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8i Acquisition 2 Corp.

8i Acquisition 2 Corp.

May 25, 2021 by Anthony Sozzi

PROPOSED BUSINESS COMBINATION: EUDA Health Limited (EUDA Health)

ENTERPRISE VALUE: $172 million
ANTICIPATED SYMBOL: EUDA

8i Acquisition 2 Corp. proposes to combine with EUDA Health Limited (EUDA Health).

EUDA Health Limited, is a Singapore-based health technology company that operates a first-of-its-kind Southeast Asian digital healthcare ecosystem aimed at making healthcare affordable and accessible, and improving the patient experience by delivering better outcomes through personalized healthcare. The company’s proprietary unified AI platform quickly assesses a patient’s medical history, triages a condition, digitally connects patients with clinicians, and predicts optimal treatment outcomes. EUDA Health’s holistic approach supports patients throughout all stages of care, including wellness & prevention, urgent care & emergencies, pre-existing conditions, and aftercare services. The company is expected to operate in five countries throughout Southeast Asia by the end of 2022.

SUBSEQUENT EVENT – 11/14/22 – LINK

  • On November 13, 2022, 8i Acquisition 2 Corp., EUDA Health Limited and certain institutional investors entered into an agreement (the “Prepaid Forward Agreement”) for an equity prepaid forward transaction (the “Prepaid Forward Transaction”).
  • Pursuant to the terms of the Prepaid Forward Agreement, Seller may:
    • (i) purchase through a broker in the open market, from holders of Shares other than the Company or affiliates thereof, 8i’s Ordinary Shares, no par value, or
    • (ii) reverse Seller’s prior exercise of redemption rights as to Shares in connection with the Business Combination (all such purchased or reversed Shares, the “Recycled Shares”).
  • While Seller has no obligation to purchase any Shares under the Prepaid Forward Agreement, the aggregate total Recycled Shares that may be purchased or reversed under the Prepaid Forward Agreement shall be no more than 1,125,000 shares (the “Maximum Number of Shares”).
  • The Seller has agreed to hold the Recycled Shares for the benefit of:
    • (a) 8i until the closing of the Business Combination and
    • (b) EUDA after the Closing (each a “Counterparty”).
  • Seller also may not beneficially own greater than 9.9% of issued and outstanding Shares following the Business Combination.
  • The Prepaid Forward Agreement provides that Seller shall be paid directly, out of the funds held in 8i’s Trust Account, a cash amount (the “Prepayment Amount”) a cash amount equal to:
    • (i) the Number of Shares underlying the Transaction as set forth in the Seller’s notice, multiplied by
    • (ii) the per-share redemption price to be paid for redeemed shares in connection with the shareholders’ vote on the Business Combination.
  • In addition to the Prepayment Amount, Seller shall be paid directly from the Trust Account an amount equal to the product of 100,000 multiplied by the Redemption Price for the purpose of repayment of Seller purchasing in the open market prior to Closing, 100,000 Shares (the “Additional Purchased Shares”), which Shares shall not be included in the Number of Shares under the Prepaid Forward Agreement.
  • Seller may, in its discretion, sell Recycled Shares that Seller purchases, the effect of which is to terminate the Prepaid Forward Agreement in respect of such Recycled Shares sold (the “Terminated Shares”).
  • The Counterparty shall be entitled to receive proceeds from such sales of Terminated Shares equal to the product of
    • (x) the number of Terminated Shares multiplied by
    • (y) the Reset Price.
  • Following the Closing, the “Reset Price” will initially be $10.00 per Share, but will be adjusted on each of the first and eleventh scheduled trading day of each calendar month (each a “Reset Date”) commencing immediately following the Closing of the Business Combination to the lowest of:
    • (a) the then-current Reset Price,
    • (b) $10.00 and
    • (c) the greater of
      • (x) $5.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and
      • (y) the quotient of:
        • (I) the sum of the daily VWAP of the Shares of the Counterparty on each scheduled trading day during the ten scheduled trading day period ending, and including, the scheduled trading day immediately preceding the applicable Reset Date, divided by
        • (II) 10; provided, however, that to the extent Counterparty sells, enters any agreement to sell or grants any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Shares or any securities of Counterparty or any of their respective subsidiaries which would entitle the holder thereof to acquire at any time Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Shares, at an effective price per share less than the then existing Reset Price, then the Reset Price shall be adjusted to equal such reduced price.
  • The maturity date of the Transaction (the “Maturity Date”) will be the earliest to occur of
    • (a) the first anniversary of the Closing and
    • (b) the date specified by Seller in a written notice to be delivered at Seller’s discretion (not earlier than the day such notice is effective) after any occurrence wherein during any 30 consecutive trading-day period, the VWAP Price of the Shares for 20 trading days is less than $3.00 per Share (a “VWAP Trigger Event”).
  • Upon the occurrence of the Maturity Date, Counterparty is obligated to pay to Seller an amount equal to the product of
    • (a) (x) the number of Recycled Shares less (y) the number of Terminated Shares multiplied by
    • (b) $2.50 (the “Maturity Consideration”).
  • The Maturity Consideration shall be payable by Counterparty, in cash or, at the option of Counterparty, Shares based on the daily VWAP Price over 30 trading days ending on
    • (i) the Maturity Date to the extent the Shares used to pay the Maturity Consideration are freely tradable by Seller, or
    • (ii) if not freely tradeable by Seller, 1 trading day prior to the date on which the resale registration statement registering the Shares used to pay the Maturity Consideration becomes effective.
  • If Counterparty pays the Maturity Consideration in Shares, then Counterparty shall pay the Maturity Consideration on a net basis such that Seller retains a Number of Shares due to Counterparty upon the Maturity Date equal to the number of Maturity Consideration Shares payable to Seller, only to the extent the Number of Shares due to Counterparty upon the Maturity Date are equal to or more than the number of Maturity Consideration Shares payable to Seller, with any Maturity Consideration remaining due to be paid to Seller in newly issued Shares (such newly issued Shares, the “Excess Shares”).
  • If Excess Shares issued as Maturity Consideration shall equate to 20% or more of the Counterparty’s outstanding Shares, then the Counterparty shall use reasonable efforts to obtain shareholder approval for the issuance of such Excess Shares to the extent required by the Exchange on which the Shares are then listed on or prior to the Maturity Date.
  • If at the Maturity Date,
    • (i) the number of Excess Shares equates to 20% or more of the Counterparty’s outstanding Shares,
    • (ii) Shareholder Approval is required by the Exchange on which the Shares are then listed and
    • (iii) the Counterparty fails to obtain the Shareholder Approval on or prior to the Maturity Date, then the Counterparty will pay such portion of the Merger Consideration that would have otherwise corresponded to the Excess Shares to Seller in cash.
  • In addition to the Maturity Consideration, at Maturity Date, Seller will be entitled to retain a cash amount equal to the product of
    • (y) the Number of Shares remaining in the Transaction multiplied by
    • (z) the Redemption Price, and Seller will deliver to Buyer the Number of Shares that remain in the Transaction.
  • A break-up fee equal to:
    • (i) all of Seller’s actual out-of-pocket reasonable fees, costs and expenses relating to the Transaction (without a cap) plus
    • (ii) $1,000,000 (collectively, the “Break-up Fee”) shall be payable, jointly and severally, by the Counterparty and EUDA to the Seller in the event
      • (a) the Prepaid Purchase Agreement or the Transaction is terminated by either the Counterparty or EUDA, or
      • (b) upon any Additional Termination Event, except where the Additional Termination Event occurred solely as a result of a failure of Seller to purchase the Maximum Number of Shares or a material breach of Seller’s obligations.
  • The Seller does not possess any redemption rights in respect of the Recycled Shares.
  • In addition, the Seller may freely transfer or assign its rights under the Prepaid Forward Agreement.
  • As of 5:00 p.m. on November 11, 2022, an aggregate of 7,091,270 Ordinary Shares were tendered for redemption in connection with the Special Meeting.
  • The Company will continue to accept shareholders’ withdrawal of their redemption requests until at least one business day prior to the closing of the Business Combination, which is currently anticipated to be on or about November 16, 2022.
  • The final redemption price is $10.0837 per share redeemed.

SUBSEQUENT EVENT – 9/8/22 – LINK

  • On September 7, 2022, the parties amended the SPA (the “Third Amendment”) to add a condition to closing and a post-closing covenant of EUDA Health that the release of funds from its bank account after the closing of the business combination shall require at least two (2) signatures, one (1) of whom shall be that of the independent director selected by 8i Holdings 2 Pte. Ltd.

SUBSEQUENT EVENT – 6/10/22 – LINK

Amendments to the Business Combination Agreement

  • Share Purchase Agreement
    • The initial consideration to be paid at closing of the Share Purchase by LAX to Seller for the Share Purchase will be adjusted to an amount equal to $140,000,000.
    • The Initial Consideration will be payable in ordinary shares of LAX, valued at $10.00 per share.
      • Previously, the Seller was receiving $550M
  • Earnout Payments
    • 4 million shares
      • 1 million shares before the first anniversary of the Closing Date and trading equal to or greater than $15.00.
      • 1 million shares after the first, but before the second anniversary and trading equal to or greater than $20.00.
      • 1 million shares if the consolidated audited financial statements of EUDA Health for the fiscal year commencing January 1, 2023 and ending December 31, 2023, reflect that EUDA Health has achieved both of the following financial metrics for such fiscal year:
        • (x) revenues of at least $20,100,000 and
        • (y) net income attributable to EUDA Health of at least $3,600,000.
      • 1 million shares if the consolidated audited financial statements of EUDA Health for the fiscal year commencing January 1, 2024 and ending December 31, 2024, reflect that EUDA Health has achieved both of the following financial metrics for such fiscal year:
        • (x) revenues of at least $40,100,000 and
        • (y) net income attributable to EUDA Health of at least $10,100,000

TRANSACTION

  • The combined company will have an estimated post-transaction enterprise value of $583 million, an estimated equity value of $673 million and $90 million in net cash
  • Cash proceeds raised will consist of 8i’s approximately $86.3 million of cash in trust (before redemptions).
  • 9 million total shares will be awarded post-transaction close if EUDA’s share price reaches $15, $20 and $25 over three years.
  • The business combination has been unanimously approved by the boards of directors of both EUDA Health and LAX and is expected to close in the fourth quarter of 2022.

NEW TRANSACTION SUMMARY

euda

OLD TRANSACTION SUMMARY

8i2 Transaction Overview

PIPE

  • There is no PIPE in this transaction.

EARNOUT

  • The Seller may receive up to 9,000,000 additional Purchaser Shares as earnout payments (the “Earnout Shares”) if, within a 3-year period following the Closing, the VWAP of Purchaser Shares equals or exceeds any of three thresholds over any 20 trading days within a 30-day trading period:
    • The Seller will be issued 3,000,000 additional Purchaser Shares if, during the period beginning on the Closing Date and ending on the first anniversary of the Closing Date, the share price is equal to or greater than $15.00 after the Closing Date.
    • The Seller will be issued 3,000,000 additional Purchaser Shares if, during the period beginning on the first anniversary of the Closing Date and ending on the second anniversary of the Closing Date, the share price is equal to or greater than $20.00 after the Closing Date.
    • The Seller will be issued 3,000,000 additional Purchaser Shares if, during the period beginning on the second anniversary of the Closing Date and ending on the third anniversary of the Closing Date, the share price is equal to or greater than $25.00 after the Closing Date.

Amended Earnout – 6/10/22 LINK

  • Earnout Payments
    • 4 million shares
      • 1 million shares before the first anniversary of the Closing Date and trading equal to or greater than $15.00.
      • 1 million shares after the first, but before the second anniversary and trading equal to or greater than $20.00.
      • 1 million shares if the consolidated audited financial statements of EUDA Health for the fiscal year commencing January 1, 2023 and ending December 31, 2023, reflect that EUDA Health has achieved both of the following financial metrics for such fiscal year:
        • (x) revenues of at least $20,100,000 and
        • (y) net income attributable to EUDA Health of at least $3,600,000.
      • 1 million shares if the consolidated audited financial statements of EUDA Health for the fiscal year commencing January 1, 2024 and ending December 31, 2024, reflect that EUDA Health has achieved both of the following financial metrics for such fiscal year:
        • (x) revenues of at least $40,100,000 and
        • (y) net income attributable to EUDA Health of at least $10,100,000

LOCK-UP

Company Lock-Up:

  • The Seller will be subject to a lock-up until the date that is 18 months after the Closing Date (the “Company Lock-up Period”).

Sponsor Lock-Up:

  • The Sponsor is subject to a lock-up of 180 days after the Closing Date (the “Sponsor Lock-up Period”).

NOTABLE CONDITIONS TO CLOSING

  • The consummation of the Share Purchase is conditioned upon the aggregate cash of EUDA Health and its subsidiaries should equal or exceed $10,000,000.

NOTABLE CONDITIONS TO TERMINATION

  • The SPA may be terminated by either LAX or Seller if the Share Purchase and related transactions are not consummated on or before November 24, 2022 (as such date may be extended by LAX, the “Outside Date”).
  • By either LAX or EUDA if any law or final, non-appealable governmental order shall have been enacted, enforced, or entered that permanently restrains, enjoins, or otherwise prohibits the consummation of the Share Purchase.

ADVISORS

  • Loeb and Loeb LLP is acting as legal counsel to LAX.
  • Kaufman & Canoles, P.C. is acting as legal counsel to EUDA Health.

MANAGEMENT & BOARD

Executive Officers

Meng Dong (James) Tan, 60
Chief Executive Officer, and Chairman

Mr. Tan has more than 20 years’ experience in managing private and public companies based in Asia and in the USA. He is the Director and CEO of 8i Capital Limited, a company focusing on investments and merger and acquisitions. Mr. Tan served as the Chief Executive Officer and Chairman of 8i Enterprises Acquisition Corp., a blank check company listed on Nasdaq, from March 2018 until September 2020 when it consummated its business combination with Diginex Ltd. He served as the Chairman and Chief Executive Officer of Moxian Inc., a Nasdaq listed company, from 2013 to 2017 and as a director from 2019 to 2021. From 2003 to 2006, he was the Chairman and CEO of Vashion Group Ltd, a company listed on the Singapore Stock Exchange, and from 2005 to 2008, he was the CEO and director of Vantage Corporation Limited, a company listed on the Singapore Stock Exchange. From 2006 to 2009, he served as a director on the Board of Pacific Internet Limited, a company listed on Nasdaq, until its sale to Connect Holdings Limited, a group comprising of Ashmore Investment Management Limited, Spinnaker Capital Limited and Clearwater Capital Partners, LLC. Mr. Tan graduated from the National University of Singapore (NUS) with a Bachelor of Arts in 1985.

Guan Hong (William) Yap, 57
Chief Financial Officer and Director

He served as the Chief Financial Officer and a Director of 8i Enterprises Acquisition Corp., a blank check company listed on Nasdaq, from March 2018 until September 2020 when it consummated its business combination with Diginex Ltd. Mr Yap is currently the director of Moxian, Inc., a company that is listed on Nasdaq. Mr. Yap served as the Head of Investment Banking for Shanghai Pingmei Shenma Finance Leasing Private Limited, a company based in Shanghai, China from March 2016 to February 2019. He founded Cataya Pte Ltd, a business that focuses on originating private equity transactions, loans and M&A deals in Asia, with an emphasis on China, Myanmar and Indonesia, in January 2011 and currently serves as its director. Prior to this, he specialized in originating proprietary private equity and venture deals in China for investment funds in Singapore for Hupomone Capital Partners (Singapore) Pte Ltd (2009-2011) and Evia Capital Partners Pte Ltd (2006-2009). Prior to then, between 1995 and 2004, he worked in various positions for Ascendas Land (Singapore) Pte Ltd, Singapore Telecom Ltd, PrimePartners Asia Capital Ltd, and IPCO International Ltd. Mr. Yap graduated from the University of Oxford with a degree in Physics and has been a member of the CFA Institute since 2000.

Board of Directors

Kwong Yeow Liew, 67
Independent Director

Mr. Liew has more than 25 years of experience in several multi-national organizations, such as Matsushita Denki, General Motors, Intel as well as Urmet Telecoms Italy. He served as a Director 8i Enterprises Acquisition Corp., a blank check company listed on Nasdaq, from March 2018 until September 2020 when it consummated its business combination with Diginex Ltd, and of Moxian, Inc from March 2014 to August 2016. Mr. Liew served as the President, Chief Executive Officer and director of Rebel Group, Inc., a Singapore company, from February 2013 to January 2015. In 2006, Mr. Liew was instrumental in setting up the first manufacturing plant of Urmet Telecommunications S.p.A in China and fine-tuning its supply chain. Prior to that, Mr. Liew was the General Manager of Aztech Singapore Pte Ltd’s plant in China from 2001 through 2005. From 1992 through 2001, he served as the Head of Operations of the manufacturing facilities of Phoenix Mecano S E Asia Pte Ltd in Singapore. Mr. Liew received his certificate in Electrical Engineering from Singapore Technical Education in 1974. He also completed the management study programs in City and Guilds regarding Electrical and Electronics in 1974, Industrial Training Board at MOE Singapore in 1976, Matsushita DENKI Management Development Program in 1978, General Motors Institute in 1983 and Intel University in 1987. Mr. Liew is fluent in English and Chinese.

Ajay Rajpal, 52
Independent Director

Mr. Rajpal is a Chartered Accountant and member of the Institute of Chartered Accountants in England & Wales (ICAEW). During his career, he has gained broad-ranging commercial experience developed in the US, Europe, Middle East and Far East, with a particular focus on M&A, financial management and insolvency/restructuring. Post qualification, Mr. Rajpal held a number of finance-related roles which involved working for periods in the US, Europe, Middle East and Far East. Since 2011, Mr. Rajpal has run his own consultancy business, NAS Corporate Services Ltd, providing companies with various corporate services, such as assistance with their pre-IPO funding, the IPO process and post IPO management. Mr. Rajpal has project managed the initial public offering process and assisted with the associated funding of two businesses on AIM, namely New Trend Lifestyle Group Plc, which provides Feng Shui products and services across Asia, and Zibao Metals Recycling Group Plc, a Hong Kong and China based metals recycling company. He currently acts as a non-executive director for Phimedix Plc (formerly named Zibao Metals Recycling Group Plc), and Dozens Savings Plc. Mr. Rajpal assisted AIM-listed MNC Strategic Investments Plc (“MNC Strategic”) with the restructuring of its debt and overseeing the disposal of the non-performing assets of the company. Following disposal of its main assets, MNC Strategic became an investing company on AIM, seeking acquisitions in the telecom, media and technology sectors. Mr. Rajpal has also listed Grand Vision Media Holdings Plc, a special purpose acquisition company on the London Stock Exchange, which successfully completed a reverse takeover of an outdoor media business in Hong Kong/China. Mr. Rajpal was previously an independent director of Moxian, Inc., a US company with a China based internet business, and 8i Enterprises Acquisition Corp, both listed on Nasdaq.

Alexander Arrow, 50
Independent Director

Dr. Arrow is the Chief Financial Officer of Carlsmed, Inc., 15-person commercial-stage orthopedic implant manufacturer that sells personalized spinal implants to improve outcomes in lumbar spinal fusion surgery and beyond, and has been the Chief Financial Officer of Protagenic Therapeutics, Inc., a pre-clinical biotechnology virtual company, since November 2015. He served as a Director 8i Enterprises Acquisition Corp., a blank check company listed on Nasdaq, from March 2018 until September 2020 when it consummated its business combination with Diginex Ltd. He serves on the board of directors of two medical technology companies: Zelegent, Inc., which sells a minimally-invasive tool for otolaryngologist sleep specialists to treat snoring in a simple office-based procedure, and Paragonix Technologies, which sells the world’s leading solid organ transport device. He previously served on the Board of Neumedicines, Inc., an immuno-oncology company developing a first-in-class broad-spectrum anti-cancer agent. He served as a Director of Biolase, Inc. (Nasdaq: BIOL), a manufacturer of dental lasers, from June 2010 to December 2014. From June 2010 to June 2013, he chaired the Audit and Compensation committees of the Board of Directors of Biolase, Inc. and was the President and Chief Operating Officer of the company from June 2013 to December 2014. Prior to Biolase, Inc, from June 2012 to May 2013, Dr. Arrow was the Chief Medical Officer of Stanford-affiliated neuroscience company Circuit Therapeutics, Inc. Prior to that, he spent five years as the Chief Financial Officer of cardiovascular device manufacturer Arstasis, Inc. Before entering medical technology operating roles, Dr. Arrow spent nine years running medical technology equity research at three Wall Street firms, the last five years as the head of medical technology research at Lazard, Ltd. He also served as the Chief Financial Officer of the Patent & License Exchange, Inc. He began his surgical residency at the UCLA Medical Center in 1996 before leaving to go into business. He has an MD from Harvard Medical School and a BA in Biophysics, magna cum laude, from Cornell University.

ByAnthony Sozzi