Keyarch Acquisition Corporation *
PROPOSED BUSINESS COMBINATION: ZOOZ Power Ltd
ENTERPRISE VALUE: $tbd million
ANTICIPATED SYMBOL: ZOOZ
Keyarch Acquisition Corporation proposes to combine with ZOOZ Power Ltd.
ZOOZ is a leading provider of Flywheel-based Power Boosting solutions for ultra-green, ultra-fast EV charging. Their goal is to eliminate range anxiety and accelerate EV adoption globally. ZOOZ’s unique flywheel-based technology enables unlimited high-power charge and discharge cycles with over 15 years lifespan, offering cost-effective and sustainable charging infrastructure. Their solutions are non-toxic, not relying on rare earth materials, making them environmentally friendly. ZOOZ is dedicated to creating reliable, long-lasting, and eco-friendly fast-charging solutions, promoting a more sustainable future for electric vehicles.
SUBSEQUENT EVENT – 3/15/24 – LINK
- Amendments to Business Combination Agreement:
- The Third BCA Amendment removes earnout milestones, for achievement of the earnout consideration, relating to any revenue events.
SUBSEQUENT EVENT – 2/15/24 – LINK
- Amendment to Business Combination Agreement
- The Outside Date has been extended from December 31, 2023 to April 1, 2024.
- The BCA Amendment now permits Zooz to secure financing before the merger closes, provided the funding values Zooz at or above its $60 million pre-money equity valuation set in the Business Combination.
- PIPE Investment
- On February 9, 2024, Keyarch and Zooz signed agreements with investors to sell 1.3 million of Keyarch’s Class A shares at $10 each, totaling $13 million, in a private placement set to close with their Business Combination.
SUBSEQUENT EVENT – 2/13/24 – LINK
- The parties updated the revenue-based milestone mechanism in their merger agreement:
- (1) The first milestone remains unchanged;
- (2) The second milestone now requires $10 million in cumulative revenue over two consecutive quarters after the first milestone;
- (3) The third milestone requires $15 million in cumulative revenue over two consecutive quarters following the second milestone, with all other conditions for both milestones unchanged.
- The SPAC is negotiating with investors to engage in a PIPE agreement to raise capital, at a price of $10 per share and according to an agreed value determined in the negotiations between the parties – which represents a value of $60 million for the Company immediately before the merger, which will be contingent upon the completion of the merger transaction by the end of the first quarter of 2024, or at a later date to be agreed upon by the parties.
- The SPAC has received signed commitment agreements from a number of Investors, for an aggregate investment amount of $12 million.
EXTENSION – 1/25/24 – LINK
- The SPAC approved the extension from January 27, 2024 to July 27, 2024.
- 337,446 shares were redeemed for $10.91 per share.
- $25K per month will be deposited into the trust account.
TRANSACTION
- Transaction values ZOOZ immediately prior to the closing at an agreed equity value of up to $100 million, which reflects $60 million at closing and up to $40 million of additional contingent consideration as an earnout.
- ZOOZ shareholders will be issued rights (the “Earnout Rights”) convertible into up to 4,000,000 ordinary shares of ZOOZ (the “Earnout Shares”) as additional contingent consideration, subject to the Company achieving certain earnout milestones based on gross revenues or share price, as more particularly set forth in the Business Combination Agreement.
- The transaction is expected to close in the fourth quarter of 2023.
SPAC FUNDING
- PIPE Investment
- On February 9, 2024, Keyarch and Zooz signed agreements with investors to sell 1.3 million of Keyarch’s Class A shares at $10 each, totaling $13 million, in a private placement set to close with their Business Combination.
EARNOUT [AMENDED See Subsequent Event from 3/15/24]
- Company
- ZOOZ shareholders will be issued rights convertible into up to 4,000,000 ordinary shares of ZOOZ as additional contingent consideration, subject to the Company achieving certain earnout milestones based on gross revenues or share price within 5 years after the Closing Date.
- 25% of the Earnout Shares will be issued if Zooz’s consolidated gross revenue reaches $10 million for any four quarters within five consecutive quarters or if the Company’s Ordinary Shares’ VWAP equals or exceeds $12.
- 35% Zooz’s revenue must be $20 million or VWAP equal/exceed $16.
- 40% requires $30 million in revenue or VWAP equal/exceed $23 during the Earnout Period.
- The parties updated the revenue-based milestone mechanism in their merger agreement:
- (1) The first milestone remains unchanged;
- (2) The second milestone now requires $10 million in cumulative revenue over two consecutive quarters after the first milestone;
- (3) The third milestone requires $15 million in cumulative revenue over two consecutive quarters following the second milestone, with all other conditions for both milestones unchanged.
- BCA Amendment removes earnout milestones, for achievement of the earnout consideration, relating to any revenue events.
- ZOOZ shareholders will be issued rights convertible into up to 4,000,000 ordinary shares of ZOOZ as additional contingent consideration, subject to the Company achieving certain earnout milestones based on gross revenues or share price within 5 years after the Closing Date.
- Sponsor
- 1,120,000 shares will be vested for 5 years following the closing of the business combination
- 25% if the share price equals or exceeds $12.00
- 35% if the share price equals or exceeds $16.00
- 40% if the share price equals or exceeds $23.00
- 1,120,000 shares will be vested for 5 years following the closing of the business combination
LOCK-UP
- Company and Sponsor
- 180 days from the Closing Date
NOTABLE CONDITIONS TO CLOSING
- As a condition to closing, the transaction is expected to deliver to ZOOZ a minimum of $10 million of net proceeds from cash held in Keyarch’s trust account and other sources.
NOTABLE CONDITIONS TO TERMINATION
- December 31, 2023 (Outside Date)
- The Outside Date has been extended from December 31, 2023 to April 1, 2024.
ADVISORS
- Company
- Shibolet & Co. is serving as Israeli legal advisor
- Lowenstein Sandler LLP is serving as U.S. legal advisor
- Maples Group acted as Cayman Islands legal advisor
- SPAC
- Ellenoff Grossman & Schole LLP is serving as U.S. legal advisor
- Goldfarb Gross Seligman& Co. is serving as Israeli legal advisor
- Walkers (Hong Kong) acted as Cayman Islands legal advisor
- EarlyBirdCapital, Inc. acted as financial advisor
EXTENSION – 7/26/23 – LINK
- The SPAC approved the extension from July 27, 2023 to January 27, 2024.
- 9,122,682 shares were redeemed for $10.50 per share.
- $90K for the first 3-months will be deposited into the trust account; $30K per month (x3) thereafter.
MANAGEMENT & BOARD
Executive Officers
Kai Xiong, 54
Chief Executive Officer and Director
Dr. Xiong joined Keywise in 2010 and is currently a Managing Partner, responsible for multiple management functions, including capital market deal sourcing, management due diligence, new business development, regulatory policy assessment, investor relations, and personnel and culture development within the firm, splitting his time among Hong Kong, Beijing and the U.S. Dr. Xiong works closely with Mr. Zheng in the daily management of the firm and building a strong culture for the firm’s long-term success. Prior to joining Keywise, Dr. Xiong worked in New York City as a Senior Vice President at Citigroup, a Senior Director at E*Trade, and a Vice President at JPMorgan Chase for more than over 10 years combined, responsible for developing risk management, marketing and sales strategies for various financial products using advanced quantitative methodology and statistical modeling. Before moving to the United States, Dr. Xiong worked at National Development and Reform Commission of China (NDRC) in Beijing for five years. Dr. Xiong holds a B.A. in Economics from Peking University, an MBA from Columbia University, and a Ph.D. in Economics from State University of New York at Buffalo.
Jing Lu, 57
Chief Financial Officer
Dr. Lu has served as a Managing Director and then Chief Operating Officer of China Bridge Capital USA, a PE/VC investment advisory company specialized in innovative technologies from 2017 to 2019 and since March 2021. She also served as Chief Investment Officer for the New Hope Fertility Center (NHFC) from 2019 to 2021, sourcing and managing PE investments, bank loans and government PPP loans. Prior to China Bridge Capital, Dr. Lu was President of ACE AV Consulting Inc. from 2005 to 2017. Dr. Lu was an Executive Director at CIBC World Markets in 2001 working on corporate securities. Between 1998 and 2001, Dr. Lu worked at the Federal Reserve Bank of New York as a bank regulator and supervisor, working on Basel Capital Accords as well as examining banks’ implementation of the Basel Accords. Before moving to New York, Dr. Lu was a professor of economics at York University in Canada for four years, specializing her teaching and research in Macroeconomics, Institutional Economics, and Econometrics. Dr. Lu holds Ph.D. and M.A. in economics from Western University in Canada, B.A in World Economy from Fudan University in China.
Board of Directors
Fang Zhang, 57
Director (Chairman)
In his career, Mr. Zheng has been applying an institutional approach to investment, with a focus on information technology and services industries. He has developed deep insights and built strong industry connections in the global markets. Before Keywise, Mr. Zheng was a co-founder and portfolio manager at Neon Liberty Capital Management, an asset management firm based in New York City, investing in the Greater China markets on behalf of institutional investors in the U.S. Prior to co-founding Neon Liberty in 2002, Mr. Zheng was a Vice President and portfolio manager at the JP Morgan Emerging Market Equity Group. Mr. Zheng was responsible for the team’s investment strategy in the Asian small cap markets. An employee of JP Morgan for more than six years, Mr. Zheng began his career as an equity research analyst in Singapore, covering the financial and property sectors. Prior to joining JP Morgan, Mr. Zheng worked at the Ministry of Machinery and Electronics Industries and CITIC in China, and Rockefeller & Co., Inc. in New York as an equity analyst. Mr. Zheng is a CFA charter holder. Mr. Zheng holds a BA degree from the University of International Business & Economics in Beijing and an MBA from Harvard Business School.
Mark Taborsky, 55
Director
Mr. Taborsky has over 25 years of investment experience as a senior investment professional at Stanford Management Company, Harvard Management Company, PIMCO, and BlackRock. At BlackRock, from 2011 to 2016, he was a Managing Director and the CIO for global asset allocation clients in the US and Asia. At PIMCO, from 2008 to 2011, he led the successful buildout of its liquid asset allocation strategy. At Harvard Management Company, from 2006 to 2008, he was a Managing Director and head of external investments. At Stanford Management Company, from 2001 to 2006, he was a Managing Director and oversaw the absolute return and fixed income portfolios and internal trading. Mr. Taborsky is a CFA charter holder. Mr. Taborsky holds an MBA in Finance and Policy with honors from The University of Chicago Booth School of Business and a B.Comm. in Joint Honors Economics and Finance with first-class honors from McGill University.
Doug Rothschild, 45
Director
Since joining Scoggin Management in 2002, he has focused on analyzing and investing in both public and private securities across all asset sectors. Mr. Rothschild has over 15 years of experience investing in SPACs and was a senior advisor for MTech Acquisition Corp. from 2018 to 2019. Prior to joining Scoggin Management, Mr. Rothschild was an associate in the asset management group of Goldman Sachs from 1997 to 2002, where he focused on the real estate, lodging and gaming sectors. Mr. Rothschild is an active supporter of various charities specifically Sinai Schools for children with special needs, where he previously served as a Board Member and on the Executive Committee. Mr. Rothschild received a B.A. in Finance from the Sy Syms School of Business at Yeshiva University and is a CFA charter holder.
Mei Han, 52
Director
For 20 years, Dr. Han held various senior management roles with Capital Group, one of the world’s largest investment management firms with assets under management of USD2 trillion as of December 31, 2020, including Managing Director for Strategic Solutions. She was responsible for business development and strategic partnerships in major Asian markets, helping clients design strategic solutions and asset allocation recommendations. The key clients were sovereign wealth funds, central banks, pension funds, insurance companies, large commercial banks and securities companies. Dr. Han was a founding member of Capital Group’s China Committee and was one of the key members who planned and organized the opening of Capital Group’s representative office in Beijing in 2009. She was also the leader of Capital Group’s Asian Women Leadership Program. Since leaving Capital Group in 2017, Dr. Han has been advising and assisting several industry-leading firms from China and Singapore, including Ucommune (co-working) and MCP Payment (digital payment), mainly on strategy, business network building and fund raising. Dr. Han is an independent director of Ucommune International Ltd. (Nasdaq: UK), the largest co-working company in China. Dr. Han holds a Bachelor Degree of Law from Peking University, an MBA degree from European University (now the EU Business School), and a Ph.D. in Business Administration from University of South Australia.
