exercise price per GLAAM Common Share of such GLAAM Option divided by (y) the GLAAM Exchange Ratio (each a “New PubCo Converted Option”) in accordance with the Closing Payments Schedule (defined below and in the Business Combination Agreement). In exchange for the Aggregate Share Swap Consideration, Exchange Sub shall distribute all of the GLAAM Common Shares it receives from GLAAM Shareholders to New Pubco, and GLAAM will become a wholly-owned direct subsidiary of New PubCo.
In the event that immediately following the Closing, the total number of (a) issued and outstanding New PubCo Ordinary Shares collectively owned beneficially or of record by Houngki Kim and Ho Joon Lee (collectively, the “GLAAM Founders”) (excluding any New PubCo Shares that Hongki Kim may be deemed to beneficially own as the CEO of Bio X Co., Ltd. (“BioX”) plus (b) any New PubCo Ordinary Shares that would have been issued in exchange for GLAAM Common Shares that were held by the GLAAM Founders on the date of the Business Combination Agreement but transferred prior to the Closing, calculated as of immediately following the Closing assuming (i) conversion of all issued and outstanding securities of New PubCo that are convertible into New PubCo Ordinary Shares and (ii) settlement of all issued and outstanding restricted stock rights of New PubCo (the “GLAAM Founder Closing Ownership Stake”) would not constitute at least 12.5% of the total number of issued and outstanding New PubCo Ordinary Shares, calculated as of immediately following
the Closing assuming (i) conversion of all issued and outstanding securities of New PubCo that are convertible into New PubCo Ordinary Shares and (ii) settlement of all issued and outstanding restricted stock rights of New PubCo (the “New PubCo Closing Fully Diluted Capital”), then prior to the Closing, New PubCo, JGGC and GLAAM shall enter into an agreement with the GLAAM Founders on reasonable terms pursuant to which New PubCo will issue to the GLAAM Founders a number of warrants to purchase New PubCo Ordinary Shares (the “New PubCo Founder Warrants”) such that following the issuance of such warrants to the GLAAM Founders, the GLAAM Founder Closing Ownership Stake shall constitute 12.5% of the New PubCo Closing Fully Diluted Capital. The New PubCo Founder Warrants will have the same exercise price and substantially the same term, exercisability, vesting schedule and other rights, obligations and conditions as the New PubCo Private Warrants.
Pursuant to a letter agreement, entered into concurrently with the Business Combination Agreement, by and among the GLAAM Founders, New PubCo, Exchange Sub, JGGC and GLAAM (the “GLAAM Founder Earnout Letter”), at the Closing, New PubCo shall issue or cause to be issued to the GLAAM Founders (in the aggregate), (i) 1,666,666.67 Series I restricted stock rights of New PubCo (the “New PubCo Series I RSRs”), (ii) 1,666,666.67 Series II restricted stock rights of New PubCo (the “New PubCo Series II RSRs”), and (iii) 1,666,666.67 Series III restricted stock rights of New PubCo (the “New PubCo Series III RSRs,” and together with the New PubCo Series I RSRs and the New PubCo Series II RSRs, the “New PubCo Earnout RSRs”), in each case upon the terms and subject to the conditions set forth in the GLAAM Founder Earnout Letter, and New PubCo shall reserve and allot a number of New PubCo Ordinary Shares for issuance upon settlement of such New PubCo Earnout RSRs (collectively, the “Earnout Shares”) if the daily volume-weighted average price (“VWAP”) of New PubCo Ordinary Shares is greater than or equal to (a) $12.00, (b) $14.00, or (c) $16.00, respectively (collectively, the “Triggering Events”), in each case, for twenty (20) days on which trading in New PubCo Ordinary Shares (each a “Trading Day”) occurs on the Nasdaq Global Market (“Nasdaq”) or such other national securities exchange on which New PubCo Ordinary Shares are traded within any thirty (30) consecutive Trading Day period occurring during the period commencing at Closing and ending on the third anniversary of the Closing (the “Earnout Period”). In the event that during the Earnout Period, in a single transaction or a series of related transactions, (i) a merger, consolidation, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction with respect to New PubCo, in each case, in which shares of New PubCo are exchanged for cash, securities of another person or entity, or other property (excluding, for the avoidance of doubt, any domestication of New PubCo or any other transaction in which New PubCo Ordinary Shares are exchanged for substantially similar securities of New PubCo or any successor entity of New PubCo) or (ii) the sale, lease or other disposition, directly or indirectly, by New PubCo of all or substantially all of the assets of New PubCo and its subsidiaries, taken as a whole (excluding any such sale or other disposition to an entity at least a majority of the combined voting power of the voting securities of which are owned by holders of New PubCo Ordinary Shares) (an “Earnout Strategic Transaction”) is consummated, and the per share value in such transaction is greater than or equal to (a) $12.00, (b) $14.00, or (c) $16.00 per share, then the corresponding New PubCo Series I RSRs, the New PubCo Series II RSRs, or the New PubCo Series III RSRs, as the case may be, will automatically vest, and any Earnout Shares underlying such vested New PubCo Earnout RSRs not previously issued pursuant to the GLAAM Founder Earnout Letter will be issued or deemed to have been issued by New PubCo immediately prior to the consummation of such transaction. The recipients of such issued or deemed to be issued Earnout Shares shall be eligible to participate with respect thereto in such Earnout Strategic Transaction.
Pursuant to the Business Combination Agreement, during the period from the date of the Business Combination Agreement and continuing until the earlier of the termination thereof pursuant to its terms and the Closing (the “Interim Period”) the parties thereto may (A) identify and seek additional sources of financing on behalf of New PubCo and/or GLAAM from third party financing sources, including in the form of (w) a private placement of New PubCo Ordinary Shares to be consummated at the Closing (a “PIPE Investment”), (x) an Approved GLAAM Financing, (y) an equity line of credit or similar financing arrangement to be in place and available to New PubCo as of the Closing (subclauses (w) – (y) collectively, “Equity Financing Arrangements”) and/or (z) debt financing arrangements for borrowed money entered into by GLAAM, New PubCo and/or JGGC (together with Equity Financing Arrangements, “Financing Arrangements”) and (B) negotiate definitive agreements on terms reasonably acceptable to GLAAM and JGGC as necessary to effectuate any Financing Arrangement, including, with respect to PIPE Investments, subscription agreements to purchase New PubCo
Ordinary Shares. In the event that any GLAAM Shareholders make demands for appraisal under the Commercial Korean Code in respect of the Transactions, the parties agree to reasonably cooperate in procuring Financing Arrangements as necessary to address any liquidity or other financial consequences to the GLAAM or New PubCo (following the Closing) resulting from such demands for appraisal. As of the date of the accompanying proxy statement/prospectus, no party to the Business Combination Agreement has entered into any PIPE Investment or other Financing Arrangements.
It is anticipated that, upon consummation of the Business Combination, in the “No Additional Redemption Scenario,” which assumes that none of JGGC’s existing shareholders exercise their redemption rights in connection with Business Combination and subject to the other assumptions set forth in the accompanying proxy statement/prospectus under “Presentation of Certain Assumptions Relating to the Business Combination,” the GLAAM Founders, GLAAM’s other existing shareholders, the holders (the “Public Shareholders”) of the JGGC Class A Ordinary Shares included as part of the JGGC Units (the “Public Shares”) sold in JGGC’s IPO, JGGC’s rights holders and the Sponsor together with JGGC’s other initial shareholders, will own approximately 0.9%, 48.3%, 28.8%, 5.5% and 16.5%, respectively, of the issued and outstanding share capital of New PubCo.
In addition, it is anticipated that, upon consummation of the Business Combination, in the “Interim Redemption Scenario,” which assumes that 5,037,147 of JGGC Class A Ordinary Shares (or 50% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per JGGC Class A Ordinary Share or $54,098,959 in the aggregate (based on the estimated value of the Trust Account at Closing), and subject to the other assumptions set forth in the accompanying proxy statement/prospectus under “Presentation of Certain Assumptions Relating to the Business Combination,” the GLAAM Founders, GLAAM’s other existing shareholders, JGGC’s Public Shareholders, JGGC’s rights holders and the Sponsor together with JGGC’s other initial shareholders, will own approximately 1.1%, 56.4%, 16.8%, 6.4% and 19.2%, respectively, of the issued and outstanding share capital of New PubCo.
In addition, it is anticipated that, upon consummation of the Business Combination, in the “Maximum Redemption Scenario,” which assumes that 10,074,293 of JGGC Class A Ordinary Shares (or 100% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per JGGC Class A Ordinary Share or $108,200,000 in the aggregate (based on the estimated value of the Trust Account at Closing), and subject to the other assumptions set forth in the accompanying proxy statement/prospectus under “Presentation of Certain Assumptions Relating to the Business Combination,” the GLAAM Founders, GLAAM’s other existing shareholders, JGGC’s Public Shareholders, JGGC’s rights holders and the Sponsor together with JGGC’s other initial shareholders, will own approximately 1.3%, 67.9%, 0.0%, 7.7% and 23.1%, respectively, of the issued and outstanding share capital of New PubCo.
The percentages referred to above do not include any other transactions that may be entered into after the date of the accompanying proxy statement/prospectus or any exercise or conversion of the New PubCo Converted Warrants or the New PubCo Founder Warrants. If any Equity Financing Arrangements (including any PIPE Investment) are entered into in connection with the Business Combination, or if any of the other assumptions are not true, these percentages will be different. You should read “The Business Combination Agreement—Ownership of, and Voting Rights in, New PubCo Following the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information” in the accompanying proxy statement/prospectus for further information.
New PubCo expects to qualify as a foreign private issuer under applicable U.S. federal securities laws. As a foreign private issuer whose securities are expected to be listed on Nasdaq, New PubCo will be permitted to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements. New PubCo may take advantage of certain exemptions available to it as a foreign private issuer so long as it continues to qualify as a foreign private issuer. See “Risk Factors—Risks Related to New PubCo—As a foreign private issuer and a company treated as an “emerging growth company” for certain purposes, New PubCo will have different disclosure and other requirements than U.S. domestic registrants and non-emerging growth companies,” “Risk Factors—Risks Related to New PubCo—As a foreign private issuer, New PubCo is permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers. This may afford less protection to holders of New PubCo Ordinary Shares.”
In addition to the Business Combination Proposal, you will also be asked to consider and vote upon:
| (a) | a proposal to approve, by special resolution, the plan of merger relating to the Merger, a copy of which is attached to the accompanying proxy statement/prospectus as Annex B (the “Merger Proposal”); |
| (b) | three separate proposals (collectively, the “Governing Documents Proposals”) to approve, on a non-binding advisory basis, by ordinary resolution, certain material differences between the amended and restated memorandum and articles of association of New PubCo to be in effect following the Business Combination, a copy of which is attached to the accompanying proxy statement/prospectus as Annex C (the “Proposed Governing Documents”), and the existing amended and restated memorandum and articles of association of JGGC (the “Existing Governing Documents”); |
| (c) | a proposal to approve, by ordinary resolution, the New PubCo Equity Plan, a copy of which is attached to the accompanying proxy statement/prospectus as Annex D (the “New PubCo Equity Plan Proposal”); and |
| (d) | a proposal to approve, by ordinary resolution, the adjournment of the Extraordinary General Meeting to a later date or dates, if necessary (i) to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to JGGC shareholders or (ii) to permit further solicitation of additional proxies from JGGC shareholders in favor of one or more of the proposals at the Extraordinary General Meeting (the “Adjournment Proposal”). Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which each JGGC shareholder is encouraged to read carefully and in its entirety. |
In connection with the Business Combination, certain related agreements have been, or will be entered into on or prior to the closing of the Business Combination, including the GLAAM Support Agreement, the Sponsor Support Agreement, the Registration Rights Agreement, the GLAAM Founder Earnout Letter and any agreements which may be entered into in connection with any Financing Arrangements (as permitted by the Business Combination Agreement) (each as defined in the accompanying proxy statement/prospectus). See “Business Combination Proposal—Certain Agreements Related to the Business Combination” in the accompanying proxy statement/prospectus for more information.
The JGGC Class A Ordinary Shares, JGGC Rights, JGGC Warrants and JGGC Units are currently listed on Nasdaq under the symbols “JGGC,” “JGGCR,” “JGGCW” and “JGGCU,” respectively. Pursuant to the terms of the Business Combination Agreement, as a closing condition, the parties are required to cause the New PubCo Ordinary Shares and the New PubCo Converted Warrants issued in connection with the Business Combination to be approved for listing on Nasdaq, but there can be no assurance that such listing condition will be met. If such listing condition is not met, the Business Combination will not be consummated unless the listing condition is waived by the parties to the Business Combination Agreement. Following the Closing, the New PubCo Ordinary Shares and the New PubCo Converted Warrants will be listed, subject to Nasdaq approval, under the proposed symbols “CAPT” and “CAPTW”, respectively. It is important for you to know that, at the time of the Extraordinary General Meeting, the parties may not have received from Nasdaq either confirmation of the listing of the New PubCo Ordinary Shares and the New PubCo Converted Warrants or that approval thereof will be obtained prior to the consummation of the Business Combination. As a result, you may be asked to vote to approve the Business Combination and the other proposals included in the accompanying proxy statement/prospectus without such confirmation, and, further, it is possible that such confirmation may never be received and the Business Combination could still be consummated if such listing condition is waived by the parties to the Business Combination and therefore the New PubCo Securities would not be listed on Nasdaq or any other nationally recognized securities exchange.
Each of JGGC and GLAAM is an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, and New PubCo is and, following the Business Combination, will be, an “emerging growth company.” As such, New PubCo is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and certain reduced, or
exempted, disclosure obligations. See “Risk Factors—Risks Related to New PubCo—As a foreign private issuer and a company treated as an “emerging growth company” for certain purposes, New PubCo will have different disclosure and other requirements than U.S. domestic registrants and non-emerging growth companies.”
Pursuant to the Existing Governing Documents, JGGC is providing its shareholders with the opportunity to have their Public Shares redeemed at the consummation of the Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding JGGC Class A Ordinary Shares included as part of the JGGC Units sold in JGGC’s IPO, subject to the limitations described in the accompanying proxy statement/prospectus. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account as of August 16, 2023 of $106,978,440 the estimated per share redemption price would have been approximately $10.62. JGGC Public Shareholders may elect to redeem their Public Shares even if they vote for the Business Combination Proposal and the other proposals. The Existing Governing Documents provide that a JGGC Public Shareholder, acting together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a partnership, limited partnership, syndicate, or other group for purposes of acquiring, holding, or disposing of any JGGC Class A Ordinary Shares, will be restricted from exercising their redemption right in an amount of shares exceeding 15% of the Public Shares in the aggregate without our prior consent. There will be no redemption rights with respect to the JGGC warrants.
Concurrently with the execution of the Business Combination Agreement, certain GLAAM Shareholders, JGGC, New PubCo and GLAAM entered into the GLAAM Support Agreement pursuant to which, among other things, such GLAAM Shareholders have agreed to (a) vote their respective GLAAM Common Shares in favor of the approval and adoption of the Business Combination Agreement and the Transactions, (b) certain transfer restrictions with respect to such GLAAM Common Shares (unless the transferee enters into a written agreement in form and substance reasonably satisfactory to JGGC and GLAAM agreeing to be bound by the applicable provisions of the GLAAM Support Agreement prior to or concurrently with the occurrence of such transfer) and (c) waive any appraisal rights (including under the Korean Commercial Code) with respect to the Transactions.
Concurrently with the execution of the Business Combination Agreement, New PubCo, JGGC, GLAAM and the Sponsor entered into the Sponsor Support Agreement pursuant to which Sponsor agreed to, among other things, (a) certain restrictions on transfer relating to its ordinary shares of JGGC prior to the Closing as set forth therein, (b) not redeem any of its shares of JGGC in connection with the vote to approve the Transactions or any proposal to extend the date by which JGGC must complete an initial business combination, (c) vote in favor of the Merger and the other Transactions and against any alternative transaction, (d) waive certain anti-dilution provisions contained in JGGC’s Existing Governing Documents in connection with the Merger and (e) subject a certain number of New PubCo Ordinary Shares received by the Sponsor at Closing to vesting (or forfeiture if such shares have not vested prior to the expiration of the applicable vesting period).
In addition, immediately prior to the effective time of the Merger, New PubCo, JGGC and the warrant agent under the warrant agreement, dated as of February 10, 2022, between JGGC and the Continental Stock Transfer & Trust Company will enter into an amended and restated warrant agreement (the “A&R Warrant Agreement”) pursuant to which, among other things, JGGC will assign to New PubCo all of its rights, interests, and obligations in and under the warrant agreement upon the Merger, and New PubCo will assume the warrants provided for under the warrant agreement. See “Business Combination Proposal—Certain Agreements Related to the Business Combination—A&R Warrant Agreement” in the accompanying proxy statement/prospectus for more information related to the A&R Warrant Agreement.
JGGC is providing the accompanying proxy statement/prospectus and the accompanying proxy card to its shareholders in connection with the solicitation of proxies to be voted at the Extraordinary General Meeting and at any adjournments of the Extraordinary General Meeting. Information about the Extraordinary General Meeting, the Business Combination, and other related business to be considered by JGGC shareholders at the Extraordinary General Meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the Extraordinary General Meeting, all JGGC shareholders are urged to read the
accompanying proxy statement/prospectus, including the Annexes thereto and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 67 of the accompanying proxy statement/prospectus.
After careful consideration, the board of directors of JGGC has unanimously approved the Business Combination Agreement and the transactions contemplated thereby, including the Merger, and unanimously recommends that shareholders vote “FOR” the Business Combination Proposal, the Merger Proposal, the Governing Documents Proposals, the New PubCo Equity Plan Proposal and the Adjournment Proposal. When you consider the recommendation of these proposals by the board of directors of JGGC, you should keep in mind that JGGC’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the sections entitled “Business Combination Proposal—Interests of JGGC’s Directors and Executive Officers and the Sponsor in the Business Combination” and “Risk Factors—Risks Related to JGGC and the Business Combination—The Sponsor, directors and officers may have a conflict of interest in determining to pursue the Business Combination or any other business combination, since certain of their interests are different from or in addition to (and may conflict with) the interests of JGGC’s Public Shareholders, and such interests may have influenced the JGGC board of directors’ decisions to approve the Business Combination and recommend that JGGC’s shareholders approve the Business Combination Proposal” in the accompanying proxy statement/prospectus for a further discussion of these considerations.
The approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of holders of at least two-thirds (2/3) of the issued JGGC ordinary shares who, being present in person or represented by proxy and entitled to vote at the Extraordinary General Meeting, vote at the Extraordinary General Meeting. The approval of each of the Business Combination Proposal, the Governing Documents Proposals, the New PubCo Equity Plan Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued JGGC ordinary shares present in person or represented by proxy at the Extraordinary General Meeting and entitled to vote on such matter.
Your vote is very important. Whether or not you plan to attend the Extraordinary General Meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are represented at the Extraordinary General 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 Extraordinary General Meeting. The Business Combination will be consummated only if the Business Combination Proposal and the Merger Proposal are approved at the Extraordinary General Meeting.
If you sign, date, and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Extraordinary General 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 Extraordinary General Meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the Extraordinary General Meeting. Accordingly, your failure to vote by proxy or to vote in person at the Extraordinary General Meeting will have no effect on the outcome of the vote on any of the proposals presented at the Extraordinary General Meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the Extraordinary General Meeting. If you are a shareholder of record and you attend the Extraordinary General Meeting and wish to vote in person, you may withdraw your proxy and vote in person.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES (OR A SPECIFIED PORTION OF THEM) ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER OR DELIVER YOUR SHARES (AND SHARE CERTIFICATES (IF ANY) AND OTHER REDEMPTION FORMS) TO THE TRANSFER AGENT BY 5:00 PM (EASTERN TIME) ON SEPTEMBER 25, 2023 (AT LEAST TWO
BUSINESS DAYS PRIOR TO THE SCHEDULED DATE OF THE EXTRAORDINARY GENERAL MEETING). IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER, AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER OR DELIVER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE (IF ANY) TO CONTINENTAL OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DEPOSIT WITHDRAWAL AT CUSTODIAN (DWAC) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.
On behalf of JGGC’s board of directors, I would like to thank you for your support and look forward to the successful consummation of the Business Combination.
September 13, 2023
Sincerely,
/s/ Gary R. Garrabrant
Gary R. Garrabrant
Chief Executive Officer
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
The accompanying proxy statement/prospectus is dated as of, and is first being mailed to shareholders on or about September 13, 2023.
PROXY STATEMENT FOR EXTRAORDINARY GENERAL MEETING OF JAGUAR GLOBAL GROWTH CORPORATION I
AND
PROSPECTUS FOR UP TO 37,264,787 ORDINARY SHARES,
23,950,000 WARRANTS,
AND 23,950,000 ORDINARY SHARES UNDERLYING WARRANTS
OF
CAPTIVISION INC.
NOTICE OF EXTRAORDINARY GENERAL MEETING OF JAGUAR GLOBAL GROWTH CORPORATION I TO BE HELD ON SEPTEMBER 27, 2023
To the Shareholders of Jaguar Global Growth Corporation I:
NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “Extraordinary General Meeting”) of Jaguar Global Growth Corporation I, a Cayman Islands exempted company (“JGGC”), to be held at 601 Brickell Key Drive, Suite 700, Miami, FL 33131, United States, and online via live webcast, at 12:00 p.m., Eastern Time, on September 27, 2023, or at such other time, on such other date and at such other place to which the meeting may be adjourned or postponed. To attend and participate in the Extraordinary General Meeting virtually, you must register at the JGGC meeting website, which is accessible through the following link: https://www.cstproxy.com/jaguarglobalgrowth/2023. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Extraordinary General Meeting and to vote and submit questions during the Extraordinary General Meeting. You are cordially invited to attend the Extraordinary General Meeting for the following purposes:
| (1) | Proposal No. 1 - The Business Combination Proposal: to consider and vote upon a proposal to approve, by
ordinary resolution, the Business Combination Agreement, dated as of March 2, 2023 as the same has been amended as of June 16, 2023, July 7, 2023, July 18, 2023 and September 7, 2023, 2023 and may be further amended, supplemented, or
otherwise modified from time to time, the “Business Combination Agreement,” and, the transactions contemplated thereby, collectively, the “Business Combination”), by and among JGGC, Captivision Inc., a Cayman
Islands exempted company (“New PubCo”), Jaguar Global Growth Korea Co., Ltd., a stock corporation (chusik hoesa) organized under the laws of the Republic of Korea and wholly owned direct subsidiary of JGGC (“Exchange
Sub”), and GLAAM Co., Ltd., a corporation (chusik hoesa) organized under the laws of the Republic of Korea (“GLAAM”), a copy of which is attached to this proxy statement/prospectus as Annex A, Annex A-1, Annex A-2,
Annex A-3 and Annex A-4, pursuant to which, among other things, (i) JGGC shall be merged with and into New PubCo, with New PubCo surviving the merger (the “Merger”), (ii) immediately thereafter, New PubCo shall issue a number
of ordinary shares, par value $0.0001 per share, of New PubCo (the “New PubCo Ordinary Shares”), equal to the Aggregate Share Swap Consideration (as defined below) to Exchange Sub, and (iii) all shareholders of GLAAM (the
“GLAAM Shareholders”) will transfer their respective common shares, par value |
| (2) | Proposal No. 2 - The Merger Proposal: to approve, by special resolutions, |
(a) JGGC be authorized to merge with and into New PubCo, so that JGGC be the merging company and all the undertaking, property, and liabilities of the merging company vest in the surviving company by virtue of the such merger pursuant to Part XVI of the Companies Act (As Revised); and
(b) the plan of merger relating to the Merger, a copy of which is attached to this proxy statement/prospectus as Annex B, pursuant to which JGGC will merge with and into New PubCo, with New PubCo being the surviving entity (the “Merger Proposal”);
| (3) | Proposal No. 3 - The Governing Documents Proposals: to consider and vote upon three separate proposals (collectively, the “Governing Documents Proposals”) to approve, on an advisory non-binding basis, by ordinary resolution, material differences between the amended and restated memorandum and articles of association of New PubCo to be in effect following the Business Combination, a copy of which is attached to this proxy statement/prospectus as Annex C (the “Proposed Governing Documents”), and the existing amended and restated memorandum and articles of association of JGGC (the “Existing Governing Documents”); |
| (4) | Proposal No. 4 - The New PubCo Equity Plan Proposal: to consider and vote upon, by ordinary resolution, a proposal to approve the New PubCo Equity Plan (the “New PubCo Equity Plan Proposal”); |
| (5) | Proposal No. 5 - The Adjournment Proposal: to consider and vote upon, as an ordinary resolution, a proposal to adjourn the Extraordinary General Meeting to a later date or dates if necessary (i) to ensure that any required supplement or amendment to this proxy statement/prospectus is provided to JGGC shareholders or (ii) to permit further solicitation of additional proxies from JGGC shareholders in favor of one or more of the proposals at the Extraordinary General Meeting (the “Adjournment Proposal”). |
Consummation of the Business Combination is conditioned on the approval of the Business Combination Proposal and the Merger Proposal, but is not conditioned on the Governing Documents Proposals, the New PubCo Equity Plan Proposal or the Adjournment Proposal. The Business Combination Proposal and the Merger Proposal are cross-conditioned on the approval of each other, the Governing Documents Proposals and the New PubCo Equity Plan Proposal are conditioned on the approval of the Business Combination Proposal and the Merger Proposal, and the Adjournment Proposal is not conditioned on the approval of any other proposal.
Only holders of record of JGGC’s Class A ordinary shares, par value $0.0001 per share (“JGGC Class A Ordinary Shares”) and Class B ordinary shares, par value $0.0001 per share (“JGGC Class B Ordinary Shares,” and together with the JGGC Class A Ordinary Shares, “JGGC Ordinary Shares”) at the close of business on September 1, 2023 are entitled to notice of and to attend, vote and have their votes counted at the Extraordinary General Meeting and any adjournment of the Extraordinary General Meeting.
This proxy statement/prospectus and accompanying proxy card is being provided to JGGC shareholders in connection with the solicitation of proxies to be voted at the Extraordinary General Meeting and at any adjournment of the Extraordinary General Meeting. Information about the Extraordinary General Meeting, the Business Combination, each of the proposals being presented at the Extraordinary General Meeting (collectively, the “Transaction Proposals”) and other related business to be considered by JGGC shareholders at the Extraordinary General Meeting is included in this proxy statement/prospectus. Whether or not you plan to attend the Extraordinary General Meeting all JGGC shareholders are urged to read this proxy statement/prospectus, including the Annexes thereto and the documents referred to herein carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 67 of this proxy statement/prospectus.
After careful consideration, the board of directors of JGGC has unanimously approved the Business Combination Agreement and the transactions contemplated thereby, including the Merger, and unanimously recommends that shareholders vote “FOR” all Transaction Proposals presented to JGGC’s shareholders. When you consider the recommendation of these proposals by the board of directors of JGGC, you should keep in mind that JGGC’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the sections entitled “Business Combination Proposal—Interests of JGGC’s Directors and Executive Officers and the Sponsor in the Business Combination” and “Risk Factors - Risks Related to JGGC and the Business Combination—The Sponsor, directors and officers may have a conflict of interest in determining to pursue the Business Combination or any other business combination, since certain of their interests are different from or in addition to (and may conflict with) the interests of JGGC’s Public Shareholders, and such interests may have
influenced the JGGC board of directors’ decisions to approve the Business Combination and recommend that JGGC’s shareholders approve the Business Combination Proposal” in this proxy statement/prospectus for a further discussion of these considerations.
Pursuant to the Existing Governing Documents, holders of JGGC Class A Ordinary Shares sold in the IPO (such shares, the “Public Shares” and such holders the “Public Shareholders”) may request that JGGC redeem all or a portion of their Public Shares for cash if the Business Combination is consummated. As a Public Shareholder, you will be entitled to receive cash for any Public Shares to be redeemed only if you:
| (i) | (a) hold Public Shares, or (b) if you hold Public Shares through JGGC Units, you elect to separate your JGGC Units into the underlying Public Shares, JGGC Rights and JGGC Warrants prior to exercising your redemption rights with respect to the Public Shares; |
| (ii) | submit a written request to Continental Stock Transfer & Trust Company (“Continental”), JGGC’s transfer agent, in which you (a) request that JGGC redeem all or a portion of your Public Shares for cash, and (b) identify yourself as the beneficial holder of the Public Shares and provide your legal name, phone number and address; and |
| (iii) | deliver your share certificates (if any) and other redemption forms (as applicable) to Continental electronically through The Depository Trust Company (“DTC”). |
Holders must complete the procedures for electing to redeem their Public Shares in the manner described above prior to 5:00 p.m., Eastern Time, on September 25, 2023 (two business days before the scheduled date of the Extraordinary General Meeting) in order for their Public Shares to be redeemed.
Holders of Public Shares seeking to exercise their redemption rights will be required to either tender or deliver their certificates (if any) along with any other redemption forms to JGGC’s transfer agent or to deliver their Public Shares to the transfer agent electronically using DTC’s Deposit/Withdrawal At Custodian System, at the holder’s option, in each case not later than 5:00 p.m. Eastern Time, on September 25, 2023 (two business days before the scheduled date of the Extraordinary General Meeting). The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number, and address to Continental in order to validly redeem its shares. Public Shareholders may elect to redeem Public Shares regardless of whether or how they vote in respect of the Business Combination Proposal. If the proposed Business Combination is not approved or completed for any reason, then such redemptions shall be cancelled and share certificates (if any) returned to the relevant Public Shareholders, as appropriate. If the Business Combination is consummated, and if a Public Shareholder properly exercises its right to redeem all or a portion of the Public Shares that it holds and timely delivers its shares to Continental, JGGC will redeem such Public Shares for a per-share price, payable in cash, equal to the aggregate amount then on deposit in JGGC’s trust account, including interest earned on the funds held in the trust account and not previously released to JGGC to pay its tax obligations, if any, divided by the number of then-outstanding Public Shares, calculated as of two days prior to the consummation of the Business Combination. For illustrative purposes, as of August 16, 2023, this would have amounted to approximately $10.62 per issued and outstanding Public Share. If a Public Shareholder exercises its redemption rights in full, then it will be electing to exchange its Public Shares for cash and will no longer own Public Shares. See “The Extraordinary General Meeting of JGGC Shareholders—Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your Public Shares for cash.
Notwithstanding the foregoing redemption rights, the Existing Governing Documents provide that a Public Shareholder, together with any affiliate of such Public Shareholder or any other person with whom such Public Shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares without the prior consent of JGGC. Accordingly, if a Public Shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash and such excess Public Shares would be converted into New PubCo Ordinary Shares in connection with the Business Combination. In addition, if the
Redemption Limitation Amendment Proposal is not approved, JGGC will not redeem Public Shares in an amount that would cause JGGC’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement. There will be no redemption rights with respect to the JGGC Warrants.
Jaguar Global Growth Partners I, LLC (the “Sponsor”) and JGGC’s officers and directors have, pursuant to the Sponsor Support Agreement, dated as of March 2, 2023 (the “Sponsor Support Agreement”), agreed to, among other things, vote all of their JGGC Ordinary Shares in favor of the proposals being presented at the Extraordinary General Meeting and waive their anti-dilution rights with respect to their JGGC Class B Ordinary Shares in connection with consummation of the Business Combination.
The Business Combination Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in this proxy statement/prospectus, including, among other things, the approval of the Transaction Proposals. There can be no assurance that the closing conditions will be satisfied or that the parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement.
It is anticipated that, upon consummation of the Business Combination, in the “No Additional Redemption Scenario,” which assumes that none of JGGC’s existing shareholders exercise their redemption rights in connection with the Business Combination and subject to the other assumptions set forth in the accompanying proxy statement/prospectus under “Presentation of Certain Assumptions Relating to the Business Combination,” the GLAAM Founders, GLAAM’s other existing shareholders, JGGC’s Public Shareholders, JGGC’s rights holders and the Sponsor together with JGGC’s other initial shareholders, will own approximately 0.9%, 48.3%, 28.8%, 5.5% and 16.5%, respectively, of the issued and outstanding share capital of New PubCo.
In addition, it is anticipated that, upon consummation of the Business Combination, in the “Interim Redemption Scenario,” which assumes that 5,037,147 of JGGC Class A Ordinary Shares (or 50% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per JGGC Class A Ordinary Share or $54,098,959 in the aggregate (based on the estimated value of the Trust Account at Closing), and subject to the other assumptions set forth in the accompanying proxy statement/prospectus under “Presentation of Certain Assumptions Relating to the Business Combination,” the GLAAM Founders, GLAAM’s other existing shareholders, JGGC’s Public Shareholders, JGGC’s rights holders and the Sponsor together with JGGC’s other initial shareholders, will own approximately 1.1%, 56.4%, 16.8%, 6.4% and 19.2%, respectively, of the issued and outstanding share capital of New PubCo.
In addition, it is anticipated that, upon consummation of the Business Combination, in the “Maximum Redemption Scenario,” which assumes that 10,074,293 of JGGC Class A Ordinary Shares (or 100% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per JGGC Class A Ordinary Share or $108,200,000 in the aggregate (based on the estimated value of the Trust Account at Closing), and subject to the other assumptions set forth in the accompanying proxy statement/prospectus under “Presentation of Certain Assumptions Relating to the Business Combination,” the GLAAM Founders, GLAAM’s other existing shareholders, JGGC’s Public Shareholders, JGGC’s rights holders and the Sponsor together with JGGC’s other initial shareholders, will own approximately 1.3%, 67.9%, 0.0%, 7.7% and 23.1%, respectively, of the issued and outstanding share capital of New PubCo.
The percentages referred to above do not include any other transactions that may be entered into after the date of the accompanying proxy statement/prospectus or any exercise or conversion of the New PubCo Converted Warrants or the New PubCo Founder Warrants. If any Equity Financing Arrangements (including any PIPE Investment) are entered into in connection with the Business Combination, or if any of the other assumptions are not true, these percentages will be different. You should read “The Business Combination Agreement—Ownership of, and Voting Rights in, New PubCo Following the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information” in the accompanying proxy statement/prospectus for further information.
New PubCo expects to qualify as a foreign private issuer under applicable U.S. federal securities laws. As a foreign private issuer whose securities are expected to be listed on Nasdaq, New PubCo will be permitted to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements. New PubCo may take advantage of certain exemptions available to it as a foreign private issuer so long as it continues to qualify as a foreign private issuer. See “Risk Factors—Risks Related to New PubCo—As a foreign private issuer and a company treated as an emerging growth company for certain purposes, New PubCo will have different disclosure and other requirements than U.S. domestic registrants and non-emerging growth companies,” “Risk Factors—Risks Related to New PubCo—As a foreign private issuer, New PubCo is permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers. This may afford less protection to holders of New PubCo Ordinary Shares.”
Your vote is very important. Whether or not you plan to attend the Extraordinary General Meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to make sure that your shares are represented at the Extraordinary General 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 Extraordinary General Meeting. The Business Combination will be consummated only if the Business Combination Proposal and the Merger Proposal are approved at the Extraordinary General Meeting.
If you sign, date, and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Extraordinary General 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 Extraordinary General Meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the Extraordinary General Meeting. Accordingly, your failure to vote by proxy or to vote in person at the Extraordinary General Meeting will have no effect on the outcome of the vote on any of the proposals presented at the Extraordinary General Meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the Extraordinary General Meeting. If you are a shareholder of record and you attend the Extraordinary General Meeting and wish to vote in person, you may withdraw your proxy and vote in person.
Your attention is directed to the remainder of this proxy statement/prospectus (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read this proxy statement/prospectus carefully and in its entirety, including the Annexes hereto and other documents referred to herein. If you have any questions or need assistance voting your JGGC Ordinary Shares, please contact Morrow Sodali LLC (“Morrow Sodali”), JGGC’s proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing JGGC.info@investor.morrowsodali.com.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors of Jaguar Global Growth Corporation I,
/s/ Gary R. Garrabrant
Gary R. Garrabrant
Chief Executive Officer
This proxy statement/prospectus is dated as of September 13, 2023 and is first being mailed to shareholders of JGGC on or about September 13, 2023.
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.
| 1 | ||||
| CERTAIN CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS |
2 | |||
| 3 | ||||
| 4 | ||||
| PRESENTATION OF CERTAIN ASSUMPTIONS RELATING TO THE BUSINESS COMBINATION |
5 | |||
| 6 | ||||
| 13 | ||||
| 15 | ||||
| 38 | ||||
| 63 | ||||
| 65 | ||||
| 67 | ||||
| 132 | ||||
| 141 | ||||
| 141 | ||||
| 155 | ||||
| 176 | ||||
| 195 | ||||
| 197 | ||||
| 199 | ||||
| 201 | ||||
| GOVERNING DOCUMENTS PROPOSAL 3B — APPROVAL OF METHOD TO APPOINT AND ELECT DIRECTORS |
203 | |||
| 205 | ||||
| 207 | ||||
| 216 | ||||
| UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION |
217 | |||
| 235 | ||||
| 248 | ||||
| 249 | ||||
| JGGC’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION |
272 | |||
| 278 | ||||
| GLAAM’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION |
298 | |||
| 332 | ||||
| CERTAIN GLAAM AND NEW PUBCO RELATIONSHIPS AND RELATED PARTY TRANSACTIONS |
334 | |||
| 339 | ||||
| 350 | ||||
| 369 | ||||
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| F-1 |
-i-
ABOUT THIS PROXY STATEMENT/PROSPECTUS
This proxy statement/prospectus, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by Captivision Inc., a Cayman Islands exempted company limited by shares (“New PubCo”) (File No. 333-271649), constitutes a prospectus of New PubCo under Section 5 of the U.S. Securities Act of 1933, as amended (the “Securities Act”), with respect to the New PubCo Ordinary Shares (as defined below) to be issued and the New PubCo warrants to be issued if the Business Combination (as defined below) 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 extraordinary general meeting of Jaguar Global Growth Corporation I (“JGGC”) shareholders at which JGGC shareholders will be asked to consider and vote upon a proposal to approve the Business Combination by the adoption of the Business Combination Agreement, among other matters.
1
CERTAIN CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS
In this proxy statement/prospectus, unless otherwise specified or the context otherwise requires:
| • | “$” and “U.S. dollar” each refer to the United States dollar; |
| • | “£” and “GBP” refers to the British pound sterling; and |
| • | “ |
2
FINANCIAL STATEMENT PRESENTATION
New PubCo
New PubCo was incorporated on February 24, 2023 for the purpose of effectuating the Business Combination described herein. New PubCo has no material assets and does not operate any businesses. Accordingly, no financial statements of New PubCo have been included in this proxy statement/prospectus. Following the Business Combination, New PubCo will qualify as a foreign private issuer as defined under Rule 405 under the Securities Act and will prepare its financial statements denominated in U.S. dollars and in accordance with International Financial Reporting Standards as adopted by the International Accounting Standards Board (“IFRS”). Accordingly, the unaudited pro forma combined financial information presented in this proxy statement/prospectus have been prepared in accordance with IFRS and denominated in U.S. dollars.
JGGC
The audited financial statements as of and for the year ended December 31, 2022 and as of and for the period from March 31, 2021 (inception) to December 31, 2021, are included in this proxy statement/prospectus. Such audited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and are denominated in U.S. dollars.
GLAAM
The financial statements of the Company as of and for the years ended December 31, 2022 and 2021 included in this proxy statement/prospectus have been prepared in accordance with IFRS and are denominated in U.S. dollar.
3
In this proxy statement/prospectus, we present industry data, information and statistics regarding the markets in which GLAAM 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 GLAAM’s own internal estimates and information obtained from discussions with its customers, taking into account publicly available information about other industry participants and GLAAM’s management’s judgment where information is not publicly available. This information appears in “GLAAM’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business of GLAAM” and other sections of this proxy statement/prospectus.
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.
4
PRESENTATION OF CERTAIN ASSUMPTIONS RELATING TO THE BUSINESS COMBINATION
JGGC, GLAAM and New PubCo cannot predict the number of Public Shares that will be redeemed by JGGC’s Public Shareholders in connection with the Business Combination. Therefore, in this proxy statement/prospectus, three alternative redemption scenarios are presented to illustrate the effects that differing levels of redemptions of Public Shares will have on the economic and voting interests of JGGC Shareholders, the Sponsor and the GLAAM Shareholders.
The three alternative redemption scenarios presented in this proxy statement/prospectus are based on the following assumptions (in addition to the additional assumptions described below):
| • | the No Additional Redemption Scenario gives effect to the redemption of 12,925,707 JGGC Class A Ordinary Shares in connection with the Extension Amendment (as defined below) and assumes that no additional Public Shares are redeemed in connection with the Business Combination; |
| • | the Interim Redemption Scenario gives effect to the redemption of 12,925,707 JGGC Class A Ordinary Shares in connection with the Extension Amendment and assumes that 5,037,147 JGGC Class A Ordinary Shares (or 50% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per share or $54,098,959 in the aggregate (based on the estimated value of the Trust Account at Closing); and |
| • | the Maximum Redemption Scenario gives effect to the redemption of 12,925,707 JGGC Class A Ordinary Shares in connection with the Extension Amendment and assumes that 10,074,293 JGGC Class A Ordinary Shares (or 100% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per share or $108,200,000 in the aggregate (based on the estimated value of the Trust Account at Closing). In light of the waiver by the parties to the Business Combination Agreement of the closing condition therein that JGGC have net tangible assets of at least $5,000,001 after giving effect to the Business Combination, the Business Combination will be able to close in this scenario despite the negative cash balance. |
In addition, unless otherwise specified, each alternative redemption scenario presented in this proxy statement/prospectus also assumes that:
| • | 5,750,000 JGGC Class B Ordinary Shares (or 75% of such shares), which excludes the 1,916,667 JGGC Class B Ordinary Shares (or 25% of such shares) subject to vesting or forfeiture, have been converted into an equal number of JGGC Class A Ordinary Shares immediately prior to the consummation of the Business Combination; |
| • | no New PubCo Converted Warrants or New PubCo Founder Warrants are exercised; |
| • | no GLAAM Options or options of New PubCo are exercised for equity securities of GLAAM or New PubCo; |
| • | no New PubCo Earnout RSRs vest and no Earnout Shares are issued; |
| • | no equity or debt financings (including any PIPE Investments) are entered into prior to consummation of the Business Combination in connection with any Financing Arrangements or otherwise; |
| • | 100% of GLAAM’s Shareholders will partake in the Business Combination and exchange their direct or indirect equity interests in GLAAM for New PubCo Ordinary Shares; |
| • | the CB does not convert into New PubCo Ordinary Shares; and |
| • | Transaction Expenses will not exceed $30 million. |
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Unless otherwise stated or unless the context otherwise requires, the term “GLAAM” refers to GLAAM Co. Ltd., a corporation (chusik hoesa) organized under the laws of Korea, the term “JGGC” refers to Jaguar Global Growth Corporation I, a Cayman Islands exempted company, and the term “New PubCo” refers to Captivision Inc. (f/k/a Phygital Immersive Limited), a Cayman Islands exempted company.
In this proxy statement/prospectus:
“Adjournment Proposal” means the proposal being presented to the JGGC shareholders at the Extraordinary General Meeting to adjourn the Extraordinary General Meeting of the JGGC shareholders to a later date or dates, if necessary, (i) to ensure that any required supplement or amendment to this proxy statement/prospectus is provided to JGGC shareholders or (ii) to permit further solicitation of additional proxies from JGGC shareholders in favor of one or more of the proposals at the Extraordinary General Meeting.
“Aggregate Share Swap Consideration” means up to 17,607,160 New PubCo Ordinary Shares.
“Approved GLAAM Financing” means any offer, sale and issuance, in a bona fide equity financing transaction of GLAAM Common Shares that is approved by JGGC in writing pursuant to which GLAAM receives proceeds following the date of the Business Combination Agreement and prior to the Closing.
“Business Combination” means the Merger and the other transactions contemplated by the Business Combination Agreement, collectively.
“Business Combination Agreement” means the Business Combination Agreement, dated as of March 2, 2023, as may be amended, supplemented, or otherwise modified from time to time, by and among JGGC, GLAAM, Jaguar Global Growth Korea Co., Ltd, and New PubCo.
“Business Combination Agreement Amendment No. 1” means the Amendment No. 1 to the Business Combination Agreement, date as of June 16, 2023, as may be amended, supplemented or otherwise modified from time to time, by and among JGGC, GLAAM, Jaguar Global Growth Korea Co., Ltd. and New PubCo.
“Business Combination Agreement Amendment No. 2” means the Amendment No. 2 to the Business Combination Agreement, date as of July 7, 2023, as may be amended, supplemented or otherwise modified from time to time, by and among JGGC, GLAAM, Jaguar Global Growth Korea Co., Ltd. and New PubCo.
“Business Combination Agreement Amendment No. 3” means the Amendment No. 3 to the Business Combination Agreement, date as of July 18, 2023, as may be amended, supplemented or otherwise modified from time to time, by and among JGGC, GLAAM, Jaguar Global Growth Korea Co., Ltd. and New PubCo.
“Business Combination Agreement Amendment No. 4” means the Amendment No. 4 to the Business Combination Agreement, dated as of September 7, 2023, as may be amended, supplemented or otherwise modified from time to time, by and among JGGC, GLAAM, Jaguar Global Growth Korea Co., Ltd. and New PubCo.
“Business Combination Proposal” means the proposal being presented to the JGGC Shareholders at the Extraordinary General Meeting to approve, by ordinary resolution, the Business Combination Agreement, which proposal includes approval of the transactions contemplated by the Business Combination Agreement, and the other agreements entered into or to be entered into by JGGC in connection with the Business Combination, including those of which copies are attached to this proxy statement/prospectus as Annex A to Annex H.
“Business Day” shall mean any day other than a Saturday, a Sunday or other day on which commercial banks in New York, New York, Seoul, Republic of Korea or the Cayman Islands are authorized or required by Legal Requirements to close.
“Closing” means the consummation of the Business Combination.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Companies Act” means the Companies Act (As Revised) of the Cayman Islands.
“Contributor” means the Sponsor or any of its designees.
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“DOOH” means digital out of home.
“Earnout Period” means, with respect to the New PubCo Earnout RSRs, the period commencing at Closing and ending on the third anniversary of the Closing.
“Earnout Shares” means the shares issuable upon settlement of the New PubCo Earnout RSRs.
“Equity Financing” means (w) a PIPE Investment, (x) an Approved GLAAM Financing and/or (y) an equity line of credit or similar financing arrangement to be in place and available to New PubCo as of the Closing.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Sub” means Jaguar Global Growth Korea Co., Ltd., a stock corporation (chusik hoesa) organized under the laws of the Republic of Korea and wholly owned direct subsidiary of JGGC.
“Existing Governing Documents” means the amended and restated memorandum and articles of association of JGGC as amended on August 11, 2023 in connection with the Extension Extraordinary General Meeting.
“Extension Payments” means the payment of $112,500 made by the Contributor into the Trust Account on August 15, 2023 and any additional payment to be made by the Contributor on or prior to September 15, 2023, or any later applicable termination date if JGGC, if requested by the Sponsor, without another shareholder vote, elects to extend the termination date on a monthly basis for up to three times by an additional one month each time after September 15, 2023, by resolution of JGGC’s board, if requested by the Sponsor and upon five days’ advance notice prior to the applicable termination date, until December 15, 2023, in the amount of the lesser of (i) $0.0225 per Class A Ordinary Share that remains outstanding and is not redeemed prior to September 15, 2023 or any such following one-month extension until December 15, 2023 or (ii) an aggregate of $112,500, for each month of the extension period up to and until December 15, 2023, pro-rated for partial months during the extension period, resulting in a maximum contribution of $450,000.
“Extension Extraordinary General Meeting” means the extraordinary general meeting of JGGC held on August 11, 2023, where JGGC’s shareholders approved an amendment to the then existing amended and restated memorandum and articles of association of JGGC to (i) extend the date by which JGGC must consummate its initial business combination from August 15, 2023 to September 15, 2023, and to allow JGGC, without another shareholder vote, to elect to extend the termination date on a monthly basis for up to three times by an additional one month each time after September 15, 2023, by resolution of JGGC’s board of directors, if requested by the Sponsor and upon five days’ advance notice prior to the applicable termination date, until December 15, 2023 and (ii) to eliminate the limitation that JGGC shall not redeem public shares to the extent that such redemption would cause JGGC’s net tangible assets to be less than US$5,000,001.
“Extraordinary General Meeting” means the extraordinary general meeting of JGGC to be held at 601 Brickell Key Drive, Suite 700, Miami, FL 33131, United States, and online via live webcast which is accessible through the following link: https://www.cstproxy.com/jaguarglobalgrowth/2023, at 12:00 p.m., Eastern Time, on September 27, 2023, or at such other time, on such other date and at such other place to which the meeting may be adjourned or postponed.
“F Reorganization” means a mere change in identity, form, or place of organization of one corporation, however effected, pursuant to Section 368(a)(1)(F) of the Code.
“Financing Arrangements” means an Equity Financing and/or debt financing arrangements for borrowed money entered into by GLAAM, New PubCo and/or JGGC.
“FPCB” means flexible printed circuit board.
“Founder Shares” means the 7,666,667 JGGC Class B Ordinary Shares held by JGGC’s initial shareholders.
“GaaS” means glass as a service.
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“GLAAM” means GLAAM Co., Ltd., a corporation (chusik hoesa) organized under the laws of Korea.
“GLAAM Common Shares” means the common shares, KRW 500 par value per share, of GLAAM.
“GLAAM Exchange Ratio” means 0.800820612130561, which is the quotient of (a) the Aggregate Share Swap Consideration divided by (b) the sum of (i) the aggregate number of GLAAM Common Shares that are issued and outstanding as of immediately prior to the effective time of the Share Swap and (ii) the number of GLAAM Common Shares issuable upon full exercise, exchange or conversion of all GLAAM Options (calculated using the treasury method of accounting on a cashless exercise basis), and assuming conversion of all such GLAAM Options in accordance with the terms of the Business Combination Agreement, outstanding as of immediately prior to the effective time of the Share Swap.
“GLAAM Founder Closing Ownership Stake” means the total number of (a) issued and outstanding New PubCo Ordinary Shares collectively owned beneficially or of record by the GLAAM Founders (excluding any New PubCo Shares that Houngki Kim may be deemed to beneifically own as the CEO of Bio X Co., Ltd. (“BioX”) plus (b) any New PubCo Ordinary Shares that would have been issued in exchange for GLAAM Common Shares that were held by the GLAAM Founders on the date of the Business Combination Agreement but transferred prior to the Closing, calculated as of immediately following the Closing assuming (i) conversion of all issued and outstanding securities of New PubCo that are convertible into New PubCo Ordinary Shares and (ii) settlement of all issued and outstanding restricted stock rights of New PubCo.
“GLAAM Founder Earnout Letter” means the letter agreement, dated March 2, 2023, by and among the GLAAM Founders, New PubCo, Exchange Sub, JGGC and GLAAM, a copy which is attached to the accompanying proxy statement/prospectus as Annex G, pursuant to which, at the Closing, New PubCo shall issue or cause to be issued to the GLAAM Founders (in the aggregate), (i) the 1,666,666.67 New PubCo Series I RSRs, (ii) the 1,666,666.67 New PubCo Series II RSRs and (iii) the 1,666,666.67 New PubCo Series III RSRs and setting forth the terms upon which such 5,000,000 New PubCo Earnout RSRs shall vest and be settled for New PubCo Ordinary Shares.
“GLAAM Founders” means Houngki Kim and Ho Joon Lee.
“GLAAM Options” means the options to purchase GLAAM Common Shares.
“GLAAM Shareholders” means the holders of GLAAM Common Shares.
“Governing Documents Proposals” means three separate proposals to approve, on a non-binding advisory basis, by special resolution, certain material differences between the Proposed Governing Documents and the Existing Governing Documents.
“Governmental Entity” means (a) any federal, provincial, state, local, municipal, foreign, national or international court, governmental commission, government or governmental authority, department, regulatory or administrative agency, board, bureau, agency or instrumentality, tribunal, arbitrator or arbitral body (public or private), or similar body; (b) any self-regulatory organization; or (c) any political subdivision of any of the foregoing.
“IASB” means International Accounting Standards Board.
“IC semiconductor chip” means an integrated circuit chip.
“IFRS” means International Financial Reporting Standards, as issued by the IASB.
“Investment Company Act” means the Investment Company Act of 1940, as amended.
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“IPO” means JGGC’s initial public offering of JGGC Units, which was consummated on February 10, 2022.
“IRS” means the U.S. Internal Revenue Service.
“JGGC” means Jaguar Global Growth Corporation I, a Cayman Islands exempted company.
“JGGC Class A Ordinary Shares” means JGGC’s Class A ordinary shares, par value $0.0001 per share.
“JGGC Class B Ordinary Shares” means JGGC’s Class B ordinary shares, par value $0.0001 per share.
“JGGC Ordinary Shares” means, collectively, the JGGC Class A Ordinary Shares and the JGGC Class B Ordinary Shares.
“JGGC Private Placement Warrants” means the 12,450,000 warrants, each exercisable to purchase one JGGC Class A Ordinary Share, purchased by the Sponsor for a purchase price of $12,450,000, or $1.00 per warrant in a private placement that closed simultaneously with the IPO.
“JGGC Public Warrants” means the redeemable warrants, each exercisable to purchase one JGGC Class A Ordinary Share, that were included in the JGGC Units.
“JGGC Rights” means the rights entitling the holder thereof to receive one-twelfth of one JGGC Class A Ordinary Share per right upon the consummation by JGGC of an initial business combination. No fractional shares will be issued upon conversion of JGGC Rights, so holders must hold rights in denominations of 12 in order to receive a JGGC Class A Ordinary Share.
“JGGC Securities” means JGGC Units, JGGC Class A Ordinary Shares, JGGC Rights and JGGC Warrants, collectively.
“JGGC Shareholders” means the holders of JGGC Ordinary Shares.
“JGGC Units” means the units sold in the IPO (including pursuant to the overallotment option), each consisting of one JGGC Class A Ordinary Share, one JGGC Right and one-half of one JGGC Public Warrant.
“JGGC Warrantholders” means holders of the JGGC Warrants.
“JGGC Warrants” means, collectively, the JGGC Public Warrants and the JGGC Private Placement Warrants.
“JOBS Act” means Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, as amended.
“LED” means light-emitting diode.
“Legal Requirements” means any federal, state, local, municipal, foreign or other law, statute, constitution, treaty, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling, injunction, judgment, order, assessment, writ or other legal requirement, administrative policy or guidance or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity.
“Merger” means the merger of JGGC with and into New PubCo upon the terms and subject to the conditions set forth in the Business Combination Agreement, the plan of merger relating to the Merger and in accordance with the applicable provisions of the Companies Act, whereupon the separate corporate existence of JGGC will cease and New PubCo will continue its existence under the Companies Act as the surviving company.
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“Merger Proposal” means the proposal being presented to the JGGC Shareholders at the Extraordinary General Meeting to approve, by special resolution, the Merger and the plan of merger relating to the Merger, a copy of which is attached to this proxy statement/prospectus as Annex B.
“Nasdaq” means the Nasdaq Global Market.
“New PubCo” means Captivision Inc. (f/k/a Phygital Immersive Limited), an exempted company with limited liability under the laws of the Cayman Islands incorporated by an affiliate of GLAAM to serve as “New PubCo” for all purposes under the Business Combination Agreement.
“New PubCo Closing Fully Diluted Capital” means the total number of issued and outstanding New PubCo Ordinary Shares, calculated as of immediately following the Closing assuming (i) conversion of all issued and outstanding securities of New PubCo that are convertible into New PubCo Ordinary Shares and (ii) settlement of all issued and outstanding restricted stock rights of New PubCo.
“New PubCo Converted Options” means the options to acquire New PubCo Ordinary Shares issued upon conversion of the GLAAM Options, in each case subject to substantially the same terms and conditions as were applicable under the converted GLAAM Option, the number of New PubCo Ordinary Shares (rounded down to the nearest whole share), determined by multiplying the number of GLAAM Common Shares subject to the converted GLAAM Option as of immediately prior to the Share Swap by the GLAAM Exchange Ratio, at an exercise price per GLAAM Common Share (rounded up to the nearest whole cent) equal to (x) the exercise price per GLAAM Common Share of the converted GLAAM Options divided by (y) the GLAAM Exchange Ratio.
“New PubCo Converted Warrants” means, collectively, the New PubCo Public Warrants and the New PubCo Private Warrants.
“New PubCo Earnout RSRs” means, collectively, the New PubCo Series I RSRs, the New PubCo Series II RSRs and the New PubCo Series III RSRs.
“New PubCo Equity Plan” means the proposed equity incentive plan for employees, directors and service providers of New PubCo and its subsidiaries to be in effect as of and contingent on the Closing, a copy of which is attached to this proxy statement/prospectus as Annex D.
“New PubCo Equity Plan Proposal” means the proposal being presented to the JGGC Shareholders at the Extraordinary General Meeting to proposal to approve, by ordinary resolution, the New PubCo Equity Plan, a copy of which is attached to the accompanying proxy statement/prospectus as Annex D.
“New PubCo Founder Warrants” means the warrants, if any, issued to the GLAAM Founders at Closing such that the GLAAM Founder Closing Ownership Stake shall constitute 12.5% of the New PubCo Closing Fully Diluted Capital.
“New PubCo Ordinary Shares” means the ordinary shares of New PubCo, par value $0.0001 per share.
“New PubCo Private Warrant” means a warrant to purchase one New PubCo Ordinary Share issued upon conversion of a JGGC Private Placement Warrant in the Merger.
“New PubCo Public Warrant” means a warrant to purchase one New PubCo Ordinary Share issued upon conversion of a JGGC Public Warrant in the Merger.
“New PubCo Securities” means New PubCo Ordinary Shares and New PubCo Warrants, collectively.
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“New PubCo Series I RSRs” means the 1,666,666.67 Series I restricted stock rights of New PubCo that will vest and be settled for an equal number of New PubCo Ordinary Shares if, during the Earnout Period, the daily VWAP of the New PubCo Ordinary Shares is greater than or equal to $12.00 for any twenty (20) Trading Days within any thirty (30) consecutive Trading Day period.
“New PubCo Series II RSRs” means the 1,666,666.67 Series II restricted stock rights of New PubCo that will vest and be settled for an equal number of New PubCo Ordinary Shares if, during the Earnout Period, the daily VWAP of the New PubCo Ordinary Shares is greater than or equal to $14.00 for any twenty (20) Trading Days within any thirty (30) consecutive Trading Day period.
“New PubCo Series III RSRs” means the 1,666,666.67 Series III restricted stock rights of New PubCo that will vest and be settled for an equal number of New PubCo Ordinary Shares if, during the Earnout Period, the daily VWAP of the New PubCo Ordinary Shares is greater than or equal to $16.00 for any twenty (20) Trading Days within any thirty (30) consecutive Trading Day period.
“New PubCo Warrants” means, collectively, the New PubCo Converted Warrants and the New PubCo Founder Warrants.
“PFIC” means passive investment foreign company.
“Paul Hastings” means Paul Hastings LLP.
“PCAOB” means the Public Company Accounting Oversight Board.
“PIPE” means any private investment in public equity which, in the context of the Business Combination, means a private investment in PubCo Ordinary Shares.
“PIPE Investment” means any transaction pursuant to which any PIPE investors may agree, pursuant to any PIPE subscription agreements to the extent entered into, to make one or more private investments to subscribe for and purchase New PubCo Ordinary Shares, to be consummated at the Closing.
“Proposed Governing Documents” means the proposed memorandum and articles of association of New PubCo to be in effect following the Business Combination, a copy of which is attached to this proxy statement/prospectus as Annex C.
“Public Shareholders” means the holders of the Public Shares.
“Public Shares” means the JGGC Class A Ordinary Shares sold in the IPO (whether they were purchased in the IPO as part of the JGGC Units or thereafter in the open market).
“Record Date” means September 1, 2023.
“Registration Rights Agreement” means the Registration Rights Agreement to be entered into at Closing by and among New PubCo, the Sponsor and certain GLAAM Shareholders party thereto in the form attached to the Business Combination Agreement as Exhibit A, which will amend and restate the registration rights agreement, dated February 10, 2022, by and among JGGC, the Sponsor and other holders of JGGC Securities party thereto.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Share Swap” means the exchange of GLAAM Common Shares for New PubCo Ordinary Shares pursuant to the Business Combination Agreement and Exchange Sub’s subsequent distribution of all of the GLAAM Common Shares it receives from GLAAM Shareholders to New PubCo in exchange for the Aggregate Share Swap Consideration.
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“Share Swap Agreement” means the share swap agreement executed by Exchange Sub and GLAAM pursuant to the Business Combination Agreement.
“SLAM” means Super Large Architectural Media.
“Specified Period” means the later of (i) the date that is 180 days after the Closing and (ii) the VWAP for New PubCo Ordinary Share being at least $12.50 for 20 Trading Days within any 30-consecutive Trading Day period during the period following the Closing and ending on the five (5) year anniversary of the Closing.
“Sponsor” means Jaguar Global Growth Partners I, LLC, a Delaware limited liability company.
“Sponsor Support Agreement” means the support agreement dated March 2, 2023 entered into between JGGC, New PubCo, GLAAM, the Sponsor and the other Sponsor Parties party thereto.
“Trading Day” means any day on which New PubCo Ordinary Shares are tradeable on Nasdaq (or the principal securities exchange or securities market on which New PubCo Ordinary Shares are then traded).
“Transaction Documents” means, collectively, the Business Combination Agreement, the Sponsor Support Agreement, the GLAAM Support Agreement, the Registration Rights Agreement, the Share Swap Agreement and all the agreements, documents, instruments and certificates entered into in connection herewith or therewith and any and all exhibits and schedules thereto.
“Transaction Proposals” means each of the Business Combination Proposal, the Merger Proposal, the New PubCo Equity Plan Proposal, the Governing Documents Proposals and the Adjournment Proposal.
“Transactions” means, collectively, the Merger, the Share Swap and each of the other transactions contemplated by the Business Combination Agreement or any of the other Transaction Documents.
“Transfer Agent” means Continental, JGGC’s transfer agent.
“Trust Account” means the trust account that holds a portion of the proceeds from the IPO and the concurrent sale of the JGGC Private Placement Warrants and that is maintained by Continental, acting as trustee.
“U.S.” means the United States.
“U.S. GAAP” means generally accepted accounting principles in the United States as in effect from time to time.
“U.S. Holder” means a beneficial owner of JGGC Securities or New PubCo Securities, as the case may be, who or that is for U.S. federal income tax purposes, (i) a citizen or individual resident of the United States, (ii) a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) created or organized (or treated as created or organized) in or under the laws of the United States, any state therein or the District of Columbia; (iii) an estate the income of which is subject to the U.S. federal income taxation regardless of its source; or (iv) a trust if (i) a U.S. court can exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has a valid election in place to be treated as a U.S. person.
“VWAP” means for each Trading Day, the daily volume-weighted average price for New PubCo Ordinary Shares on Nasdaq during the period beginning at 9:30:01 a.m., New York time on such Trading Day and ending at 4:00:00 p.m., New York time on such Trading Day, as reported by Bloomberg through its “HP” function (set to weighted average). If the VWAP cannot be calculated for New PubCo Ordinary Shares on such date(s) on the forgoing basis, the VWAP of such shares on such date(s) shall be the fair market value per share on such date(s) as reasonably determined by the PubCo Board.
“White & Case” means White & Case LLP.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus contains forward-looking statements. These forward-looking statements include, without limitation, statements relating to expectations for future financial performance, business strategies or expectations for JGGC’s, GLAAM’s and New PubCo’s respective businesses, and the timing for and ability of JGGC and GLAAM to complete the Business Combination. These statements are based on the beliefs and assumptions of the management of JGGC and GLAAM. Although JGGC and GLAAM believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, neither JGGC nor GLAAM can assure you that either will achieve or realize these plans, intentions or expectations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this proxy statement/prospectus, words such as “anticipate”, “believe”, “can”, “continue”, “could”, “estimate”, “expect”, “forecast”, “intend”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “seek”, “should”, “strive”, “target”, “will”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
Forward-looking statements in this proxy statement/prospectus and in any document incorporated by reference in this proxy statement/prospectus may include, for example, statements about JGGC and GLAAM prior to the Business Combination and New PubCo and GLAAM following the Business Combination, including:
| • | the ability to satisfy the closing conditions to the Business Combination, including approval by JGGC Shareholders and GLAAM Shareholders; |
| • | the ability to realize the benefits expected from the Business Combination; |
| • | the ability to consummate the Business Combination; |
| • | the ability to obtain and/or maintain the listing of the New PubCo Ordinary Shares and the New PubCo Public Warrants on Nasdaq following the Business Combination; |
| • | the ability to raise financing in the future and to comply with restrictive covenants related to long-term indebtedness; |
| • | the significant market adoption, demand and opportunities in the construction and DOOH media industries for GLAAM’s products; |
| • | the ability of GLAAM to remain competitive in the fourth generation architectural media glass industry in the face of future technological innovations; |
| • | the ability of GLAAM to execute its international expansion strategy; |
| • | the ability of GLAAM to protect its intellectual property rights; |
| • | the ability of GLAAM’s larger projects, which are subject to protracted sales cycles, to be profitable; |
| • | the raw materials, components, finished goods and services used by GLAAM to manufacture its products will continue to be available and will not be subject to significant price increases; |
| • | the IT, vertical real estate and large format wallscape modified regulatory restrictions or building codes; |
| • | the ability of GLAAM’s manufacturing facilities to meet their projected manufacturing costs and production capacity; |
| • | the future financial performance of New PubCo and GLAAM following the Business Combination; |
| • | the ability of New PubCo and GLAAM to retain or recruit, or to effect changes required in, their respective officers, key employees or directors following the Business Combination; and |
| • | the ability of New PubCo and GLAAM to comply with laws and regulations applicable to its business. |
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These forward-looking statements are based on information available as of the date of this proxy statement/prospectus and JGGC’s and GLAAM’s management teams’ current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside the control of JGGC, GLAAM, New PubCo and their respective directors, officers and affiliates. Accordingly, forward-looking statements should not be relied upon as representing JGGC’s, GLAAM’s or New PubCo’s management teams’ views as of any subsequent date. None of JGGC, GLAAM or New PubCo undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.
You should not place undue reliance on these forward-looking statements in deciding how your vote should be cast or in voting your shares on the proposals set out in this proxy statement/prospectus. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of JGGC’s, GLAAM’s or New PubCo’s assumptions prove incorrect, actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:
| • | the occurrence of any event, change or other circumstances that could delay the Business Combination or give rise to the termination of the Business Combination Agreement; |
| • | the outcome of any legal proceedings that may be instituted against JGGC, GLAAM or New PubCo following announcement of the Business Combination; |
| • | the inability to complete the Business Combination due to the failure to obtain approval of the JGGC Shareholders or GLAAM Shareholders, the inability to complete a Financing Arrangement or the failure of JGGC to satisfy the conditions to closing in the Business Combination Agreement; |
| • | the inability to obtain or maintain the listing of the New PubCo Ordinary Shares and New PubCo Public Warrants on Nasdaq following the Business Combination; |
| • | changes to the proposed structure of the Business Combination that may be required or appropriate as a result of applicable laws or regulations or as a condition to obtaining regulatory approval of the Business Combination; |
| • | changes in applicable laws or regulations; |
| • | the risk that the Business Combination disrupts current plans and operations of GLAAM; |
| • | the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, and the ability of New PubCo and GLAAM to grow and manage growth profitably; |
| • | costs related to the Business Combination; and |
| • | other risks and uncertainties indicated in this proxy statement/prospectus, including those set forth under the section of this proxy statement/prospectus entitled “Risk Factors” beginning on page 65. |
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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS
The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the Extraordinary General Meeting, including with respect to the proposed Business Combination. The following questions and answers may not include all of the information that is important to JGGC Shareholders. JGGC Shareholders 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. Unless the context otherwise requires, all references in this subsection to “JGGC,” “we,” “us” or “our” refer to the business of Jaguar Global Growth Corporation I prior to the consummation of the Business Combination.
| Q: | Why am I receiving this proxy statement/prospectus? |
| A: | JGGC Shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve the Business Combination Agreement and approve the Transactions contemplated thereby, including the Business Combination. The JGGC board of directors is soliciting your proxy to vote for the Business Combination Proposal and the other Transaction Proposals at the Extraordinary General Meeting because you owned JGGC Ordinary Shares at the close of business on September 1, 2023, the Record Date for the Extraordinary General Meeting, and are therefore entitled to vote at the Extraordinary General Meeting. This document also constitutes a prospectus of New PubCo with respect to the New PubCo Ordinary Shares and New PubCo Converted Warrants it will issue in the proposed Business Combination. |
This proxy statement/prospectus and its Annexes contain important information about the proposed Business Combination, the Business Combination Proposal and the other Transaction Proposals to be acted upon at the Extraordinary General Meeting. You should read this proxy statement/prospectus and its Annexes carefully and in their entirety.
| Q: | What matters will JGGC Shareholders consider at the Extraordinary General Meeting? |
| A: | At the Extraordinary General Meeting, JGGC will ask JGGC Shareholders to consider and to vote in favor of the following Transaction Proposals: |
| • | the Business Combination Proposal - a proposal to adopt and approve, by ordinary resolution, the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A (as amended by Annex A-1, Annex A-2, Annex A-3 and Annex A-4), which proposal includes the approval of (i) the Business Combination, in which (a) JGGC shall be merged with and into New PubCo, with New PubCo surviving the Merger, (b) immediately thereafter, New PubCo shall issue a number of New PubCo Ordinary Shares equal to the Aggregate Share Swap Consideration to Exchange Sub, and (c) all GLAAM Shareholders will transfer their respective GLAAM Common Shares to Exchange Sub in exchange for their respective portion of the Aggregate Share Swap Consideration in the Share Swap and, in exchange for the Aggregate Share Swap Consideration, Exchange Sub shall distribute all of the GLAAM Common Shares it receives from GLAAM Shareholders to New PubCo, (ii) the other transactions contemplated by the Business Combination Agreement, and (iii) the other agreements entered into or to be entered into by JGGC in connection with the Business Combination; |
| • | the Merger Proposal - a proposal to approve, by special resolutions: |
| • | JGGC be authorized to merge with and into New PubCo, so that JGGC be the merging company and all the undertaking, property and liabilities of the merging company vest in the surviving company by virtue of such merger pursuant to Part XVI of the Companies Act (As Revised); and |
| • | the plan of merger, a copy of which is attached to this proxy statement/prospectus as Annex B, pursuant to which JGGC will merge with and into New PubCo, with New PubCo being the surviving entity. |
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| • | the Governing Documents Proposals - three separate proposals to approve on an advisory non-binding basis, by ordinary resolution, material differences between the Proposed Governing Documents and the Existing Governing Documents; |
| • | the New PubCo Equity Plan Proposal - a proposal to approve, by ordinary resolution, the New PubCo Equity Plan; |
| • | the Adjournment Proposal - a proposal to approve, by ordinary resolution, the adjournment of the Extraordinary General Meeting to a later date or dates if necessary (i) to ensure that any required supplement or amendment to this proxy statement/prospectus is provided to JGGC Shareholders or (ii) to permit further solicitation of additional proxies from JGGC Shareholders in favor of one or more of the proposals at the Extraordinary General Meeting. |
For more information, please see “Business Combination Proposal,” “Merger Proposal,” “Governing Documents Proposals,” “New PubCo Equity Plan Proposal” and “Adjournment Proposal.”
JGGC will hold the Extraordinary General Meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the Business Combination and the other matters to be acted upon at the Extraordinary General Meeting. JGGC Shareholders should read it carefully and in its entirety.
After careful consideration, the JGGC board of directors has determined that each of (a) the Business Combination Proposal, (b) the Merger Proposal, (c) the Governing Documents Proposal, (d) the New PubCo Equity Plan Proposal and (e) the Adjournment Proposal, if presented, are in the best interests of JGGC and its shareholders and unanimously recommends that you vote, or give instruction to vote, “FOR” each of those proposals.
The existence of financial and personal interests of one or more of JGGC’s directors may result in a conflict of interest on the part of such director(s) between what he, she, or they may believe is in the best interests of JGGC and JGGC Shareholders and what he, she, or they may believe is best for himself, herself, or themselves in determining to recommend that such shareholders vote for the Transaction Proposals. In addition, JGGC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the sections “Business Combination Proposal—Interests of JGGC’s Directors and Executive Officers and the Sponsor in the Business Combination” and “Risk Factors—Risks Related to JGGC and the Business Combination—The Sponsor, directors and officers may have a conflict of interest in determining to pursue the Business Combination or any other business combination, since certain of their interests are different from or in addition to (and may conflict with) the interests of JGGC’s Public Shareholders, and such interests may have influenced the JGGC board of directors’ decisions to approve the Business Combination and recommend that JGGC’s shareholders approve the Business Combination Proposal” for a further discussion of these considerations.
| Q: | What amendments were made to the Business Combination Agreement since it was originally entered into on March 2, 2023? |
| A: | On June 16, 2023, JGGC, Merger Sub, New PubCo and GLAAM entered into the Business Combination Agreement Amendment No. 1 which amended section 1.1 of the Business Combination Agreement to amend and restate the definition of “SPAC Share Price” to mean $10.60. On July 7, 2023, JGGC, Merger Sub, New PubCo and GLAAM entered into the Business Combination Agreement Amendment No. 2 which, among other things, amended section 1.1 of the Business Combination Agreement to (i) remove the defined term “SPAC Share Price,” (ii) remove the phrase “(which approval shall not be unreasonably withheld, conditioned or delayed)” in its entirety from the defined term “Approved Company Financing” and (iii) fix the GLAAM Exchange Ratio at 0.800820612130561. In addition, the Business Combination Agreement Amendment No. 2 amended section 3.9(a) of the Business Combination Agreement to provide that the ownership level of the New PubCo Closing Fully Diluted Capital shall be determined without giving effect to any sales of Company Common Shares by any of the Company Founders following the date |
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| of the Business Combination Agreement and prior to the Closing. On July 18, 2023, JGGC, Merger Sub, New PubCo and GLAAM entered into the Business Combination Agreement Amendment No. 3 which, among other things, amended section 7.21 of the Business Combination Agreement to provide that JGGC shall file with the SEC a proxy statement pursuant to which it will propose and seek approval to extend the date by which it has to consummate a business combination to September 15, 2023 and to allow JGGC without another shareholder vote, to elect to extend the deadline to consummate a business combination on a monthly basis for up to three times by an additional one month each time, until December 15, 2023, unless the closing of JGGC’s business combination has occurred. On September 7, 2023, JGGC, Merger Sub, New PubCo and GLAAM entered into the Business Combination Agreement Amendment No. 4 which, among other things, amended section 2.2 of the Business Combination Agreement to provide that in exchange for the Aggregate Share Swap Consideration, Exchange Sub will distribute the GLAAM Common Shares it receives from GLAAM Shareholders to New PubCo. Other than as expressly modified by the Business Combination Agreement Amendment No. 1, Business Combination Agreement Amendment No. 2, Business Combination Amendment No. 3 and Business Combination Agreement Amendment No. 4, the Business Combination Agreement remains in full force and effect. |
| Q: | Are any of the proposals conditioned on one another? |
| A: | Consummation of the Business Combination is conditioned on the approval of the Business Combination Proposal and the Merger Proposal, but is not conditioned on the Governing Documents Proposals, the New PubCo Equity Plan Proposal or the Adjournment Proposal. |
The Business Combination Proposal and the Merger Proposal are cross-conditioned on the approval of each other. The Governing Documents Proposals and the New PubCo Equity Plan Proposal are conditioned on the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal.
It is important for you to note that in the event that the Business Combination Proposal and the Merger Proposal are not approved, then JGGC will not consummate the Business Combination. If JGGC does not consummate the Business Combination and fails to complete another initial business combination by September 15, 2023 (or until December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), JGGC will be required to dissolve and liquidate unless such date is extended pursuant to the Existing Governing Documents.
| Q: | Why is JGGC proposing the Business Combination? |
| A: | JGGC was incorporated on March 31, 2021, as a Cayman Islands exempted company for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. |
The JGGC board considered a wide variety of factors in connection with its evaluation of the Business Combination, including the results of the due diligence investigations of GLAAM and the industry in which it operates, and the financial and other information provided by GLAAM in the course of negotiations. As a result, the JGGC board of directors believes that the proposed Transactions with GLAAM are in the best interest of JGGC and its shareholders and present an opportunity to increase shareholder value. However, there is no assurance of this. See “Business Combination Proposal—The JGGC Board of Directors’ Reasons for Approval of the Business Combination.”
Although the JGGC board of directors believes that the Business Combination with GLAAM presents an attractive business combination opportunity and is in the best interests of JGGC and the JGGC Shareholders, the JGGC board of directors did consider certain potentially material negative factors in arriving at that conclusion. These factors are discussed in greater detail in the sections entitled “Business Combination Proposal—The JGGC Board of Directors’ Reasons for Approval of the Business Combination,” “Risk Factors—Risks Related to GLAAM’s Business and Industry,” “Risk Factors—Risks Related to New PubCo” and “Risk Factors—Risks Related to JGGC and the Business Combination.” You
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should also consider that JGGC’s directors and officers have interests in the Business Combination that may conflict with your interests as a JGGC Shareholder. See the sections entitled “Business Combination Proposal—Interests of JGGC’s Directors and Executive Officers and the Sponsor in the Business Combination” and “Risk Factors—Risks Related to JGGC and the Business Combination—The Sponsor, directors and officers may have a conflict of interest in determining to pursue the Business Combination or any other business combination, since certain of their interests are different from or in addition to (and may conflict with) the interests of JGGC’s Public Shareholders, and such interests may have influenced the JGGC board of directors’ decisions to approve the Business Combination and recommend that JGGC’s shareholders approve the Business Combination Proposal.”
| Q: | What will happen in the Business Combination? |
| A: | Pursuant to the Business Combination Agreement, (i) JGGC shall be merged with and into New PubCo, with New PubCo surviving the Merger, (ii) immediately thereafter, New PubCo shall issue a number of New PubCo Ordinary Shares equal to the Aggregate Share Swap Consideration to Exchange Sub, and (iii) all GLAAM Shareholders will transfer their GLAAM Common Shares to Exchange Sub in exchange for the Aggregate Share Swap Consideration in the Share Swap and, in exchange for the Aggregate Share Swap Consideration, Exchange Sub shall distribute all of the GLAAM Common Shares it receives from GLAAM Shareholders to New PubCo. |
In connection with the Business Combination:
| • | pursuant to the Merger: |
| o | each issued and outstanding JGGC Unit will be automatically separated and each holder will be deemed to hold one JGGC Class A Ordinary Share, one JGGC Right and one-half of one JGGC Public Warrant; |
| o | each issued and outstanding JGGC Ordinary Share will be exchanged for one New PubCo Ordinary Share; |
| o | each issued and outstanding JGGC Warrant will be converted into one New PubCo Converted Warrant, will cease to represent a right to acquire JGGC Class A Ordinary Shares and will instead represent the right to acquire the same number of New PubCo Ordinary Shares, at the same exercise price and on the same terms as in effect immediately prior to the Closing; |
| o | each issued and outstanding JGGC Right will be converted into the number of New PubCo Ordinary Shares that would have been received by the holder thereof if such JGGC Rights had been converted upon consummation of a business combination into JGGC Class A Ordinary Shares, no fractional shares will be issued upon conversion of JGGC Rights, so holders must hold rights in denominations of 12 in order to receive a JGGC Class A Ordinary Share; |
| • | pursuant to the Share Swap: |
| o | the right to each GLAAM Common Share held by the GLAAM Shareholders in connection with the Share Swap shall be converted into a number of New PubCo Ordinary Shares equal to the GLAAM Exchange Ratio; |
| o | each GLAAM Option shall be converted into a New PubCo Converted Option to acquire, subject to substantially the same terms and conditions as were applicable under such GLAAM Option, the number of New PubCo Ordinary Shares (rounded down to the nearest whole share), determined by multiplying the number of GLAAM Common Shares subject to such GLAAM Option as of immediately prior to the Share Swap by the GLAAM Exchange Ratio, at an exercise price per GLAAM Common Share (rounded up to the nearest whole cent) equal to (x) the exercise price per GLAAM Common Share of such GLAAM Option divided by (y) the GLAAM Exchange Ratio; and |
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| o | in exchange for the Aggregate Share Swap Consideration, Exchange Sub shall distribute all of the GLAAM Common Shares it receives from GLAAM Shareholders to New PubCo, and GLAAM will become a wholly-owned direct subsidiary of New PubCo. |
The JGGC Class A Ordinary Shares, JGGC Rights, JGGC Warrants and JGGC Units are currently listed on Nasdaq under the symbols “JGGC,” “JGGCR,” “JGGCW” and “JGGCU,” respectively. Pursuant to the terms of the Business Combination Agreement, as a closing condition, the parties are required to cause the New PubCo Ordinary Shares and the New PubCo Converted Warrants issued in connection with the Business Combination to be approved for listing on Nasdaq, but there can be no assurance that such listing condition will be met. If such listing condition is not met, the Business Combination will not be consummated unless the listing condition is waived by the parties to the Business Combination Agreement. Following the Closing, the New PubCo Ordinary Shares and the New PubCo Converted Warrants will be listed, subject to Nasdaq approval, under the proposed symbols “CAPT” and “CAPTW”, respectively. It is important for you to know that, at the time of the Extraordinary General Meeting, the parties may not have received from Nasdaq either confirmation of the listing of the New PubCo Ordinary Shares and the New PubCo Converted Warrants or that approval thereof will be obtained prior to the consummation of the Business Combination. As a result, you may be asked to vote to approve the Business Combination and the other proposals included in the accompanying proxy statement/prospectus without such confirmation, and, further, it is possible that such confirmation may never be received and the Business Combination could still be consummated if such condition is waived by the parties to the Business Combination and therefore the New PubCo Securities would not be listed on Nasdaq or any other nationally recognized securities exchange. See “Risk Factors” for more information.
| Q: | What will GLAAM Shareholders receive in the Business Combination? |
| A: | At the effective time of the Share Swap, (i) the right to each GLAAM Common Share held by the GLAAM Shareholders in connection with and immediately prior to the Share Swap shall be converted into and shall for all purposes represent only the right to receive a number of validly issued, fully paid and non-assessable New PubCo Ordinary Shares equal to the GLAAM Exchange Ratio and (ii) each GLAAM Option shall be converted into a New PubCo Converted Option to acquire, subject to substantially the same terms and conditions as were applicable under such GLAAM Option, the number of New PubCo Ordinary Shares (rounded down to the nearest whole share), determined by multiplying the number of GLAAM Common Shares subject to such GLAAM Option as of immediately prior to the Share Swap by the GLAAM Exchange Ratio, at an exercise price per New PubCo Ordinary Share (rounded up to the nearest whole cent) equal to (x) the exercise price per GLAAM Common Share of such GLAAM Option divided by (y) the GLAAM Exchange Ratio. In exchange for the Aggregate Share Swap Consideration, Exchange Sub shall distribute all of the GLAAM Common Shares it receives from GLAAM Shareholders to New PubCo, and GLAAM will become a wholly-owned direct subsidiary of New PubCo. |
For more information, see “The Business Combination Agreement—GLAAM Shareholders Merger Consideration.”
| Q: | Who is GLAAM? |
| A: | GLAAM is the exclusive developer, manufacturer and installer of an innovative architectural media glass product called G-Glass. G-Glass is the world’s first IT-enabled construction material that transforms buildings into extraordinary digital content delivery devices. GLAAM is a market leader in the delivery of fully transparent media façade capabilities with over 460 architectural installations worldwide. Founded in South Korea in 2005, GLAAM is now a vertically integrated manufacturer controlling almost every aspect of product assembly and installation, including assembling media glass laminates, manufacturing aluminum frame, developing electronics, operating software, and delivering product. For more information, see “Business of GLAAM.” |
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| Q: | What equity stake will current JGGC Shareholders and GLAAM Shareholders have in New PubCo after the Closing? |
| A: | As of the date of this proxy statement/prospectus, there are (i) 10,074,293 JGGC Class A Ordinary Shares outstanding (including those issued as part of the JGGC Units sold in the IPO), and (ii) 7,666,667 Founder Shares outstanding (all of which are held by JGGC’s initial shareholders). As of the date of this proxy statement/prospectus, there are 12,450,000 JGGC Private Placement Warrants outstanding and 11,500,000 JGGC Public Warrants outstanding (which were issued as part of the JGGC Units sold in the IPO). Each JGGC Warrant entitles the holder thereof to purchase one JGGC Class A Ordinary Share and, following the Closing, will entitle the holder thereof to purchase one New PubCo Ordinary Share. As of the date of this proxy statement/prospectus, there are 23,000,000 JGGC Rights outstanding, which in the aggregate, will entitle the holders of such JGGC Rights to up to 1,916,666 New PubCo Ordinary Shares upon Closing. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination and assuming that none of JGGC’s outstanding Public Shares are redeemed in connection with the Business Combination), JGGC’s fully diluted share capital, giving effect to the exercise of all of the JGGC Private Placement Warrants and JGGC Public Warrants and the conversion of all JGGC Rights, would be 43,607,627 JGGC Ordinary Shares. |
The following table illustrates the varying ownership levels in New PubCo Ordinary Shares immediately following the consummation of the Business Combination based on the varying levels of redemptions of Public Shares by Public Shareholders and based on the additional assumptions described in the notes to the table below (without taking into account any additional dilution sources).
| Share Ownership in New PubCo(1) | ||||||||||||
| Additional Redemption Scenario(2) |
Interim Redemption Scenario(3) |
Maximum Redemption Scenario(4) |
||||||||||
| Percentage of Outstanding New PubCo Ordinary Shares |
||||||||||||
| JGGC Public Shareholders |
28.8% | 16.8% | — | |||||||||
| JGGC Initial Shareholders |
16.5% | 19.2% | 23.1 | % | ||||||||
| JGGC Rights holders |
5.5% | 6.4% | 7.7 | % | ||||||||
| GLAAM Founders |
0.9% | 1.1% | 1.3 | % | ||||||||
| Other GLAAM Shareholders |
48.3% | 56.4% | 67.9 | % | ||||||||
| Total |
100.0% | 100.0% | 100.0 | % | ||||||||
| (1) | As of immediately following the consummation of the Business Combination. Excludes New PubCo Warrants and the effect of any other transactions that may be entered into after the date of this proxy statement/prospectus. For more information about the consideration to be received in the Business Combination see “The Business Combination Agreement—Consideration to be Received in the Business Combination.” A discussion of additional dilution sources is set forth in the Question and Answer immediately below. |
| (2) | Assumes that no currently outstanding Public Shares are redeemed in connection with the Business Combination. In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (3) | Assumes that 5,037,147 JGGC Class A Ordinary Shares (or 50% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per share or $54,098,959 in the aggregate (based on the estimated value of the Trust Account at Closing). In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (4) | Assumes that 10,074,293 JGGC Class A Ordinary Shares (or 100% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per share or $108,200,000 in the aggregate (based on the estimated value of the Trust Account at |
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| Closing). In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| Q: | How will variations in the levels of redemptions impact the dilutive effect of equity issuances related to the Business Combination? |
| A: | In addition to the changes in percentage ownership described above, variations in the levels of redemptions will impact the dilutive effect of certain equity issuances related to the Business Combination which would not otherwise be present in an underwritten initial public offering. Without limiting the generality of the assumptions described under the section entitled “Unaudited Pro Forma Condensed Combined Financial Information,” the ownership percentages described above do not take into account the dilutive effects of the exercise of New PubCo Warrants. The issuance of additional New PubCo Ordinary Shares upon the exercise of any New PubCo Warrants or New PubCo Converted Options, the vesting and settlement of New PubCo Earnout RSRs and/or the issuance, vesting and exercise of any securities under the New PubCo Equity Plan, could have a substantial dilutive effect on those JGGC Shareholders who do not elect to redeem their Public Shares. Increasing levels of redemptions will increase the dilutive effects of these issuances on non-redeeming Public Shareholders. |
The following sensitivity table below sets forth the potential additional dilutive impact of each of the additional dilution sources on the capitalization of New PubCo in each redemption scenario, as described further in the notes to the table below. Increasing levels of redemption will increase the dilutive effects of these issuances on non-redeeming Public Shareholders.
| Share Ownership in New PubCo(1) | ||||||||||||||||||||||||
| No Additional Redemption Scenario(2) |
Interim Redemption Scenario(3) |
Maximum Redemption Scenario(4) |
||||||||||||||||||||||
| Additional Dilution Sources |
Number of Shares |
Percentage of Shares |
Number of Shares |
Percentage of Shares |
Number of Shares |
Percentage of Shares |
||||||||||||||||||
| Total New PubCo Ordinary Shares Outstanding Immediately after the Business Combination |
34,933,611 | n/a | 29,896,464 | n/a | 24,859,318 | n/a | ||||||||||||||||||
| New PubCo Public Warrants |
11,500,000 | 32.9% | 11,500,000 | 38.5% | 11,500,000 | 46.3% | ||||||||||||||||||
| New PubCo Private Warrants |
12,450,000 | 35.6% | 12,450,000 | 41.6% | 12,450,000 | 50.1% | ||||||||||||||||||
| JGGC Sponsor Earnout Shares |
1,916,667 | 5.5% | 1,916,667 | 6.4% | 1,916,667 | 7.7% | ||||||||||||||||||
| New PubCo Founder Warrants |
2,990,972 | 8.6% | 2,271,380 | 7.6% | 1,551,788 | 6.2% | ||||||||||||||||||
| New PubCo Converted Options held by GLAAM Founders |
44,002 | 0.1% | 44,002 | 0.1% | 44,002 | 0.2% | ||||||||||||||||||
| New PubCo Converted Options (excluding GLAAM Founders) |
370,507 | 1.1% | 370,507 | 1.2% | 370,507 | 1.5% | ||||||||||||||||||
| New PubCo Earnout RSRs |
5,000,000 | 14.3% | 5,000,000 | 16.7% | 5,000,000 | 20.1% | ||||||||||||||||||
| March CB |
217,614 | 0.6% | 217,614 | 0.7% | 217,614 | 0.9% | ||||||||||||||||||
| New PubCo Ordinary Shares issuable under New PubCo Equity Plan(5) |
7,713,708 | 22.1% | 7,074,070 | 23.7% | 6,434,432 | 25.9% | ||||||||||||||||||
| Total Additional Dilution Sources |
42,203,470 | 120.8% | 40,844,240 | 136.6% | 39,485,010 | 158.8% | ||||||||||||||||||
| (1) | As of immediately following the consummation of the Business Combination. Excludes the effect of any other transactions that may be entered into after the date of this proxy statement/prospectus. For a more detailed discussion of the possible sources and extent of dilution that Public Shareholders who elect not to redeem their Public Shares may experience in connection with the Business Combination, see “The Business Combination Agreement—Ownership of, and Voting Rights in, New PubCo Following the Business Combination.” |
| (2) | Assumes that no currently outstanding Public Shares are redeemed in connection with the Business Combination. In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
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| (3) | Assumes that 5,037,147 JGGC Class A Ordinary Shares (or 50% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per share or $54,098,959 in the aggregate (based on the estimated value of the Trust Account at Closing). In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (4) | Assumes that 10,047,293 JGGC Class A Ordinary Shares (or 100% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per share or $108,200,00 in the aggregate (based on the estimated value of the Trust Account at Closing). In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (5) | The total number of New PubCo Ordinary Shares that will be reserved and may be issued under the New PubCo Equity Plan will automatically increase on the first trading day of each calendar year, beginning with calendar year 2024 and ending with calendar year 2033, by a number of New PubCo Ordinary Shares equal to 1% of the total outstanding New PubCo Ordinary Shares on the last day of the prior calendar year. |
| Q: | What differences will there be between the Proposed Governing Documents and the Existing Governing Documents that JGGC Shareholders will consider at the Extraordinary General Meeting? |
| A: | If the Business Combination is consummated, the Existing Governing Documents will effectively be replaced by the Proposed Governing Documents of New PubCo given that JGGC Shareholders will, effective as of the consummation of the Business Combination (and assuming Public Shareholders do not redeem their Public Shares) hold New PubCo Ordinary Shares subject to the Proposed Governing Documents. JGGC Shareholders are asked to consider and vote upon and to approve, on an advisory non-binding basis, by ordinary resolution three separate proposals in connection with the replacement of the Existing Governing Documents with the Proposed Governing Documents. |
The Proposed Governing Documents differ materially from the Existing Governing Documents. The below table sets forth a summary of the principal changes proposed between the Existing Governing Documents and the Proposed Governing Documents. This summary is qualified by reference to the complete text of the Existing Governing Documents and the complete text of the Proposed Governing Documents, a copy of which is attached to this proxy statement/prospectus as Annex C. JGGC Shareholders are urged to carefully read the relevant provisions of the Proposed Governing Documents that will be in effect as of the Closing Date.
| Existing Governing Documents of JGGC | Proposed Governing Documents of New PubCo | |
| Authorized Share Capital | ||
| (Governing Documents Proposal 3A) | ||
| The share capital of JGGC is US$55,500 divided into 500,000,000 JGGC Class A Ordinary Shares of a par value of US$0.0001 each, 50,000,000 JGGC Class B Ordinary Shares of a par value of US$0.0001 each and 5,000,000 preference shares of a par value of US$0.0001 each. |
The share capital of New PubCo is US$50,000 divided into 400,000,000 New PubCo Ordinary Shares of a par value of US$0.0001 each and 100,000,000 preference shares of a par value of US$0.0001 each. | |
| Approval of Method to Appoint and Elect Directors | ||
| (Governing Documents Proposal 3B) | ||
| Prior to the consummation of a Business Combination (as defined in the Existing Governing Documents), JGGC may by ordinary resolution of the holders of the Founder Shares appoint any person to be a director or remove any director. | New PubCo may by ordinary resolution appoint any person nominated under the provisions of the Proposed Governing Documents to be a director. | |
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| Existing Governing Documents of JGGC | Proposed Governing Documents of New PubCo | |
|
The directors may appoint any person to be a director, either to fill a vacancy or as an additional director provided that the appointment does not cause the number of directors to exceed any number fixed by or in accordance with the Existing Governing Documents as the maximum number of directors. |
The directors may appoint any person to be a director, either to fill a vacancy or as an additional director provided that the appointment does not cause the number of directors to exceed any number fixed by or in accordance with the Proposed Governing Documents as the maximum number of directors. | |
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A director may be removed from office by the shareholders by a resolution passed by not less than seventy-five (75) per cent of the shareholders only for cause (“cause” for removal of a director shall be deemed to exist only if (a) the director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal; (b) such director has been found by the affirmative vote of a majority of the directors then in office at any regular or special meeting of the board of directors called for that purpose, or by a court of competent jurisdiction, to have been guilty of wilful misconduct in the performance of such director’s duties to the company in a matter of substantial importance to the company, provided that such director shall be entitled to attend the applicable meeting and be heard on the motion for his removal; or (c) such director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, (which mental incompetency directly affects such director’s ability to perform their obligations as a director) at any time before the expiration of their term notwithstanding anything in the Proposed Governing Documents or in any agreement between the company and such director (but without prejudice to any claim for damages under such agreement). | ||
| Other Changes in Connection with Adoption of the Proposed Governing Documents | ||
| (Governing Documents Proposal 3C) | ||
| The Existing Governing Documents include provisions related to JGGC’s status as a blank check company prior to the consummation of a business combination. | The Proposed Governing Documents do not include such provisions related to JGGC’s status as a blank check company, which no longer will apply upon consummation of the Business Combination, as JGGC will cease to be a blank check company as a result of the Merger. | |
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| Q: | Who will be the executive officers and directors of New PubCo if the Business Combination is consummated? |
| A: | The Business Combination Agreement provides that, immediately following the Closing, the New PubCo Board will consist of seven directors. GLAAM, JGGC and New PubCo will take all necessary actions to ensure the composition of the New PubCo Board to be comprised of the individuals specified in the section entitled “New PubCo Management Following the Business Combination—Management and Board of Directors.” |
New PubCo’s executive team following the Closing is expected to be comprised of the individuals specified in the section entitled “New PubCo Management Following the Business Combination—Management and Board of Directors.”
| Q: | What conditions must be satisfied to complete the Business Combination? |
| A: | Consummation of the transactions contemplated by the Business Combination Agreement is subject to customary closing conditions, which include (i) the approval by the JGGC Shareholders of the Business Combination Proposal and the Merger Proposal (ii) the approval by the GLAAM Shareholders of the consummation of the Transactions; (iii) the net tangible assets of JGGC being at least $5,000,001 after giving effect to the Transactions, including any redemptions of Public Shares and receipt of the net proceeds actually contributed by investors pursuant to any Equity Financing Arrangement (which condition has already been waived); (iv) receipt of all necessary pre-Closing governmental authorizations; (v) the absence of any law or order preventing or prohibiting the consummation of the Business Combination and other related Transactions; (vi) the approval of New PubCo’s initial listing application with Nasdaq and the approval of the listing of New PubCo Ordinary Shares on Nasdaq; (vii) the effectiveness of the Korean Registration Statement and (viii) the effectiveness of the registration statement of which this proxy statement/prospectus forms a part. |
For a summary of the conditions that must be satisfied or waived prior to consummation of the Business Combination, see the section entitled “The Business Combination Proposal—The Business Combination Agreement.”
| Q: | What vote is required to approve the proposals presented at the Extraordinary General Meeting? |
| A: | The approval of each of the Business Combination Proposal, the Governing Documents Proposals, the Adjournment Proposal and the New PubCo Equity Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the issued JGGC Ordinary Shares who, being present in person or represented by proxy and entitled to vote at the Extraordinary General Meeting, vote at the Extraordinary General Meeting. The Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of holders of at least two-thirds (2/3) of the issued JGGC Ordinary Shares who, being present in person or represented by proxy and entitled to vote at the Extraordinary General Meeting, vote at the Extraordinary General Meeting. |
A JGGC Shareholder’s failure to vote by proxy or to vote in person at the Extraordinary General Meeting, an abstention from voting or a broker non-vote will not count as votes cast at the Extraordinary General Meeting, and otherwise will have no effect on the Transaction Proposals.
| Q: | What happens if I sell my JGGC Ordinary Shares before the Extraordinary General Meeting? |
| A: | The Record Date for the Extraordinary General Meeting will be earlier than the date that the Business Combination is expected to be completed. If you transfer your JGGC Ordinary Shares after the Record Date, but before the Extraordinary General Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Extraordinary General Meeting. However, you will not be |
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| entitled to receive any New PubCo Ordinary Shares at the effective time of the Merger because only JGGC Shareholders immediately prior to the effective time of the Merger will be entitled to receive New PubCo Ordinary Shares in connection with the Closing. |
| Q: | Will JGGC, GLAAM or New PubCo issue additional equity securities in connection with the consummation of the Business Combination? |
| A: | Pursuant to the Business Combination Agreement, the parties thereto may (A) identify and seek additional sources of financing on behalf of New PubCo and/or GLAAM from third party financing sources, including in the form of Equity Financing and (B) negotiate definitive agreements on terms reasonably acceptable to GLAAM and JGGC as necessary to effectuate any Financing Arrangement, including, with respect to PIPE Investments, subscription agreements to purchase New PubCo Ordinary Shares, as more fully described in “Presentation of Certain Assumptions Relating to the Business Combination” in this proxy statement/prospectus. |
There can be no assurance that any Equity Financing will be entered into in connection with the Business Combination. If any PIPE Investment or Equity Financings are entered into in connection with the Business Combination, an amendment or supplement to this proxy statement/prospectus shall be provided to JGGC Shareholders to describe the material terms of any such transaction.
| Q: | How many votes do I have at the Extraordinary General Meeting? |
| A: | JGGC Shareholders are entitled to one vote at the Extraordinary General Meeting for each JGGC Ordinary Share held of record as of the Record Date. As of the close of business on the Record Date, there were 10,074,293 JGGC Class A Ordinary Shares and 7,666,667 JGGC Class B Ordinary Shares issued and outstanding. |
| Q: | How will the Sponsor vote? |
| A: | Our Sponsor, officers and directors, pursuant to the terms of the Sponsor Support Agreement entered into with New PubCo, JGGC and GLAAM, agreed to vote any Founder Shares or Public Shares held by them in favor of the Transaction Proposals. |
Approval of the Business Combination Proposal, the Governing Documents Proposal, the Adjournment Proposal and New PubCo Equity Plan Proposal at the Extraordinary General Meeting requires the affirmative vote of holders of a majority of the issued JGGC Ordinary Shares who attend and vote at the Extraordinary General Meeting. As a result, in addition to the JGGC Founder Shares, we would need 1,203,814, or approximately 12% (assuming all issued and outstanding JGGC Ordinary Shares are voted), or none (assuming only the minimum number of shares representing a quorum are voted), of the 10,074,293 Public Shares outstanding as of the Record Date to be voted in favor of the Business Combination Proposal, the Governing Documents Proposal, the Adjournment Proposal and New PubCo Equity Plan Proposal in order to approve such proposals.
Approval of the Merger Proposal at the Extraordinary General Meeting requires the affirmative vote of holders of at least two-thirds (2/3) of the issued JGGC Ordinary Shares who attend and vote at the Extraordinary General Meeting. As a result, in addition to the Founder Shares, we would need 4,160,640, or approximately 41% (assuming all issued and outstanding JGGC Ordinary Shares are voted), or none (assuming only the minimum number of shares representing a quorum are voted), of the 10,074,293 Public Shares outstanding as of the Record Date to be voted in favor of the Merger Proposal in order to approve such proposal.
Accordingly, it is more likely that the necessary approvals by JGGC Shareholders will be received than would be the case if JGGC’s initial shareholders had agreed to vote their JGGC Ordinary Shares in accordance with the majority of the votes cast by JGGC’s Shareholders.
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| Q: | What interests do JGGC’s current officers and directors have in the Business Combination? |
| A: | In considering the recommendation of the JGGC board of directors to vote in favor of the Business Combination, JGGC Shareholders should be aware that, aside from their interests as shareholders, our Sponsor and certain of our directors and officers have interests in the Business Combination that may conflict with those of other shareholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination and in recommending to shareholders that they approve the Business Combination. JGGC Shareholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things, the interests listed below: |
| • | the fact that our initial shareholders hold 7,666,667 Founder Shares for which our Sponsor paid $25,000, which will convert, on a one-for-one basis, into New PubCo Ordinary Shares as of the Closing, and such shares will have a significantly higher value at the time of the Business Combination when such shares convert into shares in New PubCo, and will be worthless if we do not consummate the Business Combination or another initial business combination (as the Sponsor has waived liquidation rights with respect to such shares), such shares have an approximate aggregate market value of $81,113,336, as of June 30, 2023 (based on $10.58 per share, which was the closing price of the JGGC Class A Ordinary Share on Nasdaq on June 30, 2023); |
| • | the fact that if the Business Combination or another initial business combination is not consummated by September 15, 2023 (or until December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), our Sponsor, officers, and directors will lose their entire investment in us, which investment included a capital contribution of $25,000 and the acquisition of 12,450,000 JGGC Private Placement Warrants for a purchase price of $1.00 per warrant, having an approximate aggregate market value of $560,250, as of June 30, 2023 (based on $0.045 per warrant, which was the closing price of the JGGC Public Warrants on Nasdaq on June 30, 2023); |
| • | the fact that the Contributor has agreed to deposit the Extension Payments. The Extension Payments will constitute loans to JGGC evidenced by one or more non-interest bearing, unsecured promissory notes issued by JGGC to the Contributor and will be repayable by JGGC, forgiven or postponed to a later date at the sole discretion of the Sponsor upon consummation of an initial business combination. If JGGC does not consummate an initial business combination by September 15, 2023 (or until December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), any such promissory notes will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. If JGGC has consummated an initial business combination or announced its intention to wind up prior to September 15, 2023 (or until December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), any obligation to make any Extension Payment will terminate; |
| • | the fact that given the differential in the purchase price that the Sponsor paid for the Founder Shares as compared to the price of the Public Shares underlying the JGGC Units sold in the IPO and the 7,466,667 New PubCo Ordinary Shares that the Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, the Sponsor and its affiliates may earn a positive rate of return on their investment even if the New PubCo Ordinary Shares trade below the price initially paid for the Public Shares underlying the JGGC Units in the IPO and the Public Shareholders experience a negative rate of return following the consummation of the Business Combination; |
| • | the fact that our Sponsor, officers and directors have agreed to waive: (i) their redemption rights with respect to their Founder Shares and any Public Shares they may have acquired after the IPO in connection with consummation of the Business Combination, for which they did not receive separate consideration other than the receipt of Founder Shares for a nominal purchase price, and (ii) their rights to liquidating distributions from the Trust Account with respect to any shares held by them if JGGC fails to complete the Business Combination or another initial business combination and, accordingly, our Sponsor, officers and directors will benefit from the completion of the Business Combination or |
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| another business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to Public Shareholders rather than liquidate; |
| • | the fact that if the Trust Account is liquidated, including in the event we are unable to complete the Business Combination or another initial business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than JGGC’s independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have entered into a transaction agreement, reduce the amounts in the Trust Account to below (i) $10.20 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in the value of the trust assets, net of the amount of taxes payable, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under JGGC’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act; |
| • | the fact that, unless the Business Combination or another initial business combination is completed, JGGC and our directors are only entitled to reimbursement for any out-of-pocket expenses incurred by them on our behalf incident to identifying, investigating and consummating an initial business combination (which, as of the date of this proxy statement/prospectus were $0) from funds outside of the Trust Account, which funds are limited; |
| • | the fact that one or more of our directors or officers are expected to be appointed as a director or officer of New PubCo (See “New PubCo Management Following the Business Combination— Management and Board of Directors.”); and |
| • | the continued indemnification of current directors and officers of JGGC and the continuation of directors’ and officers’ liability insurance for a period of six years from the Closing Date. |
These interests may influence our directors in making their recommendation that you vote in favor of the approval of the Business Combination Proposal and the other Transaction Proposals. You should take these interests into account in deciding whether to approve the Business Combination and the Transaction Proposals. You should also read the section entitled “The Business Combination Proposal—Certain Other Interests in the Business Combination.”
| Q: | Did the JGGC board of directors obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination? |
| A: | Yes. The JGGC board of directors obtained a third-party fairness opinion from Houlihan Capital, LLC (“Houlihan Capital”) in connection with its determination to approve the Business Combination, which is attached hereto as Annex I. The JGGC board of directors concluded that a third-party fairness opinion coupled with the experience and backgrounds of JGGC’s officers, directors and advisors enabled them to make the necessary analyses and determinations regarding the Business Combination. |
| Q: | Do I have redemption rights? |
| A: | Public Shareholders may require JGGC to redeem their Public Shares upon consummation of the Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account 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 JGGC to pay its tax obligations, divided by the number of then issued and outstanding Public Shares. |
There will be no redemption rights with respect to the JGGC Warrants and the JGGC Rights.
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The Sponsor has agreed, in partial consideration of receiving its Founder Shares, to waive its redemption rights with respect to its Founder Shares and any Public Shares that it may have acquired during or after the IPO in connection with the consummation of our initial business combination. The Founder Shares 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 $106,978,440 on August 16, 2023, the estimated per share redemption price would have been approximately $10.62. This is greater than the $10.00 IPO price of JGGC Units. Additionally, Public Shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise, JGGC will redeem all of 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 JGGC to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, subject to applicable law.
Holders of our outstanding JGGC Warrants will not have redemption rights with respect to such warrants. Assuming the closing JGGC Public Warrant price on Nasdaq of $0.045 as of June 30, 2023, the aggregate fair value of JGGC Public Warrants that can be retained by the Public Shareholders (including redeeming shareholders), is $517,500. The actual market price of the JGGC Public Warrants may be higher or lower on the date that a JGGC Warrantholder seeks to sell such JGGC Public Warrants. Additionally, we cannot assure JGGC Warrantholders that they will be able to sell their JGGC Public Warrants in the open market as there may not be sufficient liquidity in such securities when a JGGC Warrantholder wishes to sell their JGGC Public Warrants. Further, while the level of redemptions of Public Shares will not directly change the value of the JGGC Public Warrants because the JGGC Public Warrants will remain outstanding regardless of the level of redemptions, as redemptions of Public Shares increase, JGGC Warrantholders who exercise such JGGC Public Warrants will ultimately own a greater interest in New PubCo because there would be fewer shares outstanding overall.
| Q: | Is there a limit on the number of Public Shares I may redeem? |
| A: | A Public Shareholder, together with any affiliate of his or any other person with whom he 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 in an amount of shares exceeding 15% of the Public Shares. Accordingly, all shares owned by a holder in excess of 15% of the Public Shares will not be redeemed. On the other hand, a Public Shareholder 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 do not vote your shares. As a result, the Business Combination Proposal can be approved by JGGC Shareholders who will redeem their Public Shares and no longer remain shareholders, leaving shareholders who choose not to redeem their Public Shares holding shares in a company with a less liquid trading market, fewer shareholders, 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 5:00 p.m., Eastern Time, on September 25, 2023 (two business days before the scheduled date of the Extraordinary General Meeting), (i) submit a written request to the Transfer Agent that JGGC redeem your Public Shares for cash, and (ii) tender or deliver your Public Shares (and share certificates (if any) and any other redemption forms) to the Transfer Agent electronically through DTC. The address of Continental, the Transfer Agent, is listed under the question “Who can help answer my questions?” below. JGGC requests that any requests for redemption include the identity as to the beneficial owner making such request. |
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Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with JGGC’s consent, until the vote is taken with respect to the Business Combination. If you tendered your Public Shares for redemption to the Transfer Agent and decide within the required timeframe not to exercise your redemption rights, you may request that JGGC’s Transfer Agent return the shares (electronically). You may make such request by contacting JGGC’s Transfer Agent at the phone number or address listed under the question “Who can help answer my questions?”
| Q: | What happens if a substantial number of JGGC Public Shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights? |
| A: | JGGC Shareholders are not required to vote “AGAINST” the Business Combination in order to exercise their redemption rights with respect to their Public Shares. Therefore, Public Shareholders who vote in favor of the Business Combination may nonetheless exercise their redemption rights with respect to their Public Shares, although Public Shareholders 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 Public Shareholders are reduced as a result of redemptions by Public Shareholders. |
If the Business Combination is consummated, but we experience a significant level of redemptions, this may result in fewer outstanding New PubCo Ordinary Shares and fewer Public Shareholders, which may result in the trading market for New PubCo Ordinary Shares being less liquid than if no JGGC Public Shareholders had redeemed their Public Shares. In addition, New PubCo may not be able to meet the listing standards for Nasdaq or another national securities exchange. Furthermore, with less funds available from the Trust Account, the capital infusion from the Trust Account into GLAAM’s business will be reduced. As such, GLAAM’s ability to execute against its business plan may be negatively impaired if redemptions by Public Shareholders are significant.
To the extent that any of the outstanding JGGC Ordinary Shares are redeemed in connection with the Business Combination, the percentage of New PubCo Ordinary Shares held by the current JGGC Shareholders will decrease relative to the percentage held if none of the JGGC Ordinary Shares are redeemed.
If a Public Shareholder exercises its redemption rights, such exercise will not result in the loss of any JGGC Public Warrants that it may hold. No party can predict the ultimate value following the consummation of the Business Combination of the New PubCo Public Warrants that will be issued in exchange for JGGC Public Warrants pursuant to the Business Combination. However, assuming that 100% of the 10,074,293 currently outstanding Public Shares held by our Public Shareholders were redeemed, the 11,500,000 retained outstanding New PubCo Public Warrants (that will be exercisable for New PubCo Ordinary Shares) would have an aggregate value of $517,500, based on the price per JGGC Public Warrant of $0.045 on June 30, 2023. In addition, on June 30, 2023, the price per JGGC Ordinary Share closed at $10.58. If the New PubCo Ordinary Shares trade above the exercise price of $11.50 per New PubCo Ordinary Share, the New PubCo Public Warrants will be considered to be “in the money” and are therefore more likely to be exercised by the holders thereof (when they become exercisable). This in turn increases the risk to non-redeeming Public Shareholders that the New PubCo Public Warrants will be exercised, which would result in immediate dilution to the non-redeeming Public Shareholders.
Public Shareholders who purchased JGGC Units as part of the IPO for $10.00 per unit may experience dilution if they elect not to redeem their Public Shares in connection with the Business Combination.
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The table below presents the value per share to a Public Shareholder that elects not to redeem across a range of redemption scenarios, subject, unless otherwise noted, to the assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.”
| No Additional Redemption Scenario(1) |
Interim Redemption Scenario(2) |
Maximum Redemption Scenario(3) |
||||||||||||||||||||||
| Number of Shares |
Value per Share(4) |
Number of Shares |
Value per Share(4) |
Number of Shares |
Value per Share(4) |
|||||||||||||||||||
| Base Scenario(5) |
34,933,611 | $ | 10.60 | 29,896,464 | $ | 10.60 | 24,859,318 | $ | 10.60 | |||||||||||||||
| Assuming Issuance of all Earnout Shares and Vesting of all JGGC Sponsor Earnout Shares(6) |
41,850,278 | $ | 8.85 | 36,813,131 | $ | 8.61 | 31,775,985 | $ | 8.29 | |||||||||||||||
| Exercising all New PubCo Converted Warrants(7) |
58,883,611 | $ | 10.97 | 53,846,464 | $ | 11.00 | 48,809,318 | $ | 11.04 | |||||||||||||||
| Exercising all GLAAM Founder Warrants(8) |
37,924,583 | $ | 10.67 | 32,167,844 | $ | 10.66 | 26,411,106 | $ | 10.65 | |||||||||||||||
| Exercising all New PubCo Converted Warrants and GLAAM Founder Warrants(9) |
61,874,583 | $ | 10.99 | 56,117,844 | $ | 11.02 | 50,361,106 | $ | 11.06 | |||||||||||||||
| Assuming Issuance of all Earnout Shares, Vesting of all JGGC Sponsor Earnout Shares, Exercising all New PubCo Converted Warrants and Exercising all GLAAM Founder Warrants(10) |
68,791,250 | $ | 9.89 | 63,034,511 | $ | 9.81 | 57,277,773 | $ | 9.72 | |||||||||||||||
| (1) | Assumes that no currently outstanding Public Shares are redeemed in connection with the Business Combination. In addition, except as otherwise noted, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (2) | Assumes that 5,037,147 JGGC Class A Ordinary Shares (or 50% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.60 per share or $53,393,759 in the aggregate (based on the estimated value of the Trust Account at Closing). In addition, except as otherwise noted, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (3) | Assumes that 10,074,293 JGGC Class A Ordinary Shares (or 100% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.60 per share or $106,787,506 in the aggregate (based on the estimated value of the Trust Account at Closing). In addition, except as otherwise noted, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (4) | Based on a post-transaction equity value of New PubCo of the following: |
| Post-Transaction Equity Value | ||||||||||||
| No Additional Redemption Scenario |
Interim Redemption Scenario |
Maximum Redemption Scenario |
||||||||||
| Base Scenario(5) |
$ | 370,296,277 | $ | 316,902,518 | $ | 263,508,771 | ||||||
| Assuming Issuance of all Earnout Shares and Vesting of all JGGC Sponsor Earnout Shares(6) |
$ | 370,296,277 | $ | 316,902,518 | $ | 263,508,771 | ||||||
| Exercising all New PubCo Converted Warrants(7) |
$ | 645,721,277 | $ | 592,327,518 | $ | 538,933,771 | ||||||
| Exercising all GLAAM Founder Warrants(8) |
$ | 404,692,455 | $ | 343,023,388 | $ | 281,354,333 | ||||||
| Exercising all New PubCo Converted Warrants and GLAAM Founder Warrants(9) |
$ | 680,117,455 | $ | 618,448,388 | $ | 556,779,333 | ||||||
| Assuming Issuance of all Earnout Shares, Vesting of all JGGC Sponsor Earnout Shares, Exercising all New PubCo Converted Warrants and Exercising all GLAAM Founder Warrants(10) |
$ | 680,117,455 | $ | 618,448,388 | $ | 556,779,333 | ||||||
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| (5) | Represents (i) (x) 10,074,293 New PubCo Ordinary Shares held by Public Shareholders in the No Additional Redemption Scenario, (y) 5,037,146 New PubCo Ordinary Shares held by Public Shareholders in the Interim Redemption Scenario, and (z) 0 New PubCo Ordinary Shares held by Public Shareholders in the Maximum Redemption Scenario, (ii) 1,916,667 New PubCo Ordinary Shares held by former JGGC Rights holders in all redemption scenarios, (iii) 5,750,000 New PubCo Ordinary Shares, issued to JGGC’s initial shareholders in exchange for Founder Shares, in all redemption scenarios, which excludes the 1,916,667 New PubCo Ordinary Shares issued to JGGC’s initial shareholders that are subject to vesting or forfeiture, (iv) 322,619 New PubCo Ordinary Shares issued to the GLAAM Founders in all redemption scenarios and (v) 16,870,032 New PubCo Ordinary Shares issued to the other former GLAAM Shareholders in all redemption scenarios. |
| (6) | Represents the Base Scenario plus (i) the issuance of 5,000,000 Earnout Shares upon vesting of 5,000,000 New PubCo Earnout RSRs and (ii) the vesting of the 1,916,667 New PubCo Ordinary Shares issued to JGGC’s initial shareholders that are subject to vesting or forfeiture. |
| (7) | Represents the Base Scenario plus the cash exercise of (i) 11,500,000 New PubCo Public Warrants and (ii) 12,450,000 New PubCo Private Warrants, in each case at the initial exercise price per share of $11.50. |
| (8) | Represents the Base Scenario plus the cash exercise of the GLAAM Founder Warrants for (x) an aggregate of 2,990,972 New PubCo Ordinary Shares in the No Additional Redemption Scenario, (y) an aggregate of 2,271,380 in the Interim Redemption Scenario and (z) 1,551,788 New PubCo Ordinary Shares in the Maximum Redemption Scenario, in each case at the initial exercise price per share of $11.50. |
| (9) | Represents the Base Scenario plus the cash exercise of (i) 11,500,000 New PubCo Public Warrants, (ii) 12,450,000 New PubCo Private Warrants and (iii) the GLAAM Founder Warrants for (x) an aggregate of 2,990,972 New PubCo Ordinary Shares in the No Additional Redemption Scenario, (y) an aggregate of 2,271,380 in the Interim Redemption Scenario and (z) 1,551,788 New PubCo Ordinary Shares in the Maximum Redemption Scenario, in each case at the initial exercise price per share of $11.50. |
| (10) | Represents the Base Scenario plus (i) the issuance of 5,000,000 Earnout Shares upon vesting of 5,000,000 New PubCo Earnout RSRs in all redemption scenarios, (ii) the vesting of the 1,916,667 New PubCo Ordinary Shares issued to JGGC’s initial shareholders that are subject to vesting or forfeiture in all redemption scenarios, and (iii) the cash exercise of (a) 11,500,000 New PubCo Public Warrants in all redemption scenarios, (b) 12,450,000 New PubCo Private Warrants in all redemption scenarios and (c) the GLAAM Founder Warrants for (x) an aggregate of 2,990,972 New PubCo Ordinary Shares in the No Additional Redemption Scenario, (y) an aggregate of 2,271,380 in the Interim Redemption Scenario and (z) 1,551,788 New PubCo Ordinary Shares in the Maximum Redemption Scenario, in each case at the initial exercise price per share of $11.50. |
| Q: | What are the U.S. federal income tax consequences of exercising my redemption rights? |
| A: | The U.S. federal income tax consequences of exercising your redemption rights will depend upon your particular facts and circumstances. See the section entitled “Material U.S. Federal Income Tax Considerations—Tax Considerations for U.S. Holders Exercising Redemption Rights” for additional information. U.S. Holders of Public Shares contemplating exercise of their redemption rights are urged to consult their own tax advisors to determine the tax consequences thereof. |
| Q: | What are the U.S. federal income tax consequences of the Business Combination to U.S. Holders of JGGC Securities? |
| A: | As discussed in more detail in the section entitled “Material U.S. Federal Income Tax Considerations—Effects of the Business Combination to U.S. Holders,” in the opinion of Paul Hastings, counsel to JGGC, the Merger will qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code, subject to the assumptions, qualifications and limitations set forth or referred to in such opinion. Accordingly, U.S. Holders (as defined in the section entitled “Material U.S. Federal Income Tax Considerations”) generally |
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| will not recognize gain or loss for U.S. federal income tax purposes on the exchange of JGGC Securities for New PubCo Securities in the Merger. |
All holders of JGGC Securities are urged to consult with their own tax advisors regarding the potential tax consequences to them of the Merger, including the applicability and effect of U.S. federal, state and local and non-U.S. tax laws.
| Q: | If I hold JGGC Warrants, can I exercise redemption rights with respect to my JGGC Warrants? |
| A: | No. There are no redemption rights with respect to the JGGC Warrants. |
| Q: | If I hold JGGC Rights, can I exercise redemption rights with respect to my JGGC Rights? |
| A: | No. There are no redemption rights with respect to the JGGC Rights. |
| Q: | How do the JGGC Public Warrants differ from the JGGC Private Placement Warrants and what are the related risks for any holders of New PubCo Public Warrants post Business Combination? |
| A: | JGGC Private Placement Warrants, all of which are held by the Sponsor, are identical to the JGGC Public Warrants underlying JGGC Units sold in the IPO, except that, if held by the Sponsor or its permitted transferees, the JGGC Private Placement Warrants (i) may be exercised for cash or on a cashless basis, (ii) are not subject to being called for redemption, (iii) will be subject to transfer restrictions until 30 days after the closing date of an initial business combination, subject to certain limited exceptions and (iv) will be entitled to registration rights. |
If JGGC Private Placement Warrants (and following the Closing, the New PubCo Private Warrants) are held by someone other than the Sponsor or its permitted transferees, JGGC Private Placement Warrants (and following the Closing, the New PubCo Private Warrants) are redeemable by JGGC (and following the Closing, New PubCo) in all redemption scenarios and exercisable by such holders on the same basis as the JGGC Public Warrants (and following the Closing, the New PubCo Public Warrants).
At the effective time of the Merger, each JGGC Private Placement Warrant that is outstanding and unexercised will be converted into and become a New PubCo Private Warrant to purchase one New PubCo Ordinary Share and New PubCo will assume such warrants in accordance with their terms and all rights to JGGC Ordinary Shares under JGGC Private Placement Warrants will be assumed by New PubCo (as New PubCo Private Warrants) and converted into rights with respect to New PubCo Ordinary Shares. Each New PubCo Private Warrant assumed by New PubCo may be exercised solely for New PubCo Ordinary Shares. The number of New PubCo Ordinary Shares subject to each New PubCo Private Warrant will be the number of JGGC Class A Ordinary Shares subject to each JGGC Private Placement Warrant (each JGGC Private Placement Warrant is exercisable for one JGGC Class A Ordinary Share).
The per share exercise price for the New PubCo Ordinary Shares issuable upon exercise of each New PubCo Private Warrant will initially be $11.50, subject to adjustment.
Additionally, any restriction on the exercise of any JGGC Private Placement Warrant assumed by New PubCo will continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such JGGC Private Placement Warrant will otherwise remain unchanged, provided, however that to the extent provided under the terms of a New PubCo Private Warrant, such New PubCo Private Warrant will, in accordance with its terms, be subject to adjustment as appropriate to reflect any share split, division or subdivision of shares, share dividend or distribution (including any dividend or distribution of securities convertible into New PubCo Ordinary Shares), reorganization, combination, exchange of shares, reverse share split, consolidation of shares, reclassification, recapitalization or other like change with respect to New PubCo Ordinary Shares subsequent to the Merger.
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| Q: | What are the potential impacts on the Business Combination and related transactions resulting from the waiver of deferred underwriting fees by Barclays Capital Inc. and Citigroup Global Markets Inc.? |
| A: | Each of Barclays Capital Inc. and Citigroup Global Markets Inc. has waived all rights to any deferred underwriting fees due under the Underwriting Agreement dated February 10, 2021. The deferred fees were only payable upon completion of the Business Combination. As a result of the waivers, the transaction fees payable by JGGC at the consummation of the Business Combination will be reduced by approximately $8,050,000. The IPO underwriting services being provided by Barclays Capital Inc. and Citigroup Global Markets Inc. were substantially complete at the time of the waiver, with any fees payable to Barclays Capital Inc. and Citigroup Global Markets Inc. contingent upon the closing of the Business Combination. JGGC believes 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 Barclays Capital Inc. and Citigroup Global Markets Inc. did not provide any additional detail in their letters related to the waivers, shareholders should be aware that such waivers indicate that neither of Barclays Capital Inc. and Citigroup Global Markets Inc. want to be associated with the disclosures in this proxy statement/prospectus or any underlying business analysis related to the transaction described herein. JGGC public shareholders 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: | Do I have appraisal rights or dissenters’ rights if I object to the proposed Business Combination? |
| A: | No appraisal or dissenters’ rights are available to holders of JGGC Ordinary Shares or JGGC Warrants in connection with the Business Combination Proposal. However, in respect of the Merger Proposal, under section 238 of the Companies Act, shareholders of a Cayman Islands company ordinarily have dissenters’ rights with respect to a statutory merger. |
The Companies Act prescribes when dissenters’ rights will be available and provides that shareholders are entitled to receive fair value for their shares if they exercise those rights in the manner prescribed by the Companies Act. Pursuant to section 239(1) of the Companies Act, dissenters’ rights are not available if an open market for the shares exists on a recognized stock exchange, such as Nasdaq, for a specified period after the merger is authorized (such period being the period in which dissenter’s rights would otherwise be exercisable). It is anticipated that, if the Business Combination is approved, it may be consummated prior to the expiry of such specified period and accordingly the exemption under section 239(1) of the Companies Act may not be available. However, pursuant to the terms of the Business Combination Agreement, JGGC and GLAAM may defer the Closing Date by agreement in writing, including if a JGGC Shareholder validly exercises their dissenters’ rights under the Companies Act. Such deferral, if agreed between JGGC and GLAAM, may result in the consummation of the Merger not occurring until after the expiry of the specified period, thereby allowing the exemption in section 239(1) of the Companies Act to be relied upon.
Regardless of whether dissenters’ rights are or are not available, Public Shareholders can exercise their redemption rights as described herein. The JGGC board of directors has determined that the redemption proceeds payable to Public Shareholders who exercise their redemption rights represent the fair value of the Public Shares. See “The Extraordinary General Meeting of JGGC Shareholders—Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your Public Shares for cash.
| Q: | What happens to the funds held in the Trust Account upon consummation of the Business Combination? |
| A: | Following the closing of the IPO, an amount equal to $234,600,000 ($10.20 per JGGC Unit) of the net proceeds from the IPO and the sale of the JGGC Private Placement Warrants was placed in the Trust Account. At the Extension Extraordinary General Meeting held on August 11, 2023, the holders of 12,925,707 JGGC Class A Ordinary Shares originally issued in JGGC’s IPO properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.64 per share, for an aggregate |
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| redemption amount of approximately $137.5 million. After the satisfaction of such redemptions and the Extension Payment in connection with the Extension Amendment, as of August 16, 2023, funds in the Trust Account totaled approximately $107 million and were held in money market funds. These funds will remain in the Trust Account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (i) the completion of an initial business combination (including the consummation of the proposed Business Combination) or (ii) the redemption of all of the Public Shares if JGGC is unable to complete a business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), subject to applicable law. |
If the Business Combination is consummated, the funds held in the Trust Account will be released (i) to pay Public Shareholders who properly exercise their redemption rights and (ii) for general corporate purposes of New PubCo following the Business Combination.
| Q: | What happens if the Business Combination Proposal is not approved? |
| A: | If the Business Combination Proposal is not approved, the Business Combination will not be consummated. |
| Q: | What happens if the Business Combination is not consummated? |
| A: | There are certain circumstances under which the Business Combination Agreement may be terminated. One such circumstance is that the Business Combination Agreement can be terminated by either JGGC or GLAAM if the transactions contemplated by the Business Combination Agreement shall not have been consummated on or prior to the date that is the earlier of (i) November 15, 2023 or (ii) the date by which JGGC must consummate an initial business combination under the Existing Governing Documents. See the section entitled “The Business Combination Proposal—The Business Combination Agreement” for information regarding the specific termination rights of the parties to the Business Combination Agreement. |
If, as a result of the termination of the Business Combination Agreement or otherwise, JGGC is unable to complete an initial business combination by September 15, 2023 (or December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), the Existing Governing Documents provide that JGGC 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 JGGC to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of JGGC’s remaining shareholders and the JGGC board of directors, dissolve and liquidate, subject in each case to JGGC’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. See the section entitled “Risk Factors—If JGGC is unable to complete the Business Combination with GLAAM or another business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), it will cease all operations except for the purpose of winding up its affairs, redeeming its outstanding Public Shares, dissolving and liquidating. In such event, third parties may bring claims against JGGC and, as a result, the proceeds held in the Trust Account could be reduced and the per-share liquidation price received by JGGC’s Public Shareholders could be less than $10.20 per share.” Holders of Founder Shares have waived any right to any liquidating distributions with respect to those shares.
In the event of liquidation, there will be no distribution with respect to outstanding JGGC Rights or JGGC Warrants and they 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 Extraordinary General Meeting, provided that all other conditions to the consummation of the Business |
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| Combination have been satisfied or waived, including approval by JGGC Shareholders of the proposals being submitted to them in this proxy statement/prospectus. |
JGGC, GLAAM and New PubCo currently expect to complete the Business Combination in the third quarter of 2023. However, any delay in satisfying any conditions to the Business Combination could delay consummation of the Business Combination. If the Closing has not occurred on or prior to the date that is the earlier of (i) November 15, 2023 or (ii) the date by which JGGC must consummate an initial business combination under the Existing Governing Documents (currently September 15, 2023 (or up to December 15, 2023 if JGGC extends the period of time to consummate its initial business combination)), subject to certain conditions, either JGGC or GLAAM may terminate the Business Combination Agreement.
For a description of the conditions to consummation of the Business Combination, see the section entitled “The Business Combination Proposal.”
| 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 shareholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the accompanying 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 JGGC Ordinary Shares on September 1, 2023, the Record Date for the Extraordinary General Meeting of JGGC Shareholders, you may vote with respect to the applicable proposals in person at the Extraordinary General Meeting or by completing, signing, dating and returning the accompanying proxy card in the 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, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the Extraordinary General Meeting and vote in person, obtain a proxy from your broker, bank or nominee. |
| Q: | What will happen if I abstain from voting or fail to vote at the Extraordinary General Meeting? |
| A: | At the Extraordinary General Meeting, JGGC 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 not count as votes cast for or against each of, and otherwise will have no effect on, the Transaction Proposals. |
| 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 JGGC without an indication of how the shareholder intends to vote on a proposal will be voted in favor of each Transaction Proposal presented to the shareholders. |
| Q: | Do I need to attend the Extraordinary General Meeting to vote my shares? |
| A: | No. You are invited to attend the Extraordinary General Meeting to vote on the proposals described in this proxy statement/prospectus. However, you do not need to attend the Extraordinary General Meeting to vote your shares. Instead, you may submit your proxy by signing, dating and returning the accompanying proxy card in the pre-addressed postage paid envelope. Your vote is important. JGGC encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus. |
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| Q: | If I am not going to attend the Extraordinary General Meeting in person, should I return my proxy card instead? |
| A: | Yes. After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxy, as applicable, by completing, signing, dating and returning the accompanying 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. If you do not give your broker voting instructions and the broker does not vote your shares, this is referred to as a “broker non-vote.” Broker non-votes will be counted for purposes of determining the presence of a quorum at the Extraordinary General Meeting, but will have no effect on the Transaction Proposals. However, absent a demand for redemption, in no event will a broker non-vote alone also have the effect of exercising your redemption rights for a pro rata portion of the Trust Account, and therefore no shares as to which any such broker non-vote occurs will be redeemed in connection with the proposed Business Combination. |
| Q: | May I change my vote after I have mailed my signed proxy card? |
| A: | Yes. You may change your vote by sending a later-dated, signed proxy card to Morrow Sodali at the following address: 333 Ludlow Street, 5th Floor, South Tower, Stamford, CT 06902, prior to the vote at the Extraordinary General Meeting, or attend the Extraordinary General Meeting and vote in person. You also may revoke your proxy by sending a notice of revocation to the same address, provided such revocation is received prior to the vote at the Extraordinary General 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 Extraordinary General Meeting? |
| A: | Holders of one-third of the JGGC Ordinary Shares issued and outstanding and entitled to vote at the Extraordinary General Meeting, present in person or represented by proxy, constitute a quorum. If within half an hour from the time appointed for the Extraordinary General Meeting a quorum is not present, the meeting shall stand adjourned to the same day in the next week, at the same time and place, or to such other day and at such other time and place as the JGGC board of directors may determine and if, at such adjourned meeting, a quorum is not present within 15 minutes from the time appointed for holding the adjourned meeting, the JGGC Shareholders present shall constitute a quorum. |
As of September 1, 2023, the Record Date for the Extraordinary General Meeting, 5,913,654 JGGC Ordinary Shares would be required to achieve a quorum.
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 Extraordinary General Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement.
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| Q: | Who will solicit and pay the cost of soliciting proxies? |
| A: | JGGC will pay the cost of soliciting proxies for the Extraordinary General Meeting. JGGC has engaged Morrow Sodali to assist in the solicitation of proxies for the Extraordinary General Meeting. JGGC has agreed to pay a fee of $30,000. JGGC will reimburse Morrow Sodali for reasonable out-of-pocket expenses and will indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses, damages and expenses. GLAAM also will reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of JGGC Class A Ordinary Shares for their expenses in forwarding soliciting materials to beneficial owners of JGGC Class A Ordinary Shares and in obtaining voting instructions from those owners. JGGC’s directors and officers 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. |
| Q: | Who can help answer my questions? |
| A: | If you have questions about the proposals or if you need additional copies of this proxy statement/ prospectus or the accompanying proxy card you should contact JGGC’s proxy solicitor, Morrow Sodali: |
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Telephone: (800) 662-5200
Banks and brokers: (203) 658-9400
Email: JGGC.info@investor.morrowsodali.com
You may also contact JGGC at:
Jaguar Global Growth Corporation I
601 Brickell Key Drive, Suite 700
Miami, FL 33131
United States
Tel: (646) 663-4945
To obtain timely delivery, JGGC Shareholders must request the materials no later than five business days prior to the Extraordinary General Meeting.
You may also obtain additional information about JGGC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”
If you intend to seek redemption of your Public Shares, you will need to send a letter demanding redemption and deliver your shares (and share certificates (if any) along with any other redemption documents) (electronically) to JGGC’s Transfer Agent prior to 5:00 p.m., Eastern Time, on the second business day prior to the scheduled date of the Extraordinary General Meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:
Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004 Attn: SPAC Redemption Team
E-mail: spacredemptions@continentalstock.com
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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
The following summary highlights material information from this proxy statement/prospectus. It does not contain all of the information that may be important to you. You are urged to read carefully this entire proxy statement/prospectus (including the financial statements and Annexes attached hereto) and other documents which are referred to in this proxy statement/prospectus in order to fully understand the Business Combination. See “Where You Can Find More Information” on page 321. Most items in this summary include a page reference directing you to a more complete description of those items. Unless the context otherwise requires, all references in this subsection to “JGGC,” “we,” “us” or “our” refer to the business of Jaguar Global Growth Corporation I prior to the consummation of the Business Combination.
The Parties to the Business Combination
JGGC
JGGC is a blank check exempted company incorporated in the Cayman Islands on March 31, 2021 for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
JGGC was formed as a partnership between Gary R. Garrabrant and Thomas J. McDonald, who are experienced executives with extensive deal-making and investment management experience, and Hennessy Capital Group LLC (“Hennessy Capital Group”), a leading independent SPAC sponsor.
On February 15, 2022, JGGC consummated the IPO of 23,000,000 JGGC Units, at $10.00 per JGGC Unit, which included the exercise in full of the underwriters’ option to purchase an additional 3,000,000 JGGC Units at the IPO price to cover over-allotments, generating gross proceeds of $230,000,000.
At the extraordinary general meeting of JGGC held on August 11, 2023, (the “Extension Extraordinary General Meeting”) the JGGC’s shareholders approved an amendment to the then existing amended and restated memorandum and articles of association of JGGC to (i) extend the date by which JGGC must consummate its initial business combination from August 15, 2023 to the September 15, 2023, and to allow JGGC, without another shareholder vote, to elect to extend the termination date on a monthly basis for up to three times by an additional one month each time after September 15, 2023, by resolution of JGGC’s board of directors, if requested by the Sponsor and upon five days’ advance notice prior to the applicable termination date and (ii) to eliminate the limitation that JGGC shall not redeem public shares to the extent that such redemption would cause JGGC’s net tangible assets to be less than US$5,000,001 following such redemptions. At the Extension Extraordinary General Meeting, the holders of 12,925,707 JGGC Class A Ordinary Shares originally issued in JGGC’s IPO properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.64 per share, for an aggregate redemption amount of approximately $137.5 million. As such, approximately 56% of the JGGC Class A Ordinary Shares issued in the IPO were redeemed and approximately 44% of such shares remain outstanding. After the satisfaction of such redemptions and the Extension Payment in connection with the Extension Amendment, the balance in the Trust Account was approximately $107 million as of August 16, 2023.
GLAAM
GLAAM is the exclusive developer, manufacturer and installer of an innovative architectural media glass product called G-Glass. G-Glass is the world’s first IT-enabled construction material that transforms buildings into extraordinary digital content delivery devices. GLAAM is a market leader in the delivery of fully transparent media façade capabilities with over 460 architectural installations worldwide. Founded in South Korea in 2005, GLAAM is now a vertically integrated manufacturer controlling almost every aspect of product assembly and installation, including assembling media glass laminates, manufacturing aluminum frame, developing electronics, operating software, and delivering product.
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New PubCo and Exchange Sub
New PubCo, a Cayman Islands exempted company, was incorporated on February 24, 2023. Exchange Sub, a stock corporation (chusik hoesa) organized under the laws of the Republic of Korea, was incorporated on February 28, 2023 and is a wholly owned direct subsidiary of JGGC. Until the consummation of the Business Combination, New PubCo will not have commenced operations and will have only nominal assets and liabilities and no material contingent liabilities or commitments.
The Business Combination (Page 131)
In connection with the Business Combination, (i) JGGC will merge with and into New PubCo, with New PubCo being the surviving entity, (ii) GLAAM shall become a wholly owned direct subsidiary of New PubCo and (iii) the GLAAM Shareholders, JGGC Shareholders (including the Sponsor) who do not redeem their Public Shares and the PIPE investors, if any, will become shareholders of New PubCo. For more information about the Business Combination, see the section entitled “The Business Combination Agreement.” A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A, Annex A-1, Annex A-2, Annex A-3 and Annex A-4.
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Structure
Pre-Business Combination Structure
The following diagram depicts the simplified organizational structure of JGGC, New PubCo and GLAAM immediately before the Business Combination.
Post-Business Combination Structure
The following diagram depicts the simplified organizational structure of New PubCo and its subsidiaries immediately after the consummation of the Business Combination.
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Recent Developments
Convertible Bond Financing
On
March 23, 2023, the Company issued a convertible bond (“CB”) to
(“Charm Savings Bank”) in an aggregate principal amount of KRW2.5 billion, with interest accruing at an annual rate of 10% and maturing on March 23, 2024. Charm Savings Bank may exercise its
conversion right once three months have elapsed since the date of issue, subject to converting 100% of the amount of the CB into Class A Ordinary Shares. This CB is partially guaranteed by GLAAM stock held by Bio X Co. Ltd.
(“Bio X”), a related party of GLAAM. On August 21, 2023, Charm Savings Bank transferred the CB to Bluming Inovation Co. Ltd. See “GLAAM’S Management’s Discussion and Analysis of Financial Condition and
Results of Operation -- Liquidity and Capital Resources -- Material Cash Requirements” for additional information.
Consideration to be Received in the Business Combination (Page 159)
JGGC Shareholders Merger Consideration
At the effective time of the Merger, (i) each JGGC Unit will be automatically separated and each holder will be deemed to hold one JGGC Class A Ordinary Share, one JGGC Right and one-half of one JGGC Warrant, per JGGC Unit, (ii) all JGGC Ordinary Shares that are owned by JGGC or any wholly owned subsidiary of JGGC immediately prior to the Merger will automatically be canceled, and no New PubCo Ordinary Shares or other consideration will be delivered or deliverable in exchange therefor, (iii) each JGGC Ordinary Share issued and outstanding immediately prior to the Merger will be canceled and automatically converted into the right to receive one New PubCo Ordinary Share, (iv) each JGGC Warrant outstanding immediately prior to the Merger will cease to represent a right to acquire JGGC Class A Ordinary Shares and will instead represent the right to acquire the same number of New PubCo Ordinary Shares, at the same exercise price of $11.50 per share and otherwise on the same terms as in effect immediately prior to the Merger, and (v) each JGGC Right that is issued and outstanding immediately prior to the Merger will be converted into the number of New PubCo Ordinary Shares that would have been received by the holder thereof if such JGGC Right had been converted upon the consummation of a business combination into JGGC Class A Ordinary Shares, no fractional shares will be issued upon conversion of JGGC Rights, so holders must hold rights in denominations of 12 in order to receive a New PubCo Ordinary Share, all JGGC Rights shall no longer be outstanding and shall automatically be canceled by virtue of the Merger, and each former holder of JGGC Rights shall thereafter cease to have any rights with respect thereto, except the right to receive New PubCo Ordinary Shares.
Each JGGC Class A Ordinary Share validly submitted for redemption in the manner set forth in this proxy statement/prospectus will, in accordance with the Existing Governing Documents, be canceled and redeemed prior to the Merger and for the avoidance of doubt will not be entitled to any merger consideration. As a holder of JGGC Class B Ordinary Shares, the Sponsor shall be entitled to receive New PubCo Ordinary Shares as described above.
GLAAM Shareholders Merger Consideration
At the effective time of the Merger, all of the issued share capital in New PubCo as of immediately prior to the Merger will be cancelled.
At the effective time of the Share Swap, (i) the right to each GLAAM Common Share held by the GLAAM Shareholders in connection with and immediately prior to the Share Swap shall be converted into and shall for all purposes represent only the right to receive a number of validly issued, fully paid and non-assessable New PubCo Ordinary Shares equal to the GLAAM Exchange Ratio and (ii) each GLAAM Option shall be converted into a New PubCo Converted Option in accordance with the Closing Payments Schedule (defined below and in the Business Combination Agreement). Prior to the Closing, the board of directors of GLAAM will adopt such resolutions and use its reasonable best efforts to take such other actions permitted under applicable law or the
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terms of each GLAAM Option necessary to provide that, at the effective time of the Share Swap, such GLAAM Options be converted into New PubCo Converted Options and New PubCo shall assume all obligations of GLAAM under the applicable equity incentive plan in respect of each outstanding New PubCo Converted Option and the agreements evidencing the grants thereof.
No fraction of a New PubCo Ordinary Share shall be issued by virtue of the Transactions and any fractional New PubCo Ordinary Share that would otherwise be issuable to any GLAAM Shareholder following such conversion shall be rounded up to a whole New PubCo Ordinary Share if the aggregate amount of fractional New PubCo Ordinary Shares such GLAAM Shareholder would otherwise be entitled to is equal to or exceeds 0.50 or rounded down to no New PubCo Ordinary Share if the aggregate amount of fractional New PubCo Ordinary Shares such GLAAM Shareholder would otherwise be entitled to is less than 0.50.
New PubCo Founder Warrants
In the event that immediately following the Closing, the GLAAM Founder Closing Ownership Stake would not constitute at least 12.5% of the New PubCo Closing Fully Diluted Capital, then prior to the Closing, New PubCo, JGGC and GLAAM shall enter into an agreement with the GLAAM Founders on reasonable terms pursuant to which New PubCo will issue to the GLAAM Founders a number of New PubCo Founder Warrants such that following the issuance of such warrants to the GLAAM Founders, the GLAAM Founder Closing Ownership Stake shall constitute 12.5% of the New PubCo Closing Fully Diluted Capital. The New PubCo Founder Warrants will have the same exercise price and substantially the same term, exercisability, vesting schedule and other rights, obligations and conditions as the New PubCo Private Warrants.
GLAAM Founder Earn-Out
Concurrently with the execution of the Business Combination Agreement, the GLAAM Founders, New PubCo, Exchange Sub, JGGC and GLAAM entered into the GLAAM Founder Earnout Letter. Pursuant to the GLAAM Founder Earnout Letter, at the Closing, New PubCo shall issue or cause to be issued to the GLAAM Founders (in the aggregate), (i) 1,666,666.67 New PubCo Series I RSRs, (ii) 1,666,666.67 New PubCo Series II RSRs, and (iii) 1,666,666.67 New PubCo Series III RSRs, in each case upon the terms and subject to the conditions set forth in the GLAAM Founder Earnout Letter, and New PubCo shall reserve and allot the Earnout Shares for issuance upon settlement of such New PubCo Earnout RSRs if the VWAP of New PubCo Ordinary Shares is greater than or equal to (a) $12.00, (b) $14.00, or (c) $16.00, respectively, in each case, for twenty (20) Trading Days within any thirty (30) consecutive Trading Day period occurring during the Earnout Period.
In the event that after the Closing and prior to the expiration of the Earnout Period, in a single transaction or a series of related transactions, (i) a merger, consolidation, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction with respect to New PubCo, in each case, in which shares of New PubCo are exchanged for cash, securities of another person or entity, or other property (excluding, for the avoidance of doubt, any domestication of New PubCo or any other transaction in which New PubCo Ordinary Shares are exchanged for substantially similar securities of New PubCo or any successor entity of New PubCo) or (ii) the sale, lease or other disposition, directly or indirectly, by New PubCo of all or substantially all of the assets of New PubCo and its subsidiaries, taken as a whole (excluding any such sale or other disposition to an entity at least a majority of the combined voting power of the voting securities of which are owned by holders of New PubCo Ordinary Shares) (an “Earnout Strategic Transaction”) is consummated and the per share value in connection with such Earnout Strategic Transaction is greater than or equal to (a) $12.00, (b) $14.00, or (c) $16.00 per share, then the corresponding New PubCo Series I RSRs, the New PubCo Series II RSRs, or the New PubCo Series III RSRs, as the case may be, will automatically vest, and any Earnout Shares underlying such vested New PubCo Earnout RSRs not previously issued pursuant to the GLAAM Founder Earnout Letter will be
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issued or deemed to have been issued by New PubCo immediately prior to the consummation of such Earnout Strategic Transaction. The recipients of such issued or deemed to be issued Earnout Shares shall be eligible to participate with respect thereto in such Earnout Strategic Transaction.
If New PubCo shall, at any time or from time to time, after the date of the GLAAM Founder Earnout Letter effect a share split, share subdivision, split-up, reverse share split, share consolidation, share subdivision, share dividend or distribution affecting the outstanding New PubCo Ordinary Shares, the number of Earnout Shares issuable pursuant to the vesting of the New PubCo Earnout RSRs set forth in the GLAAM Founder Earnout Letter and the stock price targets included in the definition of each Triggering Event and each Earnout Strategic Transaction Vesting Event (as defined in the GLAAM Founder Earnout Letter), shall be equitably adjusted for such share split, share subdivision, split-up, reverse share split, share consolidation, share subdivision, share dividend or distribution.
Upon the expiration of the Earnout Period, if any Triggering Event or Earnout Strategic Transaction Vesting Event has not occurred, none of the related New PubCo Earnout RSRs shall vest, and all rights underlying any such New PubCo Earnout RSRs shall be forfeited and cancelled for no consideration.
Conditions to Complete the Business Combination (Page 173)
Conditions to Each Party’s Obligations
The obligations of the parties to the Business Combination to consummate, or cause to be consummated, the Transactions are each subject to the satisfaction of the following conditions:
| • | at the Extraordinary General Meeting (including any adjournments thereof), the JGGC Shareholder Approval shall have been obtained; |
| • | at the GLAAM Shareholder Meeting (including any adjournments thereof), the Company Shareholder Approval shall have been obtained; |
| • | JGGC having at least $5,000,001 of net tangible assets after giving effect to the Transactions, including any JGGC shareholder redemptions and receipt of the net amount of proceeds actually contributed by investors pursuant to any Equity Financing Arrangement (which condition has already been waived); |
| • | receipt of all necessary pre-Closing governmental authorizations, consents, clearances, waivers and approvals as contemplated by the Business Combination Agreement (or any applicable waiting period (and any extensions thereof) thereunder shall have expired or been terminated); |
| • | the absence of any law or order preventing, enjoining, restricting, making illegal or prohibiting the consummation of the Business Combination and other Transactions; provided that the governmental authority issuing such order has jurisdiction over the parties with respect to the Transactions; |
| • | the New PubCo Ordinary Shares to be issued in connection with the Transactions shall have been approved for listing on Nasdaq (or any other agreed upon public stock market or exchange in the U.S.), subject to official notice of issuance and the requirement to have a sufficient number of round lot holders; |
| • | the effectiveness of the Form F-4 and the absence of any issued or pending stop order or proceeding (or threatened proceeding) seeking a stop order by the SEC; and |
| • | the effectiveness of the Korean Registration Statement (as defined in the Business Combination Agreement) and the absence of any issued or pending stop order or proceeding (or threatened proceeding) seeking a stop order by the Financial Services Commission of Korea. |
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Other Conditions to the Obligations of JGGC
The obligations of JGGC and the Exchange Sub to consummate, or cause to be consummated, the Transactions are subject to the satisfaction of the following additional conditions:
| • | the Fundamental Representations (as defined in the Business Combination Agreement) of GLAAM and New PubCo, to the extent not qualified as to materiality or “Company Material Adverse Effect,” shall be true and correct in all material respects, and, to the extent so qualified, shall be true in all respects on and as of the Closing as though made on and as of the Closing (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be so true and correct in all material respects as of such earlier date); |
| • | all other representations and warranties of GLAAM and New PubCo contained in the Business Combination Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation) on and as of the Closing as though made on and as of the Closing (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be so true and correct as of such earlier date) where any failures of such representations and warranties of GLAAM and New PubCo to be so true and correct, individually and in the aggregate, has not had and is not reasonably likely to have a “Company Material Adverse Effect”; |
| • | each of the agreements and covenants of GLAAM and New PubCo to be performed or complied with as of or prior to the Merger shall have been performed or complied in all material respects, except as set forth in the Business Combination Agreement; |
| • | absence of a “Company Material Adverse Effect” following the execution of the Business Combination Agreement that exists as of the Closing Date; |
| • | GLAAM having delivered a certification, certifying that the above conditions have been satisfied; |
| • | GLAAM having delivered to Exchange Sub the Share Swap Agreement, duly executed by GLAAM; |
| • | GLAAM having delivered to JGGC a spreadsheet in the form reasonably agreed to by GLAAM and JGGC prepared by GLAAM in good faith that includes all calculation and information necessary to effect the conversions and make the distributions of New PubCo Ordinary Shares at the effective time of the Merger with details containing GLAAM’s calculation of the Aggregate Share Swap Consideration, the GLAAM Exchange Ratio, and the number of Company Founder Warrants required to be issued pursuant to the Business Combination Agreement (the “Closing Payments Schedule”); and |
| • | GLAAM having delivered to JGGC the Registration Rights Agreement, duly executed by New PubCo and certain GLAAM Shareholders. |
Other Conditions to the Obligations of GLAAM, New PubCo and Exchange Sub
The obligations of GLAAM and New PubCo to consummate, or cause to be consummated, the Transactions are subject to the satisfaction of the following additional conditions:
| • | the Fundamental Representations of JGGC and Exchange Sub contained in the Business Combination Agreement, to the extent not qualified as to materiality or “SPAC Material Adverse Effect,” shall be true and correct in all material respects and, to the extent so qualified, shall be true in all respects, on and as of the Closing as though made on and as of the Closing (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be so true and correct in all material respects as of such earlier date); |
| • | all other representations and warranties of JGGC and Exchange Sub set forth in the Business Combination Agreement shall be true and correct (without giving effect to any limitation as to |
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| “materiality” or “SPAC Material Adverse Effect” or any similar limitation contained therein) on and as of the Closing as though made on and as of the Closing (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be so true and correct as of such earlier date), except where any failures of such representations and warranties of JGGC and Exchange Sub to be so true and correct, individually and in the aggregate, has not had and is not reasonably likely to have a “SPAC Material Adverse Effect”; |
| • | each of the covenants and agreements of JGGC and Exchange Sub to be performed or complied with as of or prior to the Merger shall have been performed in all material respects; |
| • | absence of a “SPAC Material Adverse Effect” following the execution of the Business Combination Agreement that exists as of the Closing Date; |
| • | JGGC having delivered a certification, certifying that the above conditions have been satisfied; |
| • | JGGC having delivered to GLAAM the Registration Rights Agreement, duly executed by the Sponsor; and |
| • | Exchange Sub having delivered to GLAAM the Share Swap Agreement, duly executed by Exchange Sub. |
Termination of the Business Combination Agreement (Page 175)
The Business Combination Agreement may be terminated and the Transactions abandoned prior to Closing under the following circumstances:
| • | by mutual written agreement of GLAAM and JGGC at any time; |
| • | by GLAAM or JGGC, if the Closing shall not have occurred by the Outside Date, provided that such right shall not be available to the party whose action or failure to act has been a principal cause of or resulted in the failure of the Closing to occur on or before the Outside date and such action or failure to act constitutes a breach of the Business Combination Agreement; |
| • | by GLAAM or JGGC if any governmental authority shall have enacted, issued, promulgated, enforced or entered any Order (as defined in the Business Combination Agreement) or taken any other action, which has become final and nonappealable and has the effect of permanently restraining, enjoining or otherwise prohibiting consummation of the Transactions; |
| • | by JGGC if there is any breach of any representation, warranty, covenant or agreement on the part of GLAAM or New PubCo set forth in the Business Combination Agreement, such that the conditions to obligations of JGGC at Closing would not be satisfied as of the time of such breach (subject to a written notice and 30-day cure right as set forth in the Business Combination Agreement if such breach is curable by GLAAM or New PubCo, as applicable, prior to the Closing); |
| • | by GLAAM if there is any breach of any representation, warranty, covenant or agreement on the part of JGGC or Exchange Sub set forth in the Business Combination Agreement, such that the conditions to obligations of GLAAM and New PubCo at Closing would not be satisfied as of the time of such breach (subject to a written notice and 30-day cure right as set forth in the Business Combination Agreement if such breach is curable by JGGC or Exchange Sub, as applicable, prior to the Closing); |
| • | by JGGC or GLAAM if at the GLAAM Shareholder Meeting (including any adjournments thereof), the Company Shareholder Approval is not obtained; and |
| • | by JGGC or GLAAM if at the Extraordinary General Meeting (including any adjournments thereof), the JGGC Shareholder Approval is not obtained. |
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In the event of the termination of the Business Combination Agreement, the Business Combination Agreement shall be of no further force or effect, except certain provisions required under the Business Combination Agreement and the Confidentiality Agreement (as defined in the Business Combination Agreement) shall survive any termination the Business Combination Agreement.
Certain Agreements Related to the Business Combination (Page 177)
GLAAM Support Agreement
In connection with the execution of the Business Combination Agreement, certain GLAAM Shareholders, JGGC, New PubCo and GLAAM entered into the GLAAM Support Agreement pursuant to which, among other things, such GLAAM Shareholders have agreed to (i) vote their respective GLAAM Common Shares in favor of the approval and adoption of the Business Combination Agreement and the Transactions, (ii) certain transfer restrictions with respect to such GLAAM Common Shares and (iii) waive any appraisal rights (including under the Korean Commercial Code) with respect to the Transactions. Pursuant to the GLAAM Support Agreement, any GLAAM Shareholder party thereto may not transfer its GLAAM Common Shares unless the applicable transferee enters into a written agreement in form and substance reasonably satisfactory to JGGC and GLAAM (to which both JGGC and GLAAM shall be parties) agreeing to be bound by the applicable provisions of the GLAAM Support Agreement prior to or concurrently with the occurrence of such transfer.
GLAAM Founder Earnout Letter
In connection with the execution of the Business Combination Agreement, the GLAAM Founders, New PubCo, Exchange Sub, JGGC and GLAAM entered into the GLAAM Founder Earnout Letter. Pursuant to the GLAAM Founder Earnout Letter, at the Closing, New PubCo shall issue or cause to be issued to the GLAAM Founders the New PubCo Earnout RSRs, in each case upon the terms and subject to the conditions set forth in the GLAAM Founder Earnout Letter, and New PubCo shall reserve and allot the Earnout Shares for issuance upon settlement of such New PubCo Earnout RSRs if the VWAP of New PubCo Ordinary Shares is greater than or equal to (a) $12.00, (b) $14.00, or (c) $16.00, respectively, in each case, for twenty (20) Trading Days within any thirty (30) consecutive Trading Day period occurring during the Earnout Period.
In the event that after the Closing and prior to the expiration of the Earnout Period, an Earnout Strategic Transaction is consummated where the per share value in connection with such Earnout Strategic Transaction is greater than or equal to (a) $12.00, (b) $14.00, or (c) $16.00 per share, then the corresponding New PubCo Series I RSRs, the New PubCo Series II RSRs, or the New PubCo Series III RSRs, as the case may be, will automatically vest, and any Earnout Shares underlying such vested New PubCo Earnout RSRs not previously issued pursuant to the GLAAM Founder Earnout Letter will be issued or deemed to have been issued by New PubCo immediately prior to the consummation of such transaction. The recipients of such issued or deemed to be issued Earnout Shares shall be eligible to participate with respect thereto in such Earnout Strategic Transaction.
If New PubCo shall, at any time or from time to time, after the date of the GLAAM Founder Earnout Letter effect a share split, share subdivision, split-up, reverse share split, share consolidation, share subdivision, share dividend or distribution affecting the outstanding New PubCo Ordinary Shares, the number of Earnout Shares issuable pursuant to the vesting of the New PubCo Earnout RSRs set forth in the GLAAM Founder Earnout Letter and the stock price targets included in the definition of each Triggering Event and each Earnout Strategic Transaction Vesting Event, shall be equitably adjusted for such share split, share subdivision, split-up, reverse share split, share consolidation, share subdivision, share dividend or distribution.
Upon the expiration of the Earnout Period, if any Triggering Event or Earnout Strategic Transaction Vesting Event has not occurred, none of the related New PubCo Earnout RSRs shall vest, and all rights underlying any such New PubCo Earnout RSRs shall be forfeited and cancelled for no consideration.
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Sponsor Support Agreement
In connection with the execution of the Business Combination Agreement, New PubCo, JGGC, GLAAM, and the Sponsor entered into the Sponsor Support Agreement pursuant to which the Sponsor agreed to, among other things, (i) certain restrictions on transfer relating to its JGGC Ordinary Shares prior to the Closing as set forth therein, (ii) not redeem any of its JGGC Ordinary Shares in connection with the vote to approve the Transactions or any proposal to extend the date by which JGGC must complete an initial business combination, (iii) vote in favor of the Merger and the other Transactions and against any alternative transaction, (iv) waive certain anti-dilution provisions contained in the Existing Governing Documents in connection with the Merger and (v) subject 1,916,667 New PubCo Ordinary Shares received by the Sponsor at Closing to vesting (or forfeiture if such shares have not vested prior to the expiration of the Specified Period) upon the later of (A) the date that is one hundred eighty (180) days after the Closing and (B) the VWAP for New PubCo Ordinary Shares being at least $12.50 for 20 Trading Days within any 30-day consecutive Trading Day period during the Specified Period.
Registration Rights Agreement
At the Closing, New PubCo, the Sponsor and certain GLAAM Shareholders (collectively, the “RRA Parties”) will enter into the Registration Rights Agreement in the form attached to the Business Combination Agreement as Exhibit A, pursuant to which, among other things, the RRA Parties will be granted certain customary registration rights, demand rights and piggyback rights with respect to their respective New PubCo Ordinary Shares. The Registration Rights Agreement will, effective as of the Closing, amend and restate the current registration rights agreement, dated February 10, 2022, by and among JGGC, the Sponsor and other holders of JGGC Securities party thereto and will require New PubCo to, among other things, file a resale registration statement on behalf of the RRA Parties as soon as practicable but no later than 30 days after the Closing. The Registration Rights Agreement will also provide certain demand rights and piggyback rights to the RRA Parties, in each case subject to certain offering thresholds, applicable lock-up restrictions, issuer suspension periods and certain other conditions. The Registration Rights Agreement includes customary indemnification provisions. New PubCo will agree to pay certain fees and expenses relating to registrations under the Registration Rights Agreement.
In addition, pursuant to the Registration Rights Agreement, and subject to certain customary exceptions, each RRA Party shall agree that, during the period beginning on the date of Closing and ending on the 180th day thereafter, such RRA Party will not, directly or indirectly: (a) sell, offer to sell, contract or agree to sell, hypothecate, pledge, lend, grant any option, right or warrant to purchase, purchase any option or contract to sell, or dispose of or agree to dispose of, or establish or increase any put equivalent position or liquidate or decrease any call equivalent position within the meaning of Section 16 of the Exchange Act, in each case with respect to any Registrable Securities (as defined in the Registration Rights Agreement); (b) enter into any swap, hedging or other agreement, arrangement or transaction that transfers to another, in whole or in part, any of the economic consequences of ownership of any Registrable Securities; or (c) publicly announce or disclose any action or intention to effect any transaction specified in clause (a) or (b).
A&R Warrant Agreement
Immediately prior to the effective time of the Merger, New PubCo, JGGC and the warrant agent for the JGGC Warrants will enter into the A&R Warrant Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Annex J, pursuant to which JGGC will assign to New PubCo at the effective time of the Merger all of its rights, interests, and obligations in and under the warrant agreement, dated as of February 10, 2022, between JGGC and the Continental Stock Transfer & Trust Company, which shall amend and restate the warrant agreement to change all references to Warrants (as such term is defined therein) to New
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PubCo Warrants and all references to Ordinary Shares (as such term is defined therein) underlying such warrants to New PubCo Ordinary Shares and which causes each outstanding New PubCo Warrant to represent the right to receive, from the effective time of the Merger, one whole New PubCo Ordinary Share.
Deferred Underwriting Fee Waiver
On February 24, 2023 and March 21, 2023, JGGC received a letter from each of Barclays Capital Inc. and Citigroup Global Markets Inc., respectively, formally waiving any entitlement to its respective portion of the deferred underwriting discount (in an aggregate amount of $8,050,000) in connection with their roles as underwriters in the IPO. Barclays Capital Inc. and Citigroup Global Markets Inc. have not been involved in the preparation of any disclosure that is included in this registration statement, or material underlying disclosure in this registration statement. See “Business of JGGC—Deferred Underwriting Fee Waiver”.
Ownership of, and Voting Rights in, New PubCo Following the Business Combination (Page 161)
As discussed further in the Proposed Governing Documents, each holder of New PubCo Ordinary Shares will be entitled to one (1) vote for each New PubCo Ordinary Share held of record by such holder on all matters subject to a vote of the New PubCo shareholders.
The following table illustrates the varying voting power in New PubCo immediately following the consummation of the Business Combination based on the varying levels of redemptions of Public Shares by Public Shareholders and based on the additional assumptions described in the notes to the table below (without taking into account any additional dilution sources, such as the New PubCo Warrants).
| Voting Power in New PubCo(1) | ||||||||||||
| No Additional Redemption Scenario(2) |
Interim Redemption Scenario(3) |
Maximum Redemption Scenario(4) |
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| Percentage of Voting Rights of Outstanding New PubCo Ordinary Shares |
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| JGGC Public Shareholders |
28.8 | % | 16.8 | % | — | |||||||
| JGGC Initial Shareholders |
16.5 | % | 19.2 | % | 23.1 | % | ||||||
| JGGC Rights Holders |
5.5 | % | 6.4 | % | 7.7 | % | ||||||
| GLAAM Founders |
0.9 | % | 1.1 | % | 1.3 | % | ||||||
| Other GLAAM Shareholders |
48.3 | % | 56.4 | % | 67.9 | % | ||||||
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| Total |
100.0 | % | 100.0 | % | 100.0 | % | ||||||
| (1) | As of immediately following the consummation of the Business Combination. Excludes New PubCo Warrants and the effect of any other transactions that may be entered into after the date of this proxy statement/prospectus. For a more detailed description of share ownership upon consummation of the Business Combination, see “Beneficial Ownership of Securities.” |
| (2) | Assumes that no currently outstanding Public Shares are redeemed in connection with the Business Combination. In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (3) | Assumes that 5,037,147 JGGC Class A Ordinary Shares (or 50% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per share or $54,098,959 in the aggregate (based on the estimated value of the Trust Account at Closing). In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (4) | Assumes that 10,074,293 JGGC Class A Ordinary Shares (or 100% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per |
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| share or $108,200,000 in the aggregate (based on the estimated value of the Trust Account at Closing). In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
The following table illustrates the varying levels of equity interest and voting power in New PubCo Ordinary Shares as a result of the exercise of New PubCo Warrants immediately following the consummation of the Business Combination based on the varying levels of redemptions of Public Shares by Public Shareholders and based on the additional assumptions described in the notes to the table below (without taking into account any dilution source other than the exercise of New PubCo Warrants).
| Equity Interest and Voting Power in New PubCo After Exercise of New PubCo Warrants(1) |
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| No Additional Redemption Scenario |
Interim Redemption Scenario |
Maximum Redemption Scenario |
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| Shareholders |
Equity Interest |
Voting Power |
Equity Interest |
Voting Power |
Equity Interest |
Voting Power |
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| JGGC Public Shareholders |
34.9% | 34.9% | 29.5% | 29.5% | 22.8% | 22.8% | ||||||||||||||||||
| JGGC Rights Holders |
3.1% | 3.1% | 3.4% | 3.4% | 3.8% | 3.8% | ||||||||||||||||||
| JGGC Initial Shareholders |
29.4% | 29.4% | 32.4% | 32.4% | 36.1% | 36.1% | ||||||||||||||||||
| GLAAM Founders |
5.4% | 5.4% | 4.6% | 4.6% | 3.7% | 3.7% | ||||||||||||||||||
| Other GLAAM Shareholders |
27.3% | 27.3% | 30.1% | 30.1% | 33.5% | 33.5% | ||||||||||||||||||
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| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
| (1) | As of immediately following the consummation of the Business Combination. Excludes New PubCo Warrants and the effect of any other transactions that may be entered into after the date of this proxy statement/prospectus. For a more detailed description of share ownership upon consummation of the Business Combination, see “Beneficial Ownership of Securities.” |
| (2) | Assumes that no currently outstanding Public Shares are redeemed in connection with the Business Combination. In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (3) | Assumes that 5,037,147 JGGC Class A Ordinary Shares (or 50% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per share or $54,098,959 in the aggregate (based on the estimated value of the Trust Account at Closing). In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
| (4) | Assumes that 10,074,293 JGGC Class A Ordinary Shares (or 100% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per share or $108,200,000 in the aggregate (based on the estimated value of the Trust Account at Closing). In addition, it reflects the other assumptions set forth under “Presentation of Certain Assumptions Relating to the Business Combination.” |
The foregoing tables are provided for illustrative purposes only. If the actual facts are different than the assumptions set forth above, the ownership and voting power percentages set forth above will be different. For more information about the consideration to be received in the Business Combinations, the three alternative redemption scenarios and the underlying assumptions, see “Presentation of Certain Assumptions Relating to the Business Combination,” “Unaudited Pro Forma Condensed Combined Financial Information” and “The Business Combination—Consideration to be Received in the Business Combination.” In addition, the share numbers above do not take into account sources of dilution other than the New PubCo Warrants that will be outstanding upon consummation of the Business Combination or dilution from any awards that are issued under the New PubCo Equity Plan following the consummation of the Business Combination.
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Redemption Rights (Page 126)
Pursuant to the Existing Governing Documents, we are providing our shareholders with the opportunity to have their Public Shares redeemed at the consummation of the Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of an initial business combination, including interest earned on the Trust Account and not previously released to JGGC to pay its tax obligations, divided by the number of then outstanding JGGC Class A Ordinary Shares included as part of the JGGC Units sold in the IPO, subject to the limitations described in this proxy statement/prospectus. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account as of August 16, 2023, of approximately $106,978,440, the estimated per share redemption price would have been approximately $10.62. Public Shareholders may elect to redeem their Public Shares even if they vote for the Business Combination Proposal and the other proposals. The Existing Governing Documents provide that a Public Shareholder, acting together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a partnership, limited partnership, syndicate, or other group for purposes of acquiring, holding, or disposing of any JGGC Class A Ordinary Shares, will be restricted from exercising this redemption rights in an amount of shares exceeding 15% of the Public Shares in the aggregate without our prior consent. There will be no redemption rights with respect to the JGGC Warrants.
The Sponsor, New PubCo, GLAAM and JGGC’s officers and directors have entered into the Sponsor Support Agreement with us pursuant to which the Sponsor Parties have agreed to, among other things, waive their redemption rights with respect to their Founder Shares and any Public Shares they may have acquired after the IPO in connection with consummation of the Business Combination. Permitted transferees of our Sponsor will be subject to the same obligations.
Each redemption of Public Shares by Public Shareholders will decrease the amount in our Trust Account, which held $106,978,440 as of August 16, 2023.
| • | if you hold your Public Shares through JGGC Units, elect to separate your JGGC Units into the underlying Public Shares, JGGC Rights and JGGC Public Warrants prior to exercising your redemption rights with respect to the Public Shares; |
| • | prior to 5:00 p.m., Eastern Time, on September 25, 2023, (two business days before the scheduled date of the Extraordinary General Meeting), tender your shares electronically and submit a request in writing that we redeem your Public Shares for cash to Continental, the Transfer Agent, to the attention of SPAC Redemptions or by email at spacredemptions@continentalstock.com; and |
| • | deliver your Public Shares (and share certificates (if any) along with any other redemption forms) electronically through DTC to the Transfer Agent at least two business days before the scheduled date of the Extraordinary General Meeting. Shareholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares delivered electronically. If you do not submit a written request and deliver your Public Shares as described above, your shares will not be redeemed. |
We will pay the redemption price to our shareholders who properly exercise their redemption rights promptly following the Closing. The Closing is subject to the satisfaction of a number of conditions. As a result, there may be a significant delay between the deadline for exercising redemption requests prior to the Extraordinary General Meeting and payment of the redemption price. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to the Transfer Agent and decide within the required timeframe not to exercise your redemption rights, you may request that the Transfer Agent return the shares. You may make such request by contacting the Transfer Agent at the email or address listed above.
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Description of New PubCo Securities (Page 321)
New PubCo is a Cayman Islands exempted company with limited liability. Its corporate affairs will be governed by the Proposed Governing Documents, the Companies Act and the common law of the Cayman Islands.
See “Description of New PubCo Securities—Authorized Capitalization.”
New PubCo Management Following the Business Combination (Page 311)
The Business Combination Agreement provides that, immediately following the Closing, the New Pubco Board will consist of seven directors. New PubCo’s officers are elected by, and serve at the discretion of, the New PubCo Board. See “New PubCo Management Following the Business Combination—Management and Board of Directors.”
Appraisal or Dissenters’ Rights (Page 128)
No appraisal or dissenters’ rights are available to holders of JGGC Class A Ordinary Shares or JGGC Warrants in connection with the ordinary resolution to approve the Business Combination. However, in respect of the special resolution to approve the Merger, under section 238 of the Companies Act, shareholders of a Cayman Islands company ordinarily have dissenters’ rights with respect to a statutory merger.
The Companies Act prescribes when dissenters’ rights will be available and provides that shareholders are entitled to receive fair value for their shares if they exercise those rights in the manner prescribed by the Companies Act. Pursuant to section 239(1) of the Companies Act, dissenters’ rights are not available if an open market for the shares exists on a recognized stock exchange, such as Nasdaq, for a specified period after the merger is authorized (such period being the period in which dissenter’s rights would otherwise be exercisable). It is anticipated that, if the Business Combination is approved, it may be consummated prior to the expiry of such specified period and accordingly the exemption under section 239(1) of the Companies Act may not be available. However, pursuant to the terms of the Business Combination Agreement, JGGC and GLAAM may defer the Closing Date by agreement in writing, including if a JGGC Shareholder validly exercises their dissenters’ rights under the Companies Act. Such deferral, if agreed between JGGC and GLAAM, may result in the consummation of the Merger not occurring until after the expiry of the specified period, thereby allowing the exemption in section 239(1) of the Companies Act to be relied upon.
Regardless of whether dissenters’ rights are or are not available, Public Shareholders can exercise the rights of redemption described herein. The JGGC board of directors has determined that the redemption proceeds payable to shareholders who exercise such redemption rights represent the fair value of those shares.
Extracts of relevant sections of the Companies Act follow:
238. (1) A member of a constituent company incorporated under this Act shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation.
239. (1) No rights under section 238 shall be available in respect of the shares of any class for which an open market exists on a recognised stock exchange or recognised interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under section 238(5), but this section shall not apply if the holders thereof are required by the terms of a plan of merger or consolidation pursuant to section 233 or 237 to accept for such shares anything except - (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a
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national securities exchange or designated as a national market system security on a recognised interdealer quotation system or held of record by more than two thousand holders; (c) cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a) and (b); or (d) any combination of the shares, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a), (b) and (c).
Anticipated Accounting Treatment of the Business Combination (Page 163)
The Business Combination will be accounted for in accordance with IFRS as a capital reorganization. Under this method of accounting, JGGC is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of GLAAM issuing shares for the net assets of JGGC, accompanied by a recapitalization. The net assets of JGGC are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are deemed to be those of GLAAM.
GLAAM has been determined to be the accounting acquirer based on the following:
| (i) | GLAAM’s shareholders will have the greatest voting interest in the Maximum Redemption Scenario with approximately 69.2% voting interest; |
| (ii) | GLAAM’s existing senior management team will comprise the senior management of New PubCo; |
| (iii) | GLAAM‘s operations will comprise the ongoing operations of New PubCo; |
| (iv) | The post-combination company will assume GLAAM’s name; and, |
| (v) | From an employee base and business operation standpoint, GLAAM is the larger entity in terms of relative size. |
The Business Combination is not within the scope of IFRS 3, Business Combinations (“IFRS 3”) because JGGC does not meet the definition of a business in accordance with IFRS 3. Rather, the Business Combination will be accounted for within the scope of IFRS 2, Share-based Payment (“IFRS 2”). Any excess of the fair value of equity issued to participating shareholders of JGGC over the fair value of JGGC’s identifiable net assets acquired represents compensation for the service of a stock exchange listing, which is expensed as incurred.
Status as Emerging Growth Company (Page 232)
JGGC is an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act.
New PubCo will, immediately after the consummation of the Business Combination, be an “emerging growth company” as defined in the JOBS Act. New 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 IPO, (b) in which New PubCo has total annual gross revenue of at least $1.235 billion or (c) in which New PubCo is deemed to be a large accelerated filer, which means the market value of New PubCo Shares held by non-affiliates exceeds $700 million as of the last business day of New PubCo’s prior second fiscal quarter, and (ii) the date on which New PubCo issued more than $1.0 billion in non-convertible debt during the prior three-year period. New PubCo may 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 New 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. If some investors find New PubCo less attractive as a result, there may be a less active trading market for New PubCo Securities and the prices of New PubCo Securities may be more volatile.
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Foreign Private Issuer
As a “foreign private issuer,” New PubCo will be subject to different U.S. securities laws than domestic U.S. issuers. The rules governing the information that New PubCo must disclose differ from those governing U.S. companies pursuant to the Exchange Act. New PubCo will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. Those proxy statements are not expected to conform to Schedule 14A of the proxy rules promulgated under the Exchange Act. As a “foreign private issuer,” New PubCo is permitted to follow certain home country corporate governance practices in lieu of the requirements of the Nasdaq Rules pursuant to Nasdaq Rule 5615(a)(3), which provides for such exemption to compliance with the Nasdaq Rule 5600 Series. New PubCo may rely on the exemptions available to foreign private issuers listed in the section entitled “New PubCo Management Following the Business Combination—Corporate Governance Practices.”
In addition, as a “foreign private issuer,” New PubCo’s officers and directors and holders of more than 10% of the issued and outstanding New PubCo Ordinary Shares will be exempt from the rules under the Exchange Act requiring insiders to report purchases and sales of ordinary shares as well as from Section 16 short swing profit reporting and liability.
Interests of JGGC’s Directors and Executive Officers and the Sponsor in the Business Combination (Page 154)
The existence of financial and personal interests of one or more of JGGC’s directors may result in a conflict of interest on the part of such director(s) between what he, she, or they may believe is in the best interests of JGGC and our shareholders and what he, she, or they may believe is best for himself, herself, or themselves in determining to recommend that shareholders vote for the proposals. When you consider the recommendation of the JGGC board of directors in favor of the Business Combination Proposal, you should keep in mind that certain of our directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. These interests include, among other things, the interests listed below:
| • | the fact that our initial shareholders hold 7,666,667 Founder Shares for which our Sponsor paid $25,000, which will convert on a one-for-one basis, into 7,666,667 New PubCo Ordinary Shares as of the Closing, and such shares will have a significantly higher value at the time of the Business Combination when such shares convert into shares in New PubCo, and will be worthless if we do not consummate our initial business combination (as the Sponsor has waived liquidation rights with respect to such shares), such shares have an approximate aggregate market value of $81,113,336, as of June 30, 2023 (based on $10.58 per share, which was the closing price of the JGGC Class A Ordinary Share on Nasdaq on June 30, 2023); |
| • | the fact that if our initial business combination is not consummated by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), our Sponsor, officers, and directors will lose their entire investment in us, which investment included a capital contribution of $25,000 and the acquisition of 12,450,000 JGGC Private Placement Warrants for a purchase price of $1.00 per warrant, having an approximate aggregate market value of $560,250, as of June 30, 2023 (based on $0.045 per warrant, which was the closing price of the JGGC Warrants on Nasdaq on June 30, 2023); |
| • | the fact that the Contributor has agreed to deposit the Extension Payments. The Extension Payments will constitute loans to JGGC evidenced by one or more non-interest bearing, unsecured promissory notes issued by JGGC to the Contributor and will be repayable by JGGC, forgiven or postponed to a later date at the sole discretion of the Sponsor upon consummation of an initial business combination. If JGGC does not consummate an initial business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), any such promissory notes will be repaid only from funds held outside of the Trust |
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| Account or will be forfeited, eliminated or otherwise forgiven. If JGGC has consummated an initial business combination or announced its intention to wind up prior to September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), any obligation to make any Extension Payment will terminate; |
| • | the fact that given the differential in the purchase price that the Sponsor paid for the Founder Shares as compared to the price of the Public Shares sold in the IPO and the 7,466,667 New PubCo Ordinary Shares that the Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, the Sponsor and its affiliates may earn a positive rate of return on their investment even if the New PubCo Ordinary Shares trade below the price initially paid for the Public Shares in the IPO and the Public Shareholders experience a negative rate of return following the consummation of the Business Combination; |
| • | the fact that our Sponsor, officers and directors have agreed to waive: (i) their redemption rights with respect to their Founder Shares and any Public Shares they may have acquired after the IPO in connection with consummation of the Business Combination, for which they did not receive separate consideration other than the receipt of Founder Shares for a nominal purchase price, and (ii) their rights to liquidating distributions from the Trust Account with respect to any shares held by them if JGGC fails to complete an initial business combination and accordingly, our Sponsor, officers and directors will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate; |
| • | the fact that if the Trust Account is liquidated, including in the event we are unable to complete our initial business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than JGGC’s independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have entered into a transaction agreement, reduce the amounts in the Trust Account to below (i) $10.20 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in the value of the trust assets, net of the amount of taxes payable, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under JGGC’s indemnity of the underwriter of the IPO against certain liabilities, including liabilities under the Securities Act; |
| • | the fact that, unless an initial business combination is completed, JGGC and our directors are only entitled to reimbursement for any out-of-pocket expenses incurred by them on our behalf incident to identifying, investigating and consummating an initial business combination (which, as of the date of this proxy statement/prospectus were $0) from funds outside of the Trust Account, which funds are limited; |
| • | the fact that one or more of our directors or officers are expected to be appointed as a director or officer of New PubCo (See “New PubCo Management Following the Business Combination—Management and Board of Directors.”); and |
| • | the continued indemnification of current directors and officers of JGGC and the continuation of directors’ and officers’ liability insurance for a period of six years from the Closing Date. |
The JGGC Board of Directors’ Reasons for Approval of the Business Combination (Page 138)
JGGC’s board considered a range of factors. In light of the number and wide variety of factors considered in connection with its evaluation of the Business Combination, JGGC’s board, as a whole, did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it
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considered in reaching its determination and supporting its decision. JGGC’s board viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual JGGC directors may have given different weight to different factors. This explanation of JGGC’s reasons for the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the section titled “Cautionary Note Regarding Forward-Looking Statements.”
Before reaching its decision, JGGC’s board reviewed various industry and financial date, including, but not limited to, GLAAM’s existing business model, historical and projected financials, and the results of JGGC’s advisors’ due diligence reviews of GLAAM, which were prepared under the direction of JGGC’s management and following discussions with their advisors, and which included:
| • | extensive meetings and calls with Cohen & Co, Oberon and GLAAM’s management to understand and analyze GLAAM’s business and to understand GLAAM’s final financial model and forecasts; |
| • | visits to GLAAM facilities and product installation sites by JGGC management and a JGGC director; |
| • | research on the digital out-of-home (“DOOH”) media industry in which GLAAM operates; |
| • | consultation with industry experts regarding competitive landscape, industry outlook, company reputation, business model, product characteristics, potential customer demand, regulatory environment and commercial track records; |
| • | consultation with JGGC’s legal, financial and technical advisors; |
| • | financial and market information prepared by GLAAM’s financial advisor; |
| • | review of GLAAM’s material contracts and financial, tax, legal, accounting, environmental, and intellectual property due diligence; |
| • | review of GLAAM’s historical audited and unaudited financial statements; |
| • | research on comparable public companies; |
| • | research on comparable transactions; and |
| • | reviews of certain projections provided by GLAAM. |
In approving the Business Combination, JGGC’s board obtained a fairness opinion as to whether the Business Combination is fair to JGGC’s public shareholders. See “Fairness Opinion of Houlihan Capital.” In addition, JGGC’s management also considered a comparable company analysis to assess the potential value that the public markets would likely ascribe to GLAAM, and this analysis was presented to JGGC’s board. These companies were selected by JGGC’s management as publicly traded companies having businesses that were considered, in certain respects, to be similar to the combined company’s business.
On July 31, 2023, JGGC’s management received and discussed with GLAAM the revised projections (the “Updated Projections”) for the fiscal years ending December 31, 2023 and 2024. JGGC’s management and the JGGC Board determined at such time that the Updated Projections required an updated third-party fairness opinion from Houlihan. On August 23, 2023, JGGC’s management received an updated fairness opinion from Houlihan.
JGGC’s management and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and background, together with the experience and sector expertise of Cohen & Co and JGGC’s other advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination.
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The JGGC board considered a number of factors, including, but not limited to, the following:
| • | High Growth Global Industry: DOOH media has thrived in recent years. Based on third-party data and industry reports by PQ Media, a provider of industry analytics and market research, the global DOOH market reached an approximate value of $14.1 billion in 2020, and is expected to grow to $25.0 billion by 2025. The JGGC board believes that GLAAM has the necessary experience, technology, relationships and agreements and manufacturing infrastructure in place to capitalize on this growth in DOOH media; |
| • | Large Total Addressable Market (TAM) with Significant Growth Opportunity. JGGC’s management and the JGGC board considered GLAAM’s current and projected market opportunity, including the size and expected growth in DOOH media in Asia, Europe, the Middle East and North America relative to GLAAM’s current Korea-dominated business operation; |
| • | GLAAM’s Experienced, Proven and Motivated Management Team. JGGC’s management and the JGGC board believe that the complementary business, industry and investing experience of JGGC’s management, board members, the Sponsor and GLAAM’s management team will help to accelerate New PubCo’s growth. In addition, GLAAM has a strong management team with a successful track record of operating experience over the last 12 years, all of whom are expected to remain with New PubCo to seek to execute GLAAM’s strategic and growth goals; |
| • | Historical Financial Performance and Condition. The JGGC board also considered factors such as GLAAM’s history of profitability (interrupted by the COVID epidemic), financial outlook, financial plan and capital structure, as well as valuations and trading of similar publicly traded companies. The JGGC board believes that GLAAM has demonstrated an ability to generate profitable, self-funded growth given its track record and historical ability to iteratively improve performance in Korea; |
| • | Scaled Cost Structure with High Operating Leverage. The JGGC board believes that GLAAM benefits from significant economies of scale driven by significant excess manufacturing capacity available at GLAAM’s existing manufacturing facilities; |
| • | Market-Leading Technology. GLAAM possesses a self-developed proprietary building product technology. JGGC and one of its advisors performed a technical review of GLAAM’s architectural glass product and believe it can be scaled up to support ongoing sustained growth in customers located in Asia, Europe, North America, the Middle East and North America; |
| • | Favorable Due Diligence Reports. JGGC’s management, with the assistance of financial, legal and technical advisors, conducted extensive due diligence examinations of GLAAM and discussions with GLAAM’s management. In all cases, the conclusions reached were favorable; |
| • | Opinion of Houlihan Capital. The JGGC board took into account the opinion of Houlihan Capital as to whether the Business Combination is fair to JGGC’s unaffiliated shareholders from a financial point of view; |
| • | Other Alternatives. The JGGC board believes, after a thorough review of other business combination opportunities reasonably available to JGGC, that the proposed Business Combination represent the best available business combination opportunity for JGGC based upon the process utilized to evaluate and assess other potential combination targets, in light of the valuation of the other targets, the competitive nature of the processes for the other targets and how the potential targets fit with JGGC’s investment criteria and guidelines, in each case, relative to GLAAM; and |
| • | Terms of the Business Combination Agreement and Related Agreements. The JGGC board reviewed the financial and other terms of the Business Combination Agreement and ancillary agreements and determined that such terms and conditions are reasonable and were the product of arm’s length negotiations between JGGC and GLAAM. |
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In the course of its deliberations, the JGGC board also considered a variety of uncertainties, risks and other potentially negative reasons relevant to the Business Combination, including the following:
| • | Macroeconomic and Geopolitical Risks. Economic downturns, geopolitical uncertainty, and market conditions beyond GLAAM’s control, including a reduction in economic activity, lingering economic effects of COVID-19, and the Russia-Ukraine conflict could adversely affect GLAAM’s business, financial condition, results of operations and prospects. |
| • | Business Risks. The risks, although not weighted and not presented in any order of significance, associated with successful implementation of GLAAM’s long-term business plan and strategy and GLAAM realizing the anticipated benefits of the Business Combination on the timeline expected or at all, including but not limited to (i) GLAAM’s continued international expansion efforts; (ii) the availability of additional capital to fund GLAAM’s growth organically and through strategic acquisitions; (iii) GLAAM’s ability to maintain, protect and enhance the GLAAM brand; (iv) GLAAM’s ability to manage growth effectively, including its ability to recruit and train its sales, commercial and marketing, technology, and finance and administration teams and refine GLAAM’s operational, financial and risk management controls and reporting systems and procedures as it grows; and (v) factors outside of the parties’ control, such as climate risks, fluctuations in interest, inflation and exchange rates and the potential negative impact of logistics and suppliers disruptions from the COVID-19 pandemic and the Russia-Ukraine conflict. |
| • | Competition. GLAAM’s business is rapidly evolving and GLAAM competes against a variety of companies, including long-standing players in the DOOH industry. |
| • | Regulatory Risk. The realization of GLAAM’s business and financial projections depends on successful penetration of GLAAM in new jurisdictions by obtaining the necessary regulatory approvals and licenses in such jurisdictions. Any delays in obtaining or difficulty in maintaining such regulatory approvals and licenses may negatively affect GLAAM’s growth, including the growth of its customer base and number of installations, or delay its ability to recognize revenue from such jurisdictions. |
| • | Business Plan and Projections May Not be Achieved. The risk that GLAAM may not be able to execute on its business plan on time or at all, or realize the financial performance as set forth in the financial projections presented to JGGC’s management and board, and the risk that GLAAM may need to raise additional capital to achieve its business plan. |
| • | Limitations of Review. The fact that JGGC’s management, board and advisors reviewed only certain materials in connection with their due diligence review of GLAAM and may not have properly evaluated GLAAM’s business. |
| • | Liquidation. The risks and costs to JGGC if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in JGGC being unable to effect a business combination within the completion window which would require JGGC to liquidate. |
| • | Shareholder Vote and Other Actions. The risk that JGGC Shareholders may object to and challenge the Business Combination and take action that may prevent or delay the Closing, including to vote down the Transaction Proposals at the Extraordinary General Meeting or redeem their JGGC Class A Ordinary Shares. |
| • | Closing Conditions. The fact that completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within JGGC’s control. |
| • | Litigation. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination. |
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| • | Fees and Expenses. The fees and expenses associated with completing the Business Combination. |
| • | Exercise of Redemption Rights by Public Shareholders. The risk that some or all holders of public shares would exercise their redemption rights, thereby depleting the amount of cash available to New PubCo following the Closing. |
| • | Nasdaq Listing. The potential inability to list New PubCo’s securities on Nasdaq or maintain such listing following the Closing. |
| • | Interests of Certain Persons. JGGC’s officers and directors may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of JGGC’s shareholders generally. For instance, the Sponsor, and the officers and directors of JGGC who have invested in the Sponsor entity, will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms that would be less favorable to JGGC Shareholders. See “Risk Factors—Risks Related to JGGC and the Business Combination—Sponsor, executive officers and directors of JGGC have potential conflicts of interest in recommending that shareholders vote in favor of the Business Combination.” |
| • | Distraction to Operations. The risk that the potential diversion of GLAAM’s management and employee attention as a result of the Business Combination may adversely affect GLAAM’s operations. |
| • | Readiness to be a Public Company; Compliance Infrastructure. As GLAAM has not previously been a public company and the majority of its executives and employees are located outside the United States, GLAAM may not have all the different types of employees necessary for it to timely and accurately prepare reports for filing with the SEC. There is a risk that GLAAM will not be able to hire the right people to fill in these gaps by the time of the Closing or that additional issues could arise after the Closing due to its failure to have hired these people in advance of Closing. In addition, as GLAAM increases its sales activities and expands into the U.S. and other jurisdictions, its compliance infrastructure more generally may not be able to keep pace with the increased compliance risks presented by such growth. |
| • | Waiver of Corporate Opportunity Doctrine. JGGC’s Existing Governing Documents contain a waiver of the corporate opportunity doctrine, and there could have been business combination targets that would have been appropriate for a combination with JGGC but were not offered due to a JGGC director’s duties to another entity. JGGC and its management are not aware of any such corporate opportunities not being offered to JGGC and does not believe that the waiver of the corporate opportunity doctrine in its Existing Governing Documents interfered with its ability to identify an acquisition target, including the decision to pursue the business combination with GLAAM. |
| • | Other Risks. Various other risk factors associated with GLAAM’s business, as described in the section titled “Risk Factors.” |
After considering the foregoing potentially negative and potentially positive reasons, the JGGC board concluded, in its business judgment, that, overall, the potentially positive reasons relating to the Business Combination and the other related transactions outweighed the potentially negative reasons. The JGGC board recognized that there can be no assurance about future results, including results considered or expected as disclosed in the foregoing discussion.
The above discussion of the material factors considered by the JGGC board sets forth the principal factors it considered but is not intended to be exhaustive.
Fairness Opinion of Houlihan Capital
On February 2, 2023, Houlihan Capital was retained by JGGC as its financial advisor to render a written opinion to JGGC’s board as to whether the Business Combination is fair to JGGC’s unaffiliated shareholders
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from a financial point of view. Houlihan Capital, a Financial Industry Regulatory Authority (FINRA) member, as part of its investment banking services, is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, private placements, bankruptcy, capital restructuring, solvency analyses, stock buybacks, and valuations for corporate and other purposes. JGGC selected Houlihan Capital to act as its financial advisor based on Houlihan Capital’s qualifications, expertise and reputation, its knowledge of, and involvement in, recent transactions in the industry in which JGGC operates and its knowledge of JGGC’s business and affairs. Houlihan Capital was engaged on a fixed fee and such compensation is not contingent upon the completion of the transaction. Houlihan Capital recommended the amount of consideration to be paid and JGGC found the amount to be reasonable. Houlihan Capital’s fee for evaluating the Business Combination and rendering an opinion as to its fairness is $250,000 with $75,000 paid upon the execution of the engagement letter and the balance payable at the closing of the Business Combination.
On March 1, 2023, Houlihan Capital delivered its written opinion to the JGGC board as to the fairness of the Business Combination, from a financial point of view, to JGGC’s unaffiliated shareholders.
On August 23, 2023, JGGC’s management received an updated fairness opinion in connection with the Updated Projections from Houlihan Capital.
Houlihan Capital’s opinion was directed to the JGGC board (in its capacity as such) and only addressed the fairness of the Business Combination, from a financial point of view, to JGGC’s unaffiliated shareholders and did not address any other aspect or implication of the Business Combination or any other arrangement, agreement or understanding. The summary of Houlihan Capital’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of Houlihan Capital’s written opinion, which is attached as Annex I to this proxy statement/prospectus and describes the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Capital in connection with the preparation of its opinion. However, neither Houlihan Capital’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus are intended to be, and do not constitute, advice or a recommendation to the JGGC board, any security holder or any other person as to how to act or vote or make any election with respect to any matter relating to the Business Combination or otherwise.
Quorum and Vote Required for Shareholder Proposals (Page 126)
A quorum of our shareholders is necessary to hold a valid meeting. A quorum will be present at the Extraordinary General Meeting if holders of one-third of the JGGC Ordinary Shares outstanding and entitled to vote at the Extraordinary General Meeting is represented in person or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum.
The approval of each of the Business Combination Proposal, the Governing Documents Proposals, the New PubCo Equity Plan Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the issued JGGC Ordinary Shares who, being present in person or represented by proxy and entitled to vote at the Extraordinary General Meeting, vote at the Extraordinary General Meeting. The approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of holders of at least two-thirds (2/3) of the issued JGGC Ordinary Shares who, being present in person or represented by proxy and entitled to vote at the Extraordinary General Meeting, vote at the Extraordinary General Meeting.
Recommendation of the JGGC Board (Page 180)
The JGGC board of directors believes that the Business Combination Proposal and the other proposals to be presented at the Extraordinary General Meeting are in the best interests of JGGC and its shareholders and
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unanimously recommends that its shareholders vote “FOR” each of the Transaction Proposals, in each case, if presented at the Extraordinary General Meeting.
The existence of financial and personal interests of one or more of our directors may result in a conflict of interest on the part of such director(s) between what he, she, or they may believe is in the best interests of JGGC and our shareholders and what he, she, or they may believe is best for himself, herself, or themselves in determining to recommend that shareholders vote for the proposals. When you consider the recommendation of the JGGC board of directors in favor of the Business Combination Proposal, you should keep in mind that certain of our directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder.
See the section entitled “Business Combination Proposal—Interests of JGGC’s Directors and Executive Officers and the Sponsor in the Business Combination” for a further discussion of these considerations.
Sources and Uses of Funds for the Business Combination
The following tables summarize the sources and uses for funding the Business Combination. Where actual amounts are not known or knowable, the figures below represent JGGC’s good faith estimate of such amounts.
| (in millions) | ||||
| Sources(1) |
||||
| Existing cash held in Trust Account(2) |
108.17 | |||
| Equity consideration to GLAAM Shareholders that become New PubCo Shareholders |
186.64 | |||
| Existing Sponsor equity at Closing |
60.95 | |||
| Additional Cash or Debt Funding |
— | |||
|
|
|
|||
| Total Sources |
355.76 | |||
|
|
|
|||
| Uses |
||||
| Equity consideration to GLAAM Shareholders that become New PubCo Shareholders |
186.64 | |||
| Existing Sponsor equity at Closing |
60.95 | |||
| Estimated JGGC Transaction Expenses and GLAAM Transaction Expenses(3) |
30.00 | |||
| Partial Paydown of Existing GLAAM Debt |
19.50 | |||
| Remaining cash to balance sheet of New PubCo |
58.67 | |||
|
|
|
|||
| Total Uses |
355.76 | |||
|
|
|
|||
| (1) | Totals might be affected by rounding. |
| (2) | Assumes that no currently outstanding Public Shares are redeemed in connection with the Business Combination. |
| (3) | Represents an estimate of transaction expenses. Actual amounts may vary and may include expenses unknown at this time. |
Risk Factors (Page 63)
GLAAM’s business and an investment in New PubCo Ordinary Shares are subject to numerous risks and uncertainties. In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the financial statements and Annexes attached hereto, and especially
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consider the factors discussed in the section entitled “Risk Factors.” Some of these risks include, but are not limited to:
| • | The fourth generation architectural media glass industry is a nascent industry; it may take a long time for GLAAM’s technology to penetrate its target markets. |
| • | GLAAM’s future growth and success is dependent upon the DOOH market and the construction industry’s willingness to adopt architectural media glass and specifically its G-Glass technology. |
| • | Failure to maintain the performance, reliability and quality standards required by GLAAM’s customers could have a materially negative impact on its financial condition and results of operation. |
| • | GLAAM’s business and results have been and may be adversely affected by fluctuations in the cost or availability of raw materials, components, purchased finished goods, shipping or services. |
| • | A global economic downturn could result in reduced demand for GLAAM’s products and adversely affect its profitability. |
| • | GLAAM’s sales cycle for large projects is protracted, which makes its annual revenue and other financial metrics hard to predict. |
| • | Technological innovation by others could render GLAAM’s technology and the products produced using its process technologies obsolete or uneconomical. |
| • | GLAAM’s financial projections are subject to significant risks, assumptions, estimates and uncertainties. As a result, its actual revenues, market share, expenses and profitability may differ materially from expectations. |
| • | GLAAM’s success depends upon its ability to develop new products and services and enhance existing products and services through product development initiatives and technological advances; any failure to make such improvements could harm its future business and prospects. |
| • | GLAAM’s government sector sales, which comprise a significant portion of its sales, may be negatively affected by presidential and congressional elections, policy changes, government land development plan changes and other local political events. |
| • | The IT, vertical real estate and large format wallscape sectors are regulated and any new or modified regulatory restrictions could negatively affect GLAAM’s sales and results of operations. |
| • | Changes in building codes could lower the demand for GLAAM’s G-Glass technology. |
| • | GLAAM sometimes manages the installation of its products, which subjects it to risks and costs that may impact its profit margin. |
| • | GLAAM sometimes relies on third-party contractors for the installation of its products, which subjects it to risks and costs that are out of its control. |
| • | GLAAM is subject to labor, health, construction/building and safety regulations, and may be exposed to liabilities and potential costs for lack of compliance. |
| • | Equipment failures, delays in deliveries and catastrophic loss at GLAAM’s manufacturing facilities could lead to production curtailments or shutdowns that prevent it from producing its products. |
| • | GLAAM may be adversely affected by disruptions to its manufacturing facilities or disruptions to its customer, supplier or employee base. |
| • | GLAAM operates with a modest inventory, which may make it difficult for it to efficiently allocate capacity on a timely basis in response to changes in demand. |
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| • | GLAAM’s business involves complex manufacturing processes that may cause personal injury or property damage, subjecting it to liabilities and possible losses or other disruptions of its operations in the future, which may not be covered by insurance. |
| • | Failure to protect GLAAM’s intellectual property rights could impair its competitiveness and harm its business and future prospects. |
| • | Earthquakes, tsunamis, floods, severe health epidemics (including the ongoing global COVID-19 pandemic and any possible recurrence of other types of widespread infectious diseases) and other natural calamities could materially adversely affect GLAAM’s business, results of operations or financial condition. |
| • | GLAAM continues to face significant risks associated with its international expansion strategy. |
| • | GLAAM’s results of operations are subject to exchange rate fluctuations, which may affect its costs and revenues. |
| • | GLAAM is subject to the risks of operations in the United Kingdom, China, Japan, Hong Kong and the United States. |
| • | JGGC will incur significant transaction costs in connection with the Business Combination. |
| • | The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus may not be indicative of what New PubCo’s actual financial position or results will be. |
The consummation of the Business Combination is subject to a number of conditions and if those conditions are not satisfied or waived, the Business Combination may be terminated in accordance with its terms and the Business Combination may not be completed.
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SELECTED HISTORICAL FINANCIAL INFORMATION OF JGGC
The following table sets forth selected historical financial information included elsewhere in this proxy statement/prospectus derived from JGGC’s
| • | Unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2023. |
| • | Audited consolidated financial statements as of and for the year ended December 31, 2022 and as of and for the period from March 31, 2021 (inception) to December 31, 2021. |
You should read the following selected financial information in conjunction with the section entitled “JGGC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and JGGC’s financial statements and the related notes appearing elsewhere in this proxy statement/prospectus. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of JGGC.
As of June 30, 2023, JGGC had neither engaged in any significant business operations nor generated any revenues. All activity for the period from inception through June 30, 2023, is related to organizational activities, execution of the IPO, identifying a target for a business combination and activities pursuant to the Business Combination Agreement. JGGC does not expect to generate any operating revenues until after consummation of the Business Combination or another initial business combination.
Statements of Operations Data:
| For the Six Months Ended June 30, 2023 |
For The Year Ended December 31, 2022 |
For The Period From March 31, 2021 (Inception) Through December 31, 2021 |
||||||||||
| Loss from operations |
$ | (3,438,592 | ) | $ | (2,459,464 | ) | $ | (39,954 | ) | |||
|
|
|
|
|
|
|
|||||||
| Net income (loss) |
$ | (2,216,112 | ) | $ | 5,615,200 | $ | (39,954 | ) | ||||
|
|
|
|
|
|
|
|||||||
| Weighted average shares outstanding of Class A ordinary shares subject to possible redemption, basic and diluted |
23,000,000 | 20,164,384 | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Basic and diluted net income (loss) per share, Class A subject to possible redemption |
$ | (0.07 | ) | $ | 0.20 | $ | 0.00 | |||||
|
|
|
|
|
|
|
|||||||
| Weighted average shares outstanding of JGGC Class B non-redeemable ordinary shares, basic and diluted |
7,666,667 | 7,543,379 | 6,666,667 | |||||||||
|
|
|
|
|
|
|
|||||||
| Basic and diluted net income (loss) per share, Class B non-redeemable ordinary shares |
$ | (0.07 | ) | $ | 0.20 | $ | (0.01 | ) | ||||
|
|
|
|
|
|
|
|||||||
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Balance Sheet Data:
| As of June 30, 2023 |
As of December 31, 2022 |
As of December 31, 2021 |
||||||||||
| Total Current Assets |
$ | 662,334 | $ | 1,256,552 | $ | 36,710 | ||||||
| Total Assets |
243,996,191 | 239,360,238 | 432,756 | |||||||||
| Total Current Liabilities |
4,109,215 | 1,330,124 | 447,710 | |||||||||
| Total Liabilities |
13,236,965 | 10,817,124 | 447,710 | |||||||||
| Class A ordinary shares subject to possible redemption |
243,233,857 | 237,938,403 | — | |||||||||
| Total Shareholders’ Deficit |
(12,474,631) | (9,395,289) | (14,954) | |||||||||
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SELECTED HISTORICAL FINANCIAL INFORMATION OF GLAAM
The selected historical consolidated statement of operations and cash flow data of GLAAM for the years ended December 31, 2022 and 2021 and the historical consolidated balance sheet data as of December 31, 2022 and 2021 are derived from GLAAM’s audited consolidated financial statements and the related notes thereto included elsewhere in this proxy statement/prospectus. GLAAM’s consolidated financial statements included elsewhere in this proxy statement/prospectus have been prepared in accordance with IFRS, as issued by the IASB. The following selected historical financial data is being provided to help you in your analysis of the financial aspects of the Business Combination. You should read this information in conjunction with the rest of this proxy statement/prospectus, including the sections entitled “GLAAM’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and GLAAM’s consolidated financial statements and the related notes appearing elsewhere in this proxy statement/prospectus.
The selected financial information presented in this proxy statement/prospectus is not necessarily indicative of GLAAM’s future operating results.
| For the Year Ended December 31, |
||||||||
| 2022 | 2021 | |||||||
| (in U.S.$ unless otherwise indicated) |
||||||||
| Consolidated Statement of Profit and Loss and Comprehensive Income: |
||||||||
| Revenue |
20,191,935 | 9,415,119 | ||||||
| Cost of sales |
13,910,570 | 10,535,322 | ||||||
|
|
|
|
|
|||||
| Gross profit/(loss) |
6,281,365 | (1,120,203 | ) | |||||
| Selling and administrative expenses |
8,827,619 | 26,363,795 | ||||||
|
|
|
|
|
|||||
| Operating loss |
(2,546,254 | ) | (27,483,998 | ) | ||||
| Finance income |
4,233,034 | 4,116,259 | ||||||
| Finance costs |
1,120,831 | 1,996,436 | ||||||
| Other income |
5,199,803 | 589,255 | ||||||
| Other expenses |
15,169,616 | 39,211,769 | ||||||
|
|
|
|
|
|||||
| Loss before tax |
(9,403,864 | ) | (63,986,689 | ) | ||||
| Corporate income tax benefit |
(1,511,696 | ) | (3,599,507 | ) | ||||
|
|
|
|
|
|||||
| Net loss for the year |
(7,892,168 | ) | (60,387,182 | ) | ||||
|
|
|
|
|
|||||
| Owners of the parent |
(5,892,144 | ) | (60,114,590 | ) | ||||
| Non-controlling interests |
(2,000,024 | ) | (272,592 | ) | ||||
| Other Comprehensive Income |
594,288 | 3,356,068 | ||||||
| Total Comprehensive Loss |
(7,297,880 | ) | (57,031,114 | ) | ||||
| Owners of the parent |
(5,297,856 | ) | (56,758,522 | ) | ||||
| Non-controlling interests |
(2,000,024 | ) | (272,592 | ) | ||||
| Earnings per share |
||||||||
| Basic earnings per share (loss) |
(0.39 | ) | (4.09 | ) | ||||
| Diluted earnings per share (loss) |
(0.39 | ) | (3.87 | ) | ||||
| Net cash flows provided (used in): |
||||||||
| Operating activities |
(5,500,004 | ) | (4,988,746 | ) | ||||
| Investing activities |
(1,102,330 | ) | 5,197,323 | |||||
| Financing activities |
6,601,098 | (125,115 | ) | |||||
| Effects of changes in foreign exchange rates |
(41,479 | ) | (18,934 | ) | ||||
|
|
|
|
|
|||||
| Increase (decrease) in cash and cash equivalents |
(42,715 | ) | 64,529 | |||||
|
|
|
|
|
|||||
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| As of December 31, | ||||||||
| 2022 | 2021 | |||||||
| (in U.S.$) | ||||||||
| Consolidated Statement of Financial Position: |
||||||||
| Total assets |
36,624,098 | 50,259,469 | ||||||
| Total liabilities |
33,907,713 | 62,524,012 | ||||||
| Total equity |
2,716,385 | (12,264,543 | ) | |||||
|
|
|
|
|
|||||
| Total liabilities and equity |
36,624,098 | 50,259,469 | ||||||
|
|
|
|
|
|||||
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You should carefully consider the risks described below and the other information contained in this proxy statement/prospectus, including the financial statements and notes to the financial statements included herein, in evaluating the Business Combination and the proposals described herein. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to the business, cash flows, financial condition and results of operations of GLAAM. 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, cash flows, financial condition and results of operations of New PubCo following the Business Combination. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. Our business, financial condition or results of operations could be materially and adversely affected by any of these risks. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to the businesses of JGGC and GLAAM.
Unless the context otherwise requires, all references in this section to “we,” “us” or “our” refer to the businesses of GLAAM, collectively, prior to the consummation of the Business Combination, or to the businesses of New PubCo, collectively, following the consummation of the Business Combination as applicable.
Risks Related to Our Industry and Company
The fourth generation architectural media glass industry is a nascent industry; it may take a long time for our technology to penetrate our target markets.
We believe we are the first and only provider of fourth generation architectural media glass. Unlike third generation architectural media glass, the fourth generation iteration is architecturally durable, fully transparent and is able to be installed in any structures where traditional architechtural glass can be installed. However, despite its use in a variety of industries, such as hardware / equipment, software, media content and design, architectural media glass is mainly used for building exteriors and DOOH advertising, giving it limited uses in a somewhat limited market. Since the commercial trends of the fourth generation architectural media glass industry are still uncertain in this relatively nascent industry in which we are the sole player, we cannot assure you of the future growth of our G-Glass technology. We further cannot assure you that our G-Glass technology will be widely adopted or that it will penetrate any or all of our target markets in the near term, which may adversely affect our profitability.
Our future growth and success are dependent upon the DOOH market and the construction industry’s willingness to adopt architectural media glass and specifically our G-Glass technology.
Our growth is highly dependent upon the adoption of architectural media glass by the construction industry and DOOH media industry. Although we anticipate growing demand for our products, there is no guarantee of such future demand, or that our products will remain competitive in the market.
Many of our potential customers in the construction industry are heavily invested in conventional building materials and may be resistant to new technology or unfamiliar products and services, in part due to health and safety concerns. Any perception of health and safety concerns, whether or not valid, may indirectly inhibit market acceptance of our products and services. Although we continue to expand our sales by successfully completing over 460 projects across multiple continents, our ability to continue to penetrate the market remains uncertain, as there is no guarantee that we will gain widespread market acceptance.
If the market for architectural media glass in general and our products in particular does not develop as we expect, or develops more slowly than we expect, or if demand for our products decreases in its markets, our
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business, prospects, financial condition and operating results could be harmed. The market for our products could be affected by numerous factors, such as:
| • | perceptions about G-Glass’ features, quality, safety, performance and cost; |
| • | competition, including from other types of architectural media glass or traditional architectural glass; |
| • | the cost premium for G-Glass in contrast to traditional architectural glass; |
| • | government regulations and economic incentives; |
| • | reduced construction activity, including as a result of the short and long-term effect of the COVID-19 pandemic; and |
| • | concerns about our future viability. |
Failure to maintain the performance, reliability and quality standards required by our customers could have a materially negative impact on our financial condition and results of operation.
If our products or services have performance, reliability or quality problems, or our products are improperly installed (for instance, with incompatible glazing materials), we may experience additional warranty and service expenses, reduced or canceled orders, diminished pricing power, higher manufacturing or installation costs or delays in the collection of accounts receivable. Additionally, performance, reliability or quality claims from our customers, with or without merit, could result in costly and time-consuming litigation that could require significant time and attention of management and involve significant monetary damages that could negatively affect our financial results.
Our business and results have been and may be adversely affected by fluctuations in the cost or availability of raw materials, components, purchased finished goods, shipping or services.
Although certain of the raw materials we use to produce G-Glass, such as unique resin, IC semiconductor chips and LEDs, are manufactured through proprietary processes, we source all of our raw materials and components from a limited number of third-party providers on an as-needed basis. However, if the demand for our products rises and we scale up production, there may be other vendors who are willing to supply similar products. Volatility in certain commodities, such as oil, affecting all suppliers may result in additional price increases from time to time, regardless of the number and availability of suppliers. Our profitability and production could be negatively impacted by limitations inherent within the supply chains of certain of these component parts, including competitive, governmental, and legal limitations, natural disasters, and other events that could impact both supply and price.
Additionally, we are dependent on certain service providers for key operational functions, such as installation of finished goods. While there are a number of suppliers of these services, the cost to change service providers and set up new processes could be significant. Our ongoing efforts to improve the cost effectiveness, performance, quality, support, delivery and capacity of our products and services may reduce the number of suppliers we depend on, in turn increasing the risks associated with reliance on a single or a limited number of suppliers. Our results of operations would be adversely affected if we are unable to obtain adequate supplies of high-quality raw materials, components or finished goods in a timely manner or make alternative arrangements for such supplies in a timely manner.
The ongoing effects of the COVID-19 pandemic negatively impacted our business in 2020 and 2021 and continued to disrupt our supply chain for certain components during 2022, which resulted in increased prices for significant commodities, such as glass, semiconductors and aluminum as well as increased shipping and warehousing costs. If these supply chain disruptions and shortages persist in the future, they could affect our ability to procure components for our products on a timely basis, or at all, or could require us to provide longer lead times to secure critical components by entering into longer term supply agreements. Alternatively, supply
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chain disruptions and shortages may require us to rely on spot market purchases at higher costs to obtain certain materials or products. Future increases in our costs and/or continued disruptions in the supply chain could negatively impact our profitability, as there can be no assurance that future price increases will be successfully passed through to customers. See “—Our business, results of operations and financial condition have been, and could continue to be, adversely affected by the COVID-19 pandemic.”
A global economic downturn could result in reduced demand for our products and adversely affect our profitability.
In recent years, adverse conditions and volatility in the worldwide financial markets, fluctuations in oil and commodity prices and the general weakness of the global economy have contributed to the uncertainty of global economic prospects in general and have adversely affected, and may continue to adversely affect, the Korean economy. Global economic downturns in the past have adversely affected demand for our products and services by our customers in Korea and overseas.
The architectural media glass business is heavily influenced by the economic trends in the real estate, construction, and advertising industries, the governments’ spending abilities and the overall domestic and global economic fluctuations and economic growth trends. The uncertainty of the Biden administration’s policies and the U.S. Federal Reserve’s increase of the base interest rate may pose risks to economic recovery and growth. Additionally, the uncertainty arising out of the European Union’s political environment, including the United Kingdom’s exit from the European Union, and China’s current regulations to cool down its overheated real estate market may curtail investor confidence.
The overall prospects for the global economy remain uncertain, especially in light of the ongoing global pandemic of COVID-19, which has had and may continue to have a negative effect on the global economy. See “—Our business, results of operations and financial condition have been, and could continue to be, adversely affected by the COVID-19 pandemic.” We cannot provide any assurance that demand for our products can be sustained at current levels in future periods or that the demand for our products will not decrease in the future due to such economic downturns, which may adversely affect our profitability. We may decide to adjust our production levels in the future subject to market demand for our products, the production outlook of the global architectural media glass industry, any significant disruptions in our supply chain and global economic conditions in general. Any decline in demand for architectural media glass products may adversely affect our business, results of operations and/or financial condition.
Our short-term profitability will be negatively impacted by our anticipated need to incur significant expenses in connection with the expansion of our staff and marketing efforts.
We plan to use the proceeds from the Business Combination to fund primarily marketing and sales personnel in our international jurisdictions in order to fuel growth. To date, the expenses and long lead times inherent in our efforts to pursue additional Korean and international business opportunities have slowed, and are expected to continue to slow, the implementation of our expansion strategy, particularly in light of our ongoing capital constraints, and have limited, and are expected to continue to limit, the revenue that we receive as a result of our efforts to develop international business in the short term. Until we are able to increase our sales as a result of such investment, our short-term profitability will be negatively impacted by the increased costs associated with investing in our expansion plans.
Our sales cycle for large projects is protracted, which makes our annual revenue and other financial metrics hard to predict.
For our Super Large Architectural Media (“SLAM”) installations, our sales cycles, which spans from initial commercial discussion to installation, is approximately four to five years on average, subject to a variety of factors including economic fluctuations and economic growth trends, supply chain disruptions and shortages, political climate changes and credit availability, all of which are out of our immediate control and which could cause delays at various stages of a SLAM installation.
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The design and sales quotation phase of a SLAM project typically takes two to three years, followed by a two to three-year construction phase. We ship and install our architectural media glass at the very end of the construction phase. The points at which we recognize revenue can be highly variable and tend to be determined on a case-by-case basis as a combination of when the initial order is placed, when the products are shipped, and when the products are installed and handed over to the customer. Revenue may be recognized at predetermined milestones during the lifecycle of a SLAM project, such as the point of the initial order, the shipment and installation. The longer the sales cycle for a particular project, the more unpredictable our ability to recognize the full potential revenue from such project. Extended sales cycles, without offsetting revenue from smaller projects with shorter sales cycles, can create volatile revenue swings from period to period. In addition, the expenses and long lead times inherent in pursuing SLAM projects have slowed GLAAM’s implementation of its strategy to pursue international business opportunities, particularly in light of GLAAM’s ongoing capital constraints, and have limited, and are expected to continue to limit, the revenue that GLAAM receives as a result of its efforts to develop international business in the short term. For a more detailed explanation of GLAAM’s revenue recognition strategy see “Management’s Discussion and Analysis of Financial Condition and Results of Operation of GLAAM—Components of Results of Operations—Revenues.”
Our ability to realize revenues on our projects is subject to risks related to the financial health and condition of the real estate developers, and their suppliers or contractors, with whom we contract to supply our products. The financial distress or bankruptcy of such developers, and their suppliers and contractors, could result in our inability to realize revenues on contracted projects.
Our key customers include real estate developers and their suppliers and contractors. Because we depend on these customers for a significant portion of our revenue, if any of these real estate developers and their suppliers or contractors were to encounter financial difficulties affecting their ability to make payments, we may not be paid in full or at all on some contracted projects, which could adversely affect our operating results, financial position, and cash flows. Further, if any of our customers with whom we have billing or payment disputes seek bankruptcy protection, such dispute or bankruptcy will likely force us to incur additional costs in attorneys’ fees and fees for other professional consultants, which will negatively affect our revenue and profit.
Technological innovation by others could render our technology and the products produced using our process technologies obsolete or uneconomical.
Our success will depend on our ability to maintain a competitive position with respect to technological advances. Our technology and the products derived from our technology may be rendered obsolete or uneconomical by technological advances by others, more efficient and cost-effective products, or entirely different approaches developed by one or more of our competitors or other third parties. Though we plan to continue to expend significant resources to enhance our technology platform and processes, there are no assurances we will be able to keep pace with technological change.
Our financial projections are subject to significant risks, assumptions, estimates and uncertainties. As a result, our actual revenues, market share, expenses and profitability may differ materially from expectations.
The financial projections included in this proxy statement/prospectus information (including the projections the JGGC board was provided with in connections with its consideration of the Business Combination on January 25, 2023 (the “Original Projections” and together with the Updated Projections, the “Projections”) and the Updated Projections) are based on our estimates and assumptions as of the date of this proxy statement/prospectus concerning various factors which are subject to significant risks and uncertainties, many of which are beyond our control, and therefore actual results may differ materially. In particular, the Original Projections and the Updated Projections were prepared by GLAAM’s management based on estimates and assumptions believed to be reasonable with respect to the expected future financial performance of GLAAM on January 12, 2023 and July 31, 2023, respectively, the date on which the Original Projections and Updated Projections were prepared, and do not take into account any circumstances or events occurring after January 12, 2023 and July 31, 2023, as
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the case may be. These estimates and assumptions include, among others: estimates of the total addressable market for products; assumptions regarding our ability to identify and convert new customers; estimates of our ability to realize revenue on current projects; assumptions regarding our ability to scale production to meet current and future demand; and assumptions regarding research, product development, product timelines, operational execution and demand. These estimates and assumptions are subject to various factors beyond our control, including, for example, changes in industry demand, increased construction costs, changes in the regulatory environment, the impact of global health crises (including the COVID-19 pandemic), the imposition or heightening of sanctions or other economic or military measures in relation to the current Russia-Ukraine conflict, and changes in our executive team. Notably, our financial projections reflect assumptions regarding contracts that are currently under negotiation with, as well as indications of interest from, potential customers who may withdraw at any time.
The importance of the risks, assumptions, estimates and uncertainties impacting our financial projections is illustrated by our management’s decision to update the Original Projections with the Updated Projections to reflect a more conservative outlook given (i) our ongoing capital constraints in 2023 which have prevented us from implementing more aggressive sales efforts resulting in decreased pipeline growth and reduced conversion of our existing pipeline into revenue, (ii) the expenses and lead times inherent in our efforts to pursue international business opportunities, which slow the implementation of our expansion strategy, particularly in light of our ongoing capital constraints, and limit the revenue that we expect to receive as a result of such efforts in the short term and (iii) the impact of the ongoing environment of elevated interest rates in South Korea which delayed and/or reduced spending in the South Korean real estate industry, which historically has been our largest market. In light of the foregoing conditions, we anticipate that our conversion rates of leads to sales will be reduced relative to the Original Projections and that lead time for sales to completed installations will be extended. See the section entitled “Certain Unaudited Projected Financial Information” for additional information. Accordingly, there can be no assurance that the actual results of GLAAM and/or New PubCo will be in line with the Projections. Except to the extent required by applicable law, neither we nor JGGC have any duty to update the financial projections included in this proxy statement/prospectus. Our failure to achieve our projected results could harm the trading price of our securities and our financial position following the completion of the Business Combination.
Our success depends partly upon our ability to enhance existing products and services and to develop new products and services through product development initiatives and technological advances; any failure to make such improvements could harm our future business and prospects.
The Company has continuously enhanced and improved its existing products and developed new products and services. We are expending resources for the development of new products in all aspects of our business, including products that can reach a broader customer base. For example, we are working to diversify our customer base by offering smaller scale, mass market products such as bus shelter, bridge, showroom and handrail applications, which require less customization and allow us to generate revenue in a much shorter time frame than SLAM projects. We are also developing our “G-Store,” an e-platform where our customers can purchase various artworks and videos, and other media content, to be displayed on G-Glass. Wherever and whenever our customers install G-Glass, they will also use media content. Some of our customers have their own content creation capabilities. However, the vast majority of our customers do not have their own content creation capability. This creates a secondary sales opportunity to sell media content to our customers. As such, we are developing our content platform, G-Store. Our Korean team, dedicated to creating media content, has created an aggregate of over 500 artworks and videos since 2017 to populate the G-Store. The successful development of our products and product enhancements are subject to numerous risks, both known and unknown, including unanticipated delays, access to significant capital, budget overruns, technical problems and other difficulties that could result in the abandonment or substantial change in the design, development and commercialization of these new products. The events could have a materially adverse impact on our results of operations.
Given the uncertainties inherent with product development and introduction, including lack of market acceptance, we cannot provide assurance that any of our product development efforts will be successful on a
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timely basis or within budget, if at all. Failure to develop new products and product enhancements on a timely basis or within budget could harm our business and prospects. In addition, we may not be able to achieve the technological advances necessary for us to remain competitive, which could have a materially negative impact on our financial condition.
If our efforts to attract prospective clients and advertisers and to retain existing clients and users of our services are not successful, our growth prospects and revenue will be adversely affected.
Our ability to grow our business, including our DOOH delivery capabilities, and generate revenue depends on retaining, expanding and monetizing our customer base. In particular, our future growth depends in large part on G-Glass installation, adoption of our services and advertising revenue and content monetization across our DOOH business. We have focused on both developing longer-term higher-value SLAM projects in an effort to accelerate our growth and profitability and advancing smaller scale mass-market products that we believe will provide greater earnings stability over time. As part of our effort to secure more SLAM projects, we are looking to introduce glass as a service (GaaS) globally, whereby we bear a portion of the maintenance and installation costs of each new G-Glass installation and license the use of the G-Glass to third parties in exchange for a portion of the media and advertising revenue derived from the installation.
However, familiarizing prospective customers with and convincing them of the value proposition of our products and services require significant time and resources. Many of our existing and prospective clients are large property owners, developers and government agencies, and we often struggle to gain access to their ultimate decision makers. The expenses and long lead times inherent in pursuing SLAM projects have slowed the implementation of our strategy to pursue international business opportunities, particularly in light of our ongoing capital constraints, and have limited, and are expected to continue to limit, the revenue that we receive as a result of our efforts to develop international business in the short term. Furthermore, our ability to attract new clients, retain existing clients, and convert users of our G-Glass to our value-added services depends in large part on our ability to continue to offer compelling curated content, leading technologies and products, superior functionality, and an engaging customer experience.
Continued downward pricing of third generation products could adversely affect fourth generation architectural media glass pricing, which may affect our results of operations.
Although we are the only player in the fourth generation iteration of architectural media façades, the pricing of third-generation products still impacts our revenues in the DOOH media industry. The market for third-generation display-glass products is large and has attracted numerous new DOOH advertising media and media companies. As some companies have sought to compete based on price, they have created pricing pressures on architectural media glass, which we expect to continue in the future. If competitive forces drive down the prices we are able to charge for our products, our profit margins will shrink, which will adversely affect our ability to maintain our profitability and to invest in and grow our business.
Our revenue largely depends on continuing domestic and global demand for architectural media glass, large media displays, and associated digital content. Our sales may not grow at the rate we expect.
Currently, our total sales are derived principally from real estate developers, building owners, and to a lesser extent, from municipalities. Going forward, our diversification strategy includes targeting more sales to content, applications and DOOH media. As each of these product segments significantly contributes to our total sales, we will continue to be dependent on continuing demand for our architectural media glass, large media displays and associated digital content from each of the construction industry, the remodeling industry and the DOOH media industry for a substantial portion of our sales. Any downturn in any of those industries in which our customers operate would result in reduced demand for our products, which may in turn result in reduced revenue, lower average selling prices and/or reduced margins.
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If new construction levels out and repair and remodeling markets decline, such market pressures have, and may in the future, negatively affect our results of operations.
The architectural media glass industry is subject to the cyclical market pressures of the larger new construction and repair and remodeling markets. In turn, these larger markets have in the past been, and may in the future be, affected by adverse changes in economic conditions such as demographic trends, employment levels, interest rates, commodity prices, availability of credit and consumer confidence, as well as by changing needs and trends in the markets, such as shifts in customers’ preferences and architectural trends. Already, GLAAM’s revenue has been negatively affected by the ongoing environment of elevated interest rates in South Korea, which has delayed and/or reduced spending in the South Korean real estate industry, which historically has been our largest market. Any future downturn or any other negative market pressures could negatively affect our results of operations in the future, as margins may decrease as a direct result of an overall decrease in demand for our products. Additionally, we may have idle manufacturing capacity which may have a negative effect on our cost structure.
If property developers, who make up our key customer base, continue to, or in the future, face operational and financial challenges, they may continue to, or in the future, change, delay or even cancel ongoing and planned projects. Since our architectural media glass products are installed at the very end of the construction process, at which point we have already, or would already have, incurred significant costs, such changes, delays or cancellations have had, or would have, a negative impact on our financial condition and results of operations.
Our government sector sales, which comprise a significant portion of our sales, may be negatively affected by presidential and congressional elections, policy changes, government land development plan changes and other local political events.
Our customers include national, provincial and local government entities. Our significant government sector sales are made primarily in South Korea. Political events such as pending presidential and congressional elections, the outcome of recent elections, changes in leadership among key executive decision makers, or revisions to government land development plans can affect our ability to secure new government contracts or the speed at which new contracts are signed, decrease future levels of spending and authorizations for programs that we bid on and/or shift spending priorities to programs in areas for which we do not provide services.
The IT, vertical real estate and large format wallscape sectors are regulated and any new or modified regulatory restrictions could negatively affect our sales and results of operations.
The IT, vertical real estate and large format wallscape sectors are subject to various laws, ordinances, rules and regulations concerning zoning, building design and safety, hurricane and floods, construction, and other similar matters. G-Glass has been tested and successfully obtained various certifications required for electric safety as well as construction materials in all of our key markets, including Korea Certification (KC), China Compulsory Certification (CCC), Conformité Européenne (CE) and UL certification. However, if we fail to maintain or renew these certifications, we are at risk of falling out of compliance with applicable laws, ordinances, rules and regulations, which will negatively affect our sales and results of operations. Further, increased regulatory restrictions could limit demand for our products and/or services, which could negatively affect our sales and results of operations. We may not be able to satisfy any future regulations, which consequently could have a negative effect on our sales and results of operations.
Changes in building codes could lower the demand for our G-Glass technology.
The market for G-Glass depends in large part on our ability to satisfy applicable state and local building codes. If the standards in such building codes are raised, we may not be able to meet such requirements, and demand for our products could decline. Conversely, if the standards in such building codes are lowered or are not enforced in certain areas, demand for our products may decrease. If we are unable to satisfy future regulations, including building code standards, it could negatively affect our sales and results of operations.
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Certain jurisdictions have stricter regulations covering the types of products and services we offer, which may potentially deter us from entering or expanding within such jurisdictions in the future. For example, the Hong Kong government imposes stringent rules and requirements with respect to building codes and we may not invest additional resources to penetrate the Hong Kong market if the cost of overcoming the barriers outweighs perceived economic gains.
We sometimes manage the installation of our products, which subjects us to risks and costs that may impact our profit margin.
From time to time, we plan and manage the installation of our products at our customers’ venues. The installation process subjects us to risks that are out of our immediate control, including construction delays, unexpected modifications, work stoppages, extreme weather conditions and operational hazards. In addition, we rely on various contractors and subcontractors to carry out each step of the construction and installation process, including brick, façade, insulation, window pane and curtain glass installers, carpenters, electricians, painters and other contractors. Our reliance on third party contractors in combination with certain operational risks can result in delays, damages, replacements, repairs that may subject us to increased or unexpected costs and may affect our ability to complete installations in a timely manner.
Due to the number of contractors and workers on a construction site and the difficulty in identifying issues during the construction process, including delays in identifying latent leaks, intermittent electrical power or signal failures, or other issues, it is difficult to identify the root cause of certain issues that materialize during the installation process. This uncertainty may prevent us from assigning legal liability or requesting reimbursement from third party contractors, forcing us to fund any replacements or remedies necessary for the completion of the installation. As a result, our project profit margin may be negatively affected.
We sometimes rely on third-party contractors for the installation of our products, which subjects us to risks and costs that are out of our control.
We may rely on third party contractors for the installation of our products at our customers’ venues. Such installation work is subject to various hazards and risks, including extreme weather conditions, work stoppages and operational hazards. If we are delayed or unable to complete installations due to a third-party contractors’ failure to properly operate or if we experience significant changes in the cost of these services due to new or additional regulations, we may not be able to complete installations in a timely manner or make alternative arrangements for such installations in a timely manner. As installation costs represent a significant part of our cost structure, substantial increases in these costs would result in a material adverse effect on our revenues and costs of operations.
Additionally, the performance of such third-party contractors is outside of our control, as a result, failures or deficiencies in the installations of third-party contractors could have an adverse impact on our operating results.
We are subject to labor, health, construction/building and safety regulations, and may be exposed to liabilities and potential costs for lack of compliance.
We are subject to labor, health, construction/building and safety laws and regulations that govern, among other things, the relationship between us and our employees, and the health and safety of our employees. If an adverse final decision that we violated any labor or health and safety laws is issued, we may be exposed to penalties and sanctions, including the payment of fines. Our subsidiaries could also be subject to work stoppages or closure of operations.
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We rely on key researchers and engineers, senior management and production facility operators, and the loss of the services of any such personnel or the inability to attract and retain them may negatively affect our business.
Our success depends to an extent upon the continued service of our research and development and engineering personnel, as well as on our ability to continue to attract, retain and motivate qualified researchers and engineers, especially during periods of rapid growth. Our focus on rapid technological developments and advanced manufacturing processes has meant that we must aggressively recruit research and development personnel and engineers with expertise in cutting-edge technologies.
We also depend on the services of experienced key senior management, and if we lose their services, it would be difficult to find and integrate replacement personnel in a timely manner, if at all. We also employ highly skilled line operators at our various production facilities.
The loss of the services of a significant number of our key research and development and engineering personnel, senior management or skilled operators without adequate replacement, or the inability to attract new qualified personnel, may have an adverse effect on our operations.
Equipment failures, delays in deliveries and catastrophic loss at our manufacturing facilities could lead to production curtailments or shutdowns that prevent us from producing our products.
We have one operational state-of-the-art manufacturing facility located in Pyeongtaek, Korea, which currently fulfills all of the market demand for our products. In March 2020, our second manufacturing facility, located in Tianjin, China, temporarily suspended its operations as a result of COVID-19 pandemic-related restrictions imposed by the Chinese government on manufacturers. Although our Chinese manufacturing facility has not yet restarted operations, we expect to be able to resume manufacturing activities in China as and when needed and to the extent possible in the future once the restrictions are lifted. Any interruption or significant disruption in production capabilities at our facilities stemming from equipment failures or other reasons could result in our inability to manufacture our products, which would reduce our sales and earnings for the affected period.
In addition, as a result of the highly customizable nature of our products, we generally begin the manufacturing process after receiving an order from a customer rather than relying on pre-existing inventory. If our manufacturing facilities experience any production stoppages, even if only temporarily, or any delays because of events that are beyond our control, delivery times could be severely affected. Any significant delay in deliveries to our customers could lead to increased product returns or cancellations and cause us to lose future sales. Our manufacturing facilities are also subject to the risk of loss due to unanticipated events such as fires, explosions, acts of terrorism or extreme weather conditions. Any plant shutdowns or periods of reduced production stemming from equipment failure, delays in deliveries or catastrophic loss, could have a material adverse effect on our results of operations or financial condition. Further, we may not have adequate insurance to compensate for all losses that result from any of these events. While we have not experienced equipment failures, delivery delays or catastrophic losses at any of our facilities to date, we cannot provide any assurance that no such event will occur in the future.
We may be adversely affected by disruptions to our manufacturing facilities or disruptions to our customer, supplier or employee base.
Any disruption to our manufacturing facilities could damage a significant portion of our inventory and materially impair our ability to distribute our products to customers. We could incur significantly higher costs and longer lead times associated with distributing our products to customers during the time that it takes for us to reopen or replace a damaged facility. In addition, if there are disruptions to our customer and supplier base or to our employees caused by weather-related events, acts of terrorism, pandemics, or any other cause, our business could be temporarily adversely affected by decreased production capabilities, higher costs for materials, increased shipping and storage costs, increased labor costs, increased absentee rates and scheduling issues. Any interruption in the production or delivery of our supplies could reduce sales of our products and increase costs.
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We operate with a modest inventory, which may make it difficult for us to efficiently allocate capacity on a timely basis in response to changes in demand.
Our customers provide us with advance forecasts of their product requirements. However, due to the highly customizable nature of our components and large-scale products in particular, firm orders are not placed until negotiations on purchase prices and construction timelines are finalized and definitive orders are placed several months prior to delivery.
As a result, firm orders may be less than anticipated based on these prior forecasts. Although we typically operate with an inventory level estimated for several months, it may be difficult for us to adjust production costs or to allocate production capacity in a timely manner to compensate for any such modifications in order volumes. Our inability to respond quickly to changes in overall demand for architectural media glass as well as changes in product mix and specifications may result in lost revenue, which would adversely affect our results of operations.
We may experience losses on inventories.
The customizable nature of most of our projects makes it difficult for us to maintain usable stock of finished or semi-finished products. As a result, our inventory consists mostly of raw materials including, glass stocks, LEDs, aluminum extrusion, resins, adhesives, drivers, FPCBs and spacer tape, among other items. Our ability to fulfil orders in a timely manner regardless of their size is dependent on the maintenance of adequate reserves of raw materials in our inventory.
We manage our inventory based on our customers’ and our own forecasts and typically operate with an inventory level estimated for several months. Although adjustments are regularly made based on market conditions, we typically deliver our goods to the customers within several months after a firm order has been placed. While we maintain open channels of communication with our major customers to avoid unexpected decreases in firm orders or subsequent changes to placed orders, and try to minimize our inventory levels, such actions by our customers may have an adverse effect on our inventory management. Other factors affecting our inventory levels include the shelf life of our raw materials and the production capacity of our manufacturing facilities.
Any issues or delays in meeting our projected manufacturing costs and production capacity could adversely impact our business, prospects, operating results and financial condition.
Future events could result in issues or delays in further ramping our products and expanding production output at our existing and future operating lines. In order to achieve our volume and the anticipated ramp in production of our products, we must continue to sustain and ramp significant production at our two, existing production lines. We are not currently employing a full degree of automation in the manufacturing processes for our products. If we are unable to maintain production at our two facilities, ramp output additionally over time as needed, and do so cost-effectively, or if we are unable to attract, hire and retain a substantial number of highly skilled personnel, our ability to supply our products could be negatively impacted, which could negatively affect our brand and harm our business, prospects, financial condition and operating results.
Our failure to properly manage the distribution of our products and services could result in the loss of revenues and profits.
We utilize a direct sales force, as well as a network of distribution and integration partners, to market and sell our products and services. We are continually reviewing our go-to-market strategy to help ensure that we are reaching the most customers that we can and with the highest level of service. At times, this may require strategic changes to our sales organization or enlisting or dropping various distributors in certain regions, which could result in additional costs or operational challenges. Successfully managing the interaction of our direct and indirect sales channels to reach various potential customers for our products and services is a complex process. In addition, our reliance on indirect selling methods may reduce visibility to demand and pricing issues.
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To support the expansion of our business internationally, we may decide to make changes to our operating structure in other countries when we believe these changes will make us more competitive by reaching additional customers, offering faster delivery, importation services, and/or local currency sales. These new operating models may require changes in legal structures, business systems, and business processes that may result in significant business disruption and negatively impact our customers’ experience, resulting in loss of sales. Furthermore, as we assume more responsibility for the importation of our products into other countries, we face higher compliance risk in adhering to local regulatory and trade requirements. Finally, the local stocking of our products in countries outside of our primary distribution centers may result in higher costs and increased risk of excess or obsolete inventory associated with maintaining the appropriate level and mix of stock in multiple inventory locations, resulting in lower gross margins.
Our go-to-market strategy has distinct risks and costs, and therefore, our failure to implement the most advantageous balance in the sales and operating model for our products and services could have a material adverse effect on our revenue and profitability.
Our business involves complex manufacturing processes that may cause personal injury or property damage, subjecting us to liabilities and possible losses or other disruptions of our operations in the future, which may not be covered by insurance.
Our business involves complex manufacturing processes. Some of these processes, such as various forms of durability testing, involve high pressures, temperatures and other hazards that present certain safety risks to workers employed at our manufacturing facilities. The potential exists for accidents involving death or serious injury. The potential liability resulting from any such accident to the extent not covered by insurance, could result in unexpected cash expenditures, thereby reducing the cash available to operate our business. Such an accident could disrupt operations at any of our facilities, which could adversely affect our ability to deliver products to our customers on a timely basis and to retain our current business.
Operating hazards inherent in our business, some of which may be outside of our control, can cause personal injury and loss of life, damage to or destruction of property, plant and equipment and environmental damage. We maintain insurance coverage in amounts and against the risks we believe are consistent with industry practice, but this insurance may not be adequate or available to cover all losses or liabilities we may incur in our operations. Our insurance policies are subject to varying levels of deductibles. Losses up to our deductible amounts accrue based upon our estimates of the ultimate liability for claims incurred and an estimate of claims incurred but not reported. However, liabilities subject to insurance are difficult to estimate due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, the number of incidents not reported and the effectiveness of our safety programs. If we were to experience insurance claims or costs above our estimates, we might also be required to use working capital to satisfy these claims.
Our business relies on our patent rights which may be narrowed in scope or found to be invalid or otherwise unenforceable.
Our success will depend, to a significant extent, on our ability to obtain and enforce our patent rights both in Korea and worldwide. The coverage claimed in a patent application can be significantly reduced before a patent is issued, either in Korea or abroad. Consequently, we cannot provide assurance that any of our pending or future patent applications will result in the issuance of patents. Patents issued to us may be subjected to further proceedings limiting their scope and may not provide significant proprietary protection or competitive advantage. Our patents also may be challenged, circumvented, invalidated or deemed unenforceable. In addition, because patent applications in certain countries generally are not published until more than 18 months after they are first filed, and because publication of discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were, or any of our licensors was, the first creator of inventions covered by pending patent applications, that we or any of our licensors will be entitled to any rights in purported inventions claimed
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in pending or future patent applications, or that we were, or any of our licensors was, the first to file patent applications on such inventions.
Furthermore, pending patent applications or patents already issued to us or our licensors may become subject to dispute, and any dispute could be resolved against us. For example, we may become involved in re-examination, reissue or interference proceedings and the result of these proceedings could be the invalidation or substantial narrowing of our patent claims. We also could be subject to court proceedings that could find our patents invalid or unenforceable or could substantially narrow the scope of our patent claims. In addition, depending on the jurisdiction, statutory differences in patentable subject matter may limit the protection we can obtain on some of our inventions.
Failure to protect our intellectual property rights could impair our competitiveness and harm our business and future prospects.
We believe that the fact that we produce G-Glass from fully proprietary, self-developed production machines and equipment, and are the only market player that can offer products of this kind are critical to the success of our business. We take active measures to obtain international protection of our intellectual property by obtaining patents and undertaking monitoring activities in our major markets. However, we cannot assure you that the measures we are taking will effectively deter competitors from improper use of our proprietary technologies. Our competitors may misappropriate our intellectual property, disputes as to ownership of intellectual property may arise and our intellectual property may otherwise become known or independently developed by our competitors.
We may in the future be subject to claims that former employees, collaborators, or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our products. Litigation may be necessary to defend against these and other claims challenging inventorship. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
Any failure to protect our intellectual property could impair our competitiveness and harm our business and future prospects.
We are subject to potential exposure to environmental liabilities and are subject to environmental regulation and any such liabilities or regulation may negatively affect our costs and results of operations in the future.
Our manufacturing processes involve hazardous materials and generate industrial waste such as used glass containing resin at various stages in the manufacturing process, and we are subject to a variety of laws and regulations relating to the use, storage, discharge and disposal of waste substances, which are frequently changing and becoming more stringent. Although we have enacted safety measures, engaged in employee education on handling such materials and installed various types of safety equipment, consistent with industry standards, for the treatment of such industrial waste, engages a professional third party industrial waste management service provider and believe that our facilities are materially in compliance with such laws and regulations, we cannot provide assurance that our protocols will always be followed by our employees or the third party service provider and safety or environmental related claims will not be brought against us or that the local or national governments will not take steps toward adopting more stringent safety or environmental standards.
Furthermore, as owners of real property, our subsidiaries can be held liable for the investigation or remediation of contamination on such properties, in some circumstances, without regard to whether we knew of
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or were responsible for such contamination. Remediation may be required in the future because of spills or releases of hazardous substances, the discovery of unknown environmental conditions, or more stringent standards regarding existing residual contamination. Environmental regulatory requirements may become more burdensome, increase our general and administrative costs, the availability of construction materials, raw materials and energy, and increase the risk that our subsidiaries incur fines or penalties or be held liable for violations of such regulatory requirements. New regulations regarding climate change may also increase our expenses and eventually reduce our sales.
Earthquakes, tsunamis, floods, severe health epidemics (including the ongoing global COVID-19 pandemic and any possible recurrence of other types of widespread infectious diseases) and other natural calamities could materially adversely affect our business, results of operations or financial condition.
If earthquakes, tsunamis, floods, fires, extreme weather events (whether as a result of climate change or otherwise), severe health epidemics (such as the COVID-19 pandemic) or any other natural calamities were to occur in the future in any area where any of our assets, suppliers or customers are located, our business, results of operations or financial condition could be adversely affected. A number of suppliers of our raw materials, components and manufacturing equipment, as well as certain of our manufacturing facilities, are located in countries which have historically suffered natural calamities from time to time, such as China and Korea. Any occurrence of such natural calamities in countries where our suppliers are located may lead to shortages or delays in the supply of raw materials, components or manufacturing equipment. In addition, natural calamities in areas where our customers are located, including Korea, China, Japan, the United States and Europe, may cause disruptions in their businesses, which in turn could adversely impact their demand for our products. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster and to execute successfully on those plans in the event of a disaster or emergency, our business would be seriously harmed.
Our business, results of operations and financial condition have been, and could continue to be, adversely affected by the COVID-19 pandemic.
The ongoing COVID-19 pandemic has impacted our business and we expect it to continue to do so. Governments and businesses have taken, and may continue to take, unprecedented measures in response to the COVID-19 pandemic. Such measures have included restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelter-in-place orders. The COVID-19 pandemic has caused significant volatility and disruption in global financial markets.
The COVID-19 pandemic and the measures taken by many countries in response have had an adverse impact on, and could continue to adversely impact, our business, results of operations and financial condition. These include:
| • | disruption in demand for our G-Glass, including a slow-down in the construction industry, which has resulted and may continue to result in a decline in the prices we are able to charge for the sale of G-Glass; |
| • | effects on our industry partners’ and potential industry partners’ ability or willingness to invest in new technologies or to work with us; |
| • | a decrease in the total possible output of our manufacturing facilities for our technology platform; |
| • | delays in the delivery of our G-Glass and limitation on our ability to operate our business as a result of federal, state or local regulations imposed as a result of COVID-19, including the temporary suspension of operations at our manufacturing facility in Tianjin, China; |
| • | limitations on our industry partners’ ability to conduct partnering activities in a timely manner; and |
| • | disruption in GLAAM’s supply chain for certain components. |
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We believe the aforementioned factors impact our revenues directly in instances where we participate in projects with industry partners and indirectly in instances where we are party to licensing agreements with industry partners and collect lower royalty fees. In turn, the negative impact on our revenues had, and may continue to have, a material adverse effect on our financial condition.
As a result of reduced revenues related to the COVID-19 pandemic, beginning in
November 2020, GLAAM was unable to pay outstanding principal and interest in the amount of W12,748,749,522 due on a loan from the Korean Development Bank secured by GLAAM’s office building and Korean manufacturing facility, the
land thereunder and the manufacturing equipment inside of GLAAM’s Korean manufacturing facility. On May 28, 2021, the Korean Development Bank reclassified the loan as non-performing and transferred the loan and its rights thereunder to an asset
securitization firm, UAMCO. UAMCO executed on the lien over the collateral and initiated an auction process. On September 26, 2022, Powergen, an IT consulting company that is majority-owned by Jeong-Kyu Lee, Mr. Ho-Joon Lee’s brother, purchased
the collateral, GLAAM’s office building and Korean manufacturing facility, the land thereunder and the manufacturing equipment inside of GLAAM’s Korean manufacturing facility, at auction for an aggregate amount of
W7,800,000,000 from UAMCO. On December 21, 2022, GLAAM entered into the Powergen Equipment Purchase Agreement, an asset purchase and sale agreement with Powergen, pursuant to which GLAAM repurchased from Powergen GLAAM’s
manufacturing equipment inside of its Korean manufacturing facility for W1,509,653,642. On December 22, 2022, GLAAM entered into the Powergen Manufacturing Facility and Land Purchase Agreement, an asset purchase and sale agreement
with Powergen Co, pursuant to which GLAAM repurchased from Powergen GLAAM’s office building and Korean manufacturing facility, the land thereunder for W6,618,317,849. The transfer of GLAAM’s assets from Powergen to GLAAM
pursuant to the Powergen Purchase Agreements was completed on December 29, 2022.
Also due to GLAAM’s reduced revenues related to the COVID-19 pandemic, GLAAM has been unable to repay and is overdue on, certain related party loans. Please see the section of the proxy statement/prospectus entitled “Certain GLAAM and New PubCo Relationships and Related Party Transactions—GLAAM—Related Party Financings.”
The full extent of the impact of the COVID-19 pandemic on our operational and current and future financial performance is currently uncertain and will depend on many factors outside our control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the availability of effective treatments and vaccines, the emergence, severity and spread of potential variants of the virus that causes COVID-19, the imposition of and compliance with protective public safety measures, and the impact of the pandemic on the global economy and on the demand for the products produced using our process technologies and our ability to maintain current and foster new relationships with our industry partners. We are continuing to monitor the situation and take appropriate actions in accordance with the recommendations and requirements of relevant authorities.
We continue to face significant risks associated with our international expansion strategy.
We are continuing to seek new opportunities to produce and commercialize products using our process technologies outside the Korea through entering into licensing and distribution with new and existing industry partners. Overall, the expenses and long lead times inherent in our efforts to pursue international business opportunities have slowed, and are expected to continue to slow, the implementation of our expansion strategy, particularly in light of our ongoing capital constraints, and have limited, and are expected to continue to limit, the revenue that we receive as a result of our efforts to develop international business in the short term. More broadly, our international business operations are subject to a variety of risks, including:
| • | challenges associated with operating in diverse cultural and legal environments, including legal restrictions that impact our ability to enter into strategic partnering arrangements; |
| • | the need to comply with a variety of Korean laws applicable to the conduct of overseas operations, including export control laws and local law requirements; |
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| • | our ability, or reduced ability, to protect our intellectual property in certain countries; |
| • | potential for longer sales cycles in certain countries; |
| • | changes in or interpretations of foreign rules and regulations that may adversely affect our or our industry partners’ ability to produce or sell products manufactured using our process technologies or repatriate profits to Korea; |
| • | economic, political or social instability in foreign countries; |
| • | difficulties in staffing and managing foreign and geographically dispersed operations including our ongoing operations and planned operational growth in China; |
| • | changes in demand for products produced using our process technologies in international markets; |
| • | the imposition of tariffs and other foreign taxes; |
| • | the imposition of limitations on, or increase of, withholding and other taxes on remittances and other payments by foreign subsidiaries or joint ventures; and |
| • | the availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us. |
Our inability to overcome these obstacles could harm our business, financial condition and operating results. Even if we are successful in managing these obstacles, our industry partners internationally are subject to these same risks and may not be able to manage these obstacles effectively.
Our financial results could vary significantly from quarter to quarter and are difficult to predict.
Our financial results could vary significantly from quarter to quarter because of a variety of factors, many of which are outside of our control and are difficult to predict. As a result, comparing our results of operations on a period-to-period basis may not be meaningful. In addition to the risk factors stated herein, other factors that could cause our quarterly results of operations to fluctuate include:
| • | achievement of, or failure to achieve, technology or product development milestones needed to allow us to enter identified markets on a timely and cost-effective basis; delays or greater than anticipated expenses associated with the scale-up and the commercialization of process technologies to produce new products; |
| • | changes in the amount that we invest to develop, acquire or license new technologies and processes; |
| • | our ability to successfully enter into partnering arrangements, and the terms of those relationships (including levels of related capital contributions); |
| • | fluctuations in the prices or availability of the raw materials required to produce products using our process technologies or those of our competitors; |
| • | changes in the size and complexity of our organization, including our expanded operations as a public company; |
| • | changes in general economic, industry and market conditions, both domestically and in our foreign markets; |
| • | business interruptions, including disruptions in the production process at any facility where products produced using our process technologies are manufactured; |
| • | departure of executives or other key management employees; |
| • | changes in the needs for the products produced using our process technologies; |
| • | the development of new competitive technologies or products by others and competitive pricing pressures; |
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| • | the timing, size and mix of sales to our industry partners for products produced using our process technologies; |
| • | seasonal production and the sale of products produced using our process technologies; and |
| • | changes in governmental, accounting and tax rules and regulations, environmental, health and safety requirements, and other rules and regulations. |
Due to these and other factors, our financial results for any quarterly or annual period may not meet our expectations or the expectations of our investors and may not be meaningful indications of our future performance.
We may require substantial additional financing to fund our operations and complete the development and commercialization of the process technologies that produce each of our products or new aspects of our existing process technologies that produce each of our products, and we may not be able to do so on favorable terms.
Our operations have consumed substantial amounts of cash since inception, and we expect to substantially increase our spending, in particular, as we:
| • | enter into and engage in strategic partnering arrangements to produce products cost-effectively at acceptable quality levels and price points, including making capital contributions for the construction of certain plants; |
| • | invest in developments with respect to our existing process technologies in order to increase their effectiveness or reduce related capital expenditures; |
| • | expand our research and development efforts; |
| • | grow our business organization; |
| • | pursue select distribution opportunities; |
| • | seek to identify additional market opportunities for the products produced using our process technologies; and |
| • | pursue partnering arrangements. |
We believe our operating cash flow, short term financing capabilities, and our existing cash and cash equivalents will be sufficient to fund our operations for at least 12 months from the date of this proxy statement/prospectus. Although we believe we will have sufficient capital to continue our operations, we have faced, and continue to face, significant ongoing capital constraints in 2023 which have prevented us from implementing more aggressive sales efforts resulting in decreased pipeline growth and reduced conversion of our existing pipeline into revenue. Further, circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. Moreover, we and our industry partners may experience delays in the production of commercial quantities of products, in a manner that is cost-effective and at suitable quality levels, which would postpone our ability to generate revenue associated with the sale of such products. Securing additional financing could require a substantial amount of time and attention from our management and may divert a disproportionate amount of its attention away from our business activities, which may adversely affect our ability to conduct our day-to-day operations. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all.
As discussed above, our ongoing capital constraints have prevented us from implementing more aggressive sales efforts resulting in decreased pipeline growth and reduced conversion of our existing pipeline into revenue. If we are unable to raise additional capital when required or on acceptable terms, we may be required to:
| • | delay or suspend some or all of our manufacturing and commercialization efforts; |
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| • | decrease or abandon some or all of our research and development efforts; |
| • | decrease the financial resources dedicated to our partnering efforts, which may substantially postpone the development, manufacture, marketing or sale of existing and future products produced using our process technologies; and |
| • | suspend the growth of our organization. |
To raise additional funds to support our business operations, we may sell additional equity, or convertible debt securities, which would result in the issuance of additional shares of our capital stock and dilution to our stockholders. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we continue to be unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will be prevented from pursuing discovery, development and commercialization efforts and our ability to generate revenues and achieve or sustain profitability will be substantially harmed.
If we are unable to manage our growth and expand our operations successfully, our reputation and brand may be damaged and our business and results of operations may be harmed.
We expect our growth to accelerate in the future in connection with our commercialization efforts, expanded research and development activities, and as we transition to operating as a public company. Our ability to effectively manage our anticipated growth and expansion of our operations will require us to do, among other things, the following:
| • | enhance our operational, financial and management controls and infrastructure, human resource policies, and reporting systems and procedures; |
| • | effectively scale our operations; |
| • | successfully identify, recruit, hire, train, maintain, motivate and integrate additional employees; |
| • | expand our facilities and equipment; and |
| • | effectively manage and maintain our corporate culture. |
These enhancements and improvements will require significant capital expenditures and allocation of valuable management and employee resources, and our growth will continue to place a strain on our operational, financial and management infrastructure. Our future financial performance and our ability to execute on our business plan will depend, in part, on our ability to effectively manage any future growth and expansion. There are no guarantees we will be able to do so in an efficient or timely manner, or at all. Our failure to effectively manage growth and expansion could have a material adverse effect on our business, results of operations, financial condition, prospects and reputation.
Our results of operations are subject to exchange rate fluctuations, which may affect our costs and revenues.
There has been considerable volatility in foreign exchange rates in recent years, including rates between the Korean Won and the U.S. dollar, between the Korean Won and the Chinese Yuan, between the Korean Won and the Euro, and between the Korean Won and the Japanese Yen. To the extent that we incur costs in one currency and make sales in another, our profit margins may be affected by changes in the exchange rates between the two currencies.
To date, the majority of our revenue is derived from the Korean market; as a result, our revenue is denominated mainly in Korean Won. Most of our international sales are denominated in U.S. dollars, and, to a much lesser extent, Japanese Yen and Chinese Yuan. The majority of our costs and the largest proportion of our
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expenditures on capital equipment are denominated in Korean Won. Accordingly, fluctuations in exchange rates, in particular between the U.S. dollar and the Korean Won, between the Chinese Yuan and the Korean Won as well as between the Japanese Yen and the Korean Won, will affect our pre-tax income.
In recent years, the value of the Won relative to the U.S. dollar, Chinese Yuan and Japanese Yen has fluctuated widely. Although a depreciation of the Korean Won against the U.S. dollar increases the Korean Won value of our export sales and enhances the price-competitiveness of our products in foreign markets in U.S. dollar terms, it also increases the cost of imported raw materials and components in Korean Won terms.
A depreciation of the Korean Won against the Chinese Yuan or Japanese Yen increases the Korean Won cost of our Chinese Yuan- or Japanese Yen-denominated purchases of equipment, raw materials or components, as applicable. Despite the fact that the majority of our costs and revenues are in Korean Won, continued exchange rate volatility may also result in foreign exchange losses for us. Although a depreciation of the Korean Won against the U.S. dollar, in general, has a net positive impact on our results of operations that more than offsets the net negative impact caused by a depreciation of the Korean Won against the Chinese Yuan or Japanese Yen, we cannot provide assurance that the exchange rate of the Korean Won against foreign currencies will not be subject to significant fluctuations, or that the impact of such fluctuations will not adversely affect the results of our operations.
Increasing interest rates could materially adversely affect our ability to generate positive cashflows and secure financing required to carry out our strategic plans.
Historically, portions of our debt have been indexed to variable interest rates that are affected by a variety of factors over which we have no control. A rise in interest rates could negatively impact the cost of financing for a portion of our debt with variable interest rates which could negatively impact our cash flow generation. Furthermore, a rise in interest rates could limit our ability to obtain financing required to support our growth through our continuing programs designed to develop new products, expand the capacity of our manufacturing facilities and execute our business strategy. While we may mitigate the risk derived from interest rate fluctuations by entering into derivative contracts or by obtaining fixed rate financing, general increases in interest rates would still have an impact on the cost of financing and our ability to obtain appropriate funding.
Government regulation of DOOH media may restrict our out-of-home advertising operations.
Regulation of the DOOH media industry varies by municipality, region and country, but generally limits the size, placement, hours of operations, nature and density of out-of-home displays. Other regulations limit the subject matter, animation and language of out-of-home displays. Our failure to comply with these or any future regulations could have an adverse impact on the effectiveness of our architectural media glass installations or their attractiveness to clients as an advertising medium. As a result, we may experience a significant impact on our operations, revenue, international client base and overall financial condition.
We have encountered regulations that restrict or prohibit digital displays, such as our digital billboards that display digital advertising copy from various advertisers which changes several times per minute. Since digital billboards have been developed and introduced relatively recently into the market on a large scale, existing regulations that currently do not apply to them by their terms could be revised or new regulations could be enacted to impose greater restrictions on digital billboards due to alleged concerns over aesthetics or driver safety. Any new restrictions on digital billboards could have a material adverse effect on both our existing inventory of digital billboards and our plans to expand our digital deployment.
A number of state and local governments have implemented or initiated taxes, fees and registration requirements in an effort to decrease or restrict the number of outdoor signs and/or to raise revenue. From time to time, legislation also has been introduced in international jurisdictions attempting to impose taxes on revenue from out-of-home advertising, for the right to use out-of-home advertising assets or for the privilege of engaging
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in the out-of-home advertising business. Several jurisdictions have imposed such taxes as a percentage of our out-of-home advertising revenue generated in that jurisdiction or based on the size of the billboard and type of display technology. In addition, some jurisdictions have taxed companies’ personal property and leasehold interests in advertising locations using various valuation methodologies. We expect U.S. and foreign jurisdictions to continue to try to impose such taxes as a way of increasing revenue. The increased imposition of these measures, and our inability to overcome any such measures, could adversely affect our operating income if we are unable to pass on the cost of these items to our customers.
Regulations governing categories of products that can be advertised through our products vary across the countries in which we conduct business. Certain products and services, such as tobacco, are banned from outdoor advertising in the U.S., and other products, such as alcohol, may be targeted in the future. Most E.U. countries, among other nations, also have banned outdoor advertisements for tobacco products and regulate alcohol advertising. In the U.K., there are localized restrictions on the location of advertising for high fat, salt and sugar foods. While we don’t generate any revenues from such advertising today, any significant reduction in advertising of products due to content-related restrictions in the future could cause a reduction in our direct revenues from such advertisements and an increase in available space on the existing inventory of billboards in the out-of-home advertising industry.
The advancement of laws and regulations may not keep pace with the accelerating advancement of the digital signage industry and technology, which may have a detrimental effect on the growth of our industry.
Changes in government policies can have significant impacts on the profitability of our architectural media glass business. The revised Act on the Management of Outdoor Advertisements in Korea defines “digital advertising” as the “use of digital displays to provide information or advertisements.” However, defining digital outdoor advertising is complex because digital technology continues to evolve. Additionally, specific discussions surrounding a possible standardization of digital advertisements, display methods, and installation standards have yet to be carried out. Rather than approaching the issue as an ecosystem encompassing hardware, software and content industries, the scope of the current legal approach is limited to regulating advertisements. We believe that the Act on the Management of Outdoor Advertisements is a longer and more complex legal framework than other laws regulating media advertisements.
Because the installation and operation of advertisements are mandated by city and province regulations, even if the law is revised, the installation and operation of advertisements will be impossible unless the city, province, county, and local ordinances are also revised. Given the digital signage industry and technology are evolving fast, the laws and regulations may not keep the pace, and such time gap may hamper the growth of our industry.
Failures or security breaches of our networks or information technology systems could have an adverse effect on our business.
We rely heavily on information technology (“IT”) both in our products and services for customers and in our IT systems used to run our business. Government agencies and security experts have warned about growing risks of hackers, cyber-criminals, malicious insiders and other actors targeting confidential information and all types of IT systems. These actors may engage in fraudulent activities, theft of confidential or proprietary information and sabotage or ransomware.
Our IT systems, our connected products, and our confidential information, which we collect and store in our cloud-based data centers and on our networks, may be vulnerable to damage or intrusion from a variety of attacks including computer viruses, worms or other malicious software programs. The risk of such attacks may increase as we integrate newly acquired companies or develop new connected products and related software. These attacks pose a risk to the security of our products, systems and networks and those of our customers, suppliers and third-party service providers, as well as to the confidentiality of our information and the integrity and
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availability of our data. While we attempt to mitigate these risks through board oversight, controls, due diligence, employee training and communication, third party intrusion testing, system hardening, email and web filters, regular patching, multi-factor authentication, surveillance, encryption, and other measures, we remain vulnerable to information security threats.
We may experience cyber security threats and vulnerabilities in our systems and those of our third-party providers, and we have experienced viruses and attacks targeting our IT systems and networks. Despite the precautions we take, we could have an intrusion or infection of our systems or connected products. While we have not had such intrusions or infections to date, we cannot guarantee there will be no such intrusions or infections in the future. Similarly, an attack on our IT systems or connected products could result in theft or disclosure of trade secrets or other intellectual property, a breach of confidential customer or employee information, or product failure or misuse. Any such events could have an adverse impact on sales, harm our reputation and cause us to incur legal liability and increased costs to address such events and related security concerns. As the threats evolve and become more potent, we may incur additional costs to secure the products that we sell, as well as our data and infrastructure of networks and devices.
We do not have absolute control over the affiliates where we are the minority shareholder nor do we maintain control over the actions of other shareholders. Actions of other shareholders of affiliates could negatively impact our performance.
We do not have a majority ownership stake in each of G-SMATT Japan Co., Ltd. (“G-SMATT Japan”), G-SMATT Hong Kong Co., Ltd. (“G-SMATT Hong Kong”) and Tian Jin CECEP Brillshow Co., Ltd. (“Brillshow”), a joint venture with China Energy Conservation and Environmental Protection Group (“CECEP”). Although together with G-Frame Co., Ltd., a wholly-owned subsidiary of GLAAM (“G-Frame”), we own a majority stake in G-SMATT America Co., Ltd. (“G-SMATT America”), GLAAM does not individually own a majority stake in G-SMATT America. As a result, we do not have absolute control over the operations of such companies nor do we maintain control over the actions of other shareholders.
In many cases, other shareholders may share, certain approval rights over major decisions and these investments may involve risks not otherwise present with other methods of investment, including, but not limited to:
| • | that other shareholders might become bankrupt, which would mean that we and any other remaining shareholders would generally remain liable for the corporation’s, partnership’s, limited liability company’s or joint venture’s liabilities; |
| • | that other shareholders may at any time have economic or business interests or goals which are or which become inconsistent with our business interests or goals; |
| • | that other shareholders may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives; For example, Zhōng Jiénéng New Material Investment Co., Ltd., our co-venturer in Brillshow, is entitled to elect a majority of the board of directors of, and thereby exercise control over Brillshow; |
| • | that, if other shareholders fail to fund their share of any required capital contributions, we may be required to contribute that capital; |
| • | that joint venture or shareholders agreements often restrict the transfer of other shareholders’ interest or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms; |
| • | that our relationships with other shareholders are contractual in nature and may be terminated or dissolved under the terms of the agreements and, in each event, we may not continue to own or operate the interests or assets underlying the relationship or may need to purchase these interests or assets at an above-market price to continue ownership; |
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| • | that disputes between us and any of other shareholders may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business; and |
| • | that we may in certain circumstances be liable for the actions of other shareholders. |
Our joint distribution agreement with G-SMATT Global, which is in effect until 2025, may adversely affect our financial results.
Pursuant to the Distribution Agreement dated as of July 31, 2015, between the Company and G-SMATT Global Co., Ltd. (“G-SMATT Global”), as amended on March 7, 2019 (the “G-SMATT Global Distribution Agreement”), GLAAM granted G-SMATT Global the joint right with GLAAM to distribute G-Glass in any and all territories worldwide, except China, until July 31, 2025.
In December 2013, the Company granted Brillshow exclusive distribution and manufacturing rights in China. Subsequently, in July 2016, Brillshow granted the Company permission to distribute in China. As a result of ongoing restrictions imposed by the Chinese government relating to the COVID-19 pandemic, Brillshow’s manufacturing and distribution business in China is currently non-operational and, as of the date of this proxy statement/prospectus, Brillshow does not currently have a plan to resume such operations. Since GLAAM has permission to distribute its products in China, GLAAM is not currently restricted from distributing and selling products in China that GLAAM has manufactured in its Korean manufacturing facility while Brillshow’s factory remains non-operational.
Under the G-SMATT Global Distribution Agreement, the pricing of the products produced by GLAAM and sold to G-SMATT Global for distribution are mutually agreed between the parties, provided that the parties ensure there is an appropriate margin for GLAAM. Further, where G-SMATT Global pursues a project, whether in Korea or abroad, the prices of the products shall be decided by mutual consultation by GLAAM and G-SMATT Global prior to the submission of project proposals. In addition, in the event that GLAAM and G-SMATT Global jointly develop a new product, (i) any rights to such product, including any intellectual property rights, will be jointly owned by GLAAM and G-SMATT Global and (ii) GLAAM will have the right to exclusively produce, and G-SMATT Global will have the right to exclusively distribute, such product.
Although G-SMATT Global is currently undergoing bankruptcy proceedings, we believe that our efforts to mitigate the effects of the bankruptcy have insulated us from any material impacts on our business functions, financial condition and result of operation. In September 2018, as part of G-SMATT Global’s restructuring process, GLAAM’s management decided to sell G-SMATT Global. As part of the terms of the sale, (i) GLAAM and G-SMATT Global were given dual distribution rights to distribute G-Glass in any and all territories worldwide, except China, and (ii) all staff involved in the G-Glass operation within G-SMATT Global were transferred to GLAAM. The sale of G-SMATT Global was completed in March 2019.
As a result of the sale and GLAAM gaining joint distribution rights to distribute G-Glass in any and all territories worldwide, except China, GLAAM did not suffer any disruption of its operations. Since the start of G-SMATT Global’s bankruptcy proceedings, GLAAM has retained no material relationship or transactional or financial link with G-SMATT Global. As such, G-SMATT Global’s bankruptcy had no material impact on GLAAM’s financial condition or results of operation. Once the G-SMATT Global Distribution Agreement expires in 2025, GLAAM will regain full distribution rights.
Although G-SMATT Global has expressed that it has no intent to distribute our products, we cannot assure you that G-SMATT Global will not successfully emerge from bankruptcy and exercise its rights under the G-SMATT Global Distribution Agreement, potentially imposing restrictions on GLAAM’s ability to price its products, which may adversely affect our business, results of operations and/or financial condition.
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Our Excellent Product designation of G-Glass by the Public Procurement Service of Korea expires on March 31, 2025, which may materially adversely affect our domestic government sales.
All businesses who wish to supply goods and services to government agencies in Korea are required to compete through a public tender process to ensure transparency and fair competition, except for goods designated as “Excellent Quality Products” by the Public Procurement Service of Korea (“PPS”). In such case, government agencies can enter into agreements and transact without a public tender.
PPS has been operating the Excellent Quality Products program since 1996, which aims to provide support to prominent small and medium-sized domestic businesses and venture companies struggling to supply their products to government institutions. The program grants the designation of Excellent Quality Products to technologies that achieve certified standards for Korean Technology, New Technology, Excellent Machine, Mechanism & Materials, Innovative Technology, Good Recycled Product, Good Quality, electric technologies, construction technologies, and patents following a rigorous evaluation by PPS.
Once a product obtains the Excellent Quality Product designation, PPS registers the designated product as a government-supply product and contracts with the company. PPS subsequently procures advertisement and promotional services and promotes the product as an Excellent Quality Product to various government agencies and public institutions.
G-Glass has been a registered Excellent Quality Product since 2020, which has allowed us to enter into contracts with government agencies without participating in public tendering procedures. However, G-Glass’ Excellent Quality Product designation will expire on March 31, 2025, after which we will lose the exemption from the public tender requirement. This may result in a decrease in revenues generated from government contracts which could have a negative impact on our financial condition and results of operation.
Risks Related to South Korea and Other Countries Where We Operate
If economic conditions in South Korea deteriorate, our current business and future growth could be materially and adversely affected.
We are headquartered in Korea and a substantial portion of our operations and assets are located in Korea. In addition, the vast majority of our installed projects are located in Korea. As a result, we are subject to political, economic, legal and regulatory risks specific to Korea, and our performance and successful fulfillment of our operational strategies are dependent in large part on the overall Korean economy. The economic indicators in Korea in recent years have shown mixed signs of growth and uncertainty, and starting in 2020, the Korean and global economies were affected as a result of the COVID-19 pandemic. As a result, future growth of the Korean economy is subject to many factors beyond our control, including developments in the global economy.
The Korean economy is closely tied to, and is affected by developments in, the global economy. In recent years, adverse conditions and volatility in the worldwide financial markets, fluctuations in oil and commodity prices, and the COVID-19 pandemic, have contributed to the uncertainty of global economic prospects in general and have adversely affected, and may continue to adversely affect, the Korean economy. Due to liquidity and credit concerns and volatility in the global financial markets, the value of the Korean Won relative to the U.S. dollar and other foreign currencies and the stock prices of Korean companies have fluctuated significantly in recent years. Further declines in the Korea Composite Stock Price Index, and large amounts of sales of Korean securities by foreign investors and subsequent repatriation of the proceeds of such sales may adversely affect the value of the Korean Won, the foreign currency reserves held by financial institutions in Korea, and the ability of Korean companies to raise capital. Any future deterioration of the Korean economy or the global economy could adversely affect our business, financial condition, and results of operations.
Potential developments that have had or could have an adverse impact on Korea’s economy include:
| • | adverse conditions or developments in the economies of countries and regions that are important export markets for Korea, such as China, the United States, Europe, and Japan, or in emerging market |
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| economies in Asia or elsewhere, including as a result of deteriorating economic and trade relations between the United States and China and increased uncertainties resulting from the United Kingdom’s exit from the European Union; |
| • | adverse changes or volatility in foreign currency reserve levels, commodity prices (including oil prices), exchange rates (including fluctuation of the Korean Won, the U.S. dollar, the euro or other exchange rates, or the revaluation of the Chinese Renminbi), interest rates, inflation rates, or stock markets; |
| • | increased sovereign default risk of select countries and the resulting adverse effects on the global financial markets; |
| • | a deterioration in the financial condition or performance of small- and medium-sized enterprises and other companies in Korea due to the Korean government’s policies to increase minimum wages and limit working hours of employees; |
| • | investigations of large Korean business groups and their senior management for possible misconduct; |
| • | a continuing rise in the level of household debt and increasing delinquencies and credit defaults by retail and small- and medium-sized enterprise borrowers in Korea; |
| • | the continued emergence of the Chinese economy, to the extent its benefits (such as increased exports to China) are outweighed by its costs (such as competition in export markets or for foreign investment and the relocation of the manufacturing base from Korea to China), as well as a slowdown in the growth of China’s economy, which is one of Korea’s most important export markets; |
| • | the economic impact of any pending or future free trade agreements or of any changes to existing free trade agreements; |
| • | social or labor unrest; |
| • | substantial changes in the market prices of Korean real estate; |
| • | a decrease in tax revenue and a substantial increase in the Korean government’s expenditures for fiscal stimulus measures, unemployment compensation, and other economic and social programs that, together, would lead to an increased government budget deficit; |
| • | financial problems or lack of progress in the restructuring of certain Korean conglomerates, certain other large troubled companies, or their suppliers; |
| • | loss of investor confidence arising from corporate accounting irregularities and corporate governance issues concerning certain Korean conglomerates; |
| • | increases in social expenditures to support an aging population in Korea or decreases in economic productivity due to the declining population size in Korea; |
| • | geopolitical uncertainty and risk of further attacks by terrorist groups around the world; |
| • | the occurrence of severe health epidemics in Korea or other parts of the world, such as the COVID-19 pandemic; |
| • | deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from territorial or trade disputes or disagreements in foreign policy (such as the ongoing trade disputes with Japan); |
| • | political uncertainty or increasing strife among or within political parties in Korea; |
| • | hostilities or political or social tensions involving oil producing countries in the Middle East and North Africa and any material disruption in the global supply of oil or increase in the price of oil; |
| • | an increase in the level of tensions or an outbreak of hostilities between North Korea and Korea or the United States; |
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| • | political or social tensions involving Russia and any resulting adverse effects on the global supply of oil or the global financial markets; |
| • | natural or man-made disasters that have a significant adverse economic or other impact on Korea or its major trading partners; and |
| • | changes in financial regulations in Korea. |
We are subject to the risks of operations in the United Kingdom, China, Japan, Hong Kong and the United States.
We have subsidiaries in the United Kingdom, China, Japan, Hong Kong and the United States and a manufacturing plant in Tianjin, China. Consequently, we are subject to the economic, political and tax conditions prevalent in the countries in which we have our subsidiaries and manufacturing facilities, including:
| • | fluctuations in the value of local currencies; |
| • | labor unrest, difficulties in staffing and geographic labor shortages; |
| • | longer payment cycles; |
| • | cultural differences; |
| • | increases in duties, tariffs, and taxation levied on our products including anti-dumping and countervailing duties; |
| • | trade restrictions including limitations on imports or exports of components or assembled products, unilaterally or bilaterally; |
| • | trade sanctions and related regulatory enforcement actions and other proceedings; |
| • | potential trade wars; |
| • | increased scrutiny by the media and other third parties of labor practices within our industry (including but not limited to working conditions) which may result in allegations of violations, more stringent and burdensome labor laws and regulations and inconsistency in the enforcement and interpretation of such laws and regulations, higher labor costs, and/or loss of revenues if our customers become dissatisfied with our labor practices and diminish or terminate their relationship with us; |
| • | imposition of restrictions on currency conversion or the transfer of funds; |
| • | expropriation of private enterprises; |
| • | ineffective legal protection of our intellectual property rights in certain countries; |
| • | natural disasters; |
| • | exposure to infectious disease, epidemics and pandemics, including the effects of the COVID-19 on our business operations in geographic locations impacted by the outbreak and on the business operations of our customers and suppliers; |
| • | inability of international customers and suppliers to obtain financing resulting from tightening of credit in international financial markets; |
| • | political unrest; and |
| • | a potential reversal of current favorable policies encouraging foreign investment or foreign trade by our host countries. |
Our manufacturing facility located in Tianjin, China temporarily suspended its operations in March 2020 and has not yet restarted production due to COVID-19 pandemic restrictions imposed by the Chinese government
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on manufacturers. While it was operational, our Chinese production capabilities were primarily geared towards the domestic Chinese market. If and when we resume manufacturing at our Tianjin facility, our attractiveness to customers and our ability to expand our operations may be affected by changes in United States and other jurisdictions’ trade policies.
In 2018, the United States imposed tariffs on a large variety of products of Chinese origin. On May 10, 2019, the United States increased tariffs on $200 billion of Chinese goods to 25%. Further, on May 15, 2019, former President Donald Trump issued an executive order designed to secure the information and communications technology and services supply chain, which would restrict the acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries. The executive order is subject to implementation by the Secretary of Commerce and applies to contracts entered into prior to the effective date of the order. In addition, the U.S. Commerce Department has implemented additional restrictions and may implement further restrictions that would affect the conduct of business with certain Chinese companies. A “phase one” trade deal signed between the United States and China on January 15, 2020 accompanied a U.S. decision to cancel a plan to increase tariffs on an additional list of Chinese products and to reduce the tariffs imposed on May 13, 2019 from 15% to 7.5% effective February 14, 2020. With U.S.-China discussions over the “phase one” trade deal potentially stalled, there is a risk the current administration may consider raising tariffs on critical Chinese industries while rolling back tariffs for other products. At present, the majority of tariff exclusions granted have expired and many of the additional tariffs on Chinese origin goods remain, as do concerns over the stability of bilateral trade relations, particularly given the limited scope of the phase one agreement. In addition, China has not met its obligations under the deal and the economic disruption caused by the COVID-19 pandemic increases the potential for China to invoke the deal’s “disaster clause,” which could further challenge US-China bilateral trade relations. Depending upon their duration and implementation as well as our ability to mitigate their impact, these tariffs, the executive order and its implementation and other regulatory actions could materially affect our business, including in the form of increased cost of goods sold, decreased margins, increased pricing for customers, and reduced sales.
In addition, U.S.-China bilateral trade relations remain uncertain. At this time, there is no assurance that a broader trade agreement will be successfully negotiated between the United States and China to reduce or eliminate the existing tariffs. Furthermore, in China, governmental authorities exercise significant influence over many aspects of the economy, and their actions could have a significant effect on us.
Operations in foreign countries also present risks associated with currency exchange and convertibility, inflation and repatriation of earnings. Inflation may impact our profits and cash flows as well as adversely affect foreign exchange rates. In some countries, economic and monetary conditions and other factors could affect our ability to convert our cash distributions to U.S. dollars or other freely convertible currencies, or to move funds from our accounts in these countries. Furthermore, the central bank of any of these countries may have the authority to suspend, restrict or otherwise impose conditions on foreign exchange transactions or to approve distributions to foreign investors.
Increased tensions with North Korea could adversely affect the South Korean economy and, consequently, our results of operations and financial condition in the future.
Relations between South Korea and North Korea have been tense throughout South Korea’s modern history. The level of tension between the two countries has fluctuated and may increase abruptly as a result of current and future events. In particular, there have been heightened security concerns stemming from North Korea’s nuclear weapons and ballistic missile programs and its hostile military actions against Korea.
North Korea’s economy also faces severe challenges, which may further aggravate social and political pressures within North Korea. Although bilateral summit meetings were held between the two nations in April, May and September 2018 and between the United States and North Korea in June 2018, February 2019 and June
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2019 (held at the Korean Demilitarized Zone), North Korea has since resumed its missile testing, heightening tensions, and the outlook of such discussions remains uncertain. As such, there can be no assurance that the level of tension on the Korean peninsula will not escalate further in the future. Any such further increase in tensions, which may occur, for example, if North Korea experiences a leadership or economic crisis, high-level contacts between South Korea and North Korea break down or further military hostilities occur, could have a material adverse effect on the South Korean economy and on our business, prospects, financial condition and results of operations and could lead to a decline in the market value of the securities of New PubCo.
Our businesses and partnerships may be affected by geopolitical tensions between China and the United States.
In recent years, there has been a deterioration in the relationship between China and the United States which has resulted in intense potential conflicts between the two countries in trade, technology, finance and other areas, and this has led to greater uncertainties in the geopolitical situations in other parts of the world affecting China, Chinese companies and companies that have business relationships with Chinese companies. For example, economic and trade sanctions have been threatened and/or imposed by the U.S. government on a number of Chinese technology companies. The United States has also threatened to impose further sanctions, trade embargoes, and other heightened regulatory requirements. Most recently, in August 2020 and January 2021, former U.S. President Donald Trump issued Executive Orders 13942, 13943 and 13971, setting forth restrictions on persons subject to U.S. jurisdiction from entering into certain transactions within the United States involving TikTok, WeChat and WeChat Pay and eight other Chinese-linked communications and financial technology software applications. The U.S. District Court for the District of Columbia enjoined enforcement of the EO 13942 restrictions on September 19, 2020 and the U.S. District Court for the Northern District of California enjoined enforcement of the EO 13943 restrictions on September 27, 2020. Although President Biden issued Executive Order 14034 on June 9, 2021 (the “EO 14034”) revoking these three Trump administration executive orders, the EO 14034 reaffirms that apps designed, developed, manufactured or supplied by “foreign adversaries” may present national security concerns, particularly with regard to access by persons owned, controlled, or subject to the jurisdiction of “foreign adversaries,” including China.
While our manufacturing facility in Tianjin, China, is currently not operational due to COVID-19 pandemic restrictions imposed by the Chinese government on manufacturers, once those restrictions are lifted we expect to be able to resume production at the Tianjin factory if there is increased demand for our products in the future. In addition, we utilize G-SMATT TECH Co., Ltd., our wholly-owned subsidiary, and Brillshow, both Chinese entities, for distribution of our products within China. Accordingly, any further deterioration of U.S.-China relations or further sanctions involving Chinese companies with whom we may do business may be detrimental and have an adverse impact on our business.
Further militarization of the South Pacific in response to the growing military strength of China could destabilize political relationships in the region and impact regional businesses.
We utilize G-SMATT TECH Co., Ltd., our wholly-owned subsidiary, and Brillshow, our joint venture manufacturing facility, both Chinese entities, for distribution of our products within China.
Over the past two decades, China has significantly increased its military presence in the South China Sea, causing tensions in the region to rise. In the event that our product distribution channels are disrupted because of hostile action stemming from the militarization of the South Pacific in response to China’s growing military presence in the area, our ability to deliver our products to our customers could be materially adversely affected.
The armed conflict between Russia and Ukraine, including sanctions and tensions between the United States along with several other countries and Russia, may adversely affect the results of our operations.
On February 24, 2022, Russia launched an invasion into Ukraine, which has escalated global tensions between the United States and NATO countries against Russia. South Korea has also condemned Russia’s
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invasion of Ukraine. Multiple economic sanctions against Russia have been imposed by many countries worldwide which has impacted the global economy as many commercial, industrial and financial businesses are closing operations in Russia. Trade restrictions imposed on Russia have led to increasing prices of oil, fluctuation in commodities markets and destabilizing many foreign currency exchange rates.
Further escalation of conflict can lead to severe constraints on global supply chains such as logistics obstructions, raw material price increases and shortages, and higher energy costs. Disruptions in global supply chains can adversely affect our ability to manufacture and deliver product to our customers.
It may be difficult or impossible to enforce judgments of courts of the United States and other jurisdictions against us.
While we have a subsidiary in the United States, all of our directors and officers and other persons named in this document reside outside the United States, and a substantial majority of our assets and the personal assets of such persons are located outside the United States. As a result, it may be difficult or impossible for you to effect service of process on, or to enforce judgments of United States courts against them or us based on the civil liability provisions of the federal securities laws of the United States or of the securities laws of any state of the United States. There is doubt as to the enforceability in Korea, either in original actions or in actions for enforcement of judgments of United States courts, of civil liabilities predicated on the federal securities laws of the United States or the securities laws of any state of the United States.
Changes in South Korea’s customs, import and export laws and foreign policy, may have an adverse effect on our financial condition and results of operations.
Our business depends significantly on Korea’s customs and foreign exchange laws and regulations, including import and export laws, as well as on fiscal and foreign policies. In the past we have benefited from, and now currently benefit from, certain customs and tax benefits granted by Korean laws, such as free trade zones which incentivizes the import of machinery and equipment by providing tax breaks, as well as from Korean foreign policy, such as free trade agreements with countries like the United States. As a result, our business and results of operations or financial condition may be adversely affected by changes in government or fiscal policies, foreign policy or customs and foreign exchange laws and regulations. We cannot predict what policies the Korean government will adopt and whether those policies would have a negative impact on the Korean economy or on our business and financial performance in the future.
New or higher taxes resulting from changes in tax regulations or the interpretation thereof in South Korea could adversely affect our results of operations and financial condition in the future.
New tax laws and regulations, and uncertainties with respect to future tax policies pose risks to us.
Changes in tax-related laws and regulations, and interpretations thereof, can create additional tax burdens on us and our businesses by increasing tax rates and fees, creating new taxes, limiting tax deductions, and/or eliminating tax-based incentives and non-taxed income. In addition, tax authorities and competent courts may interpret tax regulations differently than us, which could result in tax litigation and associated costs and penalties in part due to the novelty and complexity of new regulation.
GLAAM Shareholders will be able to exercise dissent and appraisal rights upon the consummation of the Business Combination.
In some limited circumstances, including the transfer of the whole or any significant part of our business and our merger or consolidation with another company and the Business Combination, dissenting GLAAM Shareholders have the right to require us to purchase their shares under Korean law. A GLAAM Shareholder will be able to exercise such dissent and appraisal rights the day immediately following the date of public disclosure
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of our board of directors’ resolution of a merger or other events triggering appraisal rights. We do not know at this time how many GLAAM Shareholders will exercise dissent and appraisal rights, or how many GLAAM Common Shares such dissenting shareholders will demand we purchase for cash pursuant to Korean law. If dissent and appraisal rights are exercised with respect to a large number of GLAAM Common Shares, GLAAM will be required to pay a substantial amount to dissenting shareholders. GLAAM may not have sufficient funds to satisfy all such obligations which may result in the Business Combination being delayed as the parties seek to negotiate additional financing to allow GLAAM to satisfy such obligations, or even abandoned if the parties are unable to arrange sufficient financing for GLAAM. Further, any payments to dissenting shareholders will reduce the cash available to fund GLAAM’s ongoing operations and growth plans. As a result, the exercise of dissent and appraisal rights with respect to a large number of GLAAM Common Shares will have a material adverse effect on GLAAM’s financial condition and limit GLAAM’s ability to invest in growth, which could have a material adverse effect on GLAAM’s results of operations.
Risks Related to JGGC and the Business Combination
There are risks to JGGC’s shareholders who are not affiliates of the Sponsor of becoming shareholders of New PubCo through the Business Combination rather than through an underwritten public offering, including no independent due diligence review by an underwriter and conflicts of interest of the Sponsor.
There are risks associated with New PubCo becoming publicly traded through the Business Combination with JGGC (a special purpose acquisition company) instead of through an underwritten offering, including that investors will not receive the benefit of any independent review by an underwriter of GLAAM’s business, finances and operations.
Underwritten public offerings of securities are typically subject to a due diligence review of the issuer by the underwriters to satisfy duties under the Securities Act, the rules of the Financial Industry Regulatory Authority, Inc. and the rules of the national securities exchange on which such securities will be listed. Additionally, underwriters conducting such public offerings are subject to liability for any material misstatements or omissions in a registration statement filed in connection with the public offering and undertake a due diligence review process in order to establish a due diligence defense against liability for claims under the federal securities laws. Shareholders must rely on the information in this proxy statement/prospectus and will not have the benefit of an independent review and investigation of the type typically performed by underwriters in a public securities offering. JGGC cannot assure you that due diligence conducted in connection with the Business Combination has identified all material issues that may be present in GLAAM’s business prior to the completion of the Business Combination during the course of due diligence, that it would be possible to uncover all material issues through a customary due diligence process (whether undertaken by an underwriter or by JGGC), or that factors outside of GLAAM’s and JGGC’s control will not later arise.
In addition, the Sponsor and JGGC’s directors and officers have interests in the Business Combination that may be different from, or in addition to, the interests of JGGC’s shareholders generally. Such interests may have influenced JGGC’s directors in making their recommendation that you vote in favor of the Business Combination Proposal and the other Transaction Proposals described in this proxy statement/prospectus. See “Business of JGGC —Conflicts of Interest.”
Changes in laws or regulations or how such laws or regulations are interpreted or applied, or a failure to comply with any laws or regulations, may adversely affect JGGC’s business, including its ability to complete the Business Combination, and results of operations.
JGGC is subject to laws and regulations enacted by national, regional and local governments and, potentially, foreign jurisdictions. In particular, JGGC is required to comply with certain SEC and other legal requirements, the Business Combination may be contingent on JGGC’s ability to comply with certain laws and regulations and New PubCo may be subject to additional laws and regulations. Compliance with, and monitoring
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of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time, including as a result of changes in economic, political, social and government policies. A failure to comply with applicable laws or regulations as interpreted and applied (including any changes thereto) could have a material adverse effect on JGGC’s business, including its ability to complete its initial business combination, and results of operations.
On March 30, 2022, the SEC issued proposed rules (the “2022 Proposed Rules”) relating to, among other items, enhancing disclosures in business combination transactions involving special purpose acquisition companies (“SPACs”) and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; effectively limiting the use of projections in SEC filings in connection with proposed business combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, (the “Investment Company Act”). These rules, if adopted, whether in the form proposed or in revised form, may materially adversely affect JGGC’s ability to complete the Business Combination.
If JGGC is deemed to be an investment company under the Investment Company Act, it would be required to institute burdensome compliance requirements and its activities would be severely restricted. As a result, in such circumstances, JGGC would expect to abandon its efforts to complete an initial business combination and liquidate the Trust Account.
If JGGC is deemed to be an investment company under the Investment Company Act, its activities would be severely restricted, including:
| • | restrictions on the nature of JGGC’s investments; and |
| • | restrictions on the issuance of securities. |
In addition, JGGC would be subject to burdensome compliance requirements, including:
| • | registration as an investment company with the SEC; |
| • | adoption of a specific form of corporate structure; and |
| • | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that JGGC is not currently subject to. |
As a result, if JGGC were deemed to be an investment company under the Investment Company Act, it would expect to abandon its efforts to complete an initial business combination (including the Business Combination) and liquidate the Trust Account.
In order not to be regulated as an investment company under the Investment Company Act, unless JGGC can qualify for an exclusion, it must ensure that it is engaged primarily in a business other than investing, reinvesting or trading in securities and that its activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of JGGC’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. JGGC’s business is to identify and complete an initial business combination and thereafter to operate the post-transaction business or assets for the long term. JGGC does not plan to buy businesses or assets with a view to resale or profit from their resale. JGGC does not plan to buy unrelated businesses or assets or to be a passive investor. To that end, the proceeds held in the Trust Account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the Investment Management Trust Agreement, the trustee thereunder is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to
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these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), JGGC intends to avoid being deemed an “investment company” within the meaning of the Investment Company Act.
The 2022 Proposed Rules under the Investment Company Act would provide a safe harbor for SPACs from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. The duration component of the proposed safe harbor rule would require a SPAC to file a Current Report on Form 8-K with the SEC announcing that it has entered into an agreement with the target company (or companies) to engage in an initial business combination no later than 18 months after the effective date of the SPAC’s registration statement for its initial public offering. The SPAC would then be required to complete its initial business combination no later than 24 months after the effective date of its registration statement for its initial public offering. Although the 2022 Proposed Rules, including the proposed safe harbor rule, have not yet been adopted, and may be adopted in a revised form, the SEC has indicated that there are serious questions concerning the applicability of the Investment Company Act to a SPAC that does not complete its initial business combination within the proposed time frame set forth in the proposed safe harbor rule.
Notwithstanding whether or not the 2022 Proposed Rules are adopted by the SEC, JGGC may be deemed to be an investment company. As a SPAC, JGGC was formed for the sole purpose of completing an initial business combination by September 15, 2023 (or up to December 15, 2023 if JGGC extends the period of time to consummate its initial business combination). The longer that the funds in the Trust Account are held in short-term U.S. government treasury obligations or in money market funds invested exclusively in such securities, even prior to the 24-month anniversary of JGGC’s IPO, the greater the risk that JGGC may be considered an unregistered investment company, in which case it may be required to liquidate. Accordingly, JGGC may determine, in its discretion, to liquidate the securities held in the Trust Account at any time, and instead hold all funds in a Trust Account in cash, which would further reduce the dollar amount JGGC’s Public Shareholders would receive upon any redemption or liquidation. Further, if JGGC does not invest the proceeds held in the Trust Account as discussed above, it may be deemed to be subject to the Investment Company Act, and the loss you may suffer as a result of JGGC being deemed subject to the Investment Company Act may be greater than if JGGC liquidated the securities held in the Trust Account and instead held such funds in cash.
JGGC does not believe that its principal activities subject it to regulation under the Investment Company Act. However, if JGGC were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which JGGC has not allotted funds and may hinder its ability to complete the Business Combination. In such circumstances, JGGC would expect to abandon its efforts to complete the Business Combination and liquidate the Trust Account. If JGGC is unable to complete its initial business combination within the required time period and is required to liquidate the Trust Account, JGGC’s Public Shareholders may receive only approximately $10.62 per share (based on the amount in the Trust Account as of August 16, 2023), or less in certain circumstances, on the liquidation of JGGC’s Trust Account, and the JGGC Rights and JGGC Warrants will expire worthless. If JGGC is required to liquidate, you may lose all or part of your investment in JGGC and you will not be able to realize any future appreciation in the value of your investment since the Business Combination would not have been consummated.
While the funds in JGGC’s Trust Account may only be invested in U.S. government treasury bills with a maturity of 185 days or less, or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, JGGC may, at any time, instruct the trustee to hold all funds in the Trust Account in cash until the earlier of the consummation of the Business Combination or JGGC’s liquidation in order to mitigate the risk that JGGC might be deemed to be an investment company for purposes of the Investment Company Act. Any decision to hold all funds in the Trust Account in cash, combined with any permitted withdrawals of interest held in the Trust Account to pay JGGC’s taxes, would likely reduce the effective yield on the amounts in the Trust Account and the amount JGGC’s Public Shareholders would receive upon any redemption or liquidation.
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As the proceeds held in the Trust Account are invested, the securities in which JGGC invests could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by shareholders may be less than $10.20 per share.
Since the IPO, the net proceeds of the IPO and certain proceeds from the private placement, in the amount of $234,600,000, have been and will only be invested in U.S. Treasury obligations having a maturity of 185 days or less, or in certain money market funds which invest only in direct U.S. Treasury obligations. While short-term U.S. 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 of very low or negative yields, the amount of interest income (which JGGC may withdraw to pay income taxes, if any) would be reduced. In the event that JGGC is unable to complete its initial business combination, its Public Shareholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income. If the balance of the Trust Account is reduced below $234,600,000 as a result of negative interest rates, the amount of funds in the Trust Account available for distribution to its Public Shareholders may be reduced below $10.20 per share.
If JGGC is unable to obtain sufficient funding on a timely basis and on acceptable terms and continue as a going concern, it may be required to significantly curtail, delay, or discontinue its operations.
If JGGC is unable to obtain sufficient funding on a timely basis and on acceptable terms and continue as a going concern, it may be required to significantly curtail, delay, or discontinue our operations. In general, JGGC may be unable to expand its operations or otherwise capitalize on business opportunities, and defend against and prosecute litigation necessary to conduct its business as desired, which could materially affect its business, financial condition and results of operations. If JGGC is ultimately unable to continue as a going concern, it may have to seek the protection of bankruptcy laws or liquidate its assets and may receive less than the value at which those assets are carried on JGGC’s financial statements, and it is likely that JGGC shareholders will lose all or a part of their investment.
JGGC’s independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about JGGC’s ability to continue as a “going concern.”
On a routine basis, the Company assesses going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 205-40. As of June 30, 2023, JGGC had $ 227,806 in receivables from in cash, a working capital deficit of $3,446,881, and $243,333,857 of marketable securities held in the Trust Account to be used for the Business Combination, another initial business combination or to repurchase or redeem its Public Shares in connection therewith. Prior to the completion of the IPO, JGGC’s liquidity needs had been satisfied through a contribution of $25,000 from its Sponsor in exchange for the issuance of the Founder Shares and a loan of $250,000 from the Sponsor pursuant to a promissory note (the “Note”), under which JGGC may borrow up to an aggregate principal amount of $300,000 from the Sponsor and a Sponsor affiliate. The Note was repaid on February 15, 2022, upon the closing of the IPO out of the offering proceeds. Subsequent to the IPO, JGGC has sufficient cash held outside of the Trust Account to meet its obligations. In addition, in order to finance transaction costs in connection with the Business Combination or another business combination, the Sponsor or an affiliate of the Sponsor, or certain of JGGC’s officers and directors may, but are not obligated to, provide JGGC working capital loans. JGGC has until September 15, 2023 (or up to December 15, 2023 if JGGC extends the period of time to consummate its business combination) to consummate the Business Combination or another business combination. If the Business Combination or another business combination is not consummated by this date and an additional extension is not requested by the Sponsor, there will be a mandatory liquidation and subsequent dissolution of
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JGGC. The liquidity condition date for mandatory liquidation and subsequent dissolution within twelve months raises substantial doubt about JGGC’s ability to continue as a going concern. JGGC intends to complete the Business Combination or another business combination prior to the mandatory liquidation date or obtain approval for an extension, however, it is uncertain whether JGGC will be able to do so. JGGC’s financial statements do not include any adjustments that might result from the outcome of this uncertainty.
JGGC may issue its shares to investors in connection with the Business Combination at a price which is less than the prevailing market price of JGGC’s Public Shares at that time.
In connection with the Business Combination, JGGC may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price of $10.00 per share or which approximates the per-share amounts in JGGC’s Trust Account at such time, which was $10.62 as of August 16, 2023. The purpose of such issuances may be to enable JGGC to provide sufficient liquidity to New PubCo and GLAAM following the Business Combination. The price of the shares JGGC issues may therefore be less, and potentially significantly less, than the market price for JGGC’s shares at such time.
JGGC’s initial shareholders (including the Sponsor) control a substantial interest in JGGC and thus may exert a substantial influence on actions requiring a shareholder vote, including the Transaction Proposals, potentially in a manner that you do not support.
JGGC’s initial shareholders own, on an as-converted basis, 25% of the issued and outstanding JGGC Ordinary Shares. Upon Closing, 25% of the New PubCo Ordinary Shares received by the Sponsor (1,916,667 New PubCo Ordinary Shares) will become subjected to vesting and will vest only if the daily VWAP for New PubCo Ordinary Shares on Nasdaq equals or exceeds $12.50 for any 20 Trading Days within any 30 Trading Day period during the Specified Period. Accordingly, both prior to the Closing of the Business Combination and following the Closing of the Business Combination, JGGC’s initial shareholders may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that other shareholders do not support, including in connection with the Business Combination. If JGGC’s initial shareholders purchase any JGGC Units or if the Sponsor purchases any additional JGGC Class A Ordinary Shares in the aftermarket or in privately negotiated transactions, this would increase its control. In addition, JGGC board of directors, whose members were appointed by the Sponsor, is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed in each year. JGGC may not hold an annual general meeting to elect new directors prior to the completion of its initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual general meeting, as a consequence of JGGC’s “staggered” board of directors, only a minority of JGGC board of directors will be considered for election and the Sponsor, because of its ownership position, will control the outcome, as only holders of JGGC Class B Ordinary Shares will have the right to vote on the appointment and removal of directors and to continue JGGC in a jurisdiction outside the Cayman Islands prior to the Business Combination. Accordingly, the Sponsor will continue to exert control at least until the completion of the Business Combination.
Even if JGGC consummates the Business Combination, the New PubCo Public Warrants may never be in the money, and they may expire worthless.
The exercise price for the New PubCo Public Warrants will be $11.50 per share, subject to adjustment, which exceeds the market price of JGGC Class A Ordinary Shares, which was $10.58 per share based on the closing price on June 30, 2023. There can be no assurance that the New PubCo Public Warrants will ever be in the money prior to their expiration and, as such, the New PubCo Public Warrants may expire worthless.
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JGGC may amend the terms of the JGGC Warrants in a manner that may be adverse to holders of JGGC Public Warrants with the approval by the holders of at least 50% of the then-outstanding JGGC Public Warrants. As a result, the exercise price of shareholders’ warrants could be increased, the exercise period could be shortened and the number of JGGC Class A Ordinary Shares purchasable upon exercise of a JGGC Public Warrant could be decreased, all without shareholder approval.
The JGGC Warrants were issued in registered form under the warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and JGGC. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake or defective provision, (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties thereunder may deem necessary or desirable and that such parties deem to not adversely affect the rights of the registered holders of JGGC Warrants. The warrant agreement may be amended with the vote or written consent of the holders of at least 50% of the then-outstanding JGGC Public Warrants and JGGC Private Placement Warrants, voting together as a single class, to allow for the JGGC Warrants to be classified as equity in JGGC’s financial statements. The approval by the holders of at least 50% of the then-outstanding JGGC Public Warrants is required to make any other amendment or change that adversely affects the interests of the registered holders of JGGC Public Warrants. Accordingly, JGGC may amend the terms of the JGGC Public Warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding JGGC Public Warrants approve of such amendment and, solely with respect to any amendment to the terms of the JGGC Private Placement Warrants or any provision of the warrant agreement with respect to the JGGC Private Placement Warrants, 50% of the number of the then outstanding JGGC Private Placement Warrants. Although JGGC’s ability to amend the terms of the JGGC Public Warrants with the consent of at least 50% of the then-outstanding JGGC Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of JGGC Class A Ordinary Shares purchasable upon exercise of a warrant.
New PubCo will have the ability to redeem shareholders’ unexpired New PubCo Converted Warrants prior to their exercise at a time that is disadvantageous to holders, thereby making the New PubCo Converted Warrants worthless.
New PubCo will have the ability to redeem outstanding New PubCo Public 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 the New PubCo Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period commencing at any time after the warrants become exercisable and ending on the third business day prior to proper notice of such redemption provided that on the date New PubCo gives notice of redemption and during the entire period thereafter until the time New PubCo redeems the warrants, it has an effective registration statement under the Securities Act covering the New PubCo Ordinary Shares issuable upon exercise of the warrants and a current prospectus relating to them is available. If and when the warrants become redeemable by New PubCo, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the New PubCo Public Warrants could force holders of New PubCo Public Warrants (i) to exercise their warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so, (ii) to sell their New PubCo Public Warrants at the then-current market price when they might otherwise wish to hold their 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 their warrants. Except as described in the section of this proxy statement/prospectus entitled “Description of New PubCo Securities—Warrants—New PubCo Public Warrants—Redemption of New PubCo Converted Warrants when the price per New PubCo Ordinary Share equals or exceeds $10.00,” none of the New PubCo Private Warrants will be redeemable by New PubCo so long as they are held by the Sponsor or its permitted transferees.
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In addition, New PubCo will have the ability to redeem the New PubCo Converted 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 closing price of New PubCo Ordinary Shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of New PubCo Securities—Warrants—New PubCo Public Warrants—Anti-Dilution Adjustments” for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of New PubCo Ordinary Shares determined based on the redemption date and the fair market value of New PubCo Ordinary Shares. Please see “Description of New PubCo Securities—Warrants—New PubCo Public Warrants—Redemption of New PubCo Converted Warrants when the price per New PubCo Ordinary Share equals or exceeds $10.00.” The value received upon exercise of the New PubCo Converted 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 New PubCo Converted Warrants, including because the number of ordinary shares received is capped at 0.361 JGGC Class A Ordinary Shares per warrant (subject to adjustment) irrespective of the remaining life of the New PubCo Converted Warrants.
The JGGC Rights and JGGC Warrants may have an adverse effect on the market price of JGGC Class A Ordinary Shares and make it more difficult to effectuate the Business Combination.
JGGC issued 23,000,000 JGGC Rights entitling the holder thereof to receive one-twelfth (1/12) of one JGGC Class A Ordinary Share upon the consummation of JGGC’s initial business combination and JGGC Public Warrants to purchase 11,500,000 JGGC Class A Ordinary Shares as part of the JGGC Units offered in its IPO and, simultaneously with the closing of the its IPO, JGGC issued in a private placement an aggregate of 12,450,000 JGGC Private Placement Warrants, each exercisable to purchase one JGGC Class A Ordinary Share at $11.50 per share, subject to adjustment. In addition, if the Sponsor, its affiliates or a member of JGGC’s management team makes any working capital loans, such persons may convert up to an aggregate of $1,500,000 of such loans into up to an additional 1,500,000 private placement warrants, at the price of $1.00 per warrant.
To the extent JGGC issues ordinary shares for any reason, including to effectuate its initial business combination, the potential for the issuance of a substantial number of additional JGGC Class A Ordinary Shares upon exercise of these warrants could make JGGC a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding JGGC Class A Ordinary Shares and reduce the value of JGGC Class A Ordinary Shares issued to complete the business combination transaction. Therefore, JGGC’s warrants may make it more difficult or costly to effectuate its initial business combination (including the Business Combination).
A provision of JGGC’s warrant agreement may make it more difficult for it to complete its initial business combination.
Unlike some other blank check companies, if (i) JGGC issues additional JGGC Class A Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of its initial business combination at a newly issued price of less than $9.20 per ordinary share (the “Newly Issued Price”), (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of JGGC’s initial business combination on the date of the consummation of JGGC’s initial business combination (net of redemptions), and (iii) the volume weighted average trading price of JGGC Class A Ordinary Shares during the 20 trading day period starting on the trading day prior to the day on which JGGC consummates its initial business combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00
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per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. This may make it more difficult for JGGC to complete the Business Combination with GLAAM, or another business combination with any other target business.
If a shareholder fails to receive notice of JGGC’s offer to redeem JGGC’s 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.
JGGC will comply with the proxy rules when conducting redemptions in connection with the Business Combination. Despite JGGC’s compliance with these rules, if a shareholder fails to receive JGGC’s proxy solicitation, such shareholder may not become aware of the opportunity to redeem its Public Shares. In addition, this proxy statement/prospectus describes the various procedures that must be complied with in order to validly redeem or tender Public Shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed.
JGGC’s shareholders will experience immediate dilution due to the issuance of New PubCo Ordinary Shares pursuant to the Business Combination Agreement. Having a minority share position will likely reduce the influence that JGGC’s current shareholders have on the management of New PubCo.
JGGC anticipates that, upon consummation of the Business Combination, in the “No Additional Redemption Scenario,” which assumes that none of JGGC’s existing shareholders exercise their redemption rights in connection with the Business Combination and subject to the other assumptions set forth in the accompanying proxy statement/prospectus under “Presentation of Certain Assumptions Relating to the Business Combination,” the GLAAM Founders, GLAAM’s other existing shareholders, the JGGC’s Public Shareholders, JGGC’s rights holders and the Sponsor together with JGGC’s other initial shareholders, will own approximately 0.9%, 48.3%, 28.8%, 5.5% and 16.5%, respectively, of the issued and outstanding share capital of New PubCo.
In addition, it is anticipated that, upon consummation of the Business Combination, in the “Interim Redemption Scenario,” which assumes that 5,037,147 of JGGC Class A Ordinary Shares (or 50% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per JGGC Class A Ordinary Share or $54,098,959 in the aggregate (based on the estimated value of the Trust Account at Closing), and subject to the other assumptions set forth in the accompanying proxy statement/prospectus under “Presentation of Certain Assumptions Relating to the Business Combination,” the GLAAM Founders, GLAAM’s other existing shareholders, JGGC’s Public Shareholders, JGGC’s rights holders and the Sponsor together with JGGC’s other initial shareholders, will own approximately 1.1%, 56.4%, 16.8%, 6.4% and 19.2%, respectively, of the issued and outstanding share capital of New PubCo.
In addition, it is anticipated that, upon consummation of the Business Combination, in the “Maximum Redemption Scenario,” which assumes that 10,074,293 of JGGC Class A Ordinary Shares (or 100% of the currently outstanding Public Shares) are redeemed in connection with the Business Combination at a redemption price of $10.74 per JGGC Class A Ordinary Share or $108,200,000 in the aggregate (based on the estimated value of the Trust Account at Closing), and subject to the other assumptions set forth in the accompanying proxy statement/prospectus under “Presentation of Certain Assumptions Relating to the Business Combination,” the GLAAM Founders, GLAAM’s other existing shareholders, JGGC’s Public Shareholders, JGGC’s rights holders and the Sponsor together with JGGC’s other initial shareholders, will own approximately 1.3%, 67.9%, 0.0%, 7.7% and 23.1%, respectively, of the issued and outstanding share capital of New PubCo.
The percentages referred to above do not include any other transactions that may be entered into after the date of the accompanying proxy statement/prospectus or any exercise or conversion of the New PubCo Converted Warrants or the New PubCo Founder Warrants. If any Equity Financing Arrangements (including any PIPE Investment) are entered into in connection with the Business Combination, or if any of the other assumptions are not true, these percentages will be different. You should read “The Business Combination
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Agreement—Ownership of, and Voting Rights in, New PubCo Following the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information” in the accompanying proxy statement/prospectus for further information.
The nominal purchase price paid by the Sponsor for the Founder Shares may significantly dilute the implied value of shareholders’ Public Shares in the event JGGC completes an initial business combination. In addition, the value of the Founder Shares will be significantly greater than the amount the Sponsor paid to purchase such shares in the event JGGC completes an initial business combination, even if the business combination causes the trading price of JGGC’s Class A ordinary share to materially decline.
The Sponsor invested an aggregate of $12,475,000 in JGGC in connection with JGGC’s IPO and the private placement, comprised of the $25,000 purchase price for the Founder Shares and the $12,450,000 purchase price for the JGGC Private Placement Warrants. JGGC offered the JGGC Units to the public at an offering price of $10.00 per JGGC Unit, and the amount in JGGC’s Trust Account was $10.62 per Public Share as of August 16, 2023, and is currently expected to be about $10.74 per Public Share at the time of Closing, implying an initial value of $7.65 per Public Share. However, because the Sponsor contributed only a nominal amount of approximately $0.004 per share for the Founder Shares, the value of JGGC’s shareholders’ Public Shares may be significantly diluted as a result of the automatic conversion of the Founder Shares upon the completion of its initial business combination (including the Business Combination).
The following table shows JGGC’s Public Shareholders’ and the Sponsor’s investment per share and how these compare to the implied value of one JGGC Class A Ordinary Share upon the completion JGGC’s initial business combination. The following table does not gives effect to the redemption of 12,925,707 JGGC Class A Ordinary Shares and the deposit by the Contributor into the Trust account in connection with the Extension Amendment and assumes that (i) JGGC’s valuation is $234,600,000 (which was the amount in the Trust Account after JGGC’s IPO), (ii) no interest was or is earned on the funds held in the Trust Account, (iii) no Public Shares are redeemed in connection with JGGC’s initial business combination, (iv) the vesting of the 25% of the Founder Shares subject to vesting and (v) all Founder Shares are held by JGGC’s initial shareholders upon completion of its initial business combination, and does not take into account other potential impacts on JGGC’s valuation at the time of the initial business combination such as (a) the value of the JGGC Public Warrants and JGGC Private Placement Warrants, (b) the trading price of JGGC Class A Ordinary Shares, (c) the initial business combination transaction costs, (d) any equity issued or cash paid to the target’s sellers, (e) any equity issued to other third party investors, or (t) the target’s business itself.
| JGGC Class A Ordinary Shares held by Public Shareholders |
23,000,000 shares | |||
| JGGC Class B Ordinary Shares held by JGGC’s initial shareholders |
7,666,667 shares | |||
| Total ordinary shares |
30,666,667 shares | |||
| Total funds in trust at the initial business combination |
$ | 234,600,000 | ||
| Public Shareholders’ investment per JGGC Class A Ordinary Share(1) |
$ | 10.00 | ||
| The Sponsor’s investment per JGGC Class B Ordinary Share(2) |
$ | 1.63 | ||
| Implied value per JGGC Class A Ordinary Share upon the initial business combination(3) |
$ | 7.65 |
| (1) | While the Public Shareholders’ investment is in both the Public Shares and the JGGC Public Warrants, for purposes of this table, the full investment amount is ascribed to the Public Shares only. |
| (2) | The Sponsor’s total investment in the equity of JGGC, inclusive of the Founder Shares and the JGGC Private Placement Warrants, is $12,475,000. For purposes of this table, the full investment amount is ascribed to the Founder Shares only. |
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| (3) | All Founder Shares held by the initial shareholders would automatically convert into JGGC Class A Ordinary Shares upon completion of JGGC’s initial business combination. Any redemptions of Public Shares in connection with JGGC’s initial business combination would further reduce the implied value per JGGC Class A Ordinary Share. |
Based on these assumptions, each JGGC Class A ordinary share would have an implied value of $7.65 per share upon completion of JGGC’s initial business combination, representing a 23.5% decrease from the initial implied value of $10.00 per Public Share. While the implied value of $7.65 per JGGC Class A Ordinary Share upon completion of JGGC’s initial business combination would represent a dilution to JGGC’s Public Shareholders, this would represent a significant increase in value for the Sponsor relative to the price it paid for each founder share. At $7.65 per share, the 7,666,667 JGGC Class A Ordinary Shares that the initial shareholders would own upon completion of JGGC’s initial business combination (after automatic conversion of the Founder Shares) would have an aggregate implied value of $58,573,336. As a result, even if the trading price of JGGC’s Class A ordinary share significantly declines, the value of the Founder Shares held by JGGC’s initial shareholders will be significantly greater than the amount the Sponsor paid to purchase such shares. In addition, the Sponsor could potentially recoup its entire investment in JGGC even if the trading price of JGGC Class A Ordinary Shares after the initial business combination is as low as $1.63 per share. As a result, the Sponsor is likely to earn a substantial profit on its investment in JGGC upon disposition of JGGC Class A Ordinary Shares even if the trading price of JGGC Class A Ordinary Shares declines after JGGC completes its initial business combination. The Sponsor may therefore be economically incentivized to complete an initial business combination with a riskier, weaker-performing or less-established target business than would be the case if the Sponsor had paid the same per share price for the Founder Shares as JGGC’s Public Shareholders paid for their Public Shares.
This dilution would increase to the extent that the anti-dilution provisions of the Founder Shares result in the issuance of JGGC Class A Ordinary Shares on a greater than one-to-one basis upon conversion of the Founder Shares at the time of JGGC’s initial business combination and would become exacerbated to the extent that Public Shareholders seek to redeem their Public Shares. In addition, because of the anti-dilution protection in the Founder Shares, any equity or equity-linked securities issued in connection with JGGC’s initial business combination would be disproportionately dilutive to JGGC Class A Ordinary Shares.
The Sponsor, directors and officers may have a conflict of interest in determining to pursue the Business Combination or any other business combination, since certain of their interests are different from or in addition to (and may conflict with) the interests of JGGC’s Public Shareholders, and such interests may have influenced the JGGC board of directors’ decisions to approve the Business Combination and recommend that JGGC’s shareholders approve the Business Combination Proposal.
The Sponsor, officers and directors have interests in and arising from the Business Combination that are different from or in addition to, and which may conflict with, the interests of JGGC’s Public Shareholders, which may result in a conflict of interest. These interests include:
| • | that the Sponsor, officers and directors will hold New PubCo Ordinary Shares following the Business Combination; |
| • | that the Sponsor paid an aggregate of $25,000 for its Founder Shares and $12,450,000 for its JGGC Private Placement Warrants and that such securities should have a significantly higher value at the time of the Business Combination and will have little or no value if JGGC does not complete an initial business combination (including the Business Combination); |
| • | that the Sponsor, officers and directors have waived their redemption rights with respect to their Founder Shares and Public Shares in connection with the Business Combination, and have waived their redemption and liquidation rights with respect to their Founder Shares if JGGC is unable to complete a business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination); |
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| • | that the Sponsor or an affiliate of the Sponsor or certain of JGGC’s officers and directors may, but are not obligated to, loan JGGC funds as may be required to finance transaction costs in connection with an initial business combination (including the Business Combination), and any amounts outstanding under such loans will not be repaid from the Trust Account if JGGC is unable to complete an initial business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination); |
| • | the continued indemnification of JGGC’s current directors and officers and the continuation of directors’ and officers’ liability insurance after the Business Combination. |
These interests may have influenced JGGC’s directors in making their recommendation that shareholders vote in favor of the Business Combination Proposal and the other proposals in this proxy statement/prospectus.
JGGC’s directors and officers have discretion in agreeing to changes or waivers to the terms of the Business Combination Agreement and related transactions, which may result in a conflict of interest when determining whether such changes or waivers are appropriate and in JGGC’s Public Shareholders’ best interest.
In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Business Combination Agreement, would require JGGC to agree to amend the Business Combination Agreement, to consent to certain actions taken by GLAAM or to waive rights to which JGGC is entitled to under the Business Combination Agreement. These events could arise because of changes in GLAAM’s business, a request by GLAAM to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on GLAAM’s business and would entitle JGGC to terminate the Business Combination Agreement. In any of such circumstances, it would be at JGGC’s discretion, acting through JGGC’s board of directors, to consent to such a request or action or waive such rights. The existence of the financial and personal interests of the directors described elsewhere in this proxy statement/prospectus, including this “Risk Factors” section may result in a conflict of interest on the part of one or more of the directors between what he or she may believe is best for the Public Shareholders and what he or she may believe is best for himself or herself in determining whether or not to take the requested action or waive JGGC’s rights. As of the date of this proxy statement/prospectus, JGGC does not believe there will be any requests, actions or waivers that JGGC’s directors and officers would be likely to make after shareholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further shareholder approval, JGGC will circulate a new or amended proxy statement/prospectus and resolicit its shareholders if changes to the terms of the Business Combination and other related transactions that would have a material impact on JGGC’s shareholders are required prior to the vote on the Business Combination Proposal.
JGGC’s initial shareholders, the Sponsor and members of JGGC’s management team have agreed to vote in favor of the Business Combination, regardless of how JGGC’s Public Shareholders vote.
JGGC’s initial shareholders currently own, on an as-converted basis, 43% of the outstanding JGGC Ordinary Shares. Of these shares, 25% will vest only if the closing price of New PubCo Ordinary Shares on Nasdaq equals or exceeds $12.50 during the Specified Period. The Sponsor and members of its management team also may from time to time purchase JGGC Class A Ordinary Shares prior to JGGC’s initial business combination. JGGC’s Existing Governing Documents provide that it will complete its initial business combination only if JGGC obtains the approval of an ordinary resolution under Cayman Islands law, which in respect of JGGC, requires the affirmative vote of a majority of the shares represented in person or by proxy and voted at a general meeting of the company. A quorum for such meeting will be present if holders of one-third of the issued and outstanding shares entitled to vote at the meeting are represented in person or by proxy. As a result, in addition to JGGC’s initial shareholders’ Founder Shares, JGGC would need 1,203,814, or 12% (assuming all issued and outstanding shares are voted), or none (assuming only the minimum number of shares representing a quorum are voted), of the 10,074,293 Public Shares outstanding to be voted in favor of an initial
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business combination in order to have JGGC’s initial business combination approved. Accordingly, the agreement by the Sponsor and each member of JGGC’s management team to vote in favor of the Business Combination will increase the likelihood that JGGC will receive the requisite shareholder approval for such business combination.
The provisions of JGGC’s Existing Governing Documents that relate to the rights of holders of JGGC Class A Ordinary Shares (and corresponding provisions of the agreement governing the release of funds from JGGC’s Trust Account) may be amended with the approval of a special resolution which requires the affirmative vote of at least two-thirds of the shares by shareholders who attend and vote at a general meeting of JGGC, which is a lower amendment threshold than that of some other blank check companies. It may be easier for JGGC, therefore, to amend its Existing Governing Documents to facilitate the completion of an initial business combination that some of JGGC’s shareholders may not support.
Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to the rights of a company’s shareholders, without approval by a certain percentage of the company’s shareholders. In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company’s shareholders. JGGC’s Existing Governing Documents provide that any of its provisions related to the rights of holders of JGGC Class A Ordinary Shares (including the requirement to not release net proceeds in the Trust Account except in specified circumstances, and to provide redemption rights to Public Shareholders as described herein) may be amended if approved by special resolution, which requires the affirmative vote of at least two-thirds of the shares by shareholders who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from JGGC’s Trust Account may be amended if approved by holders of at least 65% of JGGC’s ordinary shares; provided that the provisions of JGGC’s Existing Governing Documents governing the appointment or removal of directors prior to completion of the Business Combination may only be amended by a special resolution passed by not less than two-thirds of JGGC’s ordinary shares who attend and vote at JGGC’s general meeting which shall include the affirmative vote of a simple majority of JGGC Class B Ordinary Shares. JGGC’s initial shareholders and their permitted transferees, if any, who collectively beneficially own, on an as-converted basis, 25% of JGGC Class A Ordinary Shares, will participate in any vote to amend JGGC’s Existing Governing Documents and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, JGGC may be able to amend the provisions of JGGC’s Existing Governing Documents which govern JGGC’s pre-business combination behavior more easily than some other blank check companies, and this may increase JGGC’s ability to complete a business combination with which you do not agree. JGGC’s shareholders may pursue remedies against JGGC for any breach of JGGC’s Existing Governing Documents.
The Sponsor, executive officers, directors and director nominees have agreed, pursuant to agreements with JGGC, that they will not propose any amendment to JGGC’s Existing Governing Documents (A) that would modify the substance or timing of JGGC’s obligation to provide holders of JGGC Class A Ordinary Shares the right to have their shares redeemed in connection with JGGC’s initial business combination or to redeem 100% of JGGC’s Public Shares if JGGC does not complete its initial business combination within the completion window or (B) with respect to any other provision relating to the rights of holders of JGGC Class A Ordinary Shares, unless JGGC provides its Public Shareholders with the opportunity to redeem JGGC Class A Ordinary Shares upon approval of any such amendment 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 JGGC to pay its taxes, if any, divided by the number of the then outstanding Public Shares. JGGC’s shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against the Sponsor, executive officers, directors or director nominees for any breach of these agreements. As a result, in the event of a breach, JGGC’s shareholders would need to pursue a shareholder derivative action, subject to applicable law.
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JGGC’s Executive Officers, Directors, Security Holders and their Respective Affiliates may have competitive pecuniary interests that conflict with JGGC’s interests.
JGGC has not adopted a policy that expressly prohibits JGGC’s directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by JGGC or in any transaction to which JGGC is a party or have an interest. JGGC does not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by JGGC. Accordingly, such persons or entities may have a conflict between their interests and JGGC’s.
The personal and financial interests of JGGC’s directors and officers may have influenced their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, JGGC’s directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in JGGC’s shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to JGGC as a matter of Cayman Islands law and JGGC or its shareholders might have a claim against such individuals for infringing on JGGC’s shareholders’ rights. See the section titled “Description of New PubCo Securities—Certain Differences in Corporate Law—Shareholders’ Suits” for further information on the ability to bring such claims. However, JGGC might not ultimately be successful in any claim JGGC may make against them for such reason.
JGGC expects to incur significant, non-recurring costs in connection with consummating the Business Combination and related transactions.
JGGC expects to incur significant, non-recurring costs in connection with consummating the Business Combination and other related transactions. JGGC will pay all fees, expenses and costs JGGC incurs or incurred on JGGC’s behalf in connection with the Business Combination Agreement and the transactions contemplated thereby (including the Business Combination), provided that if the Business Combination is consummated, New PubCo will pay all fees, expenses and costs incurred by or on behalf of JGGC, subject to certain limited exceptions, in connection with the Business Combination Agreement and the transactions contemplated thereby (including the Business Combination). JGGC currently estimates that such transaction expenses will be approximately $13 million.
If JGGC is unable to complete the Business Combination with GLAAM or another business combination by September 15, 2023 (or up to December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), it will cease all operations except for the purpose of winding up its affairs, redeeming its outstanding Public Shares, dissolving and liquidating. In such event, third parties may bring claims against JGGC and, as a result, the proceeds held in the Trust Account could be reduced and the per-share liquidation price received by JGGC’s Public Shareholders could be less than $10.20 per share.
JGGC’s Existing Governing Documents provide that JGGC must complete the Business Combination or another business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), or it must: (i) cease all operations except for the purposes 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 JGGC to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to approval by JGGC’s remaining shareholders and its board of directors, liquidate and dissolve subject in each case to JGGC’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption
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rights or liquidating distributions with respect to JGGC’s rights or warrants, which will expire worthless if JGGC fails to complete the Business Combination or another business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination).
In the event that JGGC does not consummate a business combination or obtain an extension by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), third parties may bring claims against JGGC for monies it owes for products or services provided to JGGC. Although certain vendors and service providers that JGGC has engaged and to which it owes money have agreed to waive any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account, there is no guarantee that they or other third parties who did not agree to such waiver will not seek recourse against the Trust Account notwithstanding such waiver.
Furthermore, there is no guarantee that a court will uphold the validity of such waiver. Accordingly, the proceeds held in the Trust Account could be subject to claims which could take priority over those of JGGC’s Public Shareholders. If JGGC is unable to complete the Business Combination or another business combination within the required time period, the Sponsor has agreed it will be personally liable to ensure that the proceeds in the Trust Account are not reduced below $10.20 per Public Share by the claims of target businesses, vendors or other entities to which JGGC owes money for services rendered or contracted for or products sold to JGGC, but only if such a vendor or prospective target business does not execute such a waiver. However, the Sponsor may not be able to meet such obligation. Therefore, the per share distribution from the Trust Account in such a situation may be less than $10.20 due to such claims.
Additionally, if JGGC is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against JGGC which is not dismissed, or if JGGC otherwise enters compulsory or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its shareholders. To the extent any bankruptcy claims deplete the Trust Account, the per share distribution from the Trust Account may be less than $10.20.
If JGGC has not completed the Business Combination or another business combination within the completion window, JGGC’s Public Shareholders may be forced to wait beyond such completion window before redemption from its Trust Account.
If JGGC has not completed the Business Combination or another business combination within the completion window, the proceeds then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to JGGC to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of JGGC’s Public Shares, as further described herein. Any redemption of Public Shareholders from the Trust Account will be effected automatically by function of JGGC’s Existing Governing Documents prior to any voluntary winding up. If JGGC is required to wind up, liquidate the Trust Account and distribute such amount therein, pro rata, to its Public Shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, shareholders may be forced to wait beyond the completion window before the redemption proceeds of JGGC’s Trust Account become available to them, and they receive the return of their pro rata portion of the proceeds from the Trust Account. JGGC has no obligation to return funds to shareholders prior to the date of JGGC’s redemption or liquidation unless, prior thereto, JGGC consummates its initial business combination or amends certain provisions of its Existing Governing Documents, and only then in cases where shareholders have sought to redeem their JGGC Class A Ordinary Shares. Only upon JGGC’s redemption or any liquidation will Public Shareholders be entitled to distributions if JGGC does not complete its initial business combination and does not amend certain provisions of its Existing Governing Documents. JGGC’s Existing Governing Documents provide that, if JGGC winds up for any other reason prior to the consummation of the Business Combination, it will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
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JGGC’s shareholders may be held liable for claims by third parties against it to the extent of distributions received by them upon redemption of their shares.
If JGGC is unable to complete the Business Combination with GLAAM or another business combination within the required time period, it must dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. JGGC cannot assure you that it will properly assess all claims that may be potentially brought against it, nor can JGGC assure you that third parties will not seek to recover from JGGC’s shareholders amounts owed to them by JGGC. As such, JGGC’s shareholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of JGGC’s shareholders may extend well beyond the third anniversary of the date of distribution.
If JGGC is forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, JGGC was unable to pay JGGC’s debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by JGGC’s shareholders. Furthermore, JGGC’s directors may be viewed as having breached their fiduciary duties to JGGC or JGGC’s creditors and/or may have acted in bad faith, thereby exposing themselves and JGGC to claims, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors. JGGC cannot assure you that claims will not be brought against JGGC for these reasons.
If, after JGGC distributes the proceeds in the Trust Account to its Public Shareholders, it files a winding-up or bankruptcy or insolvency petition or an involuntary winding-up or bankruptcy or insolvency petition is filed against JGGC that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of JGGC’s board of directors may be viewed as having breached their fiduciary duties to JGGC’s creditors, thereby exposing the members of JGGC’s board of directors and JGGC to claims of punitive damages.
If, after JGGC distributes the proceeds in the Trust Account to its Public Shareholders, JGGC files a bankruptcy or winding-up or insolvency petition or an involuntary bankruptcy or winding-up or insolvency petition is filed against JGGC that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by JGGC’s shareholders. In addition, JGGC’s board of directors may be viewed as having breached its fiduciary duty to JGGC’s creditors and/or having acted in bad faith, thereby exposing itself and JGGC to claims of punitive damages, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors. JGGC and its directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of JGGC’s share premium account while JGGC was unable to pay JGGC’s debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of $18,292.68 and imprisonment for five years in the Cayman Islands.
JGGC’s directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to JGGC’s Public Shareholders.
In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.20 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.20 per Public Share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay JGGC’s tax obligations, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, JGGC’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While JGGC currently expects that its independent directors would take legal action
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on its behalf against the Sponsor to enforce its indemnification obligations to JGGC, it is possible that JGGC’s independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If JGGC’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to JGGC’s Public Shareholders may be reduced below $10.20 per Public Share.
Actions taken by JGGC’s initial shareholders and its officers and directors to increase the likelihood of approval of the Business Combination Proposal and the other proposals presented in this proxy statement/prospectus could have a depressive effect on the price of JGGC Class A Ordinary Shares.
At any time prior to the Extraordinary General Meeting, during a period when they are not then aware of any material nonpublic information regarding JGGC or JGGC’s securities, JGGC’s initial shareholders, and its directors, officers and their respective affiliates may enter into agreements to purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or enter into transactions with such investors and others to provide them with incentives to acquire JGGC Class A Ordinary Shares or vote their shares in favor of the Business Combination Proposal. As of the date of this proxy statement/prospectus, no such arrangement has been made with an existing investor. The purpose of such purchases and other transactions would be to increase the likelihood that the Business Combination Proposal is approved and to decrease the likelihood that holders request redemption of Public Shares. Entering into any such arrangements may have a depressive effect on the price of the JGGC Class A Ordinary Shares. For example, if as a result of these arrangements an investor or holder purchases shares for nominal value, the investor or holder may be more likely to sell such shares immediately following the closing of the Business Combination for a price below market value. However, any JGGC Class A Ordinary Shares purchased by JGGC’s initial shareholders, and its directors, officers and their respective affiliates pursuant to such share purchases or other transactions will not be voted in favor of the Business Combination Proposal.
To the extent that JGGC or its affiliates do decide to enter into such arrangements, JGGC will file a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.
The unaudited pro forma financial information included in this proxy statement/prospectus may not be indicative of what the combined company’s actual financial position or results of operations would have been.
The unaudited pro forma financial information in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated. See “Unaudited Pro Forma Condensed Combined Financial Information” for more information.
JGGC’s ability to successfully effect the Business Combination and New PubCo’s success thereafter will depend largely upon the efforts of certain key personnel, including the key personnel of JGGC and GLAAM. The loss of such key personnel could adversely affect the operations and profitability of New PubCo.
JGGC’s ability to recognize certain benefits of the Business Combination and New PubCo’s success following the Business Combination will depend upon the efforts of certain key personnel. The unexpected loss of key personnel may adversely affect the operations and profitability of New PubCo. In addition, New PubCo’s future success will depend in part on its ability to identify and retain key personnel to succeed senior management. Furthermore, while JGGC has closely scrutinized the skills, abilities and qualifications of the key GLAAM personnel that will be employed by New PubCo, JGGC’s assessment may not prove to be correct. If such personnel do not possess the skills, qualifications or abilities JGGC expects or those necessary to manage a public company, the operations and profitability of New PubCo’s business may be negatively impacted. Such
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individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause New PubCo to have to expend time and resources helping them become familiar with such requirements.
JGGC’s Existing Governing Documents waived any interest or expectancy that JGGC has in corporate opportunities that may be presented to JGGC’s officers, directors or shareholders or their respective affiliates, other than those officers, directors, shareholders or affiliates who are JGGC’s or JGGC’s subsidiaries’ employees. As a result, these persons will not be required to offer certain business opportunities to JGGC and may engage in business activities that compete with JGGC.
JGGC’s Existing Governing Documents waive the corporate opportunities doctrine in effect by providing that: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) JGGC renounces any interest or expectancy in, or in being offered any opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer on the one hand, and JGGC, on the other, unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that JGGC is able to complete on a reasonable basis. In addition, JGGC’s Existing Governing Documents contain provisions to exculpate and indemnify, to the maximum extent permitted by law, such persons in respect of any liability, obligation or duty to JGGC that may arise as a consequence of such persons becoming aware of any business opportunity or failing to present such business opportunity. See “Business of JGGC — Conflicts of Interest” for more information.
Under the Business Combination Agreement, JGGC has no right to seek indemnification from GLAAM following the Business Combination.
The representations, warranties and covenants made by GLAAM in the Business Combination Agreement do not survive closing and are not subject to indemnification. As a result, if GLAAM is found to have breached any of its representations, warranties or covenants contained in the Business Combination Agreement, other than those covenants that by their terms survive the closing or are to be performed in whole or in part at or after the closing of the Business Combination, JGGC will have no recourse against them.
Members of JGGC’s management team and board of directors have significant experience as founders, board members, officers, executives or employees of other companies. Certain of those persons have been, may be, or may become, involved in litigation, investigations or other proceedings, including related to those companies or otherwise. The defense of these matters could be time-consuming and could divert JGGC’s management’s attention, and may have an adverse effect on JGGC, which may impede JGGC’s and GLAAM’s ability to consummate the Business Combination.
During the course of their careers, members of JGGC’s management team and board of directors have gained significant experience as founders, board members, officers, executives or employees of other companies. As a result of their involvement and positions in these companies, certain of those persons have been, may be or may in the future become involved in litigation, investigations or other proceedings, including relating to the business affairs of such companies, transactions entered into by such companies, or otherwise. Individual members of JGGC’s management team and board of directors also may become involved in litigation, investigations or other proceedings involving claims or allegations related to or as a result of their previous personal conduct, either in their capacity as a corporate officer or director or otherwise, and may be personally named in such actions and potentially subject to personal liability as a result of their previous individual conduct or otherwise. Any such liability may or may not be covered by insurance and/or indemnification, depending on the facts and circumstances. The defense or prosecution of these matters could be time-consuming. Any litigation, investigations or other proceedings involving JGGC’s management may divert the attention and resources of JGGC’s management team and board of directors away from its business operations, negatively affect JGGC’s reputation and restrict its ability to raise capital or to enter into commercial arrangements, all of which may impede JGGC and GLAAM’s ability to complete the Business Combination.
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Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for JGGC to complete the Business Combination.
In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to JGGC and its management team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for JGGC to complete the Business Combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, New PubCo might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on New PubCo’s ability to attract and retain qualified officers and directors.
In addition, even after JGGC completes the Business Combination, its directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred prior to the Business Combination. As a result, in order to protect JGGC’s directors and officers, New PubCo will need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance will be an added expense for New PubCo, and could interfere with or frustrate JGGC’s ability to consummate the Business Combination on terms favorable to JGGC’s investors.
Each of the parties to the Business Combination is a non-U.S. entity, therefore, the Transactions may be reviewed by the Committee on Foreign Investment in the United States (CFIUS) and other regulatory authorities that have authority to recommend the transaction be enjoined, suspended or prohibited, which may require JGGC to liquidate.
Each of the Parties to the Business Combination is a non-U.S. entity. JGGC is a Cayman Island exempted company, The Sponsor is a Delaware limited liability company and is not controlled by, and does not have any substantial ties to, any non-U.S. person, New PubCo is a Cayman Island exempted company, Exchange Sub is a stock corporation (chusik hoesa) organized under the laws of the Republic of Korea and is a wholly owned direct subsidiary, and GLAAM’s shareholder base is comprised primarily of non-U.S. persons. Therefore, the Business Combination and related transactions may be reviewed by the Committee on Foreign Investment in the United States (“CFIUS”) or the government of other countries. CFIUS is a committee comprised of multiple U.S. government agencies authorized to review and investigate certain investments in U.S. businesses by foreign persons for their risk to U.S. national security. Without predicting whether the Business Combination will be reviewed by CFIUS, the timeline for CFIUS review would be determined under Section 721 of the Defense Production Act of 1950, as amended (the “DPA”), and regulations implementing the DPA promulgated by CFIUS. Depending on the type of filing, CFIUS reviews and investigations can take between 30 to 90 days from the acceptance of a submission, or even longer in some cases, including if CFIUS were to refer the matter to the President of the United States. CFIUS has authority to require mitigation measures as a condition of clearance of a transaction. CFIUS may also recommend that the President suspend or prohibit a transaction under the authority provided by the DPA, including ordering a full or partial divestiture if the parties have already completed their investment. CFIUS may also order a suspension of a transaction to prevent parties from closing until CFIUS has completed its review.
A long delay pending review/investigation, a suspension or an outright prohibition could affect our ability to close the Business Combination and because JGGC has only a limited time to complete its initial business combination, its failure to obtain any required approvals within the requisite time period may require JGGC to liquidate. If JGGC is unable to complete an initial business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), the Existing
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Governing Documents provide that JGGC 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 JGGC to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of JGGC’s remaining shareholders and the JGGC board of directors, dissolve and liquidate, subject in each case to JGGC’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. See “—If JGGC is unable to complete the Business Combination with GLAAM or another business combination by September 15, 2023 (or by December 15, 2023 if JGGC extends the period of time to consummate its initial business combination), it will cease all operations except for the purpose of winding up its affairs, redeeming its outstanding Public Shares, dissolving and liquidating. In such event, third parties may bring claims against JGGC and, as a result, the proceeds held in the Trust Account could be reduced and the per-share liquidation price received by JGGC’s Public Shareholders could be less than $10.20 per share.”
Each of Barclays Capital Inc. and Citigroup Global Markets Inc. were to be compensated in connection with the Business Combination but have instead waived such compensation and declined to review this Proxy Statement/Prospectus.
On February 24, 2023 and March 21, 2023, JGGC received a formal letter from each of Barclays Capital Inc. and Citigroup Global Markets Inc., respectively, formally waiving any entitlement to its respective portion of the deferred underwriting discount (in an aggregate amount of $8,050,000) in connection with their roles as underwriters in the IPO. Neither Barclays Capital Inc. or Citigroup Global Markets Inc. have been involved in the preparation of any disclosure that is included in the proxy statement/prospectus, or material underlying disclosure in the proxy statement/prospectus. Such deferred underwriting fee was agreed between JGGC, Barclays Capital Inc. and Citigroup Global Markets Inc. in the Underwriting Agreement dated February 10, 2021 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 JGGC at the consummation of the Business Combination will be reduced by approximately $8,050,000. The IPO underwriting services being provided by Barclays Capital Inc. and Citigroup Global Markets Inc. prior to such waivers were substantially complete at the time of the waiver, with any fees payable to the underwriters for such services contingent upon the closing of the Business Combination. The waivers were given by Barclays Capital Inc. and Citigroup Global Markets Inc. on a gratuitous basis without any consideration to Barclays Capital Inc. and Citigroup Global Markets Inc. from JGGC.
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 Barclays Capital Inc. and Citigroup Global Markets Inc. did not provide any additional detail in their waiver letters, shareholders should be aware that such waivers indicate that neither of Barclays Capital Inc. and Citigroup Global Markets Inc. wants to be associated with the disclosures in this proxy statement/prospectus or any underlying business analysis related to the transaction described herein. JGGC will not speculate about the reasons why Barclays Capital Inc. and Citigroup Global Markets Inc. forfeited fees after performing substantially all the work to earn such fees. Accordingly, Public Shareholders should not place any reliance on the fact that Barclays Capital Inc. and Citigroup Global Markets Inc. were previously engaged by JGGC to serve as an underwriter in JGGC’s IPO and should not assume that Barclays Capital Inc. and Citigroup Global Markets Inc. are involved in this transaction. Neither of Barclays Capital Inc. or Citigroup Global Markets Inc. has been engaged by JGGC, the Sponsor, GLAAM or New PubCo in connection with the Business Combination. See “Business of JGGC—Deferred Underwriting Fee Waiver”.
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JGGC is not in compliance with Nasdaq’s continued listing requirements. If JGGC is unable to comply with Nasdaq’s continued listing requirements, the JGGC Class A Ordinary Shares and JGGC Warrants could be delisted, which could affect the market price and liquidity of JGGC’s securities and reduce its ability to raise capital
On June 14, 2023, Nasdaq notified JGGC that it did not comply with Nasdaq’s minimum $1,000,000 aggregate market value of warrants requirement set forth in Nasdaq Listing Rule 5452(b)(C) (the “Rule”). Under applicable Nasdaq rules, JGGC had 45 days to submit a plan of compliance, which it did in a timely manner. On August 17, 2023, Nasdaq notified JGGC that it had been granted an extension to regain compliance with the Rule by December 11, 2023. According to its plan of compliance, JGGC plans to transfer its listing to The Nasdaq Capital Market (the “Capital Market”). This plan of compliance is intended to allow JGGC to meet the continued listing standards for the Capital Market within the extension period, or to have consummated the Business Combination within that time. In the event JGGC does not satisfy the applicable requirements within the extension period, JGGC’s securities would be delisted upon notification by Nasdaq. At that time, JGGC may appeal Nasdaq’s determination to a Listing Qualifications Panel.
If JGGC is unable to regain compliance, Nasdaq may make a determination to delist JGCC Class A Ordinary Shares and JGGC Warrants. Furthermore, if JGGC securities are delisted, they will trade, if at all, only on an over-the-counter market, and then only if one or more registered broker-dealer market makers comply with quotation requirements. Upon any such delisting, JGGC Class A Ordinary Shares could become subject to the regulations of the SEC relating to the market for penny stocks. Generally, any equity security not traded on a national securities exchange that has a market price of less than $5.00 per share may be deemed a penny stock. Any delisting of JGGC Class A Ordinary Shares and JGGC Warrants could adversely affect their market liquidity and market price. Furthermore, if JGGC Class A Ordinary Shares and JGGC Warrants were delisted it could adversely affect JGGC’s ability to obtain financing for the continuation of its operations and/or result in the loss of confidence by investors.
Risks Related to the Redemption
The ability of JGGC’s Public Shareholders to exercise redemption rights with respect to a large number of JGGC Class A Ordinary Shares could increase the probability that the Business Combination would be unsuccessful and that shareholders would have to wait for liquidation in order to redeem their shares, which may not allow JGGC to complete the most desirable business combination or optimize its capital structure.
If the Business Combination Agreement requires JGGC to use a portion of the cash in the Trust Account to pay the purchase price, or requires JGGC to have a minimum amount of cash at closing, the probability that the Business Combination would be unsuccessful is increased. If the Business Combination is unsuccessful, shareholders would not receive their pro rata portion of the funds in the Trust Account until JGGC liquidates the Trust Account. If shareholders are in need of immediate liquidity, they could attempt to sell their shares in the open market; however, at such time JGGC’s shares may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, shareholders may suffer a material loss on their investment or lose the benefit of funds expected in connection with JGGC’s redemption until it liquidates or shareholders are able to sell their shares in the open market. Additionally, if a large number of shares are tendered or delivered for redemption, JGGC may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for additional third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit JGGC’s ability to complete the most desirable business combination available to JGGC or optimize JGGC’s capital structure.
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Although the JGGC Class A Ordinary Shares are currently listed on Nasdaq, the ability of JGGC’s Public Shareholders to exercise redemption rights with respect to a large number of JGGC Class A Ordinary Shares could increase the possibility that JGGC does not maintain such listing, in which case JGGC securities may become subject to the “penny stock” rules and the trading market in JGGC securities would be limited, which would make transactions in JGGC securities cumbersome and may reduce the value of an investment in JGGC securities.
We believe that JGGC Class A Ordinary Shares will continue to be exempt from classification as a “penny stock” due to continued listing on a national securities exchange given JGGC’s current listing on Nasdaq; however, there can be no assurance to this effect.
In the event that JGGC’s Public Shareholders exercise redemption rights with respect to a large number of Class A Ordinary Shares in connection with the Business Combination, it may increase the possibility that JGGC could fail to meet the listing requirements for continued listing on Nasdaq or on the Capital Market, as well as other SEC requirements to avoid penny stock classification.
We believe that JGGC will meet the requisite criteria; however, there can be no assurance to this effect, and failure to meet these criteria or some other exemption from classification as a “penny stock” could result in JGGC’s securities becoming subject to the penny stock rules.
For any transaction involving a penny stock, unless exempt, the rules require:
| • | that a broker or dealer approve a person’s account for transactions in penny stocks; and |
| • | the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. |
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:
| • | obtain financial information and investment experience objectives of the person; and |
| • | make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. |
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which:
| • | sets forth the basis on which the broker or dealer made the suitability determination; and |
| • | affirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. |
Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our securities and cause a decline in the market value of the JGGC Class A Ordinary Shares.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
Stockholders should be aware that, according to SEC Release No. 34-29093, the market for “penny stocks” has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for
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the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, JGGC management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.
Public Shareholders of JGGC, together with any affiliates or any other person with whom they are acting in concert or as a “group,” will be restricted from exercising redemption rights with respect to 15% or more of JGGC’s Public Shares.
A Public Shareholder, together with any of its affiliates or any other person with whom it is acting in concert or as a “group,” will be restricted from exercising redemption rights with respect to an aggregate of 15% or more of JGGC’s Public Shares. Accordingly, if you hold 15% or more of the Public Shares and the Business Combination Proposal is approved, you will not be able to exercise redemption rights with respect to the full amount of your shares and may be forced to hold the shares in excess of 15% or sell them in the open market. If the Business Combination is consummated, the value of such excess shares may not appreciate over time and the market price of New PubCo Ordinary Shares may not exceed the per-share redemption price paid to JGGC’s Public Shareholders in connection with the Business Combination.
A shareholder’s decision as to whether to redeem its shares for a pro rata portion of the Trust Account may not put the shareholder in a better future economic position.
JGGC can give no assurance as to the price at which a shareholder may be able to sell his, her or its Public Shares in the future following the completion of the Business Combination. Certain events following the consummation of any business combination, such as the Business Combination, may cause an increase in the combined company’s share price, and may result in a lower value realized upon redemption than a shareholder might realize in the future had the shareholder not redeemed its shares. Similarly, if a shareholder does not redeem its shares, the shareholder will bear the risk of ownership of the Public Shares after the consummation of the Business Combination, and the risk that the shareholder may not be able, in the future to sell its shares for a greater amount than the redemption price described in this proxy statement/prospectus. A shareholder should consult his, her or its tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.
There is uncertainty regarding the U.S. federal income tax consequences of the redemption to the U.S. Holders of Public Shares.
In the event that a U.S. Holder of Public Shares exercises such holder’s right to have such holder’s Public Shares redeemed pursuant to the redemption provisions described herein, the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of such stock pursuant to Section 302 of the Code or whether the U.S. Holder will be treated as receiving a corporate distribution under Sect