Filing Overview
Registrant: Venus Acquisition Corporation, a Cayman Islands blank check company. Although the request identifies MicroAlgo Inc., the filing is a Form 8-K filed by Venus and concerns its proposed combination with VIYI Algorithm Inc. Report date: August 10, 2022.
Business Context and Transaction
Venus completed its initial public offering on February 11, 2021, issuing 4,600,000 units at $10.00 per unit and generating gross proceeds of $46.0 million. Venus entered into a merger agreement with VIYI Algorithm Inc. on June 10, 2021. The proposed transaction would make VIYI a wholly owned subsidiary of Venus, with Venus changing its name to MicroAlgo Inc.
VIYI develops and applies bespoke central processing algorithms, including analytical, recommendation, and acceleration algorithms, and provides integrated software and hardware solutions. WiMi Hologram Cloud Inc. owns approximately 73% of VIYI.
Material Agreement Amendment
On August 10, 2022, Venus, VIYI and WiMi entered into the fourth amendment to the merger agreement. The amendment changed VIYI’s obligation to deliver quarterly reviewed financial statements for the period ended June 30, 2022 from a representation and warranty to a covenant. The statements were required to be delivered no later than September 15, 2022. The amendment also made conforming changes reflecting the transaction’s current status.
Financial Metrics, Liquidity and Capitalization
- The filing does not provide current revenue, profit, cash flow, margins, debt, liquidity balances, or operating-performance metrics.
- Venus’s IPO generated gross proceeds of $46.0 million; the filing does not provide an updated trust-account balance or cash balance.
- A $15.0 million backstop agreement with WiMi terminated automatically on June 30, 2022. No Venus ordinary shares were purchased by WiMi under that agreement.
- As of the filing date, no replacement backstop investor had been identified. Venus and VIYI intended to seek a replacement backstop or similar arrangement to support share purchases and reduce redemptions.
Outlook, Conditions and Risks
The proposed transaction remained subject to customary closing conditions, including shareholder approval, satisfaction of the minimum trust-account amount after redemptions, regulatory approvals and delivery of required financial statements. The filing does not state a definitive closing date.
- The transaction could fail to close or could be delayed, including if Venus does not obtain an extension of its business-combination deadline or satisfy other conditions.
- Redemptions could reduce available funds below the required minimum trust-account amount.
- The absence of a replacement backstop investor increases financing and transaction-completion uncertainty.
- Other cited risks include termination rights, legal proceedings, Nasdaq listing compliance, securities-price volatility, employee retention, economic and COVID-19 effects, and legislative, regulatory, competitive and technological changes, particularly in China.
- Statements concerning VIYI’s products, markets, projected results and transaction benefits are forward-looking and subject to material uncertainty.
Investor Verification Checklist
- Verify the amended merger agreement and the September 15, 2022 deadline for VIYI’s June 30, 2022 reviewed financial statements.
- Confirm whether the proposed merger closed, was further amended, or was terminated after this filing.
- Review subsequent filings for the trust-account balance, redemption levels and any replacement backstop financing.
- Assess VIYI’s audited and reviewed financial statements, including revenue, profitability, cash flow, debt and liquidity.
- Review the definitive proxy or registration statement, shareholder approvals, regulatory approvals and applicable risk factors before relying on transaction projections.