Business Context and Reporting Period
This Form 8-K, dated November 23, 2020, reports the entry into a Business Combination Agreement between Apex Technology Acquisition Corporation ("Apex") and AvePoint, Inc. ("AvePoint"). The transaction involves a merger structure where AvePoint will become a wholly-owned subsidiary of Apex, followed by a second merger to create a surviving public company. The filing details the terms of the agreement, related financing, and conditions to closing.
Key Financial Metrics and Transaction Consideration
The filing outlines the aggregate consideration to be paid to AvePoint equityholders upon consummation of the transaction:
- Aggregate Cash Consideration: Approximately $261 million (subject to downward adjustment based on cash elections and redemptions).
- Aggregate Stock Consideration: 143,366,077 shares of Apex Common Stock.
- Contingent Consideration: Up to an additional 3,000,000 shares of Apex Common Stock based on the achievement of certain milestones.
- Private Placement (PIPE): Apex entered into subscription agreements to raise $140 million through the sale of 14,000,000 shares of Apex Common Stock at $10.00 per share.
- Liquidity Condition: A condition to closing requires Apex to have total cash and cash equivalents of no less than $300 million at the effective time, after giving effect to the merger and private placements.
Note: This filing does not provide AvePoint's historical revenue, profit, cash flow, or margin data. It focuses solely on the transaction terms.
Material Changes and Transaction Structure
The primary material change is the execution of the Business Combination Agreement. Key structural elements include:
- Merger Mechanics: Merger Sub 1 merges into AvePoint (First Merger), followed by AvePoint merging into Merger Sub 2 (Second Merger).
- Consideration Allocation:
- Series C Preferred Stock holders and Named Executives receive $135 million and $35 million in cash, respectively, with the balance in stock.
- Other common stockholders receive between $75 million and approximately $91 million in cash based on a "Cash Election," with the remainder in stock.
- Options are converted to Apex options based on an exchange ratio.
- Adjustments: Cash consideration may be reduced due to Apex stockholder redemptions, with an offsetting increase in stock consideration valued at $10.00 per share.
Guidance, Outlook, Risks, and Conditions
Conditions to Closing: The transaction is subject to various conditions, including stockholder approval from both Apex and AvePoint, regulatory approvals (including HSR Act), effectiveness of the registration statement, and the absence of a material adverse effect. Additionally, Apex must maintain at least $5,000,001 in net tangible assets following redemptions.
Lock-Up Agreements:
- Key AvePoint stockholders are subject to a 180-day lock-up period post-closing.
- Apex founders and the Sponsor are subject to a 12-month lock-up, with 50% of shares locked for 24 months.
- Sponsor Earn-Out Shares (2,916,700 shares) are escrowed and vest if the stock price reaches $15.00 for 20 trading days within a 30-day period or upon a change of control.
Risks and Contingencies: The filing highlights significant risks, including the potential failure to obtain stockholder or regulatory approval, the risk of significant redemptions by Apex stockholders reducing available cash, disruption of operations, and the possibility of unsolicited offers. Forward-looking statements regarding revenue and performance are subject to uncertainties.
Investor Verification Checklist
- Verify the final amount of cash consideration after accounting for Apex stockholder redemptions.
- Confirm the approval of the Business Combination Agreement by both Apex and AvePoint stockholders.
- Monitor the status of regulatory approvals, specifically under the Hart-Scott Rodino Antitrust Improvements Act.
- Review the definitive Proxy Statement (Form S-4) for detailed risk factors and financial projections not included in this 8-K.
- Assess the impact of the 180-day lock-up period on post-transaction liquidity and share availability.
- Confirm the closing of the $140 million Private Placement (PIPE) financing.