Lakeshore Acquisition II Corp. *
PROPOSED BUSINESS COMBINATION: Nature’s Miracle Holding Inc.
ENTERPRISE VALUE: $265 million
ANTICIPATED SYMBOL: tbd
Lakeshore Acquisition II Corp. proposes to combine with Nature’s Miracle Holding Inc.
Nature’s Miracle is a fast-growing agriculture technology company providing services to growers in the Controlled Environment Agriculture (“CEA”) industry which also include vertical farming in North America. The Company offers integrated solutions which include hardware as well as software to design, build and operate various indoor growing settings including greenhouse and indoor-growing spaces. Nature’s Miracle, through its two wholly-owned subsidiaries, Visiontech Group, Inc. and Hydroman, Inc., provides grow lights as well as other hydroponic products to hundreds of indoor growers in North America. Nature’s Miracle has also developed a robust pipeline to build commercial-scale greenhouse in the U.S. and Canada to meet the growing needs of fresh and local vegetable products. The Company offers turnkey solutions to its operating partners by providing the design, construction and hardware installment services; Nature’s Miracle has established its first manufacturing footprint in North America with its grow-light assembly plant in Manitoba, Canada and is expected to set up additional manufacturing/assembly facilities in North America.
EXTENSION – 12/11/23 – LINK
- The SPAC approved the extension from December 11, 2023 to March 11, 2023.
- 2,141,262 shares were redeemed.
- $20K per month will be deposited into the trust account.
EXTENSION – 6/9/23 – LINK
- The SPAC approved the extension from June 11, 2023 to December 11, 2023.
- 644,667 shares were redeemed.
- $80K per month will be deposited into the trust account.
SUBSEQUENT EVENT – 4/11/23 – LINK
- The SPAC announced it has signed a Standby Equity Purchase Agreement (SEPA) with YA II PN, Ltd. (“Yorkville”) in relation to its proposed Business Combination with Nature’s Miracle, Inc.
- Under the SEPA, the Company has the right to sell up to $60 million worth of common stock to Yorkville at any time during the commitment period, which begins six trading days after the Business Combination closes and ends on the earliest of two dates: (i) the first day of the month following the 36-month anniversary of the Effective Date or (ii) the date on which Yorkville has paid the full $60 million commitment.
- Each sale of Common Shares by the Company to Yorkville (called an “Advance”) is subject to a maximum limit based on either the trading volume of the Company’s Common Shares on the Nasdaq Stock Market or a fixed amount, whichever is greater. The price of the Common Shares will be determined by the Company at the time of the sale based on either the Market Price or the VWAP during a Pricing Period. The Advances are subject to certain limitations, including that Yorkville cannot own more than 9.99% of the Company’s outstanding Common Shares at the time of the Advance or 19.99% of the Company’s outstanding Common Shares as of the date of the closing of the Business Combination.
- In return, the Company has paid YA Global II SPV, LLC, a subsidiary of Yorkville, a structuring fee of $25,000, and it will pay a commitment fee of $300,000 by issuing Common Shares to Yorkville no later than ten trading days following the closing of the Business Combination.
EXTENSION – 3/10/23 – LINK
- The SPAC approved the extension from March 11, 2023 to June 11, 2023.
- 2,767,411 shares were redeemed.
- $250K will be deposited into the trust account.
TRANSACTION
- Lakeshore acquiring 100% of the equity securities of Nature’s Miracle.
- In exchange for their equity securities, the stockholders of Nature’s Miracle will receive an aggregate number of shares of common stock of Lakeshore with an aggregate value equal to:
- (a) $230,000,000 minus
- (b) any Closing Net Indebtedness.
- The Merger Consideration otherwise payable to Company Stockholders is subject to the withholding of a number of shares of Purchaser Common Stock equal to 3.0% of the Merger Consideration to be placed in escrow for post-closing adjustments to the Merger Consideration, in accordance with the terms of the Merger Agreement following the Closing
PIPE
- There is no PIPE for this deal.
LOCK-UP
- Company and Sponsor
- 6 months from the closing date or trading above $12.50/Share for 20/30 trading days at least 90 days from the Closing Date.
NOTABLE CONDITIONS TO CLOSING
- Upon the Closing, after giving effect to the Redemption, the Purchaser shall have net tangible assets of at least $5,000,001
NOTABLE CONDITIONS TO TERMINATION
- Either Purchaser or Nature’s Miracle, if the Closing has not occurred by June 11, 2023 (the “Outside Date”), provided that no material breach of the Merger Agreement by the party seeking to terminate the Merger Agreement will have occurred or have been made
- Either Purchaser or Nature’s Miracle, if a Governmental Authority (as defined in the Merger Agreement) of competent jurisdiction will have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the Merger Agreement, and such order or other action has become final and non-appealable
ADVISORS
- Hunter Taubman Fischer & Li LLC. is acting as legal advisor to Nature’s Miracle
- Loeb & Loeb is acting as legal advisor to Lakeshore.
- Maxim Group is acting as M&A advisor to Lakeshore.
MANAGEMENT & BOARD
Executive Officers
Bill Chen, 56
Chief Executive Officer, Chief Financial Officer and Chairman Nominee
Mr. Chen has been serving as the Chief Executive Officer and the Chairman of Lakeshore Acquisition I Corp. (Nasdaq: LAAA) since January 2021 and June 2021, respectively. Mr. Chen has a mixed background of engineering, finance, and operation management across industries and continents. Mr. Chen has been an independent advisor for merger and acquisition and equity transactions since August 2015. From February 2020 until March 2021, Mr. Chen has served as a Special Advisor for Newborn Acquisition Corp. (NASDAQ:NBAC), a special purpose acquisition company that completed a business combination with Nuvve Corporation in March 2021. Since May 2017, Mr. Chen has served as Chief Executive Officer of Shanghai Renaissance Investment Management Co. Ltd., a licensed private equity firm in China that he founded. From March 2014 to August 2015, Mr. Chen served as Executive Vice President of Sanpower Group, a private conglomerate based in China, where he was in charge of cross-border merger and acquisition and post-merger integration. From January 2011 to January 2014, Mr. Chen served as Vice President of Strategy and Global Investment of JA Solar, a vertically integrated solar products manufacturing company based in China. From February 2005 to October 2010, Mr. Chen served as a Partner of BDO Capital Advisors and its affiliates in China with a focus on cross-border merger and acquisition and equity transactions. From June 2001 to August 2004, Mr. Chen served as a Senior Business Advisor to Capgemini, a consulting company based in Toronto Canada. From November 2000 to May 2001, Mr. Chen served as a Senior Financial Analyst in IBM Global Services in Toronto Canada. From December 1997 to November 2000, Mr. Chen served as a Staff Accountant in the General Accounting Department of Ashland Inc. Prior to his career in accounting and finance, Mr. Chen was an engineer and project manager in China from July 1987 to August 1993.
Board of Directors
H. David Sherman, 73
Director Nominee
Mr. Sherman has been serving as a member of the board of directors of Lakeshore Acquisition I Corp. (Nasdaq: LAAA) since June 2021. Since 1985, Dr. Sherman has been a professor at Northeastern University, specializing in, among other areas, financial and management accounting, global financial statement analysis and contemporary accounting issues. Since January 2014, Professor Sherman has served as Trustee and Chair of the Finance Committee for the American Academy of Dramatic Arts, the oldest English language acting school in the world. Since July 2010, he has also served as a Board member and Treasurer for D-Tree International, a non-profit organization that develops and supports electronic clinical protocols to enable health care workers worldwide to deliver high quality care. Since September 2019, Dr. Sherman has served as an independent board member for Newborn Acquisition Corp. (NASDAQ:NBAC). Dr. Sherman previously served on the board and as audit committee chair for Dunxin Financial Holdings Ltd. (AMEX:DXF), a financial service company, Kingold Jewelry Inc. (NASDAQ: KGJI), a designer and manufacturer of gold jewelry related products, China HGS Real Estate Inc. (NASDAQ: HGSH), a real estate company, Agfeed Corporation, a manufacturing company of agricultural products, and China Growth Alliance, Ltd., a business acquisition company formed to acquire an operating business in China. Dr. Sherman was previously on the faculty of the Sloan School of Management at Massachusetts Institute of Technology (MIT) and also, among other academic appointments, held an adjunct professorship at Tufts Medical School and was a visiting professor at Harvard Business School (2015). From 2004 to 2005, Dr. Sherman was an Academic Fellow at the U.S. Securities and Exchange Commission in the Division of Corporate Finance’s Office of Chief Accountant. Dr. Sherman is a Certified Public Accountant and previously practiced with Coopers & Lybrand. Dr. Sherman’s research has been published in management and academic journals including Harvard Business Review, Sloan Management Review, Accounting Review and European Journal of Operations Research.
Mingyu (Michael) Li, 38
Director Nominee
Since August 2019, Mr. Li has served as Chief Executive Officer of Horizon Capital, a private equity firm focusing renewable and AI-driven manufacturing. In Horizon Capital, he has led a number of private equity fundraisings, managed advisory business for cross-border M&A. From January 2014 to January 2019, Mr. Li served as a Senior Partner at Hejun Capital, a private equity firm specializing in providing capital operation system solutions to high-growth enterprises. Hejun Capital was selected as the best private equity institution by Chinaventure for 2016. During his tenure in Hejun Capital, Mr. Li led two M&A transactions and post-merger integration projects involving listed companies in the media sector. From January 2012 to January 2013, Mr. Li served as the Director of Investment Banking in China Minsheng Bank, a leading commercial bank in China, where he was responsible for investment banking and financing needs of large energy companies. From April 2009 to December 2011, Mr. Li participated a few private equity fundraisings in real estate sector in China. From February 2007 to March 2009, Mr. Li began his career with Hejun Consulting, the largest comprehensive consulting company then in China. During his tenure at Hejun Consulting, Mr. Li was responsible for strategic consulting, M&A, and led or participated in more than 20 consulting projects.
Jon M. Montgomery, 72
Director Nominee
Mr. Montgomery is managing director at Meredith Financial Group Inc., a financial management and advisory firm located in New York City. He has served as an independent director of Nuvve Holding Corp. (NVVE.NASDAQ) since March 19, 2021. From 2010 to 2014, he was managing partner at project finance advisory firm AGlobal Partners LLC where he assisted in arranging long-term, limited-recourse financing for private investments in renewable energy, telecommunications, mining & metals, PPPs, and other infrastructure projects in emerging and other international markets. He also advised clients on foreign direct investments, including those utilizing development finance institutions, export credit agencies, and political risk insurers. In addition, Mr. Montgomery has more than 25 years of marketing consulting and market research experience, informing and guiding clients’ branding, communications, segmentation and innovation challenges across a range of industries, particularly in the information technology, telecommunications, financial services, CPG, pharmaceutical, and retail sectors. He is experienced in applying model-based quantitative analysis, particularly choice-based modeling, to solving competitive problems. Previously, from 1996 to 2010, Mr. Montgomery co-founded Hudson Group Inc. in New York, a research-based marketing consultancy. He also held prior positions as executive vice president at Marketing Strategy & Planning Inc./Synovate, and vice president at Hase Schannen Research Associates Inc. Mr. Montgomery holds a M.B.A. from Northeastern University and a B.A. from the University of California, Berkeley. Since 2000 he has been Adjunct Faculty in Marketing at the University of Georgia. We believe Mr. Montgomery is well-qualified to serve as a member of the board due to his investment banking, structuring and strategic expertise, his contacts in emerging and other international markets and his extensive experience in marketing and market research.