Wimi Hologram Cloud Inc. current report, Q1 FY2022

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Filing Overview

WiMi Hologram Cloud Inc. filed a Form 6-K for January 2022, dated January 24, 2022. The filing reports amendments to the proposed merger involving WiMi-controlled VIYI Algorithm Inc. and Venus Acquisition Corporation.

Business Context and Transaction

Under the June 10, 2021 merger agreement, a newly formed Venus subsidiary was to merge with VIYI Algorithm Inc., with VIYI surviving as a wholly owned subsidiary of Venus. Following closing, Venus was expected to change its name to MicroAlgo Inc. and remain a Cayman Islands exempted company.

Material Changes

  • The outside termination date for the proposed merger was extended to June 30, 2022.
  • The existing backstop agreement with Ever Abundant Investments Limited was terminated.
  • WiMi agreed to enter into a new backstop agreement under which it may provide Venus with aggregate backstop financing of up to $15 million.
  • The amendment acknowledges the potential need for additional governmental approvals resulting from recent changes in Chinese law.

Financial Metrics and Liquidity

The filing does not provide revenue, profit, cash flow, margin, debt, or operating liquidity figures. It identifies a potential WiMi backstop investment of up to $15 million in connection with the proposed transaction.

Outlook, Risks, and Contingencies

  • Completion of the merger remains subject to applicable conditions, including potentially required governmental approvals.
  • The transaction may terminate if it is not completed by June 30, 2022, subject to the terms of the amended merger agreement.
  • WiMi’s potential backstop commitment could require funding of up to $15 million.
  • The filing does not provide a new transaction completion date, valuation, financing terms beyond the aggregate backstop amount, or assurance that the merger will close.

Important Facts to Verify

  1. Whether the proposed merger with Venus was ultimately completed and whether Venus changed its name to MicroAlgo Inc.
  2. Whether any Chinese or other governmental approvals were required or obtained.
  3. Whether WiMi funded any portion of the up-to-$15 million backstop commitment.
  4. The detailed terms and conditions in Exhibits 99.1 and 99.2, including termination rights and funding obligations.