UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
20-F
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☒
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of event requiring this shell company report July 26, 2024
Commission File No. 001-42193
Heramba
Electric plc
(Exact
name of registrant as specified in its charter)
Not
applicable
(Translation
of registrant’s name into English)
Ireland
(Jurisdiction
of incorporation or organization)
Kiepe
Platz 1
D-40599
Düsseldorf
Germany
+49(0)211-7497-0
(Address
of principal executive offices)
Cogency
Global Inc.
122
East 42nd Street, 18th Floor
New
York, NY 10168
+1
(800) 221-0102
(Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities
registered or to be registered pursuant to Section 12(b) of the Act:
|
Title of each class: |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered: |
| Ordinary
shares, nominal value of €0.0001 per share |
|
PITA |
|
The
Nasdaq Stock Market LLC |
| Warrants,
each exercisable for one Ordinary Share at an exercise price of $11.50 |
|
PITAW |
|
The
Nasdaq Stock Market LLC |
Securities
registered or to be registered pursuant to Section 12(g) of the Act: None
Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate
the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered
by the shell company report:
On
July 26, 2024, the issuer had outstanding 47,043,407 ordinary shares, nominal value of €0.0001 per share.
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth
company.
| Large accelerated
filer ☐ |
Accelerated
filer ☐ |
Non-accelerated
filer ☒ |
Emerging
growth company ☒ |
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ¨
†
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b).
☐
Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.
| U.S. GAAP ☐ |
International
Financial Reporting Standards as issued by the International
Accounting Standards Board ☒ |
Other
☐ |
If
“Other” has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow. Item 17 ☐ Item 18 ☐
If
this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No ☐
TABLE
OF CONTENTS
EXPLANATORY
NOTE
Effective as of July 26, 2024 (the “Closing
Date”), Heramba Electric plc, an Irish public limited company duly incorporated under the laws of Ireland (“Heramba
Electric” or “Holdco”), closed the previously announced business combination (the “Business
Combination”), pursuant to that certain business combination agreement, dated as of October 2, 2023 (the “Business
Combination Agreement”), by and among Project Energy Reimagined Acquisition Corp., an exempted company incorporated in the
Cayman Islands with limited liability (“PERAC”), Holdco, Heramba Merger Corp., an exempted company incorporated
in the Cayman Islands with limited liability (“Merger Sub”), Heramba Limited, an Irish private company duly
incorporated under the laws of Ireland (“Seller”) and Heramba GmbH, a limited liability company (Gesellschaft
mit beschränkter Haftung) established under the laws of Germany (“Heramba”). Effective as of the Closing
Date, several transactions were completed pursuant to the Business Combination Agreement and the plan of merger, in the following order:
| ● | immediately
prior to the effective time of the Merger (as defined below) (the “Merger Effective
Time”), (1) each issued and outstanding PERAC unit (“PERAC Unit”)
was automatically separated into its component securities (the “Unit Separation”)
and (2) the sole issued and outstanding Class B ordinary share, par value $0.0001 per share,
of PERAC (“PERAC Class B Ordinary Share”) was automatically converted
into one Class A ordinary share, par value $0.0001 per share, of PERAC (“PERAC
Class A Ordinary Shares”, and together with the sole issued and outstanding
PERAC Class B Ordinary Share, the “PERAC Ordinary Shares”) (such
conversion, the “Closing Class B Conversion”); |
| ● | at
the Merger Effective Time, PERAC and Merger Sub entered into a plan of merger (the “Plan
of Merger”), pursuant to which Merger Sub merged with and into PERAC (the “Merger”),
with PERAC being the surviving company in the Merger (the “Surviving Company”)
and becoming a direct, wholly owned subsidiary of Holdco; |
| |
● |
at the Merger Effective Time, (a) each PERAC Class A Ordinary Share issued and outstanding immediately prior to the Merger Effective Time (which, for the avoidance of doubt, included the PERAC Class A Ordinary Shares held as a result of the Unit Separation and the Closing Class B Conversion) was automatically cancelled in exchange for the right to be issued one ordinary share in the capital of Holdco with a nominal value of €0.0001 per share (“Holdco Ordinary Shares”), (b) each PERAC public warrant (“PERAC Public Warrants”) remained outstanding but was automatically adjusted to become one Holdco public warrant (“Holdco Public Warrants”), (c) each PERAC founders warrant (“PERAC Founders Warrants” and together with the PERAC Public Warrants, the “PERAC Warrants”) remained outstanding but was automatically adjusted to become one Holdco founders warrant (“Holdco Founders Warrants” and together with the Holdco Public Warrants, the “Holdco Warrants”), (d) each PERAC Class A Ordinary Share properly tendered for redemption and issued and outstanding immediately prior to the Merger Effective Time was automatically cancelled and ceased to exist and thus represented only the right to be paid a pro rata portion of the trust account (the “Trust Account”) established for the benefit of PERAC’s public shareholders (“PERAC Public Shareholders”) in connection with PERAC’s initial public offering (the “IPO”) pursuant to PERAC’s amended and restated memorandum and articles of association, as amended and then in effect (the “PERAC Articles”), (e) each dissenting PERAC share issued and outstanding immediately prior to the Merger Effective Time held by a dissenting PERAC shareholder, if any, was automatically cancelled and ceased to exist and thus represented only the right to be paid the fair value of such dissenting PERAC share and such other rights as are granted by the Companies Act (As Revised) of the Cayman Islands, and (f) each ordinary share of Merger Sub issued and outstanding at the Merger Effective Time was automatically cancelled in consideration for the issuance of one validly issued, fully paid and non-assessable ordinary share of par value $1.00 in the Surviving Company; |
| ● | immediately
following the Merger Effective Time, pursuant to a share contribution agreement, dated June
27, 2024, entered into by and between the Seller and Holdco (the “Share Contribution
Agreement”), the Seller transferred as a contribution to Holdco, and Holdco
assumed from the Seller, the shares in Heramba, all of which were held by the Seller, in
exchange for the issuance by Holdco of 36,700,000 Holdco Ordinary Shares to Seller; and |
| |
● |
all deferred ordinary shares in the capital of Holdco with a nominal value of €1.00 each (“Holdco Deferred Shares”) were surrendered by the holder thereof to Holdco for nil consideration and such Holdco Deferred Shares are now held as treasury shares by Holdco in satisfaction of the minimum capital requirements for a public limited company under Irish law. |
Prior
to the Business Combination, Holdco did not conduct any material activities other than those incident to its formation and the matters
contemplated by the Business Combination Agreement, such as the making of certain required securities law filings, and the establishment
of Merger Sub. Upon the closing of the Business Combination, Holdco became the indirect parent of Kiepe Electric Group, a German-based
provider of electric mobility products and solutions for rail vehicles and buses.
The Holdco Ordinary Shares and Holdco Warrants
are currently listed on the Nasdaq Global Market (“Nasdaq”) under the symbols “PITA” and “PITAW,”
respectively.
Except
as otherwise indicated or required by context, references in this Shell Company Report on Form 20-F (the “Report”)
to “we”, “us”, “our”, “Holdco,” “Heramba Electric” or the “Company”
refer to Heramba Electric plc, an Irish public limited company duly incorporated under the laws of Ireland, and its consolidated subsidiaries.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain
statements made in this Report, including the description of the transactions, agreements and other information contained herein and
the exhibits hereto, as well as information incorporated by reference herein (collectively, this “Communication”)
are not historical facts but are “forward-looking statements” for purposes of the safe harbor provisions under The Private
Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,”
“may,” “will,” “estimate,” “continue,” “anticipate,” “intend,”
“expect,” “should,” “could,” “would,” “plan,” “predict,” “potential,”
“seem,” “seek,” “future,” “outlook,” “suggests,” “targets,” “projects,”
“forecast” and similar expressions that predict or indicate future events or trends or that are not statements of historical
matters. These forward-looking statements include, but are not limited to, statements regarding future events, the estimated or anticipated
future results and benefits of Holdco, future opportunities for Holdco, future planned products and services, business strategy and plans,
objectives of management for future operations of Holdco, market size and growth opportunities, competitive position, technological and
market trends, and other statements that are not historical facts. These statements are based on the current expectations of Holdco’s
management and are not predictions of actual performance.
These
forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by
any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances
are difficult or impossible to predict and will differ from assumptions. All forward-looking statements are based upon estimates and
forecasts and reflect the views, assumptions, expectations, and opinions of Holdco, which are all subject to change due to various factors.
Any such estimates, assumptions, expectations, forecasts, views or opinions, whether or not identified in this Report, should be regarded
as indicative, preliminary and for illustrative purposes only and should not be relied upon as being necessarily indicative of future
results.
Many actual events and circumstances are beyond
the control of Holdco. These statements are subject to a number of risks and uncertainties regarding Holdco’s businesses and the
Business Combination, and actual results may differ materially. These risks and uncertainties include, but are not limited to, general
economic, political and business conditions; changes in domestic or foreign business, market, financial, political and legal conditions;
the outcome of any legal proceedings that may be instituted against PERAC, Seller or Heramba following the announcement of the Business
Combination; failure to realize the anticipated benefits of the Business Combination, including difficulty in integrating the businesses
of PERAC and Heramba; the risk that the Business Combination disrupts current plans and operations or the ability of Holdco to grow
and manage growth profitably and retain its key employees including its executive team; costs related to the Business Combination;
expansion plans and opportunities, including total addressable market estimates; Heramba’s ability to grow its business in
a cost-effective manner; the implementation, market acceptance and success of Heramba’s business model; developments and projections
relating to Heramba’s competitors and industry; Heramba’s approach and goals with respect to technology; Heramba’s expectations
regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others; general economic
conditions and other factors affecting Holdco’s business; Holdco’s ability to implement its business strategy; Holdco’s
ability to manage expenses; changes in applicable laws and governmental regulation and the impact of such changes on Holdco’s
business, Holdco’s exposure to litigation claims and other loss contingencies; the risks associated with negative press or
reputational harm; Holdco’s ability to protect patents, trademarks and other intellectual property rights; any breaches
of, or interruptions in, Holdco’s technology infrastructure; changes in tax laws and liabilities; changes in legal, regulatory,
political and economic risks and the impact of such changes on Holdco’s business and those factors discussed under the section titled
“Risk Factors” in the definitive proxy statement/prospectus (the “Proxy Statement/Prospectus”)
forming part of the Registration Statement on Form F-4 of Holdco (Registration No. 333-275903), which was declared effective
by the U.S. Securities and Exchange Commission (“SEC”) on March 19, 2024 (the “Registration Statement”),
which section is incorporated herein by reference.
Forward-looking statements are subject to known
and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially
from those expected or implied by the forward-looking statements. Actual results could differ materially from those anticipated in forward-looking
statements for many reasons, including the factors discussed under the “Risk Factors” section in the Proxy Statement/Prospectus.
Accordingly, you should not rely on these forward-looking statements, which speak only as of the date of this Report. We undertake no
obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this Report or to reflect
the occurrence of unanticipated events. You should, however, review the factors and risks described in the reports we will file from time
to time with the SEC after the date of this Report.
Although
we believe the expectations reflected in the forward-looking statements were reasonable at the time made, we cannot guarantee future
results, level of activity, performance or achievements. Moreover, neither we nor any other person assume responsibility for the accuracy
or completeness of any of these forward-looking statements. You should carefully consider the cautionary statements contained or referred
to in this section in connection with the forward looking statements contained in this Report and any subsequent written or oral
forward-looking statements that may be issued by Holdco or persons acting on its behalf.
PART
I.
ITEM
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
A.
Directors and Senior Management
The
board of directors of Holdco (“Holdco Board”) after the closing of the Business Combination consists of eight
members:
Michele
Molinari, 59, has served as the Chief Executive Officer and a director of Holdco since the closing of the Business Combination.
Previously, Mr. Molinari served as Chief Executive Officer of Molinari Rail Ltd. from 2003 to 2023. During that time, Mr. Molinari served
as a member of the Management Board of the SWISSRAIL Industry Association and as a director on the board of several private companies,
including Molinari Consulting and Molinary Management Ltd. Mr. Molinari earned a Master’s degree in European Transportation from
Nottingham Trent University and a bachelor’s degree in Electrical Engineering from ZHAW Zurich University of Applied Sciences.
Michael Browning, 78, has served
as a director of Holdco since the closing of the Business Combination. Mr. Browning combines a decades-long career in real estate and
infrastructure, with deep experience in energy and civic service. He currently serves as the lead independent director for Duke Energy
Corp., where he has served on the board of directors since 2006 and also chairs the corporate governance and stockholder engagement transaction
committees and serves as a member of the compensation and people development committee. From 1977 to 2019, Mr. Browning served as chairman
of Browning Consolidated, LLC, an Indianapolis-based real estate development company and continues this role with MGB Holdings, Inc. and
from October 2021 to July 2024, Mr. Browning served as the chairman of the PERAC Board. Mr. Browning received his bachelor’s degree
from the University of Notre Dame. Mr. Browning was selected to serve on the Board because of his experience in the energy sector and
as a chairman of the PERAC Board.
Diego
Diaz, 55, has served as a director of Holdco since the closing of the Business Combination. Mr. Diaz has served as International
Director of SNCF Group and President of SNCF International since 2013. Prior to joining SNCF, Mr. Diaz was President and Chief Executive
Officer of SYSTRA USA from 2009 to 2013. Prior to that, he served in a number of roles for Bombardier Transportation from 2001 to 2008.
Mr. Diaz also currently serves on the board of directors of a number of private companies. Mr. DIAZ holds a Master of Science in Aeronautics
& Astronautics from Massachusetts Institute of Technology (M.I.T.), an aeronautical engineering degree from ISAE-SUPAERO in Toulouse,
France and an MBA from the M.I.T. Sloan School of Management. Mr. Diaz was selected to serve on the Holdco Board because of his extensive
experience as a leader in international organizations and in the rail and mobility industry.
Dr.
Hans-Jörg Grundmann, 69, has served as a director of Holdco since August 2023. Mr. Grundmann is an experienced manager in
the rail and logistics industry and has also been managing director of Heramba since January 2023. Mr. Grundmann has served as a partner
at Grundmann & Grundmann since January 2015. Further, Mr. Grundmann served as a board member of Deutsch-Bulgarisches Forum e.V and
Fritz Reuter Gesellschaft e.V since May 2022 and April 2018, respectively. Mr. Grundmann has held executive management positions in international
companies in the field of postal automation, airport logistics, road traffic engineering and railway technology. He was globally responsible
for projects in the area of high-speed trains, subways, suburban trains and trams, as well as rail automation. Dr. Grundmann received
a master’s degree in physics from the Humboldt University Berlin. Dr. Grundmann was selected to serve on the Holdco Board due to
his experience in the rail and logistics industry and his role as managing director of Heramba.
Nina Jensen, 48, has served as a
director of Holdco since the closing of the Business Combination. Ms. Jensen has dedicated her career to promoting environmentally responsible
solutions at numerous companies and organizations for over twenty years. Since 2018, Ms. Jensen has served as the Chief Executive Officer
of REV Ocean, a not-for-profit company dedicated to combatting ocean pollution and improving the health of the world’s oceans. Prior
to joining REV Ocean, Ms. Jensen held various positions during a fifteen-year career at the World Wide Fund for Nature (WWF) Norway, most
recently serving as Secretary General from 2012 to 2017 and from October 2021 to July 2024, Ms. Jensen served as a director of the PERAC
Board. Ms. Jensen also currently serves on the boards of directors of several companies and organizations dedicated to environmental sustainability,
including Aker Carbon Capture, a carbon capture technology company with solutions, services and technologies covering the entire CCUS
value chain, Aker Offshore Wind, an offshore wind power developer based in Norway and focused on deep water assets, Ocean Wise, and The
Technology for Ocean Foundation. She also serves on the Friends of Ocean Action steering committee, as an advisor to the High Level Panel
for Sustainable Ocean Economy established by the prime minister of Norway and on the advisory board of SDGs for BoDs network program.
Ms. Jensen received her bachelor’s degree from James Cook University in Townsville, Australia and her master’s degree from
The University of Fisheries Science in Tromso, Norway. Ms. Jensen was selected to serve on the Holdco Board due to her expertise in environmentally-conscious
ventures and her experience as an executive officer.
Srinath Narayanan, 56, has served
as a director of Holdco since the closing of the Business Combination. Mr. Narayanan has more than two decades of experience in growth
investing, investment banking, and corporate finance. He currently serves as managing partner of Edgewater Investments, a private multi-family
office he founded in 2013, where he has focused on growth investments into early and late-stage technology and transportation companies
in the U.S. and China. Notable investment exits include Palantir Technologies (IPO 2020), SpaceX (2020), and Quectel (IPO 2019). He currently
sits on the boards of Veea Technologies and Hyperloop Transportation Technologies and from October 2021 to July 2024, Mr. Narayanan served
as a director of the PERAC Board. He is also an active investor in WrightSpeed Technologies, which is focused on powertrain technology
for Class 8 EVs and heavy-duty trucks, and Smilodon Corporation, which is in the early phase of business model development and is focused
on inter-modal transportation, particularly hydrogen fuel-cells and EV technology. Mr. Narayanan previously served as an advisor to Kleiner
Perkins and Technology Partners portfolio companies in the solar, EV charging station and battery technology sectors from 2011 to 2013.
Mr. Narayanan started his direct investment career in 2009 managing Navation LLC, the family office of the former President of Qualcomm.
Mr. Narayanan started his career as an investment banker at Goldman Sachs (Asia) in 2000. From 2001 to 2009, Mr. Narayanan served as an
M&A and corporate finance banker at Banc of America Securities (New York and San Francisco) and Canaccord Adams (San Francisco), where
he led the west-coast technology investment banking efforts. Mr. Narayanan started his career in the technology sector in 1993, leading
product development, and operational roles at MRO Corporation (acquired by IBM), Fidelity Investments and Work Technology Corporation.
Mr. Narayanan has a bachelor’s degree in Civil Engineering from VJTI, University of Bombay, a master’s degree in Computer
Systems Engineering from Northeastern University and an MBA from M.I.T. Sloan School of Management. Mr. Narayanan was selected to serve
on the Holdco Board because of his expertise in investment management, particularly in the technology and transportation sectors, as well
as his experience as the President and Chief Executive Officer of PERAC.
Avinash
Rugoobur, 52, has served as a director of Holdco since the closing of the Business Combination. Mr. Rugoobur has served on the
board of directors of Arrival (Nasdaq: ARVL) since 2021 and previously served as the President of Arrival from 2020 until 2022 and as
the Chief Strategy Officer of Arrival from 2019 until 2020. Prior to joining Arrival, Mr. Rugoobur was the Head of Strategy and M&A
for General Motors Cruise from September 2017 to January 2019. Mr. Rugoobur also co-founded Curve Tomorrow, a leading digital health
technology company in Melbourne, Australia in October 2009 where he served as Co-CEO until July 2018, and Bliss Chocolates (now known
as Smoor) in Bangalore, India where he served as the Product, Innovation and Marketing Officer from 2008 to 2009. Prior to and after
Bliss, Mr. Rugoobur served in multiple engineering and management roles at General Motors, including approximately four years leading
advanced technology activities in Silicon Valley. Mr. Rugoobur was responsible for the acquisition of Cruise, General Motor’s self-driving
car division, for approximately $1 billion. Mr. Rugoobur received a bachelor’s degree in Mechanical Engineering and Computer Science,
Mechatronics with Honors from the University of Melbourne and a Postgraduate Certificate in Knowledge Management. Mr. Rugoobur was selected
to serve on the Holdco Board because of his public company expertise and industry knowledge.
Eric Spiegel, 66, has served as a
director of Holdco since the closing of the Business Combination. Mr. Spiegel extensive experience as an executive and consultant in the
energy, industrials and healthcare sectors as well as expertise in corporate governance. Since 2019, he has served as a special advisor
at Brighton Park Capital where he supports the firm’s sector investment teams and portfolio companies by providing strategic counsel
on industry trends, growth strategies and investment opportunities. He previously served as a special advisor at General Atlantic, a large,
growth-oriented private equity firm, from 2017 to 2019, during which time he led (as interim CEO) the formation of a healthcare startup
named OneOncology. Also during his time at General Atlantic, Mr. Spiegel served as chairman of CLEAResult, one of the largest providers
of energy efficiency programs and services in North America, and as chairman of EN Engineering, a top 50 energy engineering and design
firm in the United States. Mr. Spiegel currently serves as a member of the board of directors and chairman of the audit committee of Liberty
Mutual Holding Company Inc. and as a member of the board of directors and chairman of the finance committee of Dover Corporation and from
October 2021 to July 2024, Mr. Spiegel served as a director of the PERAC Board. From 2010 to 2016, Mr. Spiegel served as President and
CEO of Siemens USA, a global business focusing on the areas of electrification, automation and digitalization. Prior to joining Siemens,
he had 25 years of global consulting experience at Booz Allen Hamilton in the power, oil and gas, chemicals, water, retail, pharmaceuticals
and automotive markets. Mr. Spiegel received his A.B. with Honors in Economics from Harvard University and his MBA from the Tuck School
of Business at Dartmouth College where he was an Edward Tuck Scholar. Mr. Spiegel was selected to serve on the Holdco Board because of
his expertise as a member of public company boards and executive teams and his experience as a consultant in the energy sector and as
a director on the PERAC Board.
Executive
Officers
Peter Muemmler,
55, has served as the Chief Financial Officer of Holdco since the closing of the Business Combination. Mr. Muemmler served as the Vice
President Finance DACH and Vice President Finance Europe at Alstom Transportation from February 2021 to July 2024 and September 2020
to January 2021, respectively. Prior to that, Mr. Muemmler served as the Vice President of Business Administration (Global) of Siemens
Mobility GmbH from November 2016 to September 2020. In addition, Mr. Muemmler serves as the chairman of the board of directors of Alstom
Transportation Germany GmbH. Mr. Muemmler earned an Industrial Clerk degree from Siemens AG.
Christopher
Wede, 56, has served as Head of Sales & Business Development of Kiepe Electric Group since 2023. Previously, Mr. Wede served
as CSO/Head of Sales BU Truck & Bus, EMEA for Quantron AG from 2020 to 2022 and as Director of Sales for EVUM Motors GmbH in 2020.
Prior to that, he served in a number of sales and business development roles at CHN Industrial from 2013 to 2019. Mr. Wede previously
worked in various roles with Volkswagen Retail GmbH, Sortimoo International GmbH, Daimler AG, Autohaus Jacob Fleischhauer GmbH &
Co. KG and Bosch and has over thirty-five years of experience in the transportation industry.
Ulrich
Lauel, 56, has served as Head of Rail of Kiepe Electric Group and a number of roles for Kiepe Electric Group since 1998. Prior
to that, he served as a Project Manager for Siemens Mobility. Mr. Lauel earned a Master of Electric Engineering from RWTH Aachen University.
Andreas
Heitland, 56, has served as Director of Operations and Service for Kiepe Electric Group since 2021. He previously served as Senior
Project Manager for PROSE GmbH from 2017 to 2021 and as Director of Sales & Systems, Business Development for Knorr-Bremse Rail Systems
GmbH. Mr. Heitland earned a degree in Electric Engineering from Leibniz University Hannover.
Corporate
Governance
The Holdco Ordinary Shares and Holdco Warrants
are currently listed on Nasdaq under the symbols “PITA” and “PITAW,” respectively. As a foreign private issuer,
Holdco has the option to follow certain home country corporate governance practices rather than those of Nasdaq, provided that it discloses
the requirements it is not following and describes the home country practices it is following. Holdco may in the future elect to follow
home country practices with regard to certain matters. As a result, its shareholders may not have the same protections afforded to shareholders
of companies that are subject to all Nasdaq corporate governance requirements.
Pursuant to the Companies Act 2014 of Ireland,
as amended, (the “Irish Companies Act”) and the articles of association of Holdco (the “Holdco Articles”),
the Holdco Board is responsible for the management of Holdco’s business and affairs and will serve as the ultimate decision-making
body of the Company except for those matters reserved under Irish law to Holdco shareholders. The Holdco Board, in turn, is empowered,
pursuant to the Holdco Articles to delegate any of its powers, authorities and discretions (with further power to sub-delegate) to any
director, committee (consisting of such person or persons, whether directors or not, as it thinks fit), local or divisional board or agent
(including officers and employees), but regardless, the Holdco Board will remain responsible, as a matter of Irish law, for the proper
management of Holdco’s business and affairs.
Directors
Number
of Directors and Composition of Holdco Board
The
Holdco Articles provide that the number of Holdco directors shall be not more than thirteen and not less than two, with the exact number
of Holdco directors, from time to time, determined solely by the Holdco Board. There are currently eight directors on the Holdco Board.
The
Holdco Board is divided into three classes, designated Class I, Class II and Class III, with the directors of each
class serving for staggered three-year terms. Class I consists of three directors (Michael Browning, Nina Jensen and Eric
Spiegel), Class II consists of three directors (Dr. Hans-Jörg Grundmann, Srinath Narayanan and Michele Molinari) and
Class III consists of two directors (Diego Diaz and Avinash Rugoobur). The Class I directors are
appointed to serve as director until the conclusion of Holdco’s first annual general meeting following consummation of the
Business Combination, the Class II directors are appointed to serve as directors until the conclusion of Holdco’s second
annual general meeting following consummation of the
Business Combination and the Class III directors are appointed to serve as directors until the conclusion of Holdco’s
third annual general meeting following consummation of the Business Combination, or, in each case, until such individual’s death, resignation, retirement, disqualification
or removal.
If
the size of the Holdco Board is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number
of Holdco directors in each class as nearly equal as possible or as the chairperson of the Holdco Board may otherwise direct, provided
that a decrease will not shorten the term of any incumbent Holdco director.
Appointment
of Holdco Directors
The Holdco Articles provide that the Holdco directors
may be appointed by ordinary resolution of the Holdco shareholders in general meeting.
In
the event of a contested election (i.e., where the number of Holdco director nominees exceeds the number of Holdco directors to be elected),
each of those nominees shall be voted upon as a separate resolution and the Holdco directors shall be elected by a plurality of the votes
cast in person or by proxy at any such meeting. “Elected by a plurality” means the election of those Holdco director nominees
equaling in number the number of positions to be filled at the relevant general meeting that receive the highest number of votes.
The
Holdco Articles also provide that the Holdco Board may appoint any person who is willing to act as a Holdco director, either to fill
a vacancy or as an addition to the existing Holdco Board or as a successor to a Holdco director who is not re-elected at an annual general
meeting.
Removal
of Directors
Under Irish law, Holdco shareholders may remove
a director without cause by ordinary resolution, provided that at least 28 clear days’ notice of the resolution is given to
Holdco, and the Holdco shareholders comply with the relevant procedural requirements. Under Irish law, one or more shareholders representing
not less than 10% of the paid-up share capital of Holdco carrying voting rights may requisition the holding of an extraordinary general
meeting at which a resolution to remove a director and appoint another person in his or her place may be proposed.
Controlled
Company Exemption
The
Seller owns more than 50% of the voting power for the election of directors to the Holdco Board, and, as a result, Holdco is considered
a “controlled company” for the purposes of the Nasdaq rules. As such, Holdco qualifies for exemptions from certain corporate
governance requirements, including that a majority of the Holdco Board consist of “independent directors,” as defined under
the Nasdaq rules. Holdco shareholders may not have the same protections afforded to shareholders of companies that are subject to all
of the corporate governance requirements of the Nasdaq rules.
If
at any time Holdco ceases to be a “controlled company” under the Nasdaq rules, the Holdco Board intends to take any action
that may be necessary to comply with the Nasdaq rules, subject to a permitted “phase-in” period. Information regarding the
risk factors related to the closing of the Business Combination is included in the Proxy Statement/Prospectus under the section titled
“Risk Factors — Risks Related to the Business Combination and Post-Closing Operations of Holdco” and is incorporated
herein by reference.
Director
Independence
The
Holdco Board determined that Michael Browning, Diego Diaz, Nina Jensen, Avinash Rugoobur and Eric Spiegel qualify as “independent
directors”, as defined under the rules of Nasdaq, and the Holdco Board consists of a majority of “independent directors”,
as defined under the rules of the SEC and Nasdaq relating to director independence requirements. In addition, the Holdco Board is subject
to the rules of the SEC and Nasdaq relating to the membership, qualifications, and operations of the audit committee, as discussed below.
Committees
of the Holdco Board of Directors
Upon the consummation of the Business Combination,
Holdco currently established two standing committees: an audit and risk committee and a remuneration and nominating committee. The written
charter for each of the Holdco Board Committees is posted on our website at https://herambaelectric.com/investor-relations/.
Audit
and Risk Committee
The
audit and risk committee consists of Michael Browning, Nina Jensen and Eric Spiegel, with Mr. Browning serving as chairperson of the
audit and risk committee. Under Nasdaq listing standards and applicable SEC rules, all the directors on the audit committee must be
independent, while under the Irish Companies Act, the audit committee must include at least one independent non-executive director
who has a competence in accounting or auditing; the Holdco Board has determined that each of Michael Browning, Nina Jensen and Eric
Spiegel are independent under the listing standards and applicable SEC rules and for purposes of the Irish Companies Act. The audit
and risk committee will assist the Holdco Board in overseeing Holdco’s accounting and financial reporting processes, the
engagement of its independent auditor, and the audits of its financial statements. The Holdco Board has determined that Eric Spiegel
qualifies as an “audit committee financial expert”, as such term is defined in the rules of the SEC and also meet the
competence requirements of the Irish Companies Act. The audit and risk committee is governed by a charter that complies with
applicable rules of Nasdaq and the Irish Companies Act and which is posted on Holdco’s website.
Remuneration
and Nominating Committee
The
remuneration and nominating committee consists of Diego Diaz, Nina Jensen and Avinash Rugoobur, with Mr. Rugoobur serving as
chairperson of the remuneration and nominating committee. Under Nasdaq listing standards, we are required to have a compensation
committee composed entirely of independent directors; the Holdco Board has determined that each of Diego Diaz, Nina Jensen and
Avinash Rugoobur are independent under the listing standards and applicable SEC rules. The remuneration and nominating committee
will assist the Holdco Board in (i) determining compensation for Holdco’s directors and executive officers, (ii) identifying
individuals qualified to become Holdco’s directors consistent with criteria established by Holdco and (iii) in developing
Holdco’s Code of Business Conduct and Ethics and other corporate governance policies and practices. The remuneration and
nominating committee is governed by a charter that is posted on Holdco’s website.
Diversity
The
Holdco Board has not adopted any policies that address the identification and nomination of women or other diverse candidates to the
Holdco Board or to management of Holdco. The Holdco Board recognizes the importance and benefit of having a board of directors and senior
management composed of highly talented and experienced individuals having regard to the need to foster and promote diversity among board
members and senior management with respect to attributes such as gender, ethnicity and other factors. In support of this goal, the compensation
committee intends to, when identifying candidates to nominate for election to the Holdco Board or appoint as senior management or in
its review of senior management succession planning and talent management:
| ● | consider
individuals who are highly qualified, based on their talents, experience, functional expertise
and personal skills, character and qualities having regard to Holdco’s current and
future plans and objectives, as well as anticipated regulatory and market developments; |
| ● | consider
criteria that promote diversity, including with regard to gender, ethnicity, and other considerations; |
| ● | consider
the level of representation of women on its board of directors and in senior management positions,
along with other markers of diversity, when making recommendations for nominees to the Holdco
Board or for appointment as senior management and in general with regard to succession planning
for the Holdco Board and senior management; and |
| ● | as
required, engage qualified independent external advisors to assist the Holdco Board in conducting
its search for candidates that meet the board of directors’ criteria regarding skills,
experience and diversity. |
B.
Advisers
Latham
& Watkins LLP, 811 Main Street, Suite 3700, Houston, TX 77002, has acted as U.S. securities counsel for Holdco and Heramba.
Matheson LLP, 70 Sir John Rogerson’s Quay,
Dublin 2, Ireland, has acted as counsel for Holdco and Heramba with respect to Irish law.
C.
Auditors
Holdco
was incorporated on July 13, 2023 for the purpose of effectuating the Business Combination. Prior to the consummation of the Business
Combination, Holdco had no material assets and did not operate any businesses. Accordingly, no financial statements of Holdco have been
included in this Report.
For
the fiscal year ended December 31, 2023 and the period from September 1, 2022 (inception) through December 31, 2022, UHY LLP acted as
the independent registered public accounting firm for Heramba GmbH and will be Holdco’s independent registered public accounting
firm following the Business Combination.
ITEM
2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not
applicable.
ITEM
3. KEY INFORMATION
A.
[Reserved]
B.
Capitalization and Indebtedness
The
following table sets forth the capitalization of Holdco on an unaudited pro forma combined basis as of December 31, 2023, after giving
effect to the Business Combination.
| | |
As of December 31, 2023 | |
| | |
(unaudited) (in Euro € million) | |
| Cash and cash equivalents | |
| 36.8 | |
| | |
| | |
| Indebtedness: | |
| | |
| Acquisition liabilities at fair value | |
| 21.4 | |
| Promissory note | |
| 4.7 | |
| Promissory note – related party | |
| 0.8 | |
| Backstop Investors Loan | |
| 2.4 | |
| Loan payable | |
| 0.7 | |
| Bridge loan | |
| 9.5 | |
| Total indebtedness | |
| 39.5 | |
| | |
| | |
| Equity: | |
| | |
| Ordinary shares, €0.0001 nominal value | |
| - | |
| Subscribed capital | |
| - | |
| Share premium | |
| 94.7 | |
| Accumulated losses | |
| (87.5 | ) |
| Non-controlling interest | |
| 3.3 | |
| Total Equity | |
| 10.5 | |
| | |
| | |
| Total capitalization | |
| 50.0 | |
C.
Reasons for the Offer and Use of Proceeds
Not
applicable.
D.
Risk Factors
The risk factors related to the business and operations
of Holdco are described in the Proxy Statement/Prospectus under the section titled “Risk Factors,” which is incorporated
herein by reference.
ITEM
4. INFORMATION ON THE COMPANY
A.
History and Development of the Company
The
legal name of the company is Heramba Electric plc. Heramba Electric was incorporated as a public limited company organized under the
laws of Ireland on July 13, 2023. The address of the registered office of Holdco is Kiepe Platz 1, D-40599 Düsseldorf, Germany and
the telephone number of Holdco is +49(0)211-7497-0.
See
“Explanatory Note” in this Report for additional information regarding Holdco and the Business Combination. Certain
additional information about Holdco is included in the Proxy Statement/Prospectus under the section titled “Certain Information
about Holdco” and is incorporated herein by reference. The material terms of the Business Combination are described in the
Proxy Statement/Prospectus under the section titled “Proposal No. 1 — The Business Combination Proposal,”
which is incorporated herein by reference.
Holdco
is subject to certain of the informational filing requirements of the Securities Exchange Act of 1934, as amended (“Exchange
Act”). Since Holdco is a “foreign private issuer”, it is exempt from the rules and regulations under the Exchange
Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of Holdco are
exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with
respect to their purchase and sale of Holdco Ordinary Shares. In addition, Holdco is not required to file reports and financial statements
with the SEC as frequently or as promptly as U.S. public companies whose securities are registered under the Exchange Act. However,
Holdco is required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting
firm. The SEC also maintains a website at http://www.sec.gov that contains reports and other information that Holdco files with or furnishes
electronically to the SEC.
The website address of Holdco
is https://herambaelectric.com/investor-relations/. The information contained on the website does not form a part of, and is not incorporated
by reference into, this Report.
Recent
Developments
As described above, on October 2, 2023, PERAC,
Holdco, Merger Sub, the Seller, and Heramba entered into the Business Combination Agreement, which provided for a proposed business combination
through a series of related transactions.
Effective as of the Closing Date, the Business
Combination was completed in accordance with the terms of the Business Combination Agreement.
Plan of Merger
On the Closing Date, PERAC and Merger Sub entered
into the Plan of Merger, pursuant to which Merger Sub merged with and into PERAC, with PERAC being the Surviving Company in the Merger
and becoming a direct, wholly owned subsidiary of Holdco.
Amended and Restated Warrant Agreement
On the Closing Date, PERAC, Holdco and Continental
Stock Transfer & Trust Company, as warrant agent, entered into an amended and restated warrant agreement, pursuant to which the warrant
agreement then governing the PERAC Warrants was amended and restated to, among other things, reflect the automatic adjustment of the PERAC
Warrants to Holdco Warrants at the Merger Effective Time.
Share Issuances and Service Provider Promissory
Notes
As previously reported, prior
to the approval of PERAC’s first extension on August 1, 2023, PERAC entered into certain non-redemption agreements with one or
more unaffiliated third parties (the “Extension NRA Investors”), pursuant to which the Extension NRA Investors
agreed not to redeem certain PERAC public shares in connection with such extension, in exchange for PERAC agreeing to issue an aggregate
of 1,645,596 PERAC Class A Ordinary Shares, or cause the issuance of a like number of post-combination shares, to the Extension NRA Investors
at the time of PERAC’s initial business combination.
As previously reported, on July 10, 2024, PERAC
entered into a non-redemption agreement with an unaffiliated third party (the “Additional Backstop Investor”),
pursuant to which, among other matters, PERAC agreed to issue up to 500,000 PERAC Class A Ordinary Shares, or cause the issuance of a
like number of Holdco Ordinary Shares, to the Additional Backstop Investor under certain circumstances in connection with the consummation
of the Business Combination. The Additional Backstop Investor is also a lender under a loan agreement with Heramba Holdings, Inc. (“Heramba
Holdings”), which loan agreement included execution of such non-redemption agreement as a closing condition.
Prior to the Closing Date, certain service providers
(the “Service Providers”) agreed with PERAC to receive an aggregate of 690,000 PERAC Class A Ordinary Shares
in satisfaction of certain fees due to the Service Providers in connection with the consummation of the Business Combination.
As a result of these arrangements, in connection
with the Business Combination and prior to the Merger Effective Time, PERAC issued an aggregate of 1,645,596 PERAC Class A Ordinary Shares
to the Extension NRA Investors, 500,000 PERAC Class A Ordinary Shares to the Additional Backstop Investor and an aggregate of 690,000
PERAC Class A Ordinary Shares to the Service Providers, in each case in private placements and pursuant to the exemption from registration
contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). All such newly
issued PERAC Class A Ordinary Shares were exchanged for Holdco Ordinary Shares at the Merger Effective Time pursuant to the Business Combination
Agreement.
Additionally, on or prior to the Closing Date,
Holdco entered into certain promissory notes with certain service providers, pursuant to which Holdco will pay approximately $13.6
million over the next 30 months.
A&R Memorandum and Articles of Surviving Company
In connection with the consummation of the Business
Combination, pursuant to the Plan of Merger and at the Merger Effective Time, the PERAC Articles were amended and restated in their entirety
and replaced by the amended and restated memorandum and articles of association of the Surviving Company.
Registration Rights Agreement
Concurrently with the closing of the Business Combination,
Holdco and certain holders of Holdco securities, including Smilodon Capital, LLC (the “PERAC Sponsor”), entered
into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which, among other things,
Holdco agreed to register for resale, pursuant to Rule 415 under the Securities Act, certain Holdco Ordinary Shares and other equity securities
of Holdco that are held by the parties thereto from time to time. In addition, Holdco agreed to provide such holders with customary demand
and piggyback registration rights with respect to the Registrable Securities (as defined therein). Such Registrable Securities include
up to 3,476,096 Holdco Ordinary Shares issued in exchange for the PERAC founders shares other than the Released Shares (as defined and
described below), 8,425,532 Holdco Founders Warrants resulting from the automatic adjustment of the PERAC Founders Warrants at the Merger
Effective Time (and the Holdco Ordinary Shares underlying such Holdco Founders Warrants), 1,645,596 Holdco Ordinary Shares issued to the
Extension NRA Investors, 500,000 Holdco Ordinary Shares issued to the Additional Backstop Investor, 690,000 Holdco Ordinary Shares issued
to the Service Providers and 36,700,000 Holdco Ordinary Shares held by Heramba Limited.
Pursuant to the Registration Rights Agreement,
Holdco is required to submit to or file with the SEC, within 30 calendar days after the Closing Date, a shelf registration statement covering
the issuance and the resale of all such Registrable Securities on a delayed or continuous basis, and to use its commercially reasonable
efforts to have such shelf registration statement declared effective as soon as practicable after the filing thereof, but no later than
the 90th calendar day after the filing thereof. The Registration Rights Agreement does not contain any cash or other penalties resulting
from delays in registering these securities.
When an effective shelf registration statement
is on file with the SEC, certain Holdco shareholders may demand not more than two underwritten shelf takedowns in any twelve month period,
for an aggregate of not more than two underwritten shelf takedowns in any twelve month period, in each case, subject to certain customary
limitations set forth in the Registration Rights Agreement.
Lock-Up Agreement
On June 19, 2024, Holdco and certain holders of
Holdco securities upon the Closing, including the PERAC Sponsor, certain PERAC directors and executive officers and certain Heramba shareholders
holding greater than 5% of the outstanding Holdco Ordinary Shares upon the Closing, entered into the Lock-Up Agreement, pursuant to which,
among other things, each of such holders agreed to not effect any sale or distribution of the Lock-Up Securities (as defined therein),
subject to certain customary exceptions set forth in the Lock-Up Agreement, until the earliest of: (i) the twelve month anniversary of
the Closing Date, (ii) such time that the trading price of the Holdco Ordinary Shares equals or exceeds $12.00 per share (as adjusted
for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day
period commencing at least 150 calendar days after the Closing Date, (iii) the date on which the Loan (as defined therein) is repaid,
and (iv) such date on which Holdco completes a liquidation, merger, share exchange, reorganization or other similar transaction that results
in all Holdco shareholders having the right to exchange their Holdco Ordinary Shares for cash, securities or other property. The Lock-Up
Securities include 2,304,379 Holdco Ordinary Shares issued in exchange for the PERAC founders shares currently held by the PERAC Sponsor,
certain affiliates of the PERAC Sponsor and certain of PERAC’s former officers and directors, and 34,000,000 Holdco Ordinary Shares
held by Heramba Limited.
Lock-Up Release
On July 25, 2024, to facilitate the listing of
Holdco’s securities on Nasdaq and the completion of the Business Combination, PERAC agreed to release an aggregate of 3,118,319
PERAC Class A Ordinary Shares then held by the PERAC Sponsor (such founders shares, the “Released Shares”),
from all lock-up restrictions under the insider letter entered into at the time of the IPO, such that the Released Shares were distributed
to non-affiliate members of the PERAC Sponsor at or prior to the consummation of the Business Combination.
B.
Business Overview
Prior
to the Business Combination, Holdco did not conduct any material activities other than those incidental to its formation and the matters
contemplated by the Business Combination Agreement, such as the making of certain required securities law filings and the establishment
of certain subsidiaries. Upon the closing of the Business Combination, Holdco became the indirect parent of, and conducts its business
through Kiepe Electric GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) established under the Laws of Germany
having its statutory seat in Düsseldorf, Germany, registered with the commercial register of the Local Court of Düsseldorf
under HRB 34306 (“Kiepe GmbH”) and Kiepe Electric LLC, a Georgia limited liability company (“Kiepe
US” and together with Kiepe GmbH, “Kiepe Electric Group”), a German-based provider of electric
mobility products and solutions for rail vehicles and buses.
Information
regarding the business of Kiepe Electric Group is included in the Proxy Statement/Prospectus under the sections titled “Business
of Kiepe Electric and Certain Information about Kiepe Electric” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations of Kiepe Electric,” which are incorporated herein by reference.
C.
Organizational Structure
The
organizational chart of Holdco following closing of the Business Combination is set forth below.
D.
Property, Plant and Equipment
Holdco’s
property, plants and equipment are held through Kiepe Electric Group and its subsidiaries. Information regarding Holdco’s property,
plants and equipment is included in the Proxy Statement/Prospectus under the sections titled “Business of Kiepe Electric
and Certain Information about Kiepe Electric—Facilities” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations of Kiepe Electric—Property, plant and equipment” and are incorporated herein
by reference.
ITEM
4A. UNRESOLVED STAFF COMMENTS
None.
ITEM
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Following
and as a result of the Business Combination, the business of Holdco is conducted through Kiepe Electric Group.
Heramba
The
following discussion and analysis of the financial condition and results of operations of Heramba for the year ended December 31, 2023
and the period from September 1, 2022 (inception) through December 31, 2022 should be read in conjunction with Heramba’s audited
consolidated financial statements as of December 31, 2023 and 2022 and for the year ended December 31, 2023 and the period from September
1, 2022 (inception) through December 31, 2022, each of which are included elsewhere in this Report. The financial information contained
herein is taken or derived from such consolidated financial statements, unless otherwise indicated. The following discussion contains
forward-looking statements. Actual results of Heramba could differ materially from those that are discussed in these forward-looking
statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this Report, particularly
under “Risk Factors.” In this section, references to the “Company” “we,” “us,” “Heramba”
and “our” are intended to refer to Heramba and its subsidiaries, unless the context clearly indicates otherwise. Amounts
are presented in euros, except for per share data or as otherwise noted.
Business
Overview
Heramba
was established as a limited liability shell company on September 1, 2022 registered with the commercial register of the Local Court
of Düsseldorf under HRB 98529.
The
Company was formed for the purpose of focusing on investing in companies with technologies and capabilities that can accelerate the decarbonization
of commercial transportation. The Company has not commenced operations.
Heramba
GmbH has two consolidated subsidiaries, Heramba Holdings, Inc. and Heramba Investments LLC. Both subsidiaries are 100% owned and located
in the United States. Heramba Holdings, Inc. was formed in April 2023 and Heramba Investments LLC was formed in August 2023.
Recent
Developments
Promissory
Note
On
May 31, 2023, the Company issued an unsecured promissory note to an unrelated third-party in the amount of $5,000,000 (€4,668,084)
(the “Promissory Note”). Pursuant to the terms of the agreement, the Promissory Note bears interest at 10.00%
per annum and is currently due on demand. Unpaid interest expense for the year ended December 31, 2023 was €296,207 and is included
in accrued expenses within the consolidated statement of financial position.
Share
Purchase Agreement
On July 25, 2023, Heramba and Heramba Holdings
entered into the Share Purchase Agreement with Knorr-Bremse Systeme für Schienenfahrzeuge GmbH (“KB GmbH”)
and Knorr-Brake Holding Corporation (“KB US” and, together with KB GmbH, “KB Sellers”)
for the purchase of a majority interest in the Kiepe Electric Group, and on January 31, 2024, Heramba, Heramba Holdings, KB GmbH
and KB US entered into the SPA Amendment to the Share Purchase Agreement (as amended, the “SPA”). In December
of 2023, the Company prepaid €1,393,659 of purchase consideration related to this agreement, which is included in prepaid expenses
and other current assets on the consolidated statements of financial position as of December 31, 2023. The SPA closed on February 6, 2024
and KB GmbH, as sole shareholder of Kiepe GmbH, sold and transferred 85% of the equity interests in Kiepe GmbH, as well as certain receivables
and shareholder loans, to Heramba, and KB US, as the sole member of Kiepe US, sold and transferred all ownership interests in Kiepe US,
as well as certain receivables, to Heramba Holdings (the “Kiepe Acquisition”).
Business
Combination Agreement
On October 2, 2023, Heramba entered the Business
Combination Agreement with PERAC, Holdco, Merger Sub and Seller. Effective as of July 26, 2024, the Business Combination was consummated
and Holdco became a publicly traded corporation.
Effective as of the Closing Date, several transactions
were completed pursuant to the Business Combination Agreement and the Plan of Merger, in the following order:
| |
● |
immediately prior to the Merger Effective Time, (1) each issued and outstanding PERAC unit was automatically separated into its component securities and (2) the sole issued and outstanding PERAC Class B Ordinary Share was automatically converted into one PERAC Class A Ordinary Share; |
| ● | at
the Merger Effective Time, PERAC and Merger Sub entered into the Plan of Merger, pursuant
to which Merger Sub merged with and into PERAC, with PERAC being the Surviving Company and
becoming a direct, wholly owned subsidiary of Holdco; |
| |
● |
at the Merger Effective Time, (a) each PERAC Class A Ordinary Share issued and outstanding immediately prior to the Merger Effective Time (which, for the avoidance of doubt, included the PERAC Class A Ordinary Shares held as a result of the Unit Separation and the Closing Class B Conversion) was automatically cancelled in exchange for the right to be issued one Holdco Ordinary Share, (b) each PERAC Public Warrant remained outstanding but was automatically adjusted to become one Holdco Public Warrant, (c) each PERAC Founders Warrant remained outstanding but was automatically adjusted to become one Holdco Founders Warrant, (d) each PERAC Class A Ordinary Share properly tendered for redemption and issued and outstanding immediately prior to the Merger Effective Time was automatically cancelled and ceased to exist and thus represented only the right to be paid a pro rata portion of the Trust Account pursuant to the PERAC Articles, (e) each dissenting PERAC share issued and outstanding immediately prior to the Merger Effective Time held by a dissenting PERAC shareholder, if any, was automatically cancelled and ceased to exist and thus represented only the right to be paid the fair value of such dissenting PERAC share and such other rights as are granted by the Companies Act (As Revised) of the Cayman Islands, and (f) each ordinary share of Merger Sub issued and outstanding at the Merger Effective Time was automatically cancelled in consideration for the issuance of one validly issued, fully paid and non-assessable ordinary share of par value $1.00 in the Surviving Company; and |
| ● | immediately
following the Merger Effective Time, pursuant to the Share Contribution Agreement, the Seller
transferred as a contribution to Holdco, and Holdco assumed from the Seller, the shares in
Heramba, all of which were held by the Seller, in exchange for the issuance by Holdco of
36,700,000 Holdco Ordinary Shares to Seller. |
Loan
Agreements
On April 30, 2024, Heramba Holdings and Seller
entered into loan agreements (the “Loan Agreements”) with certain unaffiliated third parties (the “Initial
Backstop Investors”) pursuant to which the Company issued to the Initial Backstop Investors unsecured notes (the “Notes”)
in an aggregate principal amount of $1,800,000 (approximately €1,680,000). The Notes matured on the third business day following
consummation of the Business Combination pursuant to the Business Combination Agreement. The Notes do not bear interest during the term
of the Notes. The Notes are subject to customary events of default, the occurrence of which, following written notice to the Company,
triggers the unpaid principal balance of the Notes and all other sums payable with regard to the Notes becoming immediately due and payable.
In addition, Seller is obligated and liable for all amounts due under and pursuant to the Notes. The Initial Backstop Investors were also
party to certain non-redemption agreements with PERAC.
On July 10, 2024, Heramba Holdings entered into
a loan agreement (the “New Loan Agreement”) with the Additional Backstop Investor pursuant to which Heramba
Holdings issued to the Additional Backstop Investor an unsecured note (the “New Note”) in an aggregate principal
amount of $800,000 (approximately €747,000). The New Note matures on April 27, 2025 and bears interest at a rate of 5.0% per annum.
The New Note is subject to customary events of default, the occurrence of which, following written notice to Heramba Holdings, triggers
the unpaid principal balance of the New Note and all other sums payable with regard to the New Note becoming immediately due and payable.
The Additional Backstop Investor was also party to a non-redemption agreement with PERAC.
Critical
Accounting Estimates
The
preparation of our consolidated financial statements and related notes in conformity with International Financial Reporting Standards
(“IFRS”) may require us to make judgments, estimates and assumptions that affect the amounts of assets, liabilities
and expenses reported during the period. The SEC has defined a company’s critical accounting policies as the ones that are most
important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its
most difficult and subjective judgments. Based on this definition, Heramba has determined that there were no critical accounting estimates
identified for the year ended December 31, 2023 and the period from September 1, 2022 (inception) to December 31, 2022.
Results
of Operations
As
of December 31, 2023, the Company has not generated any revenue and all of the Company’s expenses have been related to the proposed
business combination. There has been no significant change in our financial or trading position and no material adverse change has occurred
since the date of our audited consolidated financial statements.
The
Company had no operations during the year ended December 31, 2023 and the period from September 1, 2022 (inception) through December 31,
2022.
The
following table summarizes our financial results for the year ended December 31, 2023 and the period from September 1, 2022 (inception)
through December 31, 2022 (in euros):
| | |
For
the
year
ended
December 31,
2023 | | |
For
the
period
from September 1,
2022 (inception)
to December 31,
2022 | |
| Operating
Expenses: | |
| | | |
| | |
| General
and administrative | |
€ | 2,817,681 | | |
€ | — | |
| Loss
from operations | |
| (2,817,681 | ) | |
| — | |
| Interest
expense | |
| (296,207 | ) | |
| — | |
| Net
Loss | |
€ | (3,113,888 | ) | |
€ | — | |
General
and administrative
General
and administrative expenses for the year ended December 31, 2023 was €2,817,681 as compared to €0 for the period from September
1, 2022 (inception) to December 31, 2022. General and administrative expenses of €2,817,681 reflects professional services, such
as legal and accounting, related to the proposed business combination.
Interest
expense
Interest
expense for the year ended December 31, 2023 was €296,207 as compared to €0 for the period from September 1, 2022 (inception)
to December 31, 2022. The €296,207 represents interest on the promissory note.
Liquidity
and Capital Resources
Historically,
the Company’s primary sources of liquidity have been contributions from members and the issuance of a promissory note. As of December
31, 2023, the Company had an aggregate cash balance of €1,022,710. Subsequent to December 31, 2023, the Company successfully completed
the acquisition of an operating entity in conjunction with the closing of the SPA. In order to support on-going operations and meet current
purchase consideration obligations related to the SPA, the Company will need to raise additional capital or secure debt funding. While
there can be no assurances, the Company intends to raise such capital through issuances of additional equity and debt. If additional
financing is required from outside sources, the Company may not be able to raise it on terms acceptable to the Company or at all. If
the Company is unable to raise additional capital when desired, the Company’s business, results of operations and financial condition
would be materially and adversely affected.
As
a result of the above, in connection with the Company’s assessment of going concern considerations, the Company’s management
has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as
a going concern. The consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets
or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Cash
flows for the year ended December 31, 2023 and the period from September 1, 2022 (inception) to December 31, 2022.
The
following table summarizes the Company’s cash flows from operating, investing and financing activities for the year ended December
31, 2023 and the period from September 1, 2022 (inception) to December 31, 2022:
| | |
For
the
year
ended
December 31,
2023 | | |
For
the
period
from
September 1,
2022
(inception) to December 31,
2022 | |
| | |
| | |
| |
| Net cash used
in operating activities | |
€ | (2,276,715 | ) | |
€ | — | |
| Net cash used in investing
activities | |
€ | (1,393,659 | ) | |
€ | — | |
| Net cash provided by financing
activities | |
€ | 4,668,084 | | |
€ | 25,000 | |
Cash
flows from operating activities
Net
cash used in operating activities was €2,276,715 during the year ended December 31, 2023, compared to net cash used in operating
activities of €0 during the period from September 1, 2022 (inception) to December 31, 2022. The period-to-period change was a result
of Heramba’s net loss for the period and an increase in prepaid expenses and other current assets partially offset by an increase
in accounts payable and accrued expenses and amounts due to related party.
Cash
flows from investing activities
Net
cash used in investing activities was €1,393,659 during the year ended December 31, 2023, compared to net cash used in investing
activities of €0 during the period from September 1, 2022 (inception) to December 31, 2022, as a result the prepayment of the purchase
consideration for Kiepe Acquisition.
Cash
flows from financing activities
Net
cash provided by financing activities was €4,668,084 during the year ended December 31, 2023, compared to net cash provided by financing
activities of €25,000 during the period from September 1, 2022 (inception) to December 31, 2022, as a result the proceeds from the
issuance of promissory note.
Off-Balance
Sheet Arrangement
As
of December 31, 2023 and 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Kiepe
Electric Group
The
following discussion and analysis of the financial condition and results of operations of the Kiepe Electric Group for the years ended
December 31, 2023, 2022 and 2021 should be read in conjunction with Kiepe Electric Group’s audited combined financial statements
as of December 31, 2023 and 2022 and for the fiscal years ended December 31, 2023, 2022 and 2021, each of which are included elsewhere
in this Report. The financial information contained herein is taken or derived from such combined financial statements, unless otherwise
indicated. The following discussion contains forward-looking statements. Actual results of Kiepe Electric Group could differ materially
from those that are discussed in these forward-looking statements. Factors that could cause or contribute to such differences include
those discussed below and elsewhere in this Report, particularly under “Risk Factors.” In this section, references to the
“Company” “we,” “us,” “Kiepe Electric Group” and “our” are intended to refer
to Kiepe Electric Group and its subsidiaries, unless the context clearly indicates otherwise. Amounts are presented in thousands of euros,
except for per share data or as otherwise noted.
Business
Overview and Highlights
Kiepe
Electric Group is a carve-out business of Knorr-Bremse AG, Munich, Germany (“KB”, together with its direct
and indirect subsidiaries, the “KB Group”). On July 25, 2023, wholly owned subsidiaries of KB, KB GmbH and
KB US, entered into the SPA with Heramba and Heramba Holdings, pursuant to which Heramba and Heramba Holdings are acquiring 85% of the
equity interests of Kiepe GmbH and 100% of the equity interests of Kiepe US.
Kiepe
Electric Group is a global specialist in e-engineering offerings of environmentally friendly electrical equipment for tramcars, light
rail vehicles, metro vehicles and regional vehicles as well as battery buses, trolleybuses and In-Motion-Charging buses. Kiepe Electric
Group operates in the business areas of Rail Vehicle Systems (“RVS”), Electrical Vehicle Systems (“EVS”)
and Aftermarket & Sales, Modernization with its core competence in the design and integration of electrical systems in the stated
vehicles. Kiepe Electric Group operates globally with its headquarters in Germany and operations located in Austria, Switzerland, Italy
and North America.
Key
Factors Affecting Operating Results
Supply
Chain Constraints
We
rely on a limited number of suppliers to manufacture our components and systems, including in some cases only a single supplier for some
products and components. While we have long-term agreements with suppliers of some of our key components, our reliance on a limited number
of manufacturers increases our risks, since we do not currently have proven reliable alternative or replacement manufacturers beyond
these key parties. In the event of interruption, we may not be able to increase capacity from other sources or develop alternate or secondary
sources without incurring material additional costs and substantial delays. Thus, our business could be adversely affected if one or
more of our suppliers is impacted by any interruption at a particular location. For example, in 2022 and 2023 there were supply chain
issues caused primarily by the COVID-19 pandemic and the conflict in Ukraine that affected the supply of electronic components and the
manufacturing business globally, caused delays in the production of our products, increased our costs and adversely impacted our revenues.
Approximately €25 million of projects were delayed from 2021 to 2022 and approximately €40 million of projects were delayed
from 2022 to 2023. In addition, our average cost of production increased approximately 5% per year over the period from 2021 to 2023.
In
addition, we rely on engineering service providers, including our partnership with Knorr-Bremse Technology Center India Private Ltd (“TCI”).
Disruptions in our partnership with TCI or other service providers may lead to disruptions and/or significant delays in our ongoing research
and development programs or customer projects.
If
we experience a significant increase in demand for our products, or if we need to replace an existing supplier, it may not be possible
to supplement or replace them on acceptable terms, which may undermine our ability to deliver products to customers in a timely manner.
For example, it may take a significant amount of time to identify a manufacturer that has the capability and resources to assemble circuit
boards or batteries and submodules in sufficient volume, quality and time. Identifying suitable suppliers and manufacturers could be
an extensive process that requires us to become satisfied with their quality control, technical capabilities, responsiveness and service,
financial stability, regulatory compliance, and labor and other ethical practices. To date, supply chain issues have not materially affected
our business outlook and goals or our operating results, and we have not implemented any mitigation efforts to date as a result. However,
we cannot predict the impact of any future or prolonged supply chain issues or any mitigation efforts we may take going forward. For
example, as a result of potential supply chain issues, the mitigation efforts discussed above may result in cost increases and any attempts
to offset such increases with price increases may result in reduced sales, increased customer dissatisfaction or otherwise harm our reputation.
Further, if we were to elect to transition or add suppliers or manufacturers, it may result in temporary or additional delays or risks
related to consistent product quality or reliability. This in turn may limit our ability to meet customer demand. We may in the future
also purchase supplies further in advance, which in return can result in less capital being allocated to other activities such as marketing
and other business needs. We cannot quantify the impact of such disruptions at this time or predict the impact of any mitigation efforts
we may take in response to supply chain disruptions on our business, financial condition, and results of operations. However, a loss
of any significant suppliers or manufacturers could have an adverse effect on our business, financial condition and operating results.
Russia
and Ukraine Conflict
We
have majority of customers and suppliers in Europe. Our original equipment manufacturers (“OEM”) partners have
significant presence in Europe as well. Any uncertainty in Europe driven by geo-political situations such as the conflicts between Russia
and Ukraine and Israel and Hamas may have an adverse impact on our business. This may result in longer projects delays for us due to
longer lead-time for our OEM partners in accessing raw materials such as steel and iron. Also, geopolitical conflicts may increase in
energy prices and cost of manufacturing resulting in lower margins for our business.
Components
of Combined Statements of Profit or Loss
Revenues
Kiepe
Electric Group generates revenue from contracts with various public transport companies, fleet operators and vehicle manufacturers in
the rail and road sectors.
Historically,
Kiepe Electric Group’s revenues have been generated from contracts in three primary businesses: RVS, EVS and Aftermarket &
Sales, Modernization.
The
RVS business covers electrical systems for rail vehicles. Kiepe Electric Group integrates traction equipment, on-board power supply systems,
vehicle control systems as well as many electronic and electrical vehicle components into its extensive system solutions. The RVS business
is characterized by long project cycles, resulting in high sales coverage and reliable sales planning. The RVS business represents long-term
construction contracts, which focus on customer specific solutions (includes significant engineering and construction work, followed
by serial production). IFRS 15.10 defines a contract as an agreement between two or more parties that creates enforceable rights and
obligations. For long-term construction contracts the parties generally agree on a so-called Purchase Contract or Project Purchase Contract
which, in turn, creates enforceable rights and obligations and meet the definition of a contract. The contract specifies the deliverables,
the quantities as well as the terms of payment and delivery. Terms of payment are agreed individually for each contract.
The
EVS business covers traction equipment, current collector systems, on-board power supply systems, battery chargers and insulation monitoring
systems, including energy management. The vehicle equipment is supplemented by components from other companies to an optimized system
and delivered to the customer from a single source. In contrast to the RVS business, the EVS business has a lower sales coverage caused
by shorter tendering cycles. Long-term construction contracts are applied for the EVS business to the same extent as for the RVS business.
The accounting policies applied for the EVS business are the same as those for the RVS business.
The
Aftermarket & Sales, Modernization business covers spare parts, Kiepe Electric Group’s repair center, maintenance contracts
and test and fleet modernization. Modernization of vehicles can be an alternative to buying new vehicles. Kiepe Electric Group advises
public transport companies on the prolongation of the life cycles of vehicles and offers modernization services. The typical deliveries
in connection with the Aftermarket & Sales, Modernization business are spare parts, respective services, and maintenance contracts.
For service contracts, Kiepe Electric Group generally receives separate orders to deliver parts or short-term services. In the case of
service contracts (including sale of spare parts), the customers’ orders for individual items contain the item itself, quantity,
price and terms of payment and delivery. The contract is concluded and effective with acceptance by Kiepe Electric Group.
Change
in inventory of finished and unfinished goods and own work capitalized
Own
work capitalized results from the capitalization of development costs reclassified from the line item “cost of materials”
in the combined statements of loss.
Other
operating income
Other
operating income includes income from shareholder resolution, income from other services, income from government grants and income from
the disposal of assets held.
Cost
of materials
Cost
of materials is comprised of expenditures for raw materials, consumables and purchased goods as well as purchased services.
Personnel
expenses
Personnel
expenses primarily include wages and salaries for employees as well as social security contributions and expenses for temporary employees.
Other
operating expenses
Other
operating expenses includes warranty expenses, freight costs, provision for potential liquidated damages, headquarter fees, professional
fees, maintenance expenses, travel and other employee expenses, license and patent fees, rents and leases, impairment losses and reversals,
other taxes, currency translation losses and other costs.
Depreciation,
amortization and impairment
Depreciation
expenses relates to depreciation of our property, plant and equipment, including right-of-use assets, over their estimated useful lives
using the straight-line method. Amortization expense represents the amortization of our Intangible assets with finite useful lives on
a straight-line basis over their useful lives.
If
the carrying amount of an asset, or if the cash-generating unit (“CGU”) to which the asset belongs, is higher
than its recoverable amount, the carrying amount is reduced to the recoverable amount, and an impairment loss is recognized in the combined
statements of loss.
Interest
income, interest expenses and other financial result
Interest
income from financial instruments primarily relates to cash-pooling with KB Group.
Interest
expenses primarily consist of fees for bank guarantees.
The
remaining other financial income includes dividends received from the investment in Heiterblick Projektgesellschaft mbH. Foreign currency
gains or losses on financial instruments carried at amortized cost (“AC”) mainly result from the currency translation
differences of cash and cash equivalents at the closing rate. These foreign currency gains or losses are presented net.
Income
tax (expense) benefit
Current
tax is the amount of income tax payable or recoverable in respect of the taxable profit or tax loss for a period as well as all adjustments
to the tax payable in previous years. In addition, the current tax also includes adjustments for any tax payments or refunds due for
any years not yet finally assessed (excluding interest payments or refunds). There are many transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course of business. We recognize liabilities for anticipated tax audit matters
based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts
that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination
is made. The amount is calculated from the best possible estimate of the expected tax payment (expected value or most likely value of
the tax uncertainty). Tax receivables from uncertain tax positions are then recognized if it is more likely than not and thus reasonably
certain that they can be realized.
Results
of Operations
For
a detailed discussion of our financial performance and condition for the years ended December 31, 2022 and December 31, 2021, please
refer to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Kiepe
Electric” included in the Proxy Statement/Prospectus.
Comparison
of the years ended December 31, 2023 and 2022
The
following table sets forth a summary of our combined statements of profit or loss for the periods presented (in thousands):
| | |
Years
Ended December 31, | | |
Change
in | |
| | |
2023 | | |
2022 | | |
€ | | |
% | |
| | |
(In
thousands, except percentages) | |
| Revenue | |
€ | 152,807 | | |
€ | 119,788 | | |
€ | 33,019 | | |
| 27.6 | % |
| Change
in inventory of finished and unfinished goods | |
| (3,032 | ) | |
| (4,377 | ) | |
| 1,345 | | |
| (30.7 | )% |
| Own
work capitalized | |
| 3,167 | | |
| 3,468 | | |
| (301 | ) | |
| (8.7 | )% |
| Other
operating income | |
| 2,564 | | |
| 3,534 | | |
| (970 | ) | |
| (27.4 | )% |
| Cost
of materials | |
| (67,397 | ) | |
| (53,650 | ) | |
| (13,747 | ) | |
| 25.6 | % |
| Personnel
expenses | |
| (55,211 | ) | |
| (57,429 | ) | |
| 2,218 | | |
| (3.9 | )% |
| Other
operating expenses | |
| (28,133 | ) | |
| (24,381 | ) | |
| (3,752 | ) | |
| 15.4 | % |
| Depreciation,
amortization and impairment | |
| (3,601 | ) | |
| (4,968 | ) | |
| 1,367 | | |
| (27.5 | )% |
| Operating
gain/ (loss) | |
| 1,164 | | |
| (18,015 | ) | |
| 19,179 | | |
| (106.5 | )% |
| Interest
income | |
| 1,202 | | |
| 150 | | |
| 1,052 | | |
| 701.3 | % |
| Interest
expenses | |
| (1,279 | ) | |
| (1,061 | ) | |
| (218 | ) | |
| 20.5 | % |
| Other
financial result | |
| 108 | | |
| (37 | ) | |
| 145 | | |
| (391.9 | )% |
| Income/
(loss) before taxes | |
| 1,195 | | |
| (18,963 | ) | |
| 20,158 | | |
| (106.3 | )% |
| Income
tax (expense) benefit | |
| (788 | ) | |
| (1,095 | ) | |
| 307 | | |
| (28.0 | )% |
| Income
(loss) for the period | |
€ | 407 | | |
€ | (20,058 | ) | |
€ | 20,465 | | |
| (102.0 | )% |
Revenues
Revenues
increased by 27.6%, or €33.0 million, for the year ended December 31, 2023 as compared to the same period in 2022, driven primarily
by an increase in revenues for the execution of individual projects where revenues are generated over time of €33.0 million, whereas
revenues generated at a point in time remained on the same level year over year.
Change
in inventory of finished and unfinished goods
Change
in inventory of finished and unfinished goods decreased by 30.7%, or €1.3 million, for the year ended December 31, 2023 as
compared to the same period in 2022, driven primarily by a decrease in work in progress related to contracts where revenues are generated
at a point in time and physical inventory.
Own
work capitalized
Own
work capitalized decreased by 8.7%, or €301 thousand, for the year ended December 31, 2023 as compared to the same period in
2022, driven primarily by lower product development costs.
Other
operating income
Other
operating income decreased by 27.4%, or €1.0 million, for the year ended December 31, 2023 as compared to the same period in
2022. In 2022, other operating income includes income from an earn-out agreement of the KB Group with the former shareholder of Kiepe
GmbH in the amount of €2.3 million. Offsetting this there was increases in income from other services of €758 thousand and
an increase in currency translation gains of €0.6 million for the year ended December 31, 2023 as compared to the same period in
2022. The income from other services mainly relates to intercompany services, such as human resources and rental income, provided to
other KB Group entities. The line item “other” includes income from the reversal of accruals as well as customer payments
of freight cost and cost reimbursements from suppliers.
Cost
of materials
Cost
of materials increased by 25.6%, or €13.7 million, for the year ended December 31, 2023 as compared to the same period in 2022.
In 2023 revenue increased by 27.6% and cost of materials increased by 25.6%, The relative higher increase in revenues is due to a resolution
of project risks in the reporting year. The expenses for raw materials, consumables and for purchased goods includes increases in write-downs
on inventories in the amount of €3.3 million, for the year ended December 31, 2023 as compared to €0.9 million for the year
ended December 31, 2022.
Personnel
expenses
Personnel
expenses decreased by 3.9%, or €2.2 million, for the year ended December 31, 2023 as compared to the same period in 2022. The
decrease in wages and salaries in 2023 was primarily driven by the reduction of employees reduced bonus payments of €1.4 million
and one-time payments in 2022 based on a collective labor contract in the amount of €1.5 million.
Other
operating expenses
Other
operating expenses increased by 15.4%, or €3.8 million, for the year ended December 31, 2023 as compared to the same period
in 2022. The increase in 2023 results mainly from additional warranty provisions, increased costs for consultants and auditors as well
as impairment losses. Impairment losses and reversals consist mainly of allowances for customer receivables. In 2023, a one-time allowance
for trade receivables and contract assets was recorded due to insolvent customers. In 2022, €0.5 million previously recorded impairment
losses were recovered resulting in total in a reversal.
Depreciation,
amortization and impairment
Depreciation,
amortization and impairment expense decreased by 27.5%, or €1.4 million, primarily relating to decreases in the amortization of
intangible assets from acquisitions of €1.1 million, and depreciation of property, plant and equipment of €283 thousand.
Interest
income, interest expense and other financial result
Interest
income increased by 701.3%, or €1.1 million, for the year ended December 31, 2023 as compared to the same period in 2022, primarily
due to increased cash balances.
Interest
expenses increased by 20.5%, or €0.2 million, for the year ended December 31, 2023 as compared to the same period in 2022,
primarily due to interest on a loan provided by Knorr-Bremse AG.
Other
financial result increased by 391.9%, or €0.1 million, for the year ended December 31, 2023 as compared to the same period
in 2022, primarily due to foreign exchange gains and losses.
Income
tax (expense) benefit
Income
tax (expense) benefit decreased by 28.0%, or €0.3 million, for the year ended December 31, 2023 as compared to the same period
in 2022, primarily due to tax loss carryforwards that were recognized as non-cash contributions or withdrawals by KB Group for Kiepe
Electric Group entities that historically did not constitute separate income tax payers.
Liquidity
and Capital Resources
Sources
of Liquidity
Historically,
the Company’s primary sources of liquidity have been cash and cash equivalents, cash flows from operations (when available) and
cash flows from financing activities, including funding under a profit and loss transfer agreement (“PLTA”)
that was entered into between Kiepe Electric GmbH and KB SfS.
In
preparation of the transaction that was completed on February 6, 2024, the PLTA is no longer in force and has been mutually terminated
as of January 31, 2024. In addition, as the Company is no longer wholly owned by KB Group, Kiepe Electric does not have access to secure
bond credit lines in order to support its revenue generating and operational business needs sufficiently and there is no assurance that
future access to bonding and funding will be available if and when required or at terms acceptable to the Company. Such factors raise
substantial doubt about the ability of Kiepe Electric to continue as a going concern.
Cash
Flow Summary for the Years Ended December 31, 2023 and 2022
The
following table summarizes our cash flows for the periods presented:
| | |
For
the years ended
December 31, | |
| | |
2023 | | |
2022 | |
| Net
cash from operating activities | |
| 10,576 | | |
| (10,992 | ) |
| Net
cash from investing activities | |
| (3,833 | ) | |
| (4,897 | ) |
| Net
cash from financing activities | |
| 17,629 | | |
| 17,520 | |
| Effect
of exchange rate changes on cash | |
| (299 | ) | |
| (1,028 | ) |
| Net
increase in cash and cash equivalents | |
| 24,073 | | |
| 603 | |
Cash
flows from operating activities
Net
cash from operating activities was €10.6 million for the year ended December 31, 2023 as compared to net cash from operating
activities of €(11.0) million for the same period in 2022. The increase in net cash from operating activities was primarily related
to the decrease in Kiepe Electric Group’s net loss for the year, as well as changes in Kiepe Electric Group’s trade receivables.
This was partially offset by changes in Kiepe Electric Group’s inventories and trade payables and contract liabilities.
Cash
flows from investing activities
Net
cash from investing activities was €(3.8) million for the year ended December 31, 2023 as compared to €(4.9) million for
the same period in 2022. In both years, cash flows from financing activities were primarily related investments in intangible assets,
property, plant and equipment as well as the cash inflow for interest received.
Cash
flows from financing activities
Net cash from financing activities was €17.6 million for the year
ended December 31, 2023 as compared to €17.5 million for the year ended December 31, 2022. In both years, cash flows
from financing activities primarily related to financing transactions with KB. In 2023, the cash flow from financing activities includes
the payment of the cash-pooling receivable of €14.4 million that has been paid due to the termination of the cash-pooling agreement
with KB.
Critical
Accounting Estimates
The
preparation of our combined financial statements and related notes requires us to make judgments, estimates and assumptions that affect
the reported amounts of assets, liabilities, revenue and expenses, fair value of acquired intangible assets and goodwill, useful lives
of acquired intangible assets and related disclosure of contingent assets and liabilities. The SEC has defined a company’s critical
accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations,
and which require a company to make its most difficult and subjective judgments. Based on this definition, we have identified the critical
accounting policies and judgments addressed below.
We
have based our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates due to risks and uncertainties, including uncertainty in the current
economic environment due to supply chain constraints and the conflict in Ukraine. As of the date of issuance of these financial statements,
we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying
value of our assets or liabilities. An accounting policy is considered to be critical if it requires an accounting estimate to be made
based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably
could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact
the combined financial statements. We believe the following critical accounting policies reflect the more significant estimates and assumptions
used in the preparation of our combined financial statements.
Revenue
Recognition
Revenue
is recognized in accordance with IFRS 15 when the customer has obtained control of the goods and services expected to be provided by
Kiepe Electric Group. Control is either transferred at a point-in-time or over a period of time. When assessing revenue recognition over
time, Kiepe Electric Group assesses whether a good has an alternative use and has an enforceable right to payment for the performance
completed based on the project agreements. In instances in which these criteria are met, revenue is recognized based on measuring progress
by using input-oriented methods. Kiepe Electric Group applies the cost-to-cost percentage-of-completion measure of progress as it best
depicts how control transfers to clients. The cost-to-cost approach measures progress towards completion based on the ratio of cost incurred
to date compared to total estimated contract cost. Kiepe Electric Group generates revenue from contracts with customers in the RVS, EVS
and Aftermarket & Service, Modernization business.
Rail
Vehicle Systems
The
RVS business unit covers electrical systems for rail vehicles. Kiepe Electric Group integrates traction equipment, on-board power supply
systems, vehicle control systems as well as many electronic and electrical vehicle components into its extensive system solutions. The
RVS sector is characterized by long project cycles, resulting in high sales coverage and reliable sales planning.
The
RVS business represents long-term construction contracts, which focuses on customer specific solutions (includes significant engineering
and construction work, followed by serial production). IFRS 15.10 defines a contract as an agreement between two or more parties that
creates enforceable rights and obligations. For long-term construction contracts the parties generally agree on a so-called Purchase
Contract or Project Purchase Contract which in turn, creates enforceable rights and obligations and meet the definition of a contract.
The contract specifies the deliverables, the quantities as well as the terms of payment and delivery. Terms of payment are agreed individually
for each contract.
Kiepe
Electric Group accounts for each promised good or service as a separate performance obligation if the good or service is capable of being
distinct. A good or service is considered distinct if the customer can benefit from the good or service on its own or together with other
resources and the promise to transfer a good or service to the customer is separately identifiable. In the case of long-term construction
contracts Kiepe Electric Group accounts for the contracts as one performance obligation and one product group. All engineering and all
deliveries contained in the base contract for the respective rail vehicle system form one performance obligation. If a contract specifies
more than one product group each product group represents a separate performance obligation. Kiepe Electric Group provides legally required
warranties and offers service type warranties for each delivered system which lead to a separate performance obligation.
The
transaction price is the amount of consideration to which an entity expects to be entitled to in exchange for transferring promised goods
or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). Due to the nature
of Kiepe Electric Group’s industry, there is significant complexity in Kiepe Electric Group’s estimation of total expected
revenue and cost, for which Kiepe Electric Group must make significant judgments. Kiepe Electric Group’s contracts with its customers
may contain several types of variable consideration, including claims, unpriced change orders, award and incentive fees, liquidated damages
and penalties or other provisions that can either increase or decrease the contract price to arrive at estimated revenue. These variable
amounts generally are earned upon achievement of certain performance metrics, program milestones or cost targets and can be based upon
customer discretion. Kiepe Electric Group estimates variable consideration at the most likely amount to which it expects to be entitled
upon completion of a project. Kiepe Electric Group includes estimated amounts in the transaction price to the extent it is probable it
will realize that amount. Kiepe Electric Group’s estimates of variable consideration and its determination of its inclusion in
project revenue are based on an assessment of Kiepe Electric Group’s anticipated performance and other information that may be
available to it.
When
the transaction price includes a significant financing component, the purchase price is adjusted accordingly. As of December 31, 2023
and 2022, only one project contained a significant financing component due to exceptionally high prepayments. The recognition of the
significant financing component is based on a straight-line basis over the term of the project.
If
a contract involves multiple performance obligations Kiepe Electric Group allocates the transaction price to each performance obligation
identified in the contract on a relative stand-alone selling price basis. As all long-term construction projects are customized products,
the stand-alone selling price is not directly observable. Kiepe Electric Group therefore derived the stand-alone selling price with a
best estimate of cost to satisfy the obligation plus an average margin.
For
each performance obligation identified, at contract inception, Kiepe Electric Group determines whether it satisfies the performance obligation
over-time or satisfies the performance obligation at a point-in-time. For long-term construction contracts revenue is generally recognized
over-time.
Electrical
Vehicle Systems
The
EVS business unit offers traction equipment, current collector systems, on-board power supply systems, battery chargers and insulation
monitoring systems, including energy management. The vehicle equipment is supplemented by components from other companies to an optimized
system and delivered to the customer from a single source. In contrast to the RVS business, the EVS business has a lower sales coverage
caused by shorter tendering cycles. Long-term construction contracts are applied for the EVS business to the same extent as for the RVS
business. The accounting policies applied for the EVS business are the same as those for the RVS business.
Aftermarket &
Sales, Modernization
Kiepe
Electric Group offers spare parts, its repair center, cost-saving maintenance contracts as well as test and measuring instruments. Modernization
of vehicles can be an alternative to buying new vehicles. Kiepe Electric Group advises public transport companies on the prolongation
of the life cycles of vehicles and offers modernization services.
The
typical deliveries in connection with the Aftermarket & Sales, Modernization business are spare parts, respective services, and maintenance
contracts. For service contracts Kiepe Electric Group generally gets separate orders to deliver parts or short-term services. In the
case of service contracts (including sale of spare parts), the customers’ orders for individual items contain the item itself,
quantity, price and terms of payment and delivery. The contract is concluded and effective with acceptance by Kiepe Electric Group.
For
service contracts the agreed goods and services are explicitly stated in the contract. All goods and services which can be ordered separately
by the customer are distinct and classified as separate performance obligations. Kiepe Electric Group offers legally required and service
type warranties. The transaction price for service contracts (including the sale of spare parts) is determined by the list price and
each part or component is sold by its stand-alone selling price. Variable components (e.g.; bonuses or discounts) are considered as changes
in the transaction price.
Revenue
from service contracts is recognized over-time. Due to the short-term nature of service contracts, which is typically less than one year,
revenue from service contracts is recognized when the service is completed. Revenue from the sale of spare parts is recognized at the
point in time when control is transferred to the customer.
Long-term
construction contracts are applied for the modernization business to the same extent as for the RVS business. The accounting policies
applied for the modernization business are the same as those for the RVS business.
Intangible
assets and goodwill
Intangible
assets with a finite useful life that were not acquired as part of a business combination are recognized at cost less accumulated amortization.
If necessary, accumulated impairment losses are recognized. Expenditures for research activities are recognized in profit or loss in
the period in which they arise. Development activities are capitalized at acquisition or manufacturing cost in accordance with IAS 38.57,
including allocable overheads if the development costs can be reliably measured, the technical feasibility of completing the asset is
available, a future economic benefit is probable, and Kiepe Electric Group intends and has adequate resources to complete the development
and use or sell the asset. Development activities are measured at cost less accumulated amortization and accumulated impairment losses.
Internally generated intangible assets are amortized on a straight-line basis over the expected product life cycle. Intangible assets
with finite useful lives are generally amortized on a straight-line basis over their useful lives. The amortization period for intangible
assets with finite useful lives is reviewed annually. Changes in expected useful lives are treated prospectively as changes in accounting
estimates. The carrying values of intangible assets with finite useful lives are reviewed for indicators of impairment at each reporting
date and are subject to impairment testing when events or changes in circumstances indicate that the carrying values may not be recoverable.
The amortization expense on intangible assets with finite useful lives is recognized in profit or loss.
The
estimated useful lives of capitalized intangible assets are:
| ●
Licenses and acquired rights: | |
1-5
years |
| ●
Brands and customer relationships: | |
3-10
years |
| ●
Internally generated intangible assets: | |
3-10
years |
With
acquisitions of businesses, goodwill represents the excess of the consideration transferred over the fair values assigned to the identifiable
assets proportionally acquired and liabilities assumed. Goodwill resulting from a business combination is recognized at acquisition costs
less impairment charges. Goodwill is not amortized but is tested for impairment annually, or sooner when an indication of impairment
has been identified.
Property,
plant and equipment
Property,
plant and equipment are measured at acquisition or manufacturing cost less accumulated depreciation and accumulated impairment, if any.
Acquisition costs comprise the purchase price and costs directly attributable to bringing the asset to its location and condition necessary
for its intended use. The manufacturing costs of internally produced equipment and facilities include all direct costs and allocable
overheads. Acquisition or manufacturing costs include the estimated costs, if any, of dismantling and removing the item and restoring
the site.
Property,
plant and equipment are depreciated over their estimated useful lives using the straight-line method as shown in the table below:
| ●
Buildings: | |
1-50
years |
| ●
Technical equipment and machinery: | |
2-16
years |
| ●
Other equipment, factory and office equipment: | |
2-20
years |
The
useful life and depreciation method are reviewed at the end of each reporting period. If the expected useful life of an asset changes,
the effect on depreciation is recognized prospectively as a change in accounting estimate.
Inventories
Inventories
are measured at the lower of acquisition or manufacturing cost and net realizable value. Unfinished and finished goods include costs
directly related to the units of production as well as a systematic allocation of fixed and variable production overheads. Production-related
administration costs are also capitalized. The net realizable value is the expected selling price in the ordinary course of business
less estimated costs of completion and the estimated costs necessary to make the sale. Acquisition or manufacturing costs for inventories
that are interchangeable are allocated under the moving average cost formula.
Employee
benefits
Kiepe
Electric Group recognizes defined contribution plans, defined benefit plans (pensions, severance payments) and other long term employee
benefits (jubilee, partial retirement). Contributions to defined contribution plans are recognized as an expense when the related service
has been rendered. Prepaid benefits are reported as an asset when there is a right to reimbursements or reduction of future payments.
Under Kiepe Electric Group’s Italian (“TFR”) and Austrian (“Abfertigungszahlungen”) severance plans, commitments
are made whereby employees waive their right to cash settlements. Kiepe Electric Group’s net obligation with respect to defined
benefit plans is calculated separately for each plan by estimating the future benefits that employees have earned in the current period
and in prior periods. The earned future benefits are discounted to the valuation date and summarized as defined benefit obligations.
The recognized defined benefit obligations are based on actuarial reports on the basis of the projected unit credit method. The fair
value of any plan asset is netted against the calculated defined benefit obligations. For defined benefit plans, the remeasurements of
the net defined benefit liability are recognized directly in other comprehensive income (loss). The remeasurement includes the effect
of change in assumptions, actuarial profits and losses, the income from plan assets (excluding interest income) and the impact of any
asset cap (excluding interest income). For other long term employee benefits, the remeasurements are recognized in profit or loss. Since
no comprehensive disclosures are made in the notes for the severance payment obligations in accordance with IAS 19, the remeasurements
of these plans are also recognized in profit and loss.
Other
provisions
A
provision is recognized in the combined statements of financial position when Kiepe Electric Group has a present legal or constructive
obligation in relation to third parties as a result of past events, it is probable that an outflow of economic benefits will be required
to settle the obligation and a reliable estimate can be made. The amount recognized as a provision represents the best estimate of the
obligation at the reporting date. If the provisions are expected to be utilized within the normal business cycle, they are classified
as current. Non-current provisions with an original maturity of more than one year are discounted to the present value of the expenditures
expected to settle the obligation at the end of the reporting period.
Warranties
Provisions
for warranty obligations are recognized for the expected warranty obligations from the sale of products and services. Kiepe Electric
Group provides assurance type warranties that are recorded as provisions. Provisions are based on best estimates regarding to the settlement
of obligations taking into account past experience. They also include provisions for outstanding customer claims.
Restructuring
Provisions
A
provision for restructuring is recognized when Kiepe Electric Group has approved a detailed and formal restructuring plan and the restructuring
measures have either commenced or have been communicated to the parties affected. Future operating losses are not taken into consideration
for such provisions. Expenses resulting from the recognition of restructuring provision are recognized in the line item “personnel
expenses” within the combined statements of loss.
Onerous
Contracts
A
provision for onerous contracts is recognized if the unavoidable costs of meeting the contractual obligations exceed the revenue expected
from the contract. The provision is measured at present value of the expected loss (i.e., the difference between the total costs to be
incurred and the total proceeds to be received from the contract). Before a provision is recognized, Kiepe Electric Group records an
impairment loss for the assets associated with that contract.
Provisions
for Taxes
Kiepe
Electric Group reports all obligations arising from tax matters other than income taxes under other provisions.
Financial
instruments
A
financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument
of another entity. Financial instruments in the form of financial assets and financial liabilities are generally presented separately.
Financial instruments are recognized as soon as Kiepe Electric Group becomes a party to the contractual provisions of the financial instrument.
In the case of purchases or sales of financial assets through the regular market, Kiepe Electric Group uses the transaction date as the
date of initial recognition or derecognition. Upon initial recognition, financial instruments are measured at fair value. For the purpose
of subsequent measurement, financial instruments are allocated to one of the categories mentioned in IFRS 9 (financial instruments measured
at amortized cost, financial instruments measured at fair value through other comprehensive income and financial instruments measured
at fair value through profit or loss). Transaction costs directly attributable to acquisition or issuance are considered when determining
the carrying amount if the financial instruments are not measured at fair value through profit or loss.
Classification
of financial instruments
The
classification of financial instruments is based on the business model for managing the financial assets and on their contractual cash
flows.
Financial
instruments at amortized cost: Financial assets at amortized cost are non-derivative financial assets that consist solely of payments
of principal and interest on the nominal amount outstanding and which are held with the aim of collecting the contractual cash flows,
such as trade receivables (not including factoring), receivables from related parties and cash and cash equivalents (business model “hold
to collect”). Cash and cash equivalents consist primarily of cash. Cash equivalents are short-term, extremely liquid financial
investments that can be converted to cash at any time and that are only subject to insignificant risks of changes in value. After initial
recognition, financial assets at amortized cost are subsequently carried at amortized cost using the effective interest method less any
loss allowances. Gains and losses are recognized in the combined statements of profit and loss when the financial assets at amortized
cost are impaired or derecognized. Interest effects on the application of the effective interest method are also recognized in profit
or loss, as well as the effects of currency translation.
Financial
instruments at fair value through other comprehensive income: Financial assets at fair value through other comprehensive income are non-derivative
financial assets that consist solely of payments of principal and interest on the nominal amount outstanding and which are held to collect
the contractual cash flows as well to sell the financial assets (business model “hold to collect and sell”). Kiepe Electric
Group currently does not hold any financial assets designated as at “fair value through other comprehensive income”.
Financial
instruments at fair value through profit or loss: Financial assets measured at fair value through profit or loss include financial assets
with cash flows other than those of principal and interest on the nominal amount outstanding. Furthermore, financial assets that are
held in a business model other than “hold to collect” or “hold to collect and sell” are included here. If financial
instruments are classified as “fair value through profit or loss”, transaction costs are reported through profit or loss
and presented net within “other financial result” in the combined statements of profit and loss directly in the period in
which they arise. In addition, derivative financial instruments to which hedge accounting is not applied fall under this category, as
well as financial assets that are classified as held for trading, are included here. Gains or losses on these financial assets are recognized
in profit or loss. Currently, Kiepe Electric Group does not hold any financial assets designated as at “fair value through profit
or loss”.
Financial
Liabilities
Financial
liabilities are classified in the “at amortized cost” category. If the fair value option is exercised for the initial recognition,
they are classified as “at fair value through profit or loss”. There are no financial liabilities which fall under fair value
option. Financial liabilities are subsequently measured at amortized costs using the effective interest method, are non-derivative financial
liabilities or arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach
applies. For Kiepe Electric Group, financial liabilities classified at amortized costs mainly include trade payables, liabilities to
related parties and other financial liabilities.
Offsetting
of Financial Instruments
Financial
assets and financial liabilities are offset and the net amount is presented in the combined statements of financial position provided
that an enforceable right exists to offset the recognized amounts and there is an intention to carry out the offsetting on a net basis
or to settle a liability when the related assets are sold.
Investments
Kiepe
GmbH, Germany holds investments in Heiterblick Projektgesellschaft mbH. For the purpose of the combined financial statements this investment
has been measured at amortized cost.
Derecognitions
and Modifications
Financial
assets are derecognized when the contractual rights to the cash flows from the financial asset have expired or have been transferred
by Kiepe Electric Group with substantially all of the risks and rewards associated with the ownership, or if not so, have been transferred
with no control retained at Kiepe Electric Group. Any gain or loss on derecognition is recognized as other operating income or expenses
in the combined statements of profit and loss. Financial liabilities are derecognized if, and only if Kiepe Electric Group’s contractual
obligations are settled, cancelled, or have expired. Further, Kiepe Electric Group derecognizes financial liabilities when its terms
are modified and the cash flow of the modified liability are substantially different, in which case a new financial liability based on
the modified terms is recognized at fair value. The assessment as to whether a modification is substantial is made on basis of qualitative
and quantitative criteria; the criteria used by Kiepe Electric Group for financial assets corresponds to the criteria for financial liabilities.
A gain or loss from extinguishment of the original financial liability is recognized in profit or loss in “other financial result”.
Impairment
and Financial Assets
At
each reporting date, a loss allowance is recognized for financial assets other than those to be measured at fair value through profit
or loss, reflecting a forward-looking estimate of future credit losses for these instruments. Expected credit losses are measured according
to a three stage impairment approach:
Stage
1: Includes all contracts with no significant increase in credit risk since initial recognition and usually includes contracts with
fewer than 30 days past due date. The portion of the lifetime expected credit losses resulting from default events possible within
the next 12 month is recognized.
Stage
2: If the credit risk of a financial asset increases significantly without being credit impaired, lifetime expected credit losses
are recognized based on a lifetime probability of default. A rating deterioration does not trigger a transfer into stage 2, if the credit
rating remains within the investment grade range. A significant increase in the default risk is assumed in the event that the financial
instruments are more than 30 days overdue.
Stage
3: If a financial asset is defined as credit impaired or in default, it is transferred to stage 3 and measured at lifetime expected
credit loss. A financial asset is considered credit-impaired when there is observable information about significant financial difficulties.
Impairment triggers include liquidity problems of debtors, indications of imminent insolvency or the disappearance of an active market
for a security due to financial difficulties. The assessment of whether a financial asset has experienced a significant increase in credit
risk is based on an assessment of the relative changes in ratings or credit default swap spreads (“CDS spreads”)
of the business partner. Rating and default probability data are updated quarterly.
The
assessment incorporates all available relevant information, not only historical and current loss data, but also reasonable forward-looking
information. In the past, impairment losses were determined primarily by using the default probabilities published in historical default
studies. In view of the effects of the Covid-19 pandemic, this approach is no longer considered adequate. Beginning in the fourth quarter
of 2020, the determination of forward looking information was expanded by including CDS spreads and continued in 2021. Trade receivables
of business partners are divided into four groups:
| ● | Group
1: debtor-specific CDS spread can be determined |
| ● | Group
2: rating-equivalent benchmark CDS spread can be determined |
| ● | Group
3: the probability of default can be determined via a credit agency |
| ● | Group
4: the probability of default is determined on the basis of the average CDS spreads in the
appropriate sectors: rail and banks. |
In
stages 1 and 2, the effective interest revenue is calculated based on gross carrying amounts. If a financial asset becomes credit impaired
in stage 3, the effective interest revenue is calculated based on its net carrying amount (gross carrying amount adjusted for any loss
allowance). For Kiepe Electric Group, in particular cash and cash equivalents are subject to the impairment requirements in accordance
with the general approach. For trade receivables, the simplified approach is applied, whereby all trade receivables are allocated to
stage 2 initially, irrespective of the credit risk. Consequently, no determination of significant increases in credit risk is necessary.
A transfer to stage 3 takes place if there is objective evidence of impairment. With respect to trade receivable, a default event is
assumed in the case that there are delays in payment in excess of 12 months. A default also exists if it considered probable that
a debtor cannot meet or cannot entirely meet its payment obligations. A financial asset is written off when there is no reasonable expectation
of recovery, for example, at the end of insolvency proceedings or after a court determines it is uncollectible.
Impairment
The
carrying amounts of Kiepe Electric Group’s non-financial assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. If assets do not generate cash flows that are largely independent of those
from other assets or groups of assets, the impairment test is performed at the level of the cash-generating unit (“CGU”)
to which the asset belongs. If a review for impairment is performed the recoverable amount of the respective asset is estimated. Goodwill
is tested annually for impairment.
Recoverability
of assets is measured by comparing the carrying amount of the asset or CGU with the recoverable amount, which is the higher of the asset
or CGU’s value in use and its fair value less costs to sell. When assessing value in use, the estimated future cash flows are discounted
to their present value using the pre-tax weighted average cost of capital (WACC). The fair value of non-financial assets is determined
by applying the same method as for the fair value of financial assets.
If
the carrying amount of an asset, or of the CGU to which the asset belongs, is higher than its recoverable amount, the carrying amount
is reduced to the recoverable amount, and an impairment loss is recognized in the combined statements of profit and loss.
An
impairment loss recognized for goodwill is not reversible in a subsequent period. For other assets, an impairment loss is reversed to
the extent that the asset’s fair value does not exceed the carrying amount (less depreciation or amortization) that would have
been determined if no impairment loss had been reported.
Quantitative
and Qualitative Disclosures About Market Risk
Foreign
Currency Exchange Risk
Currency
risks arise from future transactions involving both the purchase of intermediate products and the sale of end products. However, Kiepe
Electric Group has a moderate exposure towards currency risk arising from fluctuations in exchange rates in connection with international
operations. Receivables and liabilities recognized in the combined statements of financial position as well as highly probable expected
cash flows in foreign currencies are examined.
Some
Kiepe Electric Group’s entities are located outside the Eurozone. For the preparation of the Combined Financial Statements, financial
statements of foreign operations are translated into Euro, as Kiepe Electric Group’s presentation currency is the Euro. Effects
from foreign currency exchange rate fluctuations on the translation of net investment amounts into Euro are reflected in other comprehensive
income (loss) for the period in the combined statements of changes in net investment. Kiepe Electric Group does not hedge net investments
in foreign operations.
The
sensitivity analysis for the currency risk mainly arises from cash and cash equivalents as of Dec. 31, 2023 and 2022. The following table
demonstrates the approximate effect on Kiepe Electric Group’s post-tax profit or (loss) and net investment in response to fluctuations
of the currencies other than the respective functional currencies which the Kiepe Electric Group entities have exposure at the balance
sheet date.
| | |
USD/EUR
+10% | | |
USD/EUR
-10% | | |
CHF/EUR
+10% | | |
CHF/EUR
-10% | |
| | |
(In
€ thousands) | |
| December 31, 2022 | |
| | |
| | |
| | |
| |
| Effect
on net result | |
| (34 | ) | |
| 38 | | |
| (6 | ) | |
| 3 | |
| Effect
on net investment | |
| (34 | ) | |
| 38 | | |
| (6 | ) | |
| 3 | |
| | |
| | | |
| | | |
| | | |
| | |
| December 31,
2023 | |
| | | |
| | | |
| | | |
| | |
| Effect
on net result | |
| (36 | ) | |
| 39 | | |
| (76 | ) | |
| 84 | |
| Effect
on net investment | |
| (36 | ) | |
| 39 | | |
| (76 | ) | |
| 84 | |
Kiepe
Electric Group uses the value at risk as the primary risk measure to determine the risk potential for currency risks. It indicates the
maximum loss. The value at risk is calculated for the core currencies of USD and CHF.
Value
at Risk:
| | |
2023 | | |
2023 | |
| | |
(In
€ thousands) | |
| USD | |
| 989 | | |
| 946 | |
| CHF | |
| 2,021 | | |
| 60 | |
The
change in CHF value at risk from €60 thousand in 2022 to €2,021 thousand in 2023 relates to higher amounts of cash held in
CHF. Exposures to other currencies exist, however, such exposures usually do not have a material effect on earnings.
Credit
Risk
Credit
risks arise from an unexpected loss in cash and earnings if the customer or contracting party payment is late, partial or is lacking
payments of receivables without compensation and to non-payment. Kiepe Electric Group’s exposure to credit risk arises primarily
from trade receivables and receivables from related parties. The maximum exposure to credit risk represents the carrying amount of trade
receivables, cash and cash equivalents and other financial assets as reported in the combined financial statements. For trade receivables,
as well as other financial assets that are neither impaired nor past due, as of December 31, 2023 and December 31, 2022, there were
no indications that defaults in payment obligations will occur.
Credit
risk is monitored regularly. This includes the review of individual receivables and individual customer creditworthiness and the analysis
of historical bad debts on a portfolio basis. Decisions on financial transactions are made on the basis of this monitoring. In principle,
commercial transactions are exposed to the risk of a possible loss of value due to the defaulting of business partners as customers.
Interest
Rate Risk
Interest
rate risks arise as a result of market-related fluctuations in interest rates. They affect the level of Kiepe Electric Group’s
interest expenses. Interest bearing liabilities with floating interest rates exist at Kiepe Electric Group from the loan provided by
Knorr-Bremse AG to Kiepe Electric Schweiz AG. At the reporting date, Kiepe Electric Group has a very low exposure to a possible
change in interest rates. Due to low interest expenses arising from the loan the interest rate risk does not have a material effect on
Kiepe Electric Group’s loss for the period.
ITEM
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors and Senior Management
Information
on the board of directors and senior management can be found in this Report in Item 1(A), which is incorporated herein by reference.
B.
Compensation
Holdco
is a newly formed company, and as a result did not pay or grant any compensation during 2023.
In
connection with the Business Combination, Holdco adopted the Heramba Electric plc 2024 Incentive Award Plan (the “Incentive
Plan”), to facilitate the grant of equity and cash incentive awards to directors, employees (including executive officers)
and consultants of Holdco and certain of its affiliates and to enable Holdco to obtain and retain the services of these individuals,
which is essential to Holdco’s long-term success. The Incentive Plan is subject to applicable laws and stock exchange rules.
The Holdco Articles provide for the indemnification of the officers
and directors of Holdco on the terms set forth therein and expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into between the Holdco and its directors, officers, and other persons
with respect to indemnification and advancement of expenses. Holdco has entered into indemnification agreements with substantially all
of its current directors and officers.
C.
Board Practices
Information
on the Holdco Board’s practices can be found in this Report in Item 1(A), which is incorporated herein by reference.
D.
Employees
Following
and as a result of the Business Combination, the business of Holdco is conducted through Kiepe Electric Group.
Information
regarding the employees of Holdco is included in the Proxy Statement/Prospectus under the section titled “Business of Kiepe
Electric and Certain Information about Kiepe Electric—Employees” and is incorporated herein by reference.
E.
Share Ownership
Ownership
of the Company’s shares by its directors and executive officers upon consummation of the Business Combination is set forth in Item
7.A of this Report.
F.
Disclosure of a registrant’s action to recover erroneously awarded compensation
Not
applicable.
ITEM
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
Major Shareholders
The following table sets forth the beneficial ownership of Holdco Ordinary
Shares immediately following the Business Combination by:
(a) each person, or group of affiliated persons, known by us to beneficially
own more than 5% of the outstanding Holdco Ordinary Shares;
(b)
each of Holdco’s officers and directors; and
(c)
all of Holdco’s officers and directors as a group.
Beneficial
ownership is determined in accordance with the rules and regulations of the SEC. Each person named in the table has sole voting and investment
power with respect to all Holdco Ordinary Shares shown as beneficially owned by such person, except as otherwise indicated in the table
or footnotes below.
The
beneficial ownership of Holdco Ordinary Shares post-Business Combination is based on 47,043,407 Holdco Ordinary Shares issued and outstanding,
on a non-fully diluted basis, immediately following the Business Combination.
To Holdco’s knowledge, no Holdco Ordinary Shares beneficially
owned by any executive officer, director or director nominee have been pledged as security.
Unless
otherwise indicated, the address of each person named below is c/o Heramba Electric plc, Kiepe Platz 1 D-40599 Düsseldorf Germany.
| Name
and Address of Beneficial Owners | |
Number of
Holdco Ordinary
Shares | | |
% of
Total Holdco
Ordinary
Shares | |
| Five
Percent Holders | |
| | |
| |
| Heramba Limited(1) | |
| 36,700,000 | | |
| 78.0 | % |
| Smilodon Capital, LLC(2) | |
| 9,743,706 | | |
| 17.6 | % |
| Directors
and Executive Officers of Holdco | |
| | | |
| | |
| Michele Molinari | |
| — | | |
| — | |
| Peter Muemmler | |
| — | | |
| — | |
| Michael Browning | |
| 50,000 | | |
| * | |
| Diego Diaz | |
| — | | |
| — | |
| Dr. Hans-Jörg Grundmann | |
| — | | |
| — | |
| Nina Jensen | |
| 50,000 | | |
| * | |
| Srinath Narayanan(2)(3) | |
| 10,274,286 | | |
| 18.5 | % |
| Avinash Rugoobur | |
| — | | |
| — | |
| Eric
Spiegel | |
| 50,000 | | |
| * | |
| All Directors and Executive
Officers of Holdco as a group (9 Individuals) | |
| 10,424,286 | | |
| 22.2 | % |
| (1) | Heramba
Limited is the record holder of the reported shares. Zhe Zhang, as the sole director of Heramba
Limited, may be deemed to have voting and dispositive power for the shares held by Heramba
Limited. Mr. Zhang disclaims beneficial ownership over the shares noted herein except to
the extent of his pecuniary interest therein. The registered office of Heramba Limited is
70 Sir John Rogerson’s Quay, Dublin 2, Ireland D02 R296. |
| (2) | Includes (i) 1,318,174 Holdco Ordinary Shares held by Smilodon Capital,
LLC and (ii) 8,425,532 Holdco Ordinary Shares issuable upon exercise of 8,425,532 Holdco Warrants held by Smilodon Capital, LLC. Smilodon
Capital, LLC, the PERAC Sponsor, is the record holder of the reported securities. Admit Capital, LLC (“Admit Capital”) is
the manager of Smilodon Capital, LLC, and Mr. Narayanan is the manager of Admit Capital. Admit Capital and Mr. Narayanan may be deemed
to share beneficial ownership of such securities. Each of Admit Capital and Mr. Narayanan disclaims beneficial ownership of such securities
except to the extent of its or his pecuniary interest therein. The business address of each of such persons and entities is c/o Project
Energy Reimagined Acquisition Corp., 1280 El Camino Real, Suite 200, Menlo Park, California 94025. |
| (3) |
Includes 530,580 Holdco Ordinary Shares held by PANA Capital, LLC.
PANA Capital, LLC is the record holder of the reported shares. Mr. Narayanan is the manager of PANA Capital, LLC and may be deemed to
share beneficial ownership of such shares. Mr. Narayanan disclaims beneficial ownership of such shares except to the extent of his pecuniary
interest therein. The business address of PANA Capital, LLC is 5301 Southwest Parkway, Suite 400, Austin, Texas 78735. |
B. Related Party
Transactions
Information regarding certain related party transactions is included
in the Proxy Statement/Prospectus under the section titled “Certain Relationships and Related Person Transactions”
and is incorporated herein by reference.
C.
Interests of Experts and Counsel
Not
Applicable.
ITEM
8. FINANCIAL INFORMATION.
A.
Consolidated Statements and Other Financial Information.
See
Item 18 of this Report for consolidated financial statements and other financial information.
Information
regarding legal proceedings involving Holdco and Kiepe Electric Group is included in the Proxy Statement/Prospectus under the section
“Business of Kiepe Electric and Certain Information About Kiepe Electric— Legal Proceedings,” and is incorporated
herein by reference.
B.
Significant Changes
A
discussion of significant changes since December 31, 2023, is provided under Item 4 and Item 5 of this Report and is incorporated herein
by reference.
ITEM
9. THE OFFER AND LISTING
A.
Offer and Listing Details
Nasdaq
Listing of Holdco Ordinary Shares and Holdco Warrants
The Holdco Ordinary Shares and Holdco Warrants are currently listed
on Nasdaq under the symbols “PITA” and “PITAW,” respectively. Holders of Holdco Ordinary Shares and Holdco Warrants
should obtain current market quotations for their securities.
There
can be no assurance that the Holdco Ordinary Shares or Holdco Warrants will remain listed on Nasdaq. If Holdco fails to comply with the
Nasdaq listing requirements, the Holdco Ordinary Shares and Holdco Warrants could be delisted from Nasdaq. A delisting of the Holdco
Ordinary Shares or Holdco Warrants will likely affect the liquidity of the Holdco Ordinary Shares and Holdco Warrants, as applicable,
and could inhibit or restrict the ability of Holdco to raise additional financing.
Additionally, if the Holdco Ordinary Shares or Holdco Warrants become
delisted from Nasdaq and are not otherwise listed on another national securities market in the United States, trading in such securities
through the facilities of DTC would likely come within the charge to Irish stamp duty (currently at the rate of 1% of the higher of the
price paid and the market value of the securities traded) and, in such circumstances, such securities may cease to be eligible for continued
deposit and clearing within the DTC system. If DTC determined that the Holdco Ordinary Shares and/or the Holdco Warrants ceased to be
eligible for continued deposit and clearance within its system, all transfers of such securities would need to take place outside of DTC
by use of a physical (paper based) instrument of transfer (with all relevant amounts of Irish stamp duty paid to Irish Revenue before
a transfer is registered).
Lock-up
Agreements
Information
regarding the lock-up restrictions applicable to some of the Holdco Ordinary Shares is included in the Proxy Statement/Prospectus under
the section titled “Certain Relationships and Related Person Transaction—Lock-Up Agreements” and is incorporated
herein by reference.
On July 25, 2024, to facilitate the listing of Holdco’s securities
on Nasdaq and the completion of the Business Combination, PERAC agreed to release an aggregate of 3,118,319 PERAC Class A Ordinary Shares
then held by the PERAC Sponsor from all lock-up restrictions under the insider letter entered into at the time of the IPO, such that the
Released Shares were distributed to non-affiliate members of the PERAC Sponsor at or prior to the consummation of the Business Combination.
B.
Plan of Distribution
Not
applicable.
C.
Markets
The
Holdco Ordinary Shares and Holdco Warrants are listed on Nasdaq under the symbols “PITA” and “PITAW,” respectively.
D.
Selling Shareholders
Not
applicable.
E.
Dilution
Not
applicable.
F.
Expenses of the Issue
Not
applicable.
ITEM
10. ADDITIONAL INFORMATION
A.
Share Capital
As of the date of this Report, Holdco has an issued
share capital in the amount of 47,043,407 Holdco Ordinary Shares and 25,000 Holdco Deferred Shares (with all such Holdco Deferred Shares
being held in treasury).
Holdco’s authorized share capital following the consummation
of the Business Combination is (i) €49,990 divided into 200,000,000 ordinary shares of €0.0001 each (nominal value) (i.e., the
Holdco Ordinary shares), (ii) 49,900,000 preference shares of €0.0001 (nominal value) and (iii) 25,000 deferred ordinary shares of
€1.00 each (nominal value) (i.e., the Holdco Deferred Shares).
B.
Holdco Articles
Information regarding certain material provisions of the Holdco Articles
is included in the Proxy Statement/Prospectus under the section titled “Description of Holdco Securities” and
is incorporated herein by reference.
C.
Material Contracts
Material
Contracts Relating to Holdco’s Operations
Following
and as a result of the Business Combination, all of the Company’s business is conducted through Heramba and Kiepe Electric Group.
Information pertaining to a number of Heramba’s and Kiepe Electric Group’s material contracts is set forth in “Certain
Relationships and Related Person Transactions” and is incorporated herein by reference.
Material
Contracts Relating to the Business Combination
Business
Combination Agreement
A
description of the Business Combination Agreement is set forth in the Proxy Statement/Prospectus under the section titled “Proposal
No. 1 – The Business Combination Proposal – Business Combination Agreement” and is incorporated herein by reference.
Related
Agreements
A description of the material provisions of certain additional agreements
entered into pursuant to the Business Combination Agreement is set forth in the Proxy Statement/Prospectus under the heading “Proposal
No. 1 – The Business Combination Proposal—Ancillary Agreements,” “Description of Holdco Securities—Holdco
Warrants” and “Certain Relationships and Related Person Transactions,” which information is incorporated herein
by reference.
D.
Exchange Controls and Other Limitations Affecting Security Holders
Under the laws of Ireland, except as indicated
below, and save for any tax that may require to be withheld at law, there are currently no other restrictions on the export or import
of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to
non-resident holders of Holdco Ordinary Shares.
It is an offence under Irish law (pursuant to various
statutory instruments) to transfer funds or make funds or economic resources available, directly or indirectly to any person or entity
in contravention of Irish, EU or United Nations sanctions or to otherwise contravene Irish, EU or United Nations sanctions.
Under the Financial Transfers Act 1992 of Ireland
(the “1992 Act”), the Criminal Justice (Terrorist Offences Act) 2005 of Ireland and/or the Criminal Justice
(Money Laundering and Terrorist Finance) Act 2010 of Ireland, the Minister for Finance of Ireland may make provision for the restriction
of financial transfers between Ireland and persons and entities in other countries. Financial transfers are broadly defined, and dividends
would fall within this definition.
The 1992 Act and underlying EU regulations prohibit financial transfers
with certain persons and entities listed in the EU Consolidated Financial Sanctions List and United Nations Security Council Consolidated
List, each of which is updated on an ongoing basis, but which currently include, but are not limited to, certain persons from/in and entities
in Afghanistan, Belarus, Bosnia & Herzegovina, Burma (Myanmar), Burundi, the Central African Republic, China, the Democratic Republic
of Congo, the Republic of Guinea, the Republic of Guinea-Bissau, Haiti, Iran, Iraq, the Democratic People’s Republic of Korea (North
Korea), Libya, Lebanon, Mali, Nicaragua, Pakistan, Palestinian Territory, Russia, Sudan, South Sudan, Somalia, Syria, Tunisia, Turkey,
Ukraine, Venezuela, Yemen, Zimbabwe, and certain known terrorists and terrorist groups, and countries that harbor certain terrorist groups,
including the Albanian branch of Al-Haramain, Al-Qaeda members in various countries, Al Shabaab in Kenya and Somalia, and Boko Haram in
Nigeria.
E.
Taxation
This section describes certain material U.S. federal
income tax considerations relevant to beneficial owners of Holdco Ordinary Shares of the ownership and disposition thereof. This discussion
applies only to Holdco Ordinary Shares held as capital assets for U.S. federal income tax purposes (generally, property held for investment)
and does not discuss all aspects of U.S. federal income taxation that might be relevant to holders in light of their particular circumstances
or status, including alternative minimum tax and Medicare contribution tax consequences, or holders who are subject to special rules,
including:
| ● | dealers
traders in securities that elect to use a mark-to-market method of accounting for their securities
holdings; |
| ● | tax-exempt
organizations, qualified retirement plans, individual retirement accounts or other tax deferred
accounts; |
| ● | banks
or other financial institutions, underwriters, insurance companies, real estate investment
trusts or regulated investment companies; |
| ● | U.S.
expatriates or former long-term residents of the United States; |
| ● | persons
that own (directly, indirectly, or by attribution) 5% or more (by vote or value) of the stock
of Holdco (except as specifically addressed herein); |
| ● | partnerships
or other pass-through entities or arrangements for U.S. federal income tax purposes or beneficial
owners of partnerships or other pass-through entities or arrangements; |
| ● | persons
holding the Holdco Ordinary Shares as part of a straddle, hedging or conversion transaction,
constructive sale, or other arrangement involving more than one position; |
| ● | persons
subject to special tax accounting rules as a result of any item of income relating to the
Holdco Ordinary Shares being recognized on an applicable financial statement; |
| ● | U.S.
holders (as defined below) whose functional currency is not the U.S. Dollar; |
| ● | U.S.
holders that hold the Holdco Ordinary Shares in connection with a trade or business conducted
outside the United States; |
| ● | Persons
that received the Holdco Ordinary Shares as compensation for services; or |
| ● | controlled
foreign corporations or passive foreign investment companies. |
If
an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes owns Holdco Ordinary Shares, the U.S.
federal income tax treatment of a partner will generally depend on the status of the partner and the status and activities of the partnership.
Partnerships owning Holdco Ordinary Shares and partners in such partnerships should consult their tax advisors as to the particular U.S.
federal income tax consequences of acquiring, owning and disposing of Holdco Ordinary Shares.
This discussion is based on the Code, its legislative
history, existing and proposed Treasury regulations promulgated under the Code (the “Treasury Regulations”), published rulings
by the IRS and court decisions, all as of the date hereof. These laws are subject to change, possibly on a retroactive basis. This discussion
is necessarily general and does not address all aspects of U.S. federal income taxation. In addition, this discussion does not address
any U.S. federal estate and gift tax laws, or any state, local or non-U.S. tax laws. Holdco has not sought and does not intend to seek
any rulings from the IRS or opinions of counsel regarding the matters described herein. There is no assurance that the U.S. Internal Revenue
Service (“IRS”) will not take positions concerning the tax consequences of an investment in the Holdco Ordinary Shares that
are different from those discussed below, or that any such different positions would not be sustained by a court.
ALL HOLDERS OF HOLDCO ORDINARY SHARES SHOULD CONSULT
WITH THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES AND CONSIDERATIONS RELATING TO THE OWNERSHIP AND DISPOSITION OF HOLDCO ORDINARY
SHARES, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE, AND LOCAL AND NON-U.S. TAX LAWS.
U.S. Holders
This section applies to U.S. holders. For purposes
of this discussion, a U.S. holder means a beneficial owner of Holdco Ordinary Shares that
is, for U.S. federal income tax purposes:
| ● | an
individual who is a citizen or resident of the United States; |
| ● | a
corporation (or other entity taxable as a corporation for U.S. federal income tax purposes)
created or organized in or under the laws of the United States, any state thereof or the
District of Columbia; |
| ● | an
estate whose income is subject to U.S. federal income tax regardless of its source; or |
| ● | a
trust if (1) a U.S. court can exercise primary supervision over the trust’s administration
and one or more U.S. persons are authorized to control all substantial decisions of the trust;
or (2) the trust has a valid election in effect under applicable Treasury Regulations to
be treated as a U.S. person. |
Distributions on Holdco Ordinary Shares
Subject to the discussion below under “—Passive
Foreign Investment Company Rules,” the gross amount of any distribution on Holdco Ordinary Shares that is made out of Holdco’s
current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) generally will be taxable to a U.S. holder
as ordinary dividend income on the date such distribution is actually or constructively received. Any such dividends generally will not
be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations. To the
extent that the amount of the distribution exceeds Holdco’s current and accumulated earnings and profits (as determined under U.S.
federal income tax principles), such excess amount will be treated first as a non-taxable return of capital to the extent of the U.S.
holder’s tax basis in the Holdco Ordinary Shares, and thereafter as capital gain recognized on a sale or exchange. It is not expected,
however, that Holdco will maintain calculations of its earnings and profits in accordance with U.S. federal income tax principles. U.S.
holders should therefore assume that any distribution by Holdco with respect to Holdco Ordinary Shares will be reported as dividend income.
U.S. holders should consult their own tax advisors with respect to the appropriate U.S. federal income tax treatment of any distribution
received from Holdco.
Subject to the discussion below under “—Passive
Foreign Investment Company Rules,” dividends received by non-corporate U.S. holders (including individuals) from a “qualified
foreign corporation” may be eligible for reduced rates of taxation, provided that certain holding period requirements and other
conditions are satisfied. For these purposes, a non-U.S. corporation will be treated as a qualified foreign corporation if it is eligible
for the benefits of a comprehensive income tax treaty with the United States that meets certain requirements. A non-U.S. corporation is
also treated as a qualified foreign corporation with respect to dividends it pays on shares that are readily tradable on an established
securities market in the United States. U.S. Treasury guidance indicates that shares listed on Nasdaq are considered readily tradable
on an established securities market in the United States. There can be no assurance that the Holdco Ordinary Shares will be considered
readily tradable on an established securities market in future years. Further, Holdco will not constitute a qualified foreign corporation
for purposes of these rules if it is a passive foreign investment company for the taxable year in which it pays a dividend or for the
preceding taxable year. See “—Passive Foreign Investment Company Rules.”
Subject to certain conditions and limitations,
non-refundable withholding taxes (at a rate not in excess of any applicable income tax treaty rate), if any, on dividends paid by Holdco
may be treated as foreign taxes eligible for credit against a U.S. holder’s U.S. federal income tax liability under the U.S. foreign
tax credit rules. As a result of recent changes to the U.S. foreign tax credit rules, however, a withholding tax generally will need to
satisfy certain additional requirements in order to be considered a creditable tax for a U.S. holder. Holdco has not determined whether
these requirements have been met with respect to any withholding tax that may apply to dividends paid by Holdco and, accordingly, no assurance
can be given that any such withholding tax will be creditable. For purposes of calculating the U.S. foreign tax credit, dividends paid
on Holdco Ordinary Shares will generally be treated as income from sources outside the United States and will generally constitute passive
category income. The rules governing the U.S. foreign tax credit are complex. U.S. holders should consult their tax advisors regarding
the availability of the U.S. foreign tax credit under their particular circumstances.
Sale, Exchange, Redemption or Other Taxable Disposition
of Holdco Ordinary Shares
Subject to the discussion below under “—Passive
Foreign Investment Company Rules,” a U.S. holder generally will recognize gain or loss on any sale, exchange, redemption or other
taxable disposition of Holdco Ordinary Shares in an amount equal to the difference between (i) the amount realized on the disposition
and (ii) such U.S. holder’s adjusted tax basis in such Holdco Ordinary Shares. Any gain or loss recognized by a U.S. holder on a
taxable disposition of Holdco Ordinary Shares generally will be capital gain or loss and will be long-term capital gain or loss if the
holder’s holding period in such Holdco Ordinary Shares exceeds one year at the time of the disposition. Preferential tax rates may
apply to long-term capital gains of non-corporate U.S. holders (including individuals). The deductibility of capital losses is subject
to limitations. Any gain or loss recognized by a U.S. holder on the sale or exchange of Holdco Ordinary Shares generally will be treated
as U.S. source gain or loss.
Passive Foreign Investment Company Rules
Generally. The treatment of U.S. holders of Holdco
Ordinary Shares could be materially different from that described above if Holdco is treated as a passive foreign investment company,
or “PFIC,” for U.S. federal income tax purposes. A PFIC is any foreign (i.e., non-U.S.) corporation with respect to
which either: (i) 75% or more of the gross income for a taxable year constitutes passive income for purposes of the PFIC rules, or (ii)
50% or more of such foreign corporation’s assets in any taxable year (generally based on the quarterly average of the value of its
assets during such year) is attributable to assets that produce passive income or are held for the production of passive income. Passive
income generally includes dividends, interest, certain royalties and rents, annuities, net gains from the sale or exchange of property
producing such income and net foreign currency gains. Cash is generally a passive asset. The value of goodwill is an active asset to the
extent attributable to activities that produce active income. The determination of whether a foreign corporation is a PFIC is based upon
the composition of such foreign corporation’s income and assets (including, among others, its proportionate share of the income
and assets of any other corporation in which it owns, directly or indirectly, 25% (by value) of the stock), and the nature of such foreign
corporation’s activities. A separate determination must be made after the close of each taxable year as to whether a foreign corporation
was a PFIC for that year.
If Holdco were a PFIC for any taxable year and
any subsidiary or other entity in which Holdco owns equity interests is also a PFIC (any such entity, a “lower-tier PFIC”),
a U.S. holder will be deemed to own a proportionate amount (by value) of the shares of each such lower-tier PFIC and, unless timely QEF
elections (as discussed further below) are made, will be subject to U.S. federal income tax according to the excess distribution rules
described below on (i) certain distributions by any lower-tier PFIC and (ii) dispositions of shares of any lower-tier PFIC, in each case,
as if the U.S. holder held such shares directly, even though the U.S. holder will not receive any proceeds of those distributions or dispositions.
If Holdco is treated as a PFIC during a U.S. holder’s
holding period, it will, with respect to such U.S. holder, always be treated as a PFIC, regardless of whether it satisfied either of the
qualification tests in subsequent years, subject to certain exceptions (such as upon making a “deemed sale” election).
PFIC Status of Holdco. Based on the projected
composition of Holdco’s income and assets and the expected value of its assets, including goodwill (which is based in part on the
expected price of the Holdco Ordinary Shares), it cannot be determined whether Holdco will be a PFIC for its current taxable year. Furthermore,
the tests for determining PFIC status are applied annually after the close of the taxable year, and it is difficult to predict accurately
future income and assets relevant to this determination. The fair market value of the assets of Holdco is expected to depend, in part,
upon (a) the market value of the Holdco Ordinary Shares, and (b) the composition of the assets and income of Holdco. Further, because
Holdco’s goodwill may be determined based on the market value of the Holdco Ordinary Shares, a decrease in the market value of the
Holdco Ordinary Shares and/or an increase in cash or other passive assets would increase the relative percentage of its passive assets.
The application of the PFIC rules is subject to uncertainty in several respects and, therefore, no assurances can be provided that Holdco
is not currently or will not be a PFIC for any taxable year.
If Holdco is or becomes a PFIC during any year
in which a U.S. holder holds Holdco Ordinary Shares, there are three separate taxation regimes that could apply to such U.S. holder under
the PFIC rules: (i) the excess distribution regime (which is the default regime), (ii) the qualified electing fund (“QEF”)
regime, or (iii) the mark-to-market regime. A U.S. holder who holds (actually or constructively) stock in a foreign corporation during
any year in which such corporation qualifies as a PFIC is subject to U.S. federal income taxation under one of these three regimes. The
effect of the PFIC rules on a U.S. holder will depend upon which of these regimes applies to such U.S. holder. Dividends paid by a PFIC,
however, are not eligible for the lower rates of taxation applicable to qualified dividend income under any of the foregoing regimes.
Excess Distribution Regime. If a U.S. holder
does not make or is not eligible to make a QEF election or a mark-to-market election, as described below, the U.S. holder will be subject
to the default “excess distribution regime” under the PFIC rules with respect to (i) any gain realized on a sale or other
disposition (including a pledge) of Holdco Ordinary Shares, and (ii) any “excess distribution” on Holdco Ordinary Shares
(generally, any distributions in excess of 125% of the average of the annual distributions
on Holdco Ordinary Shares during the preceding three taxable years or the U.S. holder’s holding period, for the Holdco Ordinary
Shares that preceded the taxable year of the distribution whichever is shorter). Generally, under this excess distribution regime:
| ● | the
gain or excess distribution will be allocated ratably over the period during which the U.S.
holder held the Holdco Ordinary Shares; |
| ● | the
amount allocated to the current taxable year and to any taxable year during the U.S. holder’s
holding period before the first day of the first taxable year in which Holdco became a PFIC,
will be treated as ordinary income; and |
| ● | the
amount allocated to other prior taxable years not described in the preceding bullet will
be subject to the highest tax rate in effect for that taxable year for individuals or corporations,
as applicable, and the interest charge generally applicable to underpayments of tax will
be imposed on the resulting tax attributable to each such year. |
The
tax liability for amounts allocated to years prior to the year of disposition or excess distribution will be payable generally without
regard to offsets from deductions, losses and expenses. In addition, gains (but not losses) realized on the sale of a U.S. holder’s
Holdco Ordinary Shares cannot be treated as capital gains, even if such Holdco Ordinary Shares are held as capital assets. Further,
no portion of any distribution will be treated as qualified dividend income.
QEF Regime. A valid QEF election is effective
for the taxable year for which the election is made and all subsequent taxable years and may not be revoked without the consent of the
IRS. If a U.S. holder makes a timely QEF election with respect to its direct or indirect interest in a PFIC, the U.S. holder will be required
to include in income each year its allocable portion of the ordinary earnings and net capital gains of the PFIC as QEF income inclusions,
even if such portion is not distributed to the U.S. holder. Thus, the U.S. holder may be required to report taxable income as a result
of QEF income inclusions without corresponding receipts of cash. U.S. holders of Holdco Ordinary Shares should not expect that they will
receive cash distributions from Holdco sufficient to cover their respective U.S. tax liability with respect to such QEF income inclusions.
The timely QEF election also allows the electing
U.S. holder to generally: (i) treat any gain recognized on the disposition of its shares of the PFIC as capital gain; (ii) treat its share
of the PFIC’s net capital gain, if any, as long-term capital gain instead of ordinary income; and (iii) either avoid interest charges
resulting from PFIC status, or make an annual election, subject to certain limitations, to defer payment of current taxes on its undistributed
QEF income inclusions, subject to an interest charge on the deferred tax computed by using the statutory rate of interest applicable to
an extension of time for payment of tax. In addition, net losses (if any) of a PFIC will not pass through to its shareholders and may
not be carried back or forward in computing such PFIC’s ordinary earnings and net capital gain in other taxable years.
A U.S. holder’s tax basis in Holdco Ordinary
Shares will be increased to reflect QEF income inclusions and will be decreased to reflect distributions of amounts previously included
in income as QEF income inclusions. No portion of the QEF income inclusions attributable to ordinary income will be treated as qualified
dividend income. Amounts included as QEF income inclusions with respect to direct and indirect PFICs generally will not be taxed again
when distributed by such PFICs.
A U.S. holder may make a QEF election with respect
to its Holdco Ordinary Shares only if Holdco provides U.S. holders on an annual basis with certain information, including a “PFIC
annual information statement” as described in the Treasury Regulations. There can be no assurance that Holdco will have timely knowledge
of its status as a PFIC or that Holdco will timely provide U.S. holders with the required information on an annual basis to allow U.S.
holders to make and maintain a QEF election with respect to the Holdco Ordinary Shares in the event Holdco is treated as a PFIC for any
taxable year. The failure to provide such information on an annual basis could prevent a U.S. holder from making a QEF election or result
in the invalidation or termination of a U.S. holder’s prior QEF election.
If a U.S. holder makes a QEF election with respect
to its Holdco Ordinary Shares in a year after Holdco’s first taxable year as a PFIC in which the U.S. holder held (or was deemed
to hold) Holdco Ordinary Shares, then notwithstanding such QEF election, the excess distribution regime discussed above, adjusted to take
into account the QEF income inclusions resulting from the QEF election, will continue to apply with respect to such U.S. holder’s
Holdco Ordinary Shares, unless the U.S. holder makes a purging election under the PFIC rules. Under one type of purging election, the
U.S. holder will be deemed to have sold such Holdco Ordinary Shares at their fair market value and any gain recognized on such deemed
sale will be treated as an excess distribution, as described above. As a result of such purging election, the U.S. holder will have additional
basis (to the extent of any gain recognized on the deemed sale) and, solely for purposes of the PFIC rules, a new holding period in the
Holdco Ordinary Shares.
Mark-to-Market Regime. Alternatively, a
U.S. holder may make an election to mark marketable shares in a PFIC to market on an annual basis. PFIC shares generally are marketable
if they are “regularly traded” on a national securities exchange that is registered with the SEC, such as Nasdaq. There can
be no assurance that Holdco Ordinary Shares will continue to be listed on a national securities exchange or will be “regularly traded”
for purposes of these rules. Pursuant to such mark-to-market election, a U.S. holder of Holdco Ordinary Shares would include in each year
as ordinary income the excess, if any, of the fair market value of such stock over its adjusted basis at the end of the taxable year.
A U.S. holder may treat as ordinary loss any excess of the adjusted basis of the Holdco Ordinary Shares over its fair market value at
the end of the year, but only to the extent of the net amount previously included in income as a result of the election in prior years.
A U.S. holder’s adjusted tax basis in the Holdco Ordinary Shares will be increased to reflect any amounts included in income, and
decreased to reflect any amounts deducted, as a result of a mark-to-market election. Any gain recognized on a disposition of Holdco Ordinary
Shares in a taxable year in which Holdco is a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss (but
only to the extent of the net amount of income previously included as a result of a mark-to-market election, and any loss in excess of
such prior inclusions generally would be treated as a capital loss). A mark-to-market election applies for the taxable year in which the
election was made, and for each subsequent taxable year, unless the PFIC shares cease to be marketable or the IRS consents to the revocation
of the election. U.S. holders should also be aware that the Code and the Treasury Regulations do not allow a mark-to-market election with
respect to stock of lower-tier PFICs that is non-marketable. There is also no provision in the Code, Treasury Regulations or other published
authority that specifically provides that a mark-to-market election with respect to the stock of a publicly traded holding company (such
as Holdco) effectively exempts stock of any lower-tier PFICs from the negative tax consequences arising from the general PFIC rules. U.S.
holders are advised to consult their own tax advisor to determine whether the mark-to-market tax election is available to them and the
consequences resulting from such election.
PFIC Reporting Requirements. A U.S. holder
that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. holder generally is required to file an IRS Form
8621 with such U.S. holder’s U.S. federal income tax return and provide such other information as the IRS may require. Failure to
file IRS Form 8621 for each applicable taxable year may result in substantial penalties and result in the U.S. holder’s taxable
years being open to audit by the IRS until such forms are properly filed. The rules dealing with PFICs and with the QEF, purging and mark-to-market
elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. holders of Holdco
Ordinary Shares are urged to consult their tax advisors concerning the application of the PFIC rules under their particular circumstances.
Additional Reporting Requirements
Certain U.S. holders holding specified foreign
financial assets with an aggregate value in excess of the applicable dollar thresholds are required to report information to the IRS relating
to such assets, subject to certain exceptions (including an exception for specified foreign financial assets held in accounts maintained
by U.S. financial institutions), by attaching a complete IRS Form 8938 to their tax return, for each year in which they hold such assets.
Substantial penalties apply to any failure to file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not willful
neglect. Also, in the event a U.S. holder does not file IRS Form 8938 or fails to report a specified foreign financial asset that is required
to be reported, the statute of limitations on the assessment and collection of U.S. federal income taxes of such U.S. holder for the related
taxable year may not close until three years after the date on which the required information is filed. U.S. holders should consult their
tax advisors regarding the effect, if any, of these rules on the ownership and disposition of Holdco Ordinary Shares.
Non-U.S. Holders
This section applies
to non-U.S. holders. For purposes of this discussion, a non-U.S. holder means a beneficial owner (other than a partnership or an entity
or arrangement so characterized for U.S. federal income tax purposes) of Holdco Ordinary Shares that is, for U.S. federal income tax
purposes:
| ● | a
nonresident alien individual, other than certain former citizens and residents of the United
States; |
| ● | a
foreign corporation; or |
| ● | a
foreign estate or trust; |
but
generally does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition.
A holder that is such an individual should consult its tax advisor regarding the U.S. federal income tax consequences of the sale or
other disposition of Holdco Ordinary Shares.
Ownership and Disposition of Holdco Ordinary Shares
A non-U.S. holder of Holdco Ordinary Shares will
generally not be subject to U.S. federal income tax or, subject to the discussion below under “—Information Reporting and
Backup Withholding,” U.S. federal withholding tax on any dividends received on Holdco Ordinary Shares or any gain recognized on
a sale or other disposition of Holdco Ordinary Shares (including, any distribution to the extent it exceeds the adjusted basis in the
non-U.S. holder’s Holdco Ordinary Shares) unless the dividend or gain is effectively connected with the non-U.S. holder’s
conduct of a trade or business in the United States, and if required by an applicable income tax treaty, is attributable to a permanent
establishment maintained by the non-U.S. holder in the United States.
Dividends and gains that are effectively connected
with a non-U.S. holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty,
are attributable to a permanent establishment or fixed base in the United States) generally will be subject to U.S. federal income tax
at the same regular U.S. federal income tax rates applicable to a comparable U.S. holder and, in the case of a non-U.S. holder that is
a corporation for U.S. federal income tax purposes, also may be subject to an additional branch profits tax at a 30% rate or a lower applicable
income tax treaty rate.
Information Reporting and Backup Withholding
Information reporting requirements may apply to
cash received in redemption of Holdco Ordinary Shares, dividends paid on Holdco Ordinary Shares, and the proceeds received on the disposition
of Holdco Ordinary Shares effected within the United States (and, in certain cases, outside the United States), in each case other than
U.S. holders that are exempt recipients (such as corporations). Backup withholding may apply to such amounts if the U.S. holder fails
to provide an accurate taxpayer identification number (generally on an IRS Form W-9 provided to the paying agent of the U.S. holder’s
broker) or is otherwise subject to backup withholding. U.S. holders should consult their tax advisors regarding the application of the
U.S. information reporting and backup withholding rules.
Information returns may be filed with the IRS in
connection with, and non-U.S. holders may be subject to backup withholding on amounts received in respect of their Holdco Ordinary Shares,
in transactions effected in the United States or through certain U.S.-related financial intermediaries, unless the non-U.S. holder furnishes
to the applicable withholding agent the required certification as to its non-U.S. status, such as by providing a valid IRS Form W-8BEN,
IRS Form W-8BEN-E or IRS Form W-8ECI, as applicable, or the non-U.S. holder otherwise establishes an exemption.
Backup withholding is not an additional tax. Amounts withheld as backup
withholding may be credited against the U.S. holder’s U.S. federal income tax liability, and a holder may obtain a refund of any
excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing
any required information.
F.
Dividends and Paying Agents
Holdco has not paid any cash dividends on the Holdco
Ordinary Shares to date. For the foreseeable future, Holdco intends to retain all available funds and any future earnings to fund the
development and expansion of its business. The payment of cash dividends in the future will be dependent upon Holdco’s revenues
and earnings, if any, capital requirements and general financial condition,, and to its ability to satisfy the legal requirements of Irish
law for the payment of dividends.
Under Irish law, Holdco may only pay dividends
and make other distributions (and, generally, make share repurchases and redemptions) only out of distributable profits shown on its unconsolidated
financial statements prepared in accordance with the Irish Companies Act and filed with the Irish Companies Registration Office. “Distributable
profits” are the accumulated realized profits of Holdco that have not previously been utilized in a distribution or capitalization
less the accumulated realized losses of Holdco that have not previously been written off in a reduction or reorganization of capital,
and include reserves created by way of a court approved reduction of capital. In addition, no dividend may be paid or other distribution,
share repurchase or redemption made by Holdco unless its net assets are equal to, or exceed, the aggregate of its called up share capital
plus undistributable reserves and the dividend or other distribution, share repurchase or redemption does not reduce Holdco’s net
assets below such aggregate. Undistributable reserves include the un-denominated capital, the capital redemption reserve fund, and the
amount by which Holdco’s accumulated unrealized profits that have not previously been utilized by any capitalization exceed Holdco’s
accumulated unrealized losses that have not previously been written off in a reduction or reorganization of capital.
As a new parent company with no operational history, Holdco has no
distributable profits of its own. Accordingly, in order to pay dividends or make other distributions, share repurchases or redemptions,
Holdco will need to generate distributable profits from its business activities or otherwise create distributable profits by alternative
means, including by a court approved reduction of capital.
G.
Statement by Experts
The
consolidated financial statements of Heramba GmbH as of December 31, 2023 and 2022 and for the year ended December 31, 2023 and
for the period from September 1, 2022 (inception) through December 31, 2022, included in this Report have been audited by UHY LLP, independent
registered public accounting firm, as set forth in their report thereon, which includes an explanatory paragraph as to the ability of
Heramba GmbH to continue as a going concern appearing herein, and are included in reliance on such report given on the authority of such
firm as experts in auditing and accounting.
The
combined financial statements of Kiepe Electric Group as of December 31, 2023 and 2022 and for the years ended December 31, 2023,
2022 and 2021, included in this Report have been audited by UHY LLP, independent registered public accounting firm, as set forth in their
report thereon, which includes an explanatory paragraph as to the ability of Kiepe Electric Group to continue as a going concern appearing
herein, and are included in reliance on such report given on the authority of such firm as experts in auditing and accounting.
The
financial statements of Project Energy Reimagined Acquisition Corp. as of and for the years ended December 31, 2023 and 2022, incorporated
by reference in this report, have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report
thereon appearing elsewhere herein, which includes an explanatory paragraph as to the ability of Project Energy Reimagined Acquisition
Corp. to continue as a going concern, and are included in reliance on such report given on the authority of such firm as an expert in
accounting and auditing.
H.
Documents on Display
We
are subject to certain of the informational filing requirements of the Exchange Act. Since we are a “foreign private issuer,”
we are exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and our
officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions
contained in Section 16 of the Exchange Act, with respect to their purchase and sale of our shares. In addition, we are not required
to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered
under the Exchange Act. However, we are required to file with the SEC an Annual Report on Form 20-F containing financial statements audited
by an independent accounting firm. We may, but are not required, to furnish to the SEC, on Form 6-K, unaudited financial information
after each of our first three fiscal quarters. The SEC also maintains a website at http://www.sec.gov that contains
reports and other information that we file with or furnish electronically with the SEC. You may read and copy any report or document
we file, including the exhibits, at the SEC’s public reference room located at 100 F Street, N.E., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference room.
I.
Subsidiary Information.
Not
applicable.
ITEM
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The
information set forth in the heading “Quantitative and Qualitative Disclosure about Market Risk” in Item 5 of this
Report and is incorporated herein by reference.
ITEM
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Information
regarding Holdco Warrants is included in the Proxy Statement/Prospectus under the section titled “Description of Holdco
Securities—Holdco Warrants” and is incorporated herein by reference.
PART
II.
Item 16A.
Audit Committee Financial Expert
Our Holdco Board has determined that Eric Spiegel is an “audit
committee financial expert,” within the meaning of the current rules of the SEC and also meets the competence requirements of the
Irish Companies Act. Eric Spiegel is “independent” as required by the Nasdaq Listing Rules.
Item 16B.
Code of Ethics
We
have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer
or controller, or persons performing similar functions. Pursuant to our Code of Ethics, officers of Holdco covered by Holdco’s
Code of Ethics are required to promptly bring to the attention of the appropriate personnel, including officers, the General Counsel,
outside counsel for the Company and the Board or the relevant committee thereof, any information concerning any violations of the Code
of Ethics.
Item 16G.
Corporate Governance
The
Holdco Ordinary Shares and Holdco Warrants are listed on Nasdaq and as a Nasdaq-listed company, we are required to comply with certain
corporate governance standards under applicable Nasdaq Listing Rules. However, as a foreign private issuer, pursuant to Nasdaq Listing
Rule 5615(a)(3), we are permitted to follow home country practice in lieu of certain provisions of the Nasdaq Listing Rules.
Our
corporate governance practices differ in certain significant respects from those that U.S. companies must adopt in order to maintain
a Nasdaq listing and, in accordance with Nasdaq Listing Rule 5615(a)(3), we provide a brief, general summary of such differences.
Pursuant to Nasdaq Listing Rule 5615(a)(3), the Company has elected
to follow certain Irish practices consistent with the requirements of the Irish Companies Act and the Irish Takeover Panel Act, 1997,
Irish Takeover Rules 2022 (together, the “Irish Rules”) in lieu of the requirement of Nasdaq Rule 5635,
which sets forth the circumstances under which shareholder approval is required prior to an issuance of securities in certain circumstances
as set out therein.
The shareholder approval requirements set forth in Nasdaq Listing Rule 5635
are different than those required pursuant to the Irish Rules. Holdco intends to comply with the Irish Rules in lieu of the requirements
set forth in Nasdaq Listing Rule 5635.
Other
than the home country practices described above, we are not aware of any significant ways in which our corporate governance practices
differ from those followed by U.S. domestic companies under the Nasdaq listing rules.
PART
III.
ITEM
17. FINANCIAL STATEMENTS
We
have elected to provide financial statements and related information pursuant to “Item 18. Financial Statements.”
ITEM
18. FINANCIAL STATEMENTS
The audited financial statements of PERAC for the fiscal year ended
December 31, 2023 form part of this Report.
The
audited consolidated financial statements of Heramba GmbH for the fiscal year ended December 31, 2023 and the period from September 1,
2022 (inception) through December 31, 2022 form part of this Report.
The
audited combined financial statements of Kiepe for the fiscal years ended December 31, 2023, 2022 and 2021 form part of this Report.
The
unaudited pro forma condensed combined financial statements of Holdco as of and for the year ended December 31, 2023 are attached as
Exhibit 15.1 to this Report.
ITEM
19. EXHIBITS.
| Exhibit
Number |
|
Description |
| 1.1* |
|
Memorandum and Articles of Association of Heramba Electric plc. |
| 2.1† |
|
Business Combination
Agreement, dated October 2, 2023, by and among Project Energy Reimagined Acquisition Corp., Heramba Electric plc, Heramba Merger
Corp., Heramba Limited and Heramba GmbH (incorporated by reference as Annex A to the Registration Statement on Form F-4
(Reg. No. 333-275903), filed with the SEC on December 6, 2023). |
| 2.2* |
|
Plan of Merger, dated July 26, 2024, between Project Energy Reimagined Acquisition
Corp. and Heramba Merger Corp. |
| 2.3* |
|
Share Contribution Agreement, dated June 27, 2024, by and between Heramba Electric plc and Heramba Limited. |
| 2.4* |
|
Amended and Restated Warrant Agreement, dated July 26, 2024, by and among Heramba Electric plc, Project Energy Reimagined Acquisition Corp. and Continental Stock Transfer & Trust Company. |
| 4.1*† |
|
Registration Rights Agreement, dated July 26, 2024, by and among Heramba Electric plc, Smilodon Capital, LLC and the other signatories thereto. |
| 4.2* |
|
Lock-Up Agreement, dated June 19, 2024, by and among Heramba Electric plc, Smilodon Capital, LLC and the other signatories thereto. |
| 4.3* |
|
Form of Deed of Indemnification and Advancement between Heramba Electric plc and each of its directors and officers. |
| 4.4 |
|
Sponsor Support
Agreement, dated October 2, 2023, among Project Energy Reimagined Acquisition Corp., Heramba GmbH and Smilodon Capital, LLC (incorporated
by reference to Exhibit 10.6 of the Registration Statement on Form F-4 (Reg. No. 333-275903), filed with the SEC on
December 6, 2023). |
| 4.5* |
|
Heramba Electric plc 2024 Incentive Award Plan. |
| 4.6 |
|
Share
Purchase Agreement, Deed Index No. W 2651/2023 of Notary Public Prof. Dr. Hartmut Wicke, Munich, Germany, dated as of July 25, 2023,
by and among Heramba GmbH, Heramba Holdings, Inc., Knorr-Bremse Systeme für Schienenfahrzeuge GmbH and Knorr-Brake Holding Corporation
(incorporated by reference as Exhibit 2.3 to the Registration Statement on Form F-4/A (Reg. No. 333-275903), filed
with the SEC on March 15, 2024). |
| 4.7 |
|
Amendment
Agreement to Share Purchase Agreement, Deed Index No. W 0385/24 of Notary Public Prof. Dr. Hartmut Wicke, Munich, Germany, dated
as of January 31, 2024, y and among Heramba GmbH, Heramba Holdings, Inc., Knorr-Bremse Systeme für Schienenfahrzeuge GmbH and
Knorr-Brake Holding Corporation (incorporated by reference as Exhibit 2.4 to the Registration Statement on Form F-4/A (Reg. No. 333-275903),
filed with the SEC on March 15, 2024). |
| 4.8* |
|
Letter Agreement, dated October 28, 2021, among Project Energy Reimagined
Acquisition Corp., its executive officers, its directors and Smilodon Capital, LLC. |
| 8.1* |
|
List of subsidiaries of Heramba Electric plc. |
| 15.1* |
|
Unaudited pro
forma condensed combined financial statements. |
| 15.2* |
|
Consent of UHY LLP |
| 15.3* |
|
Consent of UHY LLP |
| 15.4* |
|
Consent of Marcum LLP |
| † | Certain
of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation
S-K Item 601(b)(2). The registrant agrees to furnish supplementally a copy of all omitted
exhibits and schedules to the SEC upon its request. |
| # | Indicates
management contract or compensatory plan or arrangement. |
| * | Filed
herewith. |
SIGNATURES
The registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: August 2, 2024 |
Heramba Electric plc |
| |
|
| |
By: |
/s/
Michele Molinari |
| |
|
Name: |
Michele Molinari |
| |
|
Title: |
Chief Executive Officer and Director |
HERAMBA GMBH
Audited Consolidated Financial Statements
For the year ended December 31, 2023 and the period
from September 1, 2022 (Inception) to December 31, 2022
Table of Contents
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Heramba GmbH
Opinion on the Consolidated
Financial Statements
We have audited the accompanying
consolidated statements of financial position of Heramba GmbH (the “Company”), as of December 31, 2023 and 2022, the related
consolidated statements of operations, changes in member’s equity (deficit) and cash flows for the year ended December 31, 2023
and for the period from September 1, 2022 (inception) to December 31, 2022, and the related notes (collectively referred to as the “consolidated
financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2023 and 2022, in conformity with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
Substantial Doubt About the
Company’s Ability to Continue as a Going Concern
The accompanying consolidated
financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated
financial statements, the Company has a working capital deficit, incurred operating losses, and has additional capital needs to proceed
with its business plan and has stated that these events or conditions raise substantial doubt about its ability to continue as a going
concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Basis for opinion on the
Consolidated Financial Statements
These consolidated financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance
with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit
of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control
over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion.
Our audits included performing
procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that
our audits provide a reasonable basis for our opinion.
/s/ UHY LLP
We have served as the Company’s auditor since
2023.
Melville, New York
July 29, 2024
HERAMBA
GMBH
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(expressed in Euros)
| | |
| |
December 31, | | |
December 31, | |
| | |
Note | |
2023 | | |
2022 | |
| Assets | |
| |
| | |
| |
| Current assets: | |
| |
| | |
| |
| Cash | |
| |
€ | 1,022,710 | | |
€ | 25,000 | |
| Prepaid expenses and other current assets | |
| |
| 1,539,531 | | |
| — | |
| Total Current Assets | |
| |
| 2,562,241 | | |
| 25,000 | |
| TOTAL ASSETS | |
| |
€ | 2,562,241 | | |
€ | 25,000 | |
| | |
| |
| | | |
| | |
| LIABILITIES | |
| |
| | | |
| | |
| Current Liabilities: | |
| |
| | | |
| | |
| Accounts payable | |
| |
€ | 522,118 | | |
€ | — | |
| Accrued expenses | |
| |
| 306,468 | | |
| — | |
| Due to related party | |
| |
| 154,459 | | |
| — | |
| Promissory note | |
5 | |
| 4,668,084 | | |
| — | |
| Total Current Liabilities | |
| |
€ | 5,651,129 | | |
€ | — | |
| TOTAL LIABILITIES | |
| |
| | | |
| | |
| | |
| |
| | | |
| | |
| MEMBER’S EQUITY (DEFICIT) | |
| |
| | | |
| | |
| Subscribed Capital | |
6 | |
€ | 25,000 | | |
€ | 25,000 | |
| Accumulated losses | |
| |
| (3,113,888 | ) | |
| — | |
| TOTAL MEMBER’S EQUITY (DEFICIT) | |
| |
| (3,088,888 | ) | |
| 25,000 | |
| TOTAL LIABILITIES AND MEMBER’S EQUITY (DEFICIT) | |
| |
€ | 2,562,241 | | |
€ | 25,000 | |
The accompanying notes are an integral part
of these consolidated financial statements.
HERAMBA
GMBH
CONSOLIDATED STATEMENTS OF OPERATIONS
(expressed in Euros)
| | |
For the
year ended
December 31, | | |
For the
period from
September 1,
2022
(inception) to
December 31, | |
| | |
2023 | | |
2022 | |
| | |
| | |
| |
| Operating Expenses: | |
| | |
| |
| General and administrative | |
€ | 2,817,681 | | |
€ | — | |
| Loss from operations | |
| (2,817,681 | ) | |
| — | |
| | |
| | | |
| | |
| Interest expense | |
| (296,207 | ) | |
| — | |
| Net loss | |
€ | (3,113,888 | ) | |
€ | — | |
| | |
| | | |
| | |
| Weighted average shares outstanding, basic and diluted | |
| 25,000 | | |
| 25,000 | |
| | |
| | | |
| | |
| Loss per share, basic and diluted | |
€ | (124.56 | ) | |
€ | 0.00 | |
The accompanying notes are an integral part
of these consolidated financial statements.
HERAMBA
GMBH
CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER’S EQUITY(DEFICIT)
FOR THE YEAR ENDED DECEMBER 31, 2023 AND THE PERIOD FROM SEPTEMBER 1, 2022
(INCEPTION) TO DECEMBER 31, 2022
(expressed in Euros)
| |
|
|
|
Subscribed Capital |
|
|
Accumulated |
|
|
Total Member’s
Equity |
|
| |
|
Note |
|
Amount |
|
|
Losses |
|
|
(Deficit) |
|
| Balance September 1, 2022 (inception) |
|
|
|
€ |
— |
|
|
€ |
— |
|
|
€ |
— |
|
| Member’s Contribution of Capital |
|
6 |
|
|
25,000 |
|
|
|
— |
|
|
|
25,000 |
|
| Balance, December 31, 2022 |
|
|
|
|
25,000 |
|
|
|
— |
|
|
|
25,000 |
|
| Net loss |
|
|
|
|
— |
|
|
|
(3,113,888 |
) |
|
|
(3,113,888 |
) |
| Balance, December 31, 2023 |
|
|
|
€ |
25,000 |
|
|
€ |
(3,113,888 |
) |
|
€ |
(3,088,888 |
) |
The accompanying notes are an integral part
of these consolidated financial statements.
HERAMBA
GMBH
CONSOLIDATED STATEMENT OF CASH FLOWS
(expressed in Euros)
| | |
For the
year ended
December 31, | | |
For the
period from
September 1,
2022
(inception) to
December 31, | |
| | |
2023 | | |
2022 | |
| Cash Flows from Operating Activities: | |
| | |
| |
| Net loss | |
€ | (3,113,888 | ) | |
€ | — | |
| Adjustments to reconcile net loss to net cash flows used in operating activities: | |
| | | |
| | |
| Non-cash interest expense | |
| 296,207 | | |
| — | |
| Changes in working capital: | |
| | | |
| | |
| Increase in prepaid expenses and other current assets | |
| (145,872 | ) | |
| — | |
| Increase in accounts payable | |
| 522,118 | | |
| — | |
| Increase in accrued expenses | |
| 10,261 | | |
| — | |
| Due to related party | |
| 154,459 | | |
| — | |
| Net cash used in operating activities | |
| (2,276,715 | ) | |
| — | |
| | |
| | | |
| | |
| Cash Flows from Investment Activities: | |
| | | |
| | |
| Prepaid purchase consideration for acquisition | |
| (1,393,659 | ) | |
| — | |
| Net cash used in investing activities | |
| (1,393,659 | ) | |
| — | |
| | |
| | | |
| | |
| Cash Flows from Financing Activities: | |
| | | |
| | |
| Proceeds from capital subscription | |
| — | | |
| 25,000 | |
| Proceeds from the issuance of promissory note | |
| 4,668,084 | | |
| — | |
| Net cash provided by financing activities | |
| 4,668,084 | | |
| 25,000 | |
| | |
| | | |
| | |
| Net increase in cash | |
| 997,710 | | |
| 25,000 | |
| Cash, beginning of period | |
| 25,000 | | |
| — | |
| Cash, end of period | |
€ | 1,022,710 | | |
€ | 25,000 | |
The accompanying notes are an integral part
of these consolidated financial statements.
1. ORGANIZATION
AND NATURE OF OPERATIONS
Heramba GmbH (formerly known
as Blitz D22-275) (the “Company” or “Heramba”) was established as a limited liability shell company on September
1, 2022 registered with the commercial register of the Local Court of Düsseldorf under HRB 98529.
The Company was formed for the
purpose to focus on investing in companies with technologies and capabilities that can accelerate the decarbonization of commercial transportation.
The Company has not commenced operations.
Heramba GmbH has two consolidated
subsidiaries, Heramba Holdings, Inc. and Heramba Investments LLC. Both subsidiaries are 100% owned and located in the US. Heramba Holdings,
Inc. was formed in April 2023 and Heramba Investments LLC was formed in August 2023.
Share Purchase Agreement
On July 25, 2023, Heramba and Heramba Holdings
entered into the Share Purchase Agreement with Knorr-Bremse Systeme für Schienenfahrzeuge GmbH (“KB GmbH”) and Knorr-Brake
Holding Corporation (“KB US” and, together with KB GmbH, “KB Sellers”) for the purchase of a majority interest
in Kiepe Electric GmbH and Kiepe Electric LLC (collectively “Kiepe Electric”), and on January 31, 2024, Heramba, Heramba Holdings,
KB GmbH and KB US entered into the SPA Amendment to the Share Purchase Agreement (as amended, the “SPA”). In December 2023,
the company prepaid €1,393,659 of purchase consideration related to this agreement, which is included in prepaid expenses and other
current assets on the accompanying consolidated statements of financial position. The SPA closed on February 6, 2024 (see Note 7).
Business Combination Agreement
On October 2, 2023, Heramba
entered into a Business Combination Agreement (“BCA”) with Project Energy Reimagined Acquisition Corp. (“PERAC”),
a special purpose acquisition company (“SPAC”), incorporated as a Cayman Islands exempted company, Heramba Electric plc,
an Irish public limited company duly incorporated under the laws of Ireland (“Holdco”), Heramba Merger Corp., an exempted
company incorporated in the Cayman Islands with limited liability (“Merger Sub”) and Heramba Limited, an Irish private company
limited by shares duly incorporated under the laws of Ireland and the sole shareholder of Heramba GmbH (the “Seller”).
Upon consummation of the BCA
transaction, Heramba Electric PLC will become a publicly traded corporation. The transaction is subject to the approval of shareholders
and the consummation of the SPA between Heramba and Kiepe Electric.
2.
LIQUIDITY AND GOING CONCERN
Historically, the Company’s
primary sources of liquidity have been cash flows from contributions from members and the issuance of a promissory note. As of December
31, 2023, the Company had an aggregate cash balance of €1,022,710. Subsequent to December 31, 2023, the Company successfully completed
the acquisition of an operating entity in conjunction with the closing of the SPA (see Note 7). In order to support on-going operations
and meet current purchase consideration obligations related to the SPA, the Company will need to raise additional capital or secure debt
funding. While there can be no assurances, the Company intends to raise such capital through issuances of additional equity and debt.
If additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to the Company
or at all. If the Company is unable to raise additional capital when desired, the Company’s business, results of operations and
financial condition would be materially and adversely affected.
As a result of the above, in
connection with the Company’s assessment of going concern considerations management has determined that the Company’s liquidity
condition raises substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements
do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be
necessary should the Company be unable to continue as a going concern.
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standard Board (“IASB”) and interpretations issued by the International Financial Reporting Standards Interpretations
Committee (“IFRIC”). These consolidated financial statements have been prepared on the historical cost basis.
The consolidated financial statements
comprise the financial statements of the Company and its subsidiaries All intercompany transactions and balances have been eliminated.
The functional currency of the
Company and its subsidiaries is the currency of the primary economic environment in which each entity operates. The presentation currency
of the Company is Euros.
Use of Estimates
The preparation of the accompanying
consolidated financial statements in conformity with IFRS requires management to make certain estimates and assumptions that affect the
reported amounts and disclosures of assets, liabilities, and expenses during the reporting period. Estimates are adjusted to reflect
actual experience when necessary. There were no significant estimates for the year ended December 31, 2023 and the period from September
1, 2022 (inception) to December 31, 2022.
Cash
Cash is comprised of cash held
in banks which are subject to an insignificant risk of change in value. The Company considers all short-term investments with an original
maturity of three months or less when purchased to be cash equivalents.
Other Financial Assets and
Other Financial Liabilities
Financial instruments are any
form of contract that gives rise to a financial asset in one company and a financial liability or equity instrument in another company.
A financial asset or financial liability is included in the statement of financial position when the entity becomes a party to the contractual
terms of the instrument. Other financial liabilities and other financial assets, including liabilities to and receivables from related
parties, are valued at amortized cost. A financial asset is removed from the statement of financial position when the contractual right
to cash flow from the asset has ceased or been settled. The same applies where the risks and benefits associated with the holding are
essentially transferred to another party and the entity no longer has control over the financial asset. A financial liability is derecognized
when the agreed obligation has been fulfilled or ceased.
Transaction Costs in an Offering
of Equity Securities
In the event of offering of
equity securities, incremental costs that otherwise would not have been incurred are deferred and capitalized in the statement of financial
position as a financial asset at amortized cost instead of expensed as incurred. When cash is received from investors as part of the
offering, such deferred incremental costs are derecognized and deducted from member’s equity.
Business Combinations
Business combinations are accounted
for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured
at acquisition date fair value, and the amount of any noncontrolling interest in the acquiree. For each business combination, the Company
elects whether to measure the components of the noncontrolling interest in the acquiree either at fair value or at the proportionate
share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in general and
administrative expenses.
Any contingent consideration
to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration that is classified
as equity is not remeasured and subsequent settlement is accounted for within equity. Contingent consideration classified as an asset
or liability that is a financial instrument within the scope of IFRS 9, Financial Instruments (“IFRS 9”) is measured at fair
value with the changes in fair value recognized in profit or loss. In accordance with IFRS 9, other contingent consideration that is
not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognized in profit or loss.
Goodwill is initially measured
at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for noncontrolling interests, and
any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other
items is lower than the fair value of the net assets acquired, the difference is, after reassessment, recognized in profit or loss as
a gain on bargain purchase.
Earnings (loss) Per Share
Basic and diluted loss per share
is calculated by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding
during the year.
New and Revised Standards
Issued, but not yet Effective
The IASB has issued new or amended
accounting standards and interpretations that have not yet become effective and have consequently not been implemented in the consolidated
financial statements. The Company expects to adopt the accounting standards and interpretations when they become effective. Management
does not expect that the adoption of these standards will have a material impact on future financial statements of Heramba going forward.
New or revised standards and
Interpretations |
|
Contents
of, or change to, standard or interpretation |
|
Effective
date
(Periods beginning on or after)
|
| Amendments
to IAS 1 |
|
Classification
of Liabilities as Current or Non-Current |
|
01/01/2024 |
| Amendments
to IFRS 16 |
|
Lease
Liability in a Sale and Leaseback |
|
01/01/2024 |
| Amendments
to IAS 1 |
|
Non-Current
liabilities with Covenants |
|
01/01/2024 |
| Amendments
to IAS 21 |
|
Lack
of Exchangeability |
|
01/01/2024 |
| Amendments
to IAS 7 and IFRS 7 |
|
Supplier
Finance Arrangements |
|
01/01/2024 |
The Company has not voluntarily
adopted any new or amended standards and interpretations earlier.
4.
RELATED PARTY TRANSACTIONS
Due to related party
As of December 31, 2023, an
affiliate had advanced the Company an aggregate of €154,459 for working capital requirements. The advances are non-interest bearing
and due on demand.
Consultancy Agreement
In January 2023, the Company
entered into a consultancy agreement with an affiliate. Pursuant to the consultancy agreement, the affiliate will provide advisory service
related to the Business Combination at a monthly cost of €7,500 plus applicable value added tax (VAT). For the year ended December
31, 2023, €59,859 was expensed under this agreement and included in general and administrative expense in the consolidated statement
of operations. At December 31, 2023, €8,925 was included in accounts payable in the accompanying consolidated statement of financial
position.
5.
PROMISSORY NOTE
On May 31, 2023, the Company
issued an unsecured promissory note with an unrelated third-party in the amount of $5,000,000 (€4,668,084) (the “Promissory
Note”). Pursuant to the terms of the agreement, the Promissory Note bears interest at 10.00% per annum and is currently due on
demand. Unpaid interest expense for the year ended December 31, 2023 was €296,207 and is included in accrued expenses within the
consolidated statement of financial position.
6.
MEMBERS’ EQUITY
The Company was formed on September
1, 2022 and issued 25,000 ordinary shares at a nominal value of €1.00 per share. The Company is authorized to issue 25,000 ordinary
shares.
7.
SUBSEQUENT EVENTS
Subsequent events have been
evaluated through July 29, 2024, which represents the date the consolidated financial statements were available to be issued, and no
events have occurred through that date that would impact the consolidated financial statements.
Kiepe Acquisition
On February 6, 2024, KB GmbH,
as sole shareholder of Kiepe Electric GmbH (“KE DE”), sold and transferred 85% of the equity interests in KE DE, as well
as certain receivables and shareholder loans, to Heramba, and KB US, as the sole member of Kiepe Electric LLC (“KE US”),
sold and transferred all ownership interests in KE US, as well as certain receivables, to Heramba Holdings (the “Kiepe Acquisition”).
KE DE and KE US are collectively referred to herein as “Target Companies.” KB GmbH revised and updated the articles of association
and the shareholders list of KE DE such that the share capital of KE DE is divided into two shares, one share having a nominal amount
of €850,000 (“KE DE Share 1”) and one share having a nominal amount of €150,000 (“KE DE Share 2”).
The aggregate preliminary purchase
price for the sale and transfer of the KE DE Share 1 and the KE US interests was €4,800,000, calculated in accordance with the terms
of the SPA (which such purchase price is subject to customary adjustments based on a customary closing account mechanism).
Heramba has the option, but
is not required, to purchase all, but not less than all, of the KE DE Share 2 from KB GmbH (the “Call Option”) at any time
prior to December 31, 2025 against payment of €5,000,000 (the “Option Purchase Price”). KB GmbH has the option, but
shall not be required, to sell all, but not less than all, of the KE DE Share 2 to Heramba (the “Put Option”) at any time
between January 1, 2025 and November 30, 2025 against payment of the Option Purchase Price.
In addition to the above purchase
price, an amount of €15,000,000 shall be paid by Heramba and Heramba Holdings to KB Sellers as an earn-out which shall be due and
payable within 30 business days from the date of submission of the audited 2023 consolidated financial statements of the Target Companies,
but in any event no later than September 30, 2024 (the “2nd Purchase Price”), if the audited 2023 revenues of the Target
Companies equals or exceeds €141,903,100.
In addition to the above purchase
price and the 2nd Purchase Price, an amount of up to €9,500,000 shall be paid by Heramba and Heramba Holdings to KB Sellers as an
earn-out which shall be due and payable within 30 business days from the date of submission of the audited 2024 consolidated financial
statements of the Target Companies, but in any event no later than September 30, 2025 (the “3rd Purchase Price”), if the
audited 2024 revenues of the Target Companies equals or exceeds certain thresholds. The 3rd Purchase Price shall be €9,500,000 if
the audited 2024 revenues of the Target Companies equal or exceeds €190,961,200 and the 3rd Purchase Price shall be €7,000,000
if the audited 2024 revenues of the Target Companies equal or exceeds €164,916,680 but is less than €190,961,200.
In connection with the completion
of a project relating to the design, construction, delivery and commissioning of a certain number of vehicles (the “WSW Project”),
Heramba may, under certain circumstances, be obligated to pay to KB GmbH, as additional purchase price, an amount of up to €5,000,000
(the “WSW Earn-out”).
In addition to the above purchase
price, the 2nd Purchase Price, the 3rd Purchase Price and the WSW Earn-out, an amount of €5,000,000 (the “Additional Purchase
Price”) shall be paid by Heramba and Heramba Holdings to KB Sellers on the later of the date of the completion of the WSW Project
and March 30, 2026.
Following consummation of the
Kiepe Acquisition, Heramba and Heramba Holdings have the option, under certain conditions, to pay KB Sellers the 3rd Purchase Price and
Optional Purchase Price, as applicable, in Holdco Ordinary Shares (such shares, the “Stock Consideration Shares”). The number
of Holdco Ordinary Shares to be issued will be equal to the quotient of the 3rd Purchase Price or Optional Purchase Price, as applicable,
divided by the twenty-day volume weighted average price of the Holdco Ordinary Shares on Nasdaq immediately prior to such payment.
The Company has accounted for
the aforementioned acquisition pursuant to IFRS 3, Business Combinations, (“IFRS 3”) as the accounting acquirer using the
acquisition method of accounting as KE DE and KE US each meet the definition of a business, respectively. Each identifiable asset and
liability will be measured at its acquisition-date fair value. The non-controlling interest relating to KB GmbH’s 15% ownership
will be measured at fair value.
The Company based the preliminary
allocation of the purchase price on estimates and assumptions that are subject to change within the purchase price allocation period,
which is generally one year from the acquisition date. The purchase accounting is not yet complete, and as such, the final allocation
may be subject to future adjustments, including, but not limited to, inventory, contract assets, intangible assets, and certain income
tax matters.
The following table summarizes
the preliminary allocation of the purchase price for the Kiepe Acquisition:
| | |
February 6,
2024 | |
| Fair value of consideration: | |
| |
| Cash paid at closing | |
€ | 4,800,000 | |
| 2nd purchase price earn-out | |
| 13,341,899 | |
| 3rd purchase price earn-out | |
| 2,021,802 | |
| Less: Call option | |
| (1,001,048 | ) |
| Add: Put option | |
| 2,086,499 | |
| WSW Earn-out | |
| 5,000,000 | |
| Total | |
€ | 26,249,152 | |
| | |
| | |
| Allocated to: | |
| | |
| Cash and cash equivalents | |
€ | 27,622,751 | |
| Accounts receivable | |
| 44,117,142 | |
| Inventory | |
| 54,548,016 | |
| Contract assets | |
| 29,444,290 | |
| Other assets | |
| 20,561,571 | |
| Fixed assets | |
| 22,320,826 | |
| Accounts payable | |
| (23,228,405 | ) |
| Contract liabilities | |
| (57,436,169 | ) |
| Other provisions - current | |
| (22,644,302 | ) |
| Other current liabilities | |
| (15,271,273 | ) |
| Other liabilities | |
| (25,602,487 | ) |
| Total identifiable net assets acquired | |
€ | 54,431,960 | |
| | |
| | |
| Non-controlling interests | |
€ | 3,339,948 | |
| | |
| | |
| Excess of net assets acquired before allocation to identifiable intangible assets and bargain purchase gain over purchase price | |
€ | (24,842,860 | ) |
While a final determination
of the value of the identifiable intangibles has not been completed, management has made an initial determination that €6,703,800
should be allocated to identifiable intangible assets. The preliminary excess of fair value of the net assets acquired over the purchase
price results in a bargain purchase gain. Management believes the acquisition will ultimately result in a bargain purchase gain, because
the seller was motivated to divest such business as it was no longer part of the seller’s long-term strategy.
| | |
Amount | | |
Estimated
useful life (Years) |
| Tradename – Trademark (1) | |
€ | 965,900 | | |
15 |
| Intellectual property – Technology license rights (2) | |
| 161,000 | | |
5 |
| Customer base (3) | |
| 5,576,900 | | |
10 |
| | |
| 6,703,800 | | |
|
| Bargain purchase gain | |
| (31,546,660 | ) | |
|
| | |
€ | (24,842,860 | ) | |
|
| (1) | The tradename was preliminarily valued using
a Relief of Royalty Method (“ROR”). The ROR reflects the present value of the
royalties that could be earned by licensing the tradename and the cost to realize those revenues
and an appropriate discount rate to reflect the time value and risk associated with the cash
flows. |
| (2) | The intellectual property was preliminarily
valued using a Relief of Royalty Method (“ROR”). The ROR reflects the present
value of the royalties that could be earned by licensing the intellectual property after
taking into account technological obsolescence and the cost to realize those revenues and
an appropriate discount rate to reflect the time value and risk associated with the cash
flows. |
| (3) | These customer relationships were preliminarily
valued using the Mutli-Period Excess Earnings Method (“MPEEM”). The MPEEM reflects
the present value of the operating cash flows generated by existing customer relationships
after taking into account retention of the customers and the cost to realize the revenue
and an appropriate discount rate to reflect the time value and risk associated with the cash
flows. |
Loan Agreements
On April 30, 2024, Heramba Holdings,
Inc., and Heramba Limited, entered into loan agreements (the “Loan Agreements”) with certain unaffiliated third parties (the
“Investors”) pursuant to which the Company issued to the Investors unsecured notes (the “Notes”) in an aggregate
principal amount of $1,800,000 (approximately €1,680,000). The Notes mature on the third business day following consummation of
the Business Combination pursuant to the BCA; provided, however, that if the BCA is terminated prior to the consummation of the Business
Combination, the Notes mature on the thirtieth business day following the date the BCA is terminated; provided further, that in no event
shall the maturity date be later than September 1, 2024. The Notes do not bear interest during the term of the Notes. The Notes are subject
to customary events of default, the occurrence of which, following written notice to the Company, triggers the unpaid principal balance
of the Notes and all other sums payable with regard to the Notes becoming immediately due and payable. In addition, Seller is obligated
and liable for all amounts due under and pursuant to the Notes.
In the event the BCA is terminated
prior to consummation of the Business Combination, the Investors collectively shall be issued equity interests in Seller equal to 2.65%
of the equity ownership of Seller.
On July 9, 2024, Heramba Holdings,
Inc. entered into a loan agreement with a third party (the “Lender”) pursuant to which the Heramba Holdings, Inc. issued
to the Lender an unsecured notes (the “New Note”) in an aggregate principal amount of $800,000 (approximately €747,000).
The Lender advanced the principal amount in April 2024. The New Note bears interest of 5% during the term of the New Note and matures
on April 27, 2025. The New Note is subject to customary events of default, the occurrence of which, following written notice to the Company,
triggers the unpaid principal balance and accrued interest of the New Note and all other sums payable with regard to the New Note becoming
immediately due and payable.
Other Events
Subsequent to the closing of
the SPA, the Company became in violation of certain covenants within the SPA as a result of Kiepe Electric entering into an unapproved
letter of credit with an unrelated financial institution in the amount of $10,000,000 (approximately €9,200,000). Kiepe Electric
is currently restricted from accessing the amount as it is being irrevocably pledged in favor of the financial institution.
Business Combination Agreement
On July 26, 2024, the Business
Combination was consummated.
Kiepe Electric Group
Audited Combined Financial Statements
As of December 31, 2023 and 2022 and for the years ended December 31,
2023, 2022, and 2021
KIEPE ELECTRIC GROUP
INDEX TO COMBINED FINANCIAL
STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors of
Kiepe Electric Group
Opinion on the Combined Financial
Statements
We have audited the accompanying
combined statements of financial position of Kiepe Electric Group (the “Company”), as of December 31, 2023, and
2022, the related combined statements of profit or loss, comprehensive profit or loss, changes in net investment, and cash flows for each
of the three years ended December 31, 2023, 2022, and 2021 and the related notes (collectively referred to as the “combined
financial statements”). In our opinion, the combined financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2023, and 2022, and the results of its operations and its cash flows for the years ended
December 31, 2023, 2022, and 2021 in conformity with International Financial Reporting Standards as issued by the International Accounting
Standards Board.
Substantial Doubt About the
Company’s Ability to Continue as a Going Concern
The accompanying combined financial
statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note A.1 to the combined financial
statements, the Company does not have access to secure bond credit lines in order to support its revenue generating and operational business
needs, as a result, the Company does not believe that its current level of cash and cash equivalents is sufficient to fund operations.
These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters
are also described in Note A.1. The combined financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
Basis for opinion on the Combined
Financial Statements
These combined financial statements
are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s combined
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance
with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of
material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over
financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion.
Our audits included performing
procedures to assess the risks of material misstatement of the combined financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the combined financial statements. Our audits also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the combined financial statements. We believe that our audits provide
a reasonable basis for our opinion.
Emphasis of Matter
We draw attention to Note A.2,
“Basis of Combination” to the combined financial statements with respect to the principles and conventions applied to the
preparation and presentation of the combined financial statements. Our opinion is not modified with respect to this matter.
/s/ UHY LLP
We have served as the Company’s auditor since
2023.
Melville, New York
July 29, 2024
Combined
Statements of Profit or Loss
of Kiepe Electric Group, for the years ended
December 31, 2023, 2022 and 2021
01. COMBINED STATEMENTS OF PROFIT OR LOSS
| in € thousand | |
Notes | |
2023 | | |
2022 | | |
2021 | |
| Revenue | |
C.1 | |
| 152,807 | | |
| 119,788 | | |
| 109,265 | |
| Change in inventory of finished and unfinished goods | |
C.2 | |
| (3,032 | ) | |
| (4,377 | ) | |
| 1,360 | |
| Own work capitalized | |
C.2 | |
| 3,167 | | |
| 3,468 | | |
| 3,734 | |
| Other operating income | |
C.3 | |
| 2,564 | | |
| 3,534 | | |
| 5,844 | |
| Cost of materials | |
C.4 | |
| (67,397 | ) | |
| (53,650 | ) | |
| (56,579 | ) |
| Personnel expenses | |
C.5 | |
| (55,211 | ) | |
| (57,429 | ) | |
| (61,296 | ) |
| Other operating expenses | |
C.6 | |
| (28,133 | ) | |
| (24,381 | ) | |
| (23,629 | ) |
| Depreciation, amortization and impairment | |
C.7 | |
| (3,601 | ) | |
| (4,968 | ) | |
| (6,669 | ) |
| Operating
gain / (loss) | |
| |
| 1,164 | | |
| (18,015 | ) | |
| (27,970 | ) |
| Interest income | |
C.8 | |
| 1,202 | | |
| 150 | | |
| 33 | |
| Interest expenses | |
C.8 | |
| (1,279 | ) | |
| (1,061 | ) | |
| (1,655 | ) |
| Other financial result | |
C.8 | |
| 108 | | |
| (37 | ) | |
| 15 | |
| Income
/ (loss) before taxes | |
| |
| 1,195 | | |
| (18,963 | ) | |
| (29,577 | ) |
| Income tax (expense) benefit | |
C.9 | |
| (788 | ) | |
| (1,095 | ) | |
| 918 | |
| Income
/ (loss) for the period | |
| |
| 407 | | |
| (20,058 | ) | |
| (28,659 | ) |
| Income / (loss) attributable to Parent | |
| |
| 407 | | |
| (20,058 | ) | |
| (28,659 | ) |
- The accompanying
notes are an integral part of these combined financial statements. -
Combined
Statements of Comprehensive Profit or Loss
of Kiepe Electric Group, for the years ended
December 31, 2023, 2022 and 2021
02. COMBINED STATEMENTS OF COMPREHENSIVE
PROFIT OR LOSS
| in € thousand | |
Notes | |
2023 | | |
2022 | | |
2021 | |
| Income
/ (loss) for the period | |
| |
| 407 | | |
| (20,058 | ) | |
| (28,659 | ) |
| Actuarial gains and losses | |
D.9 | |
| (504 | ) | |
| 2,951 | | |
| 1,141 | |
| Income taxes relating to these items | |
C.9 | |
| 304 | | |
| (753 | ) | |
| (86 | ) |
| Items
that will not be reclassified to profit or loss | |
| |
| (200 | ) | |
| 2,198 | | |
| 1,055 | |
| Currency translation difference | |
| |
| (182 | ) | |
| (842 | ) | |
| 755 | |
| Items
that may be reclassified to profit or loss | |
| |
| (182 | ) | |
| (842 | ) | |
| 755 | |
| Other
comprehensive income / (loss) after taxes | |
| |
| (382 | ) | |
| 1,356 | | |
| 1,810 | |
| Total
comprehensive income / (loss) for the period | |
| |
| 25 | | |
| (18,702 | ) | |
| (26,849 | ) |
| Total comprehensive income / (loss) attributable to Parent | |
| |
| 25 | | |
| (18,702 | ) | |
| (26,849 | ) |
- The accompanying
notes are an integral part of these combined financial statements. -
Combined
Statements of Financial Position
of Kiepe Electric Group, as of December 31,
2023 and 2022
03. ASSETS
| in € thousand | |
Notes | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Assets | |
| |
| | |
| |
| Intangible assets, net | |
D.1 | |
| 13,688 | | |
| 11,485 | |
| Goodwill | |
D.2 | |
| 4,321 | | |
| 4,321 | |
| Property, plant and equipment, net | |
D.3 | |
| 22,440 | | |
| 24,289 | |
| Financial assets | |
D.4 | |
| 119 | | |
| 48 | |
| Deferred tax assets | |
C.9 | |
| 79 | | |
| 43 | |
| Non-current
assets | |
| |
| 40,647 | | |
| 40,186 | |
| | |
| |
| | | |
| | |
| Inventories, net | |
D.6 | |
| 53,072 | | |
| 45,020 | |
| Trade receivables, net | |
D.5 | |
| 46,302 | | |
| 41,454 | |
| Other financial assets | |
D.5 | |
| 1,561 | | |
| 1,960 | |
| Other assets | |
D.5 | |
| 6,554 | | |
| 4,188 | |
| Contract assets | |
C.1 | |
| 27,661 | | |
| 21,244 | |
| Receivables from related parties | |
F.3 | |
| 4,560 | | |
| 53,988 | |
| Cash and cash equivalents | |
D.7 | |
| 32,535 | | |
| 8,462 | |
| Current
assets | |
| |
| 172,245 | | |
| 176,316 | |
| | |
| |
| | | |
| | |
| Total
assets | |
| |
| 212,892 | | |
| 216,502 | |
- The accompanying notes
are an integral part of these combined financial statements. -
04. NET INVESTMENT AND LIABILITIES
| in € thousand | |
Notes | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Net investment | |
| |
| | |
| |
| Net investment attributable to Parent | |
| |
| 59,730 | | |
| 54,550 | |
| Other comprehensive income | |
| |
| 1,681 | | |
| 2,063 | |
| Total net investment attributable to Parent | |
D.8 | |
| 61,411 | | |
| 56,613 | |
| | |
| |
| | | |
| | |
| Liabilities | |
| |
| | | |
| | |
| Provisions for pensions | |
D.9 | |
| 4,031 | | |
| 3,591 | |
| Provisions for other employee benefits | |
D.9 | |
| 968 | | |
| 931 | |
| Other provisions | |
D.10 | |
| 17,326 | | |
| 12,618 | |
| Financial liabilities | |
D.12 | |
| 2,237 | | |
| 1,889 | |
| Other liabilities | |
D.11 | |
| 135 | | |
| 264 | |
| Deferred tax liabilities | |
C.9 | |
| 3 | | |
| 26 | |
| Non-current liabilities | |
| |
| 24,700 | | |
| 19,319 | |
| | |
| |
| | | |
| | |
| Provisions for other employee benefits | |
D.9 | |
| 548 | | |
| 542 | |
| Other provisions | |
D.10 | |
| 22,334 | | |
| 28,573 | |
| Trade payables | |
D.11 | |
| 23,827 | | |
| 18,365 | |
| Financial liabilities | |
D.12 | |
| 1,305 | | |
| 1,017 | |
| Other liabilities | |
D.11 | |
| 8,350 | | |
| 11,109 | |
| Contract liabilities | |
C.1 | |
| 65,965 | | |
| 75,425 | |
| Liabilities to related parties | |
F.3 | |
| 4,258 | | |
| 5,348 | |
| Income tax liabilities | |
D.14 | |
| 194 | | |
| 191 | |
| Current liabilities | |
| |
| 126,781 | | |
| 140,570 | |
| Liabilities | |
| |
| 151,481 | | |
| 159,889 | |
| Total net investment and liabilities | |
| |
| 212,892 | | |
| 216,502 | |
- The accompanying
notes are an integral part of these combined financial statements. -
Combined
Statements of Changes in Net Investment
of Kiepe Electric Group, as of December 31,
2023, 2022 and 2021
05. COMBINED STATEMENTS OF CHANGES IN NET
INVESTMENT
| in € thousand | |
Notes | |
Net investment attributable to Parent | | |
Currency translation differences | | |
Total net investment attributable to Parent | |
| Balance at January 1, 2021 | |
| |
| 61,375 | | |
| – | | |
| 61,375 | |
| Net income / (loss) for the period | |
| |
| (28,659 | ) | |
| – | | |
| (28,659 | ) |
| Other comprehensive income / (loss) for the period | |
| |
| 1,055 | | |
| 755 | | |
| 1,810 | |
| Total comprehensive income / (loss) for the period | |
| |
| (27,604 | ) | |
| 755 | | |
| (26,849 | ) |
| Other transactions with Parent | |
D.8 | |
| 18,723 | | |
| – | | |
| 18,723 | |
| Balance at December 31, 2021 | |
| |
| 52,494 | | |
| 755 | | |
| 53,249 | |
| | |
| |
| | | |
| | | |
| | |
| Balance at January 1, 2022 | |
| |
| 52,494 | | |
| 755 | | |
| 53,249 | |
| Net income / (loss) for the period | |
| |
| (20,058 | ) | |
| – | | |
| (20,058 | ) |
| Other comprehensive income / (loss) for the period | |
| |
| 2,198 | | |
| (842 | ) | |
| 1,356 | |
| Total comprehensive income / (loss) for the period | |
| |
| (17,860 | ) | |
| (842 | ) | |
| (18,702 | ) |
| Other transactions with Parent | |
D.8 | |
| 22,066 | | |
| – | | |
| 22,066 | |
| Balance at December 31, 2022 | |
| |
| 56,700 | | |
| (87 | ) | |
| 56,613 | |
| | |
| |
| | | |
| | | |
| | |
| Balance at January 1, 2023 | |
| |
| 56,700 | | |
| (87 | ) | |
| 56,613 | |
| Net income / (loss) for the period | |
| |
| 407 | | |
| – | | |
| 407 | |
| Other comprehensive income / (loss) for the period | |
| |
| (200 | ) | |
| (182 | ) | |
| (382 | ) |
| Total comprehensive income / (loss) for the period | |
| |
| 207 | | |
| (182 | ) | |
| 25 | |
| Other transactions with Parent | |
D.8 | |
| 4,773 | | |
| – | | |
| 4,773 | |
| Balance at December 31, 2023 | |
| |
| 61,680 | | |
| (269 | ) | |
| 61,411 | |
- The accompanying
notes are an integral part of these combined financial statements. -
Combined
Statements of Cash Flows
of Kiepe Electric Group, for the years ended
December 31, 2023, 2022 and 2021
06. COMBINED STATEMENTS OF CASH FLOWS
| in € thousand | |
Notes | |
2023 | | |
2022 | | |
2021 | |
| Income / (loss) for the period | |
| |
| 407 | | |
| (20,058 | ) | |
| (28,659 | ) |
| Adjustments for | |
| |
| | | |
| | | |
| | |
| Income tax expense (benefit) | |
| |
| 788 | | |
| 1,095 | | |
| (918 | ) |
| Interest result | |
| |
| 77 | | |
| 911 | | |
| 1,622 | |
| Amortization, depreciation and impairment | |
| |
| 3,601 | | |
| 4,968 | | |
| 6,669 | |
| Loss on the disposal of fixed assets | |
| |
| – | | |
| 73 | | |
| 209 | |
| Other non-cash expenses and income | |
| |
| 1,366 | | |
| 15 | | |
| (3,195 | ) |
| Income tax payments | |
| |
| (535 | ) | |
| (1,386 | ) | |
| (1,168 | ) |
| Changes of | |
| |
| | | |
| | | |
| | |
| Decrease/(increase) in inventories | |
| |
| (7,869 | ) | |
| 2,111 | | |
| 4,594 | |
| Decrease/(increase) in trade receivables | |
| |
| 29,986 | | |
| (19,441 | ) | |
| 6,860 | |
| Decrease/(increase) in contract assets | |
| |
| (6,389 | ) | |
| (2,791 | ) | |
| 14,651 | |
| Decrease/(increase) in other assets | |
| |
| (1,776 | ) | |
| 1,999 | | |
| (2,959 | ) |
| (Decrease)/increase in trade payables and contract liabilities | |
| |
| (3,703 | ) | |
| 13,392 | | |
| (21,888 | ) |
| (Decrease)/increase in other liabilities | |
| |
| (4,353 | ) | |
| 4,377 | | |
| 2,237 | |
| (Decrease)/increase in provisions | |
| |
| (1,024 | ) | |
| 3,743 | | |
| 5,329 | |
| Cash flow from operating activities | |
E.1 | |
| 10,576 | | |
| (10,992 | ) | |
| (16,616 | ) |
| | |
| |
| | | |
| | | |
| | |
| Purchase of intangible assets and capitalized development costs | |
| |
| (3,197 | ) | |
| (3,468 | ) | |
| (4,157 | ) |
| Proceeds from the sale of property, plant and equipment | |
| |
| – | | |
| 6 | | |
| 5,484 | |
| Purchase of property, plant and equipment | |
| |
| (1,027 | ) | |
| (1,498 | ) | |
| (800 | ) |
| Purchase of investments and other long-term assets | |
| |
| (666 | ) | |
| (65 | ) | |
| (75 | ) |
| Interest received | |
| |
| 1,057 | | |
| 128 | | |
| 31 | |
| Cash flow from investing activities | |
E.2 | |
| (3,833 | ) | |
| (4,897 | ) | |
| 483 | |
| | |
| |
| | | |
| | | |
| | |
| Proceeds from borrowings | |
| |
| 250 | | |
| – | | |
| 1,329 | |
| Repayments of borrowings | |
| |
| – | | |
| – | | |
| (62 | ) |
| Repayments of lease liabilities | |
| |
| (772 | ) | |
| (903 | ) | |
| (861 | ) |
| Proceeds from grants and subsidies | |
| |
| – | | |
| – | | |
| 366 | |
| Interest paid | |
| |
| (981 | ) | |
| (926 | ) | |
| (1,605 | ) |
| Termination cash-pool agreement with Parent | |
| |
| 14,361 | | |
| – | | |
| – | |
| Other financing transactions with Parent | |
| |
| 4,771 | | |
| 19,349 | | |
| 21,341 | |
| Cash flow from financing activities | |
E.3 | |
| 17,629 | | |
| 17,520 | | |
| 20,508 | |
| | |
| |
| | | |
| | | |
| | |
| Cash flow changes | |
| |
| 24,372 | | |
| 1,631 | | |
| 4,375 | |
| Effect of movements in exchange rates | |
| |
| (299 | ) | |
| (1,028 | ) | |
| 548 | |
| | |
| |
| | | |
| | | |
| | |
| Cash funds at the beginning of the period | |
| |
| 8,462 | | |
| 7,859 | | |
| 2,936 | |
| Cash funds at the end of the period | |
E.4 | |
| 32,535 | | |
| 8,462 | | |
| 7,859 | |
- The
accompanying notes are an integral part of these combined financial statements. -
Notes
to the Combined Financial Statements
| A. | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
| A.1 | Background and description of business |
Kiepe Electric is a carve-out
business of Knorr-Bremse AG, Munich, Germany (“KB”, together with its direct and indirect subsidiaries the “KB Group”,
collectively “Parent”). The Kiepe Electric business is headed by Kiepe Electric GmbH, Kiepe Platz 1, Dusseldorf, Germany,
and its direct subsidiaries, as well as Kiepe Electric LLC., Alpharetta, USA, an indirect subsidiary of KB. All of these combined legal
entities have been jointly conducting Kiepe Electric activities (“Kiepe Electric”, the “Kiepe Electric Group “
or the “Company”). The Kiepe Electric Group companies operate globally with its headquarters in Germany and operations located
in Germany, Austria, Switzerland, Italy and North America.
On July 25, 2023, a share purchase
agreement by and between Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, Munich, Germany (“KB SfS”) and Knorr Brake
Holding Corporation, Avon, USA as sellers and Heramba GmbH, Dusseldorf, Germany and Heramba Holdings Inc., Newark, USA as purchasers regarding
the sale and transfer of shares in Kiepe Electric GmbH and Kiepe Electric LLC was signed. On February 6, 2024, the transaction to sell
the Kiepe Electric business to Heramba GmbH and Heramba Holdings Inc. was completed, leaving KB with a 15% interest in Kiepe Electric
GmbH. In October 2023, Heramba GmbH, a special purpose company, entered into a business combination agreement with Project Energy Reimagined
Acquisition Corporation, Cayman Islands (“PERAC”). Following the consummation of the business combination agreement, the combined
company’s securities are expected to be listed on The Nasdaq Stock Market LLC.
Kiepe Electric is a global specialist
in e-engineering offerings of environmentally friendly electrical equipment for tramcars, light rail vehicles, metro vehicles and regional
vehicles as well as battery buses, trolleybuses and In-Motion-Charging buses. Kiepe Electric operates in the business areas of Rail Vehicle
Systems (“RVS”), Electrical Vehicle Systems (“EVS”) and Aftermarket & Sales, Modernization with its core competence
in the design and integration of electrical systems in the stated vehicles.
The management of Kiepe Electric
Group (the “Management”) has prepared these combined financial statements in accordance with International Financial Reporting
Standards (“IFRS”) and the interpretations of the IFRS Interpretations Committee as issued by the International Accounting
Standards Board (“IASB”).
The combined financial statements
comprise the combined statements of financial position and combined statements of changes in net investment as of December 31, 2023 and
2022, combined statements of profit or loss and comprehensive profit or loss and combined statement of cash flows for the fiscal years
ended December 31, 2023, 2022 and 2021, as well as notes to the combined financial statements (“Combined Financial Statements”,
“CFS”) for the fiscal years ended December 31, 2023 and 2022.
Historically, the Company’s
primary sources of liquidity have been cash and cash equivalents, cash flows from operations (when available) and cash flows from financing
activities, including funding under a profit and loss transfer agreement (“PLTA”) that was entered into between Kiepe Electric
GmbH and KB SfS.
In preparation of the transaction
that was completed on February 6, 2024, the PLTA is no longer in force and has been mutually terminated as of January 31, 2024. In addition,
as the Company is no longer wholly-owned by KB Group, Kiepe Electric does not have access to secure bond credit lines in order to support
its revenue generating and operational business needs sufficiently and there is no assurance that future access to bonding and funding
will be available if and when required or at terms acceptable to the Company. Such factors raise substantial doubt about the ability of
Kiepe Electric to continue as a going concern. The combined financial statements do not include any adjustments that might result from
the outcome of this uncertainty. The Combined Financial Statements are presented in euro (€). All amounts are stated in thousands
of euros (€ thousand) unless otherwise stated. Rounding differences may result in differences in amounts and percentages.
The Combined Financial Statements
were authorized for issuance by management of Kiepe Electric GmbH on July 29, 2024.
During the reporting periods
presented, Kiepe Electric has not been a group of entities under the control of a parent company as defined by IFRS 10 “Consolidated
Financial Statements” and therefore has not prepared consolidated or combined financial statements for internal or external reporting
purposes in the past. However, the Company has been under common control of an ultimate parent company during the reporting periods presented.
The Combined Financial Statements
include the following legal entities as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021.
07. COMPOSITION OF THE COMPANY
| | |
| |
Dec. 31,
2023 | | |
Dec. 31,
2022 | | |
Dec. 31,
2021 | |
| Name | |
Country | |
share of voting rights | | |
share of voting rights | | |
share of voting rights | |
| Kiepe Electric GmbH | |
Germany | |
n/a | | |
n/a | | |
n/a | |
| Kiepe Electric S.r.L. | |
Italy | |
| 100 | % | |
| 100 | % | |
| 100 | % |
| Kiepe Electric Schweiz AG | |
Switzerland | |
| 100 | % | |
| 100 | % | |
| 100 | % |
| Kiepe Electric LLC | |
USA | |
| 100 | % | |
| 100 | % | |
| 100 | % |
| Kiepe Electric Corporation | |
Canada | |
| 100 | % | |
| 100 | % | |
| 100 | % |
| Heiterblick Projektgesellschaft mbH | |
Germany | |
| 49 | % | |
| 49 | % | |
| 49 | % |
| Kiepe Electric India Pvt. Ltd. | |
India | |
| — | % | |
| 20 | % | |
| 20 | % |
Heiterblick Projektgesellschaft
mbH and Kiepe Electric India Pvt. Ltd. are included as investments measured at cost within the CFS. During 2023, Kiepe Electric GmbH sold
its investment in Kiepe Electric India Pvt. Ltd.
During the reporting periods
presented, the Kiepe Electric business was solely comprised of and conducted by these legal entities. These legal entities were fully
dedicated to the Kiepe Electric business and operated largely independently from the rest of the KB Group.
The preparation of combined financial
statements requires Management to make judgments, use estimates and adopt assumptions that affect the amounts presented for revenues,
expenses, assets and liabilities. However, uncertainty relating to these judgments, assumptions and estimates could lead to results that
require a significant adjustment to the book value of certain assets and liabilities in future years.
Kiepe Group’s Management
states and confirms that all relevant information in the Combined Financial Statements is being evidenced and corresponds to the financial
statements used by Management in the administration.
The Combined Financial Statements
have been prepared on the historical cost basis, except certain financial assets and liabilities that are measured at their fair value.
The Kiepe Group’s businesses
included in these CFS are not generated as a single legal entity. These Combined Financial Statements are, therefore, not necessarily
indicative of performance, cash flows obtained, and possessing actual equity and financial situation, as if Kiepe Group had operated in
a single legal entity during the years, or indicative of future results.
KB acquired Kiepe Electric in
2017. The purchase price of € 87,900 thousand resulted in the recognition of goodwill of € 4,321 thousand, fair value
step-ups for acquired assets of € 27,145 thousand and deferred tax liabilities of € 7,417 thousand. For the purpose
of the CFS, the effects of the business combination, including historical goodwill, have been included to consider all of the costs and
resources controlled by Kiepe Electric. Refer to Note B.17 for more information.
All intercompany balances, income
and expenses, and unrealized gains and losses resulting from transactions between the Kiepe Electric Group companies are eliminated, except
for gains or losses from foreign exchange translation. Transactions between Kiepe Electric Group companies and the remaining KB Group
companies are accounted for at arm’s length and classified as related party transactions in accordance with International Accounting
Standard (“IAS”) 24 “Related Party Disclosures”. Respective outstanding balances, including trade accounts, cash
pool clearing accounts and loans, are presented as separate financial statements line items “Receivables from related parties”
or “Liabilities to related parties” in the combined statements of financial position, respectively. For more information see
Note F.3.
The Company uses a centralized
approach for cash management and to finance its operations through participation in the in-house banking system within the KB Group.
Accordingly, excluding cash and cash equivalents held directly with third party banks, the Company’s cash deposits and funding are
pooled directly with KB through cash pool clearing accounts and treated as receivables from and payables to related parties.
Furthermore, as no KB Group
debt is directly attributable to the Company, no parent level debt or interest expense has been allocated to the Combined Financial Statements.
Interest earned on deposits through the cash-pooling arrangements and interest payable on related party interest bearing borrowings were
historically settled through the cash-pooling arrangement.
Receivables related to the PLTA
between Kiepe Electric GmbH and KB SfS are presented as receivables from related parties.
Interest income on cash-pooling
deposits and interest expense on related party borrowings are typically based on country-specific market interest rates that, when taken
together, reflect interest rates that management believes are comparable to the rates charged by third-party banks. For more information
see Note F.3.
For purpose of the Combined Financial
Statements, income taxes were determined using the separate return approach based on the assumption that Kiepe Electric entities included
in a consolidated income tax return constitute separate taxpayers. This assumption implies that current and deferred taxes assigned to
Kiepe Electric are calculated separately and that the recoverability of deferred taxes is assessed on this basis. For Kiepe Electric entities
which did not historically constitute separate income tax payers, current tax expense and deferred tax income were recognized in the Combined
Financial Statements in the year in which they arose as non-cash contributions or withdrawals by KB Group.
The combined statements of changes
in net investment present the changes in net investment attributable to KB in the respective reporting periods. In the periods under consideration,
Kiepe Electric did not constitute a group with a parent company in accordance with IFRS 10. Therefore, “Net investment attributable
to Parent” is shown in lieu of share capital, reserves and retained earnings. For such reasons, no earnings per share is presented.
Exchange differences on currency translation of foreign operations are reported separately in accordance with IAS 1 “Presentation
of Financial Statements”.
KB Group provides some central
services to Kiepe Electric, such as strategy, HR, tax, treasury and legal services. The respective costs have historically already been
charged to Kiepe Electric and are included in profit or loss at their historical amounts. The costs charged to Kiepe Electric may not
be indicative of costs incurred had the combined entities operated on a standalone basis.
Since IFRS does not provide specific
guidelines for the preparation of Combined Financial Statements, IAS 8 “Accounting Policies, Changes in Accounting Estimates and
Errors” has been used for the preparation of the Combined Financial Statements. Management uses judgement in developing and applying
accounting policies in order to prepare information that is relevant to users, reliable and free from bias, and complete in all material
respects. In doing so, management also considered IAS 8.12, which requires the consideration of the most recent pronouncements of other
standard setting bodies, other financial reporting requirements and recognized industry practices.
| B. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| B.1 | Use of Estimates and critical judgement |
The preparation of the Combined
Financial Statements in conformity with IFRS requires management to make certain estimates, judgments, and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenue and expenses during the periods presented. Such estimates include, but are not limited to: the useful
lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; the recognition of revenue and project profit
or loss, in particular, on construction contracts accounted for under the cost-to-cost method, for which the recorded amounts require
estimates of costs to complete and the amount and probability of variable consideration included in the contract transaction price; allowance
for expected credit losses; determination of leases and accounting for income taxes. Management bases its estimates on historical experience
and on various other assumptions that management believes to be reasonable under the circumstances. The Combined Financial Statements
requires management to make estimates, assumptions and judgements that affect the amount and recognition of the reported assets and liabilities,
as well as the recognition of revenue and expenses. Even though these estimates, assumptions and judgements were made to the best of management’s
knowledge, actual amounts can deviate. Such estimates include measurement of defined benefit obligations, impairment tests and revenue
recognition over time and such judgements include revenue recognition and determination of leases. The Company evaluates its estimates,
assumptions, and judgments on an ongoing basis using historical experience and other factors and revises them when facts and circumstances
dictate.
The Company is not aware of any
specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets
or liabilities. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially
from these estimates under different assumptions or conditions.
The Combined Financial Statements
have been prepared on the historical cost basis except as specifically stated otherwise for periods presented.
| B.3 | Foreign Currency Transactions and Translation |
The financial position and results
of operations for each of the entities included in the Combined Financial Statements are determined using the local currency as the functional
currency. Foreign exchange differences arising from transactions and balances denominated in currencies other than the functional currency
are generally recognized in profit or loss of the respective entity and reported in “other financial result” in the combined
statements of profit and loss.
The presentation currency of
the Combined Financial Statements is Euro (EUR). The assets and liabilities of foreign operations, where the functional currency is other
than EUR, are translated using period-end exchange rates. The income and expenses of foreign operations are translated into EUR at the
average of the exchange rate for each fiscal year. Differences arising from such translations are recognized in the other comprehensive
income or loss through net investment.
The exchange rates of the currencies
of non-EUR countries used in the preparation of the Combined Financial Statements are as follows:
08. CURRENCY EXCHANGE RATES
| | |
| |
| | |
Dec. 31,
2023 | | |
| | |
Dec. 31,
2022 | | |
Dec. 31,
2021 | |
| Country | |
Currency | |
Period-end
rate | | |
Average
rate | | |
Period-end
rate | | |
Average
rate | | |
Average
rate | |
| USA | |
USD | |
| 0.90498 | | |
| 0.92461 | | |
| 0.93756 | | |
| 0.94949 | | |
| 0.84311 | |
| Switzerland | |
CHF | |
| 1.07991 | | |
| 1.02887 | | |
| 1.01554 | | |
| 0.99526 | | |
| 0.92305 | |
| Canada | |
CAD | |
| 0.68297 | | |
| 0.68500 | | |
| 0.69252 | | |
| 0.73009 | | |
| 0.67236 | |
Revenue is recognized in accordance
with IFRS 15 when the customer has obtained control of the goods and services expected to be provided by Kiepe Electric. Control is either
transferred at a point-in-time or over a period of time. When assessing revenue recognition over time, Kiepe Electric assesses whether
a good has an alternative use and has an enforceable right to payment for the performance completed based on the project agreements. In
instances in which these criteria are met, revenue is recognized based on measuring progress by using input-oriented methods. Kiepe Electric
applies the cost-to-cost percentage-of-completion measure of progress as it best depicts how control transfers to clients. The cost-to-cost
approach measures progress towards completion based on the ratio of cost incurred to date compared to total estimated contract cost.
Kiepe Electric generates revenue
from contracts with customers in the RVS, EVS and Aftermarket & Service, Modernization business.
RAIL VEHICLE SYSTEMS
The Rail Vehicle Systems business
unit covers electrical systems for rail vehicles. Kiepe Electric integrates traction equipment, on-board power supply systems, vehicle
control systems as well as many electronic and electrical vehicle components into its extensive system solutions. The RVS sector is characterized
by long project cycles, resulting in high sales coverage and reliable sales planning.
The Rail Vehicle Systems business
represents long-term construction contracts, which focuses on customer specific solutions (includes significant engineering and construction
work, followed by serial production). IFRS 15.10 defines a contract as an agreement between two or more parties that creates enforceable
rights and obligations. For long-term construction contracts the parties generally agree on a so-called Purchase Contract or Project Purchase
Contract which in turn, creates enforceable rights and obligations and meet the definition of a contract. The contract specifies the deliverables,
the quantities as well as the terms of payment and delivery. Terms of payment are agreed individually for each contract.
The Company accounts for each
promised good or service as a separate performance obligation if the good or service is capable of being distinct. A good or service is
considered distinct if the customer can benefit from the good or service on its own or together with other resources and the promise to
transfer a good or service to the customer is separately identifiable. In the case of long-term construction contracts Kiepe Electric
accounts for the contracts as one performance obligation and one product group. All engineering and all deliveries contained in the base
contract for the respective rail vehicle system form one performance obligation. If a contract specifies more than one product group each
product group represents a separate performance obligation. Kiepe Electric provides legally required warranties and offers service type
warranties for each delivered system which lead to a separate performance obligation.
The transaction price is the
amount of consideration to which an entity expects to be entitled to in exchange for transferring promised goods or services to a customer,
excluding amounts collected on behalf of third parties (for example, some sales taxes). Due to the nature of the Company’s industry,
there is significant complexity in the Company’s estimation of total expected revenue and cost, for which the Company must make
significant judgments. The Company’s contracts with its customers may contain several types of variable consideration, including
claims, unpriced change orders, award and incentive fees, liquidated damages and penalties or other provisions that can either increase
or decrease the contract price to arrive at estimated revenue. These variable amounts generally are earned upon achievement of certain
performance metrics, program milestones or cost targets and can be based upon customer discretion. The Company estimates variable consideration
at the most likely amount to which it expects to be entitled upon completion of a project. The Company includes estimated amounts in the
transaction price to the extent it is probable it will realize that amount. The Company’s estimates of variable consideration and
its determination of its inclusion in project revenue are based on an assessment of the Company’s anticipated performance and other
information that may be available to it.
When the transaction price includes
a significant financing component, the purchase price is adjusted accordingly. As of December 31, 2023 and 2022, only one project contained
a significant financing component due to exceptionally high prepayments. The recognition of the significant financing component is based
on a straight-line basis over the term of the project.
If a contract involves multiple
performance obligations the Company allocates the transaction price to each performance obligation identified in the contract on a relative
stand-alone selling price basis. As all long-term construction projects are customized products, the stand-alone selling price is not
directly observable. Kiepe Electric therefore derived the stand-alone selling price with a best estimate of cost to satisfy the obligation
plus an average margin.
For each performance obligation
identified, at contract inception, the Company determines whether it satisfies the performance obligation over-time or satisfies the performance
obligation at a point-in-time. For long-term construction contracts revenue is generally recognized over-time.
ELECTRIC VEHICLE SYSTEMS
The Electric Vehicle Systems
business unit offers traction equipment, current collector systems, on-board power supply systems, battery chargers and insulation monitoring
systems, including energy management. The vehicle equipment is supplemented by components from other companies to an optimized system
and delivered to the customer from a single source. In contrast to the RVS business, the EVS business has a lower sales coverage caused
by shorter tendering cycles.
Long-term construction contracts
are applied for the EVS business to the same extent as for the RVS business. The accounting policies applied for the EVS business are
the same as those for the RVS business.
AFTERMARKET & SALES, MODERNIZATION
Kiepe Electric offers spare parts,
its repair center, cost-saving maintenance contracts as well as test and measuring instruments. Modernization of vehicles can be an alternative
to buying new vehicles. Kiepe Electric advises public transport companies on the prolongation of the life cycles of vehicles and offers
modernization services.
The typical deliveries in connection
with the Aftermarket & Sales, Modernization business are spare parts, respective services, and maintenance contracts. For service
contracts Kiepe Electric generally gets separate orders to deliver parts or short-term services. In the case of service contracts (including
sale of spare parts), the customers’ orders for individual items contain the item itself, quantity, price and terms of payment and
delivery. The contract is concluded and effective with acceptance by Kiepe Electric.
For service contracts the agreed
goods and services are explicitly stated in the contract. All goods and services which can be ordered separately by the customer are distinct
and classified as separate performance obligations. Kiepe Electric offers legally required and service type warranties. The transaction
price for service contracts (including the sale of spare parts) is determined by the list price and each part or component is sold by
its stand-alone selling price. Variable components (e.g.; bonuses or discounts) are considered as changes in the transaction price.
Revenue from service contracts
is recognized over-time. Due to the short-term nature of service contracts, which is typically less than one year, revenue from service
contracts is recognized when the service is completed. Revenue from the sale of spare parts is recognized at the point in time when control
is transferred to the customer.
Long-term construction contracts
are applied for the modernization business to the same extent as for the RVS business. The accounting policies applied for the modernization
business are the same as those for the RVS business.
Government grants are recognized
if there is adequate certainty that the conditions associated to the grant will be complied with and that the grants will be received.
Grants related to assets are
either deducted from the carrying amount of the corresponding asset or recognized as deferred income that is released to income over the
useful life of the asset. The Company deducts grants for assets from the carrying amount of the asset.
Performance-related grants are
either reported in other operating income or deducted from the corresponding expense. The Company recognizes performance-related government
grants as other operating income, except to the extent that they relate to short-time work compensation in which they are deducted from
personnel expenses.
| B.6 | Financial income and financing expenses |
Interest income and expenses
are recognized in profit or loss based on the effective interest method.
Current tax is the amount of
income tax payable or recoverable in respect of the taxable profit or tax loss for a period as well as all adjustments to the tax payable
in previous years. In addition, the current tax also includes adjustments for any tax payments or refunds due for any years not yet finally
assessed (excluding interest payments or refunds). There are many transactions and calculations for which the ultimate tax determination
is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit matters based on estimates
of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially
recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The
amount is calculated from the best possible estimate of the expected tax payment (expected value or most likely value of the tax uncertainty).
Tax receivables from uncertain tax positions are then recognized if it is more likely than not and thus reasonably certain that they can
be realized.
Deferred
tax assets and liabilities are recognized on temporary differences arising between the carrying amounts of assets and liabilities for
group accounting purposes and the amounts used for tax purposes. Deferred tax assets and liabilities are not recognized for:
| ● | temporary
differences in the event of the initial reporting of assets or liabilities for a transaction
that does not relate to a business combination and that does not influence the accounting
earnings before taxes or the taxable earnings, |
| ● | temporary
differences in connection with shares in subsidiaries, associates and jointly controlled
entities, if the Company is able to control the timing of the reversal of the temporary differences
and it is likely that they will not be reversed in the foreseeable future, |
| ● | taxable
temporary differences in the event of the initial reporting of goodwill. |
A deferred tax asset is recognized
for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is likely that future taxable profits
will be available for which they can be used. Future taxable profits are determined on the basis of the individual business plans of the
Group entities, taking into account the reversal of temporary differences. Unrecognized deferred tax assets are reassessed on every reporting
date and recognized in the amount probable to be recovered by the realization of future taxable profits.
Deferred tax assets are reviewed
on every reporting date and reduced to the extent to which it is no longer probable that the associated tax benefit will be realized;
any recorded valuation allowances are reversed to the extent that taxable profits are available.
Deferred taxes are measured based
on the tax rates expected which apply when the temporary differences are reversed; namely, using tax rates that have been substantively
enacted on the reporting date.
The measurement of deferred taxes
reflects the tax consequences that arise from the Company’s expectation with regard to the manner of recognition of the carrying
amounts of its assets and the settlement of its debts as of the reporting date.
Deferred income tax assets and
liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when
the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where there is an intention to settle the balances on a net basis.
| B.8 | Intangible assets and goodwill |
Intangible assets with a finite
useful life that were not acquired as part of a business combination are recognized at cost less accumulated amortization. If necessary,
accumulated impairment losses are recognized.
Expenditures for research activities
are recognized in profit or loss in the period in which they arise.
Development activities are capitalized
at acquisition or manufacturing cost in accordance with IAS 38.57, including allocable overheads if the development costs can be reliably
measured, the technical feasibility of completing the asset is available, a future economic benefit is probable, and the Company intends
and has adequate resources to complete the development and use or sell the asset. Development activities are measured at cost less accumulated
amortization and accumulated impairment losses. Internally generated intangible assets are amortized on a straight-line basis over the
expected product life cycle.
Intangible assets with finite
useful lives are generally amortized on a straight-line basis over their useful lives. The amortization period for intangible assets with
finite useful lives is reviewed annually. Changes in expected useful lives are treated prospectively as changes in accounting estimates.
The carrying values of intangible assets with finite useful lives are reviewed for indicators of impairment at each reporting date and
are subject to impairment testing when events or changes in circumstances indicate that the carrying values may not be recoverable. The
amortization expense on intangible assets with finite useful lives is recognized in profit or loss.
The estimated useful lives of
capitalized intangible assets are:
| Licenses and acquired rights: | |
1-5 years |
| Brands and customer relationships: | |
3-10 years |
| Internally generated intangible assets: | |
3-10 years |
With acquisitions of businesses,
goodwill represents the excess of the consideration transferred over the fair values assigned to the identifiable assets proportionally
acquired and liabilities assumed. Goodwill resulting from a business combination is recognized at acquisition costs less impairment charges.
Goodwill is not amortized but is tested for impairment annually, or sooner when an indication of impairment has been identified.
Please refer to Note B.16 for
information on the fair value of non-financial assets.
| B.9 | Property, plant and equipment |
Property, plant and equipment
are measured at acquisition or manufacturing cost less accumulated depreciation and accumulated impairment, if any. Acquisition costs
comprise the purchase price and costs directly attributable to bringing the asset to its location and condition necessary for its intended
use. The manufacturing costs of internally produced equipment and facilities include all direct costs and allocable overheads. Acquisition
or manufacturing costs include the estimated costs, if any, of dismantling and removing the item and restoring the site.
Property, plant and equipment
are depreciated over their estimated useful lives using the straight-line method as shown in the table below:
| Buildings: | |
| 1-50
years | |
| Technical
equipment and machinery: | |
| 2-16
years | |
| Other
equipment, factory and office equipment: | |
| 2-20
years | |
The useful life and depreciation
method are reviewed at the end of each reporting period. If the expected useful life of an asset changes, the effect on depreciation is
recognized prospectively as a change in accounting estimate.
Please refer to Note B.17 for
information on impairment.
Leases are accounted for in accordance
with IFRS 16. At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
COMPANY AS LESSEE
General policy
Leases include all contracts
that transfer the right to use a specified asset for a period of time in exchange for consideration, even if the right-to-use such asset
is not explicitly described in the contract. The Company recognizes and measures all leases (except for short-term leases and leases for
which the underlying asset is of low value) in accordance with a single lessee accounting model.
Right-of-use assets
The Company recognizes right-of-use
assets as of the commencement date of the lease (i.e.; as of the date on which the underlying asset is available for use by a lessee).
Right-of-use assets are measured at cost less accumulated depreciation and accumulated impairment losses and adjusted for any remeasurement
of the lease liability. The right-of-use asset corresponds to the amount of the initial measurement of the lease liability, the initial
direct costs incurred and the lease payments made at or before the commencement date, less any lease incentives received and the estimate
of costs for dismantling or removing the underlying asset or for restoring the underlying asset or the site on which it is located. The
Company’s leases primarily include real estate and vehicle contracts.
Right-of-use assets are depreciated
on a straight-line basis over the useful life of the underlying asset, adjusted for impairments. The useful life of the right-of-use asset
is the shorter of the asset’s economic useful life or the lease term:
| Land and buildings: | |
| 1-10 years | |
| Vehicles and other equipment: | |
| 1-4 years | |
If ownership of the underlying
asset transfers to the Company at the end of the lease term or a purchase option is exercised, the depreciation will be calculated based
on the expected useful life of the underlying asset.
Please refer to Note B.17 for
information on impairment. The Company’s right-of-use assets are presented in “property, plant and equipment” (see Note
D.3).
Lease liabilities
On the commencement date, the
Company measures the lease liabilities at the present value of the future lease payments. In determining the lease term, extension and
termination options are taken into account if it is reasonably certain that they will be exercised or not exercised (see Note F.7 for
details). The lease payments include fixed payments (including in-substance fixed payments), less any lease incentives receivable, variable
lease payments that depend on an index or rate and amounts expected to be payable under residual value guarantees. The lease payments
further include the exercise price of a purchase option if the Company is reasonably certain to exercise that option and payments of penalties
for terminating the lease if the lease term reflects the Company exercising an option to terminate the lease.
Variable lease payments, that
do not depend on an index or a rate, are recognized in profit or loss in the period in which the event or condition that triggers those
payments occurs (unless the payments are incurred to produce inventories).
As a practical expedient, the
Company has elected not to separate non-lease components from lease components, and instead accounts for each lease component and any
associated non-lease components as a single lease component.
When calculating the present
value of the lease payments, the Company uses its interest rate implicit in the lease. If that rate cannot be readily determined, which
is generally the case for leases, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would
have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment
with similar terms, security and conditions. Following the commencement date, the amount of the lease liability is increased to reflect
interest and reduced to reflect the lease payments made. In addition, the carrying amount of the lease liability is remeasured in the
event of changes to the lease term, changes to the lease payments (e.g.; changes in future lease payments as a result of a change in an
index or a rate used to determine those payments) or in the event of a change in the assessment of an option to purchase the underlying
asset.
The Company’s lease liabilities
are presented as “financial liabilities” (see Notes D.12 and F.7).
Short-term leases and
leases of low value assets
The Company applies the exemption
for short-term leases (i.e.; leases whose term from the commencement date is a maximum of twelve months and which do not include a purchase
option) for all asset classes. It also applies the exemption for leases of low value assets to leases of the asset class other equipment
classified as low value up to an amount of € 5 thousand. Lease payments for short-term leases and for leases of low value assets
are recognized as an expense on a straight-line basis over the lease term.
COMPANY AS LESSOR
When the Company acts as a lessor,
it determines at lease inception whether a lease is a finance lease or an operating lease.
To classify a lease agreement,
the Company assesses whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying
asset. If this is the case, the lease is accounted for as a finance lease; if not, it is treated as an operating lease. As part of this
assessment, the Company considers certain indicators such as:
| ● | if
the lease transfers ownership of the underlying asset to the lessee by the end of the lease
term, |
| ● | the
lessee has the option to purchase the underlying asset at a price that is expected to be
sufficiently lower than the fair value at the date the option becomes exercisable for it
to be reasonably certain, at the inception date, that the option will be exercised, |
| ● | the
lease term is for the major part of the economic life of the underlying asset even if the
title is not transferred, |
| ● | at
the inception date, the present value of the lease payments amounts to at least substantially
all of the fair value of the underlying asset, and |
| ● | the
underlying asset is of such a specialized nature that only the lessee can use it without
major modifications. |
Based on the above indicators,
the Company’s leases are classified as finance leases. At the commencement date of the finance lease, the Company derecognizes the
asset that it transferred to the customer and recognizes revenue based on the present value of the future lease payments, which is calculated
using the interest rate implicit to the lease.
When the Company is an intermediate
lessor, it accounts for its interests in the head lease and the sublease separately. It assesses the lease classification of a sublease
with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a
short-term lease it classifies the sublease as an operating lease.
If an arrangement contains lease
and non-lease components the Company applies IFRS 15 to allocate the consideration in the contract. The Company applies the derecognition
and impairment requirements in IFRS 9 to the net investment in the lease. It further regularly reviews estimated unguaranteed residual
values used in calculating the gross investment in the lease. Lease payments received under operating leases are recognized as income
on a straight-line basis over the lease term and recorded as “other revenue”.
Inventories are measured at the
lower of acquisition or manufacturing cost and net realizable value. Unfinished and finished goods include costs directly related to the
units of production as well as a systematic allocation of fixed and variable production overheads. Production-related administration costs
are also capitalized.
The net realizable value is the
expected selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make
the sale. Acquisition or manufacturing costs for inventories that are interchangeable are allocated under the moving average cost formula.
Non-current assets or disposal
groups are classified as “Assets held for sale” if the carrying amount will be recovered principally through a sale transaction
rather than through continuing use.
Non-current assets held for sale
are measured at the lower of their carrying amount and fair value less costs to sell. While classified as held for sale, intangible assets
and property, plant and equipment are no longer amortized or depreciated. Immediately before classification as held for sale, the carrying
amount of the asset is determined in accordance with the applicable individual requirements. If fair value less costs to sell subsequently
increases, any impairment loss previously recognized is reversed. This reversal is restricted to the impairment loss previously recognized
for the assets or disposal group concerned. Kiepe Electric discloses these assets or disposal groups separately in the combined statements
of financial position.
The Company recognizes defined
contribution plans, defined benefit plans (pensions, severance payments) and other long term employee benefits (jubilee, partial retirement).
Contributions to defined contribution
plans are recognized as an expense when the related service has been rendered. Prepaid benefits are reported as an asset when there is
a right to reimbursements or reduction of future payments. Under the company’s Italian (“TFR”) and Austrian (“Abfertigungszahlungen”)
severance plans, commitments are made whereby employees waive their right to cash settlements.
The Company’s net obligation
with respect to defined benefit plans is calculated separately for each plan by estimating the future benefits that employees have earned
in the current period and in prior periods. The earned future benefits are discounted to the valuation date and summarized as defined
benefit obligations. The recognized defined benefit obligations are based on actuarial reports on the basis of the projected unit credit
method. The fair value of any plan asset is netted against the calculated defined benefit obligations.
For defined benefit plans, the
remeasurements of the net defined benefit liability are recognized directly in other comprehensive income (loss). The remeasurement includes
the effect of change in assumptions, actuarial profits and losses, the income from plan assets (excluding interest income) and the impact
of any asset cap (excluding interest income). For other long term employee benefits, the remeasurements are recognized in profit or loss.
Since no comprehensive disclosures are made in the notes for the severance payment obligations in accordance with IAS 19, the remeasurements
of these plans are also recognized in profit and loss.
A provision is recognized in
the combined statements of financial position when the Company has a present legal or constructive obligation in relation to third parties
as a result of past events, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable
estimate can be made.
The amount recognized as a provision
represents the best estimate of the obligation at the reporting date. If the provisions are expected to be utilized within the normal
business cycle, they are classified as current. Non-current provisions with an original maturity of more than one year are discounted
to the present value of the expenditures expected to settle the obligation at the end of the reporting period.
WARRANTIES
Provisions for warranty obligations
are recognized for the expected warranty obligations from the sale of products and services. The Company provides assurance type warranties
that are recorded as provisions. Provisions are based on best estimates regarding to the settlement of obligations taking into account
past experience. They also include provisions for outstanding customer claims.
RESTRUCTURING PROVISIONS
A provision for restructuring
is recognized when the Company has approved a detailed and formal restructuring plan and the restructuring measures have either commenced
or have been communicated to the parties affected. Future operating losses are not taken into consideration for such provisions. Expenses
resulting from the recognition of restructuring provision are recognized in the line item “personnel expenses” within the
combined statements of loss.
ONEROUS CONTRACTS
A provision for onerous contracts
is recognized if the unavoidable costs of meeting the contractual obligations exceed the revenue expected from the contract. The provision
is measured at present value of the expected loss (i.e.; the difference between the total costs to be incurred and the total proceeds
to be received from the contract). Before a provision is recognized, the Company records an impairment loss for the assets associated
with that contract.
PROVISIONS FOR TAXES
The Company reports all obligations
arising from tax matters other than income taxes under other provisions.
| B.15 | Financial instruments |
A financial instrument is any
contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial
instruments in the form of financial assets and financial liabilities are generally presented separately. Financial instruments are recognized
as soon as Kiepe Electric becomes a party to the contractual provisions of the financial instrument. In the case of purchases or sales
of financial assets through the regular market, Kiepe Electric uses the transaction date as the date of initial recognition or derecognition.
Upon initial recognition, financial
instruments are measured at fair value. For the purpose of subsequent measurement, financial instruments are allocated to one of the categories
mentioned in IFRS 9 (financial instruments measured at amortized cost, financial instruments measured at fair value through other comprehensive
income and financial instruments measured at fair value through profit or loss). Transaction costs directly attributable to acquisition
or issuance are considered when determining the carrying amount if the financial instruments are not measured at fair value through profit
or loss.
Classification of financial
instruments
The classification of financial
instruments is based on the business model for managing the financial assets and on their contractual cash flows.
Financial instruments
at amortized cost
Financial assets at amortized
cost are non-derivative financial assets that consist solely of payments of principal and interest on the nominal amount outstanding and
which are held with the aim of collecting the contractual cash flows, such as trade receivables (not including factoring), receivables
from related parties and cash and cash equivalents (business model “hold to collect”). Cash and cash equivalents consist primarily
of cash.
Cash equivalents are short-term,
extremely liquid financial investments that can be converted to cash at any time and that are only subject to insignificant risks of changes
in value.
After initial recognition, financial
assets at amortized cost are subsequently carried at amortized cost using the effective interest method less any loss allowances. Gains
and losses are recognized in the combined statements of profit and loss when the financial assets at amortized cost are impaired or derecognized.
Interest effects on the application of the effective interest method are also recognized in profit or loss, as well as the effects of
currency translation.
Financial instruments
at fair value through other comprehensive income
Financial assets at fair value
through other comprehensive income are non-derivative financial assets that consist solely of payments of principal and interest on the
nominal amount outstanding and which are held to collect the contractual cash flows as well to sell the financial assets (business model
“hold to collect and sell”). Kiepe Electric currently does not hold any financial assets designated as at “fair value
through other comprehensive income”.
Financial instruments
at fair value through profit or loss
Financial assets measured at
fair value through profit or loss include financial assets with cash flows other than those of principal and interest on the nominal amount
outstanding. Furthermore, financial assets that are held in a business model other than “hold to collect” or “hold to
collect and sell” are included here. If financial instruments are classified as “fair value through profit or loss”,
transaction costs are reported through profit or loss and presented net within “other financial result” in the combined statements
of profit and loss directly in the period in which they arise. In addition, derivative financial instruments to which hedge accounting
is not applied fall under this category, as well as financial assets that are classified as held for trading, are included here. Gains
or losses on these financial assets are recognized in profit or loss. Currently, Kiepe Electric does not hold any financial assets designated
as at “fair value through profit or loss”.
FINANCIAL LIABILITIES
Financial liabilities are classified
in the “at amortized cost” category. If the fair value option is exercised for the initial recognition, they are classified
as “at fair value through profit or loss”. There are no financial liabilities which fall under fair value option.
Financial liabilities are subsequently
measured at amortized costs using the effective interest method, are non-derivative financial liabilities or arise when a transfer of
a financial asset does not qualify for derecognition or when the continuing involvement approach applies.
For Kiepe Electric, financial
liabilities classified at amortized costs mainly include trade payables, liabilities to related parties and other financial liabilities.
OFFSETTING OF FINANCIAL INSTRUMENTS
Financial assets and financial
liabilities are offset and the net amount is presented in the combined statements of financial position provided that an enforceable right
exists to offset the recognized amounts and there is an intention to carry out the offsetting on a net basis or to settle a liability
when the related assets are sold.
INVESTMENTS
Kiepe Electric GmbH, Germany
holds investments in Heiterblick Projektgesellschaft mbH. For the purpose of the combined financial statements this investment has been
measured at amortized cost.
DERECOGNITIONS AND MODIFICATIONS
Financial assets are derecognized
when the contractual rights to the cash flows from the financial asset have expired or have been transferred by Kiepe Electric with substantially
all of the risks and rewards associated with the ownership, or if not so, have been transferred with no control retained at Kiepe Electric.
Any gain or loss on derecognition is recognized as other operating income or expenses in the combined statements of profit and loss.
Financial liabilities are derecognized
if, and only if the Company’s contractual obligations are settled, cancelled, or have expired. Further, Kiepe Electric derecognizes
financial liabilities when its terms are modified and the cash flow of the modified liability are substantially different, in which case
a new financial liability based on the modified terms is recognized at fair value. The assessment as to whether a modification is substantial
is made on basis of qualitative and quantitative criteria; the criteria used by the Company for financial assets corresponds to the criteria
for financial liabilities. A gain or loss from extinguishment of the original financial liability is recognized in profit or loss in “other
financial result”.
IMPAIRMENT AND FINANCIAL ASSETS
At each reporting date, a loss
allowance is recognized for financial assets other than those to be measured at fair value through profit or loss, reflecting a forward-looking
estimate of future credit losses for these instruments. Expected credit losses are measured according to a three-stage impairment approach:
Stage 1:
Stage 1 includes all contracts
with no significant increase in credit risk since initial recognition and usually includes contracts with fewer than 30 days past due
date. The portion of the lifetime expected credit losses resulting from default events possible within the next 12 month is recognized.
Stage 2:
If the credit risk of a financial
asset increases significantly without being credit impaired, lifetime expected credit losses are recognized based on a lifetime probability
of default. A rating deterioration does not trigger a transfer into stage 2, if the credit rating remains within the investment grade
range. A significant increase in the default risk is assumed in the event that the financial instruments are more than 30 days overdue.
Stage 3:
If a financial asset is defined
as credit impaired or in default, it is transferred to stage 3 and measured at lifetime expected credit loss. A financial asset is considered
credit-impaired when there is observable information about significant financial difficulties. Impairment triggers include liquidity problems
of debtors, indications of imminent insolvency or the disappearance of an active market for a security due to financial difficulties.
The assessment of whether a financial
asset has experienced a significant increase in credit risk is based on an assessment of the relative changes in ratings or credit default
swap spreads (“CDS spreads”) of the business partner. Rating and default probability data are updated quarterly.
The assessment incorporates all
available relevant information, not only historical and current loss data, but also reasonable forward-looking information. In the past,
impairment losses were determined primarily by using the default probabilities published in historical default studies. In view of the
effects of the Covid-19 pandemic, this approach is no longer considered adequate. Beginning in the fourth quarter of 2020, the determination
of forward looking information was expanded by including CDS spreads and continued in the subsequent years.
Trade receivables
of business partners are divided into four groups:
| ● | Group
1: debtor-specific CDS spread can be determined |
| ● | Group
2: rating-equivalent benchmark CDS spread can be determined |
| ● | Group
3: the probability of default can be determined via a credit agency |
| ● | Group
4: the probability of default is determined on the basis of the average CDS spreads in the
appropriate sectors: rail and banks. |
In stages 1 and 2, the effective
interest revenue is calculated based on gross carrying amounts. If a financial asset becomes credit impaired in stage 3, the effective
interest revenue is calculated based on its net carrying amount (gross carrying amount adjusted for any loss allowance).
For the Company, in particular
cash and cash equivalents are subject to the impairment requirements in accordance with the general approach.
For trade receivables, the simplified
approach is applied, whereby all trade receivables are allocated to stage 2 initially, irrespective of the credit risk. Consequently,
no determination of significant increases in credit risk is necessary. A transfer to stage 3 takes place if there is objective evidence
of impairment. With respect to trade receivable, a default event is assumed in the case that there are delays in payment in excess of
12 months. A default also exists if it considered probable that a debtor cannot meet or cannot entirely meet its payment obligations.
A financial asset is written
off when there is no reasonable expectation of recovery, for example, at the end of insolvency proceedings or after a court determines
it is uncollectible.
Kiepe Electric’s accounting
policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
Fair value is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. When measuring the fair value, it is assumed that the transaction is concluded on the principal market or, in its absence, on the
most favorable market.
If available, the Company measures
the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions
for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
If there is no quoted price in
an active market, then Kiepe Electric uses valuation techniques that maximize the use of relevant observable inputs and minimize the use
of unobservable inputs. The chosen valuation technique incorporates all the factors that market participants would take into account in
pricing a transaction.
Fair values are categorized into
different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
| Level 1: | Quoted (unadjusted) market prices in active markets for identical
assets and liabilities |
| Level 2: | Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) |
| Level 3: | Inputs for assets or liabilities that are not based on observable
market data (that is, unobservable input) |
If the inputs used to measure
the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized
in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The assessment procedures and
the input parameters used are reviewed regularly. The aim of the reviews is to use observable input factors in determining fair value
as far as possible.
Transfers between levels of fair
value hierarchy are made at the end of the reporting period during which the change has occurred and are disclosed.
There were no transfers between
level 1, level 2, and level 3 for recurring fair value measurements during the 12-month periods ended December 31, 2023, and 2022.
The carrying amounts of the Company’s
non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. If assets do not generate cash flows that are largely independent of those from other assets or groups of assets, the
impairment test is performed at the level of the cash-generating unit (“CGU”) to which the asset belongs. If a review for
impairment is performed the recoverable amount of the respective asset is estimated. Goodwill is tested annually for impairment.
Recoverability of assets is measured
by comparing the carrying amount of the asset or CGU with the recoverable amount, which is the higher of the asset or CGU’s value
in use and its fair value less costs to sell. When assessing value in use, the estimated future cash flows are discounted to their present
value using the pre-tax weighted average cost of capital (WACC). The fair value of non-financial assets is determined by applying the
same method as for the fair value of financial assets (Note B.16).
If the carrying amount of an
asset, or of the CGU to which the asset belongs, is higher than its recoverable amount, the carrying amount is reduced to the recoverable
amount, and an impairment loss is recognized in the combined statements of profit and loss.
An impairment loss recognized
for goodwill is not reversible in a subsequent period. For other assets, an impairment loss is reversed to the extent that the asset’s
fair value does not exceed the carrying amount (less depreciation or amortization) that would have been determined if no impairment loss
had been reported.
| B.18 | New and revised standards issued, but not yet effective |
IASB has issued new or amended
accounting standards and interpretations that have not yet become effective and have consequently not been implemented in the Combined
Financial Statements. The Company expects to adopt the accounting standards and interpretations when they become effective.
Management does not expect that
the adoption of these standards will have a material impact on future combined or the consolidated financial statements of the Kiepe Electric
going forward.
09. ACCOUNTING STANDARDS ISSUED BY THE IASB
New or revised standards and
interpretations | |
Contents of, or change to, standard or interpretation | |
Effective date |
| Amendments to IAS 1 | |
Classification of Liabilities as Current or Non-Current | |
01/01/2024 |
| Amendments to IFRS 16 | |
Lease Liability in a Sale and Leaseback | |
01/01/2024 |
| Amendments to IAS 1 | |
Non-Current Liabilities with Covenants | |
01/01/2024 |
| Amendments to IAS 7 and IFRS 7 | |
Supplier Finance Agreements | |
01/01/2024 |
| Amendments to IAS 21 | |
Lack of Exchangeability | |
01/01/2025 |
| C. | NOTES TO THE COMBINED STATEMENTS OF PROFIT AND LOSS |
TRANSACTION PRICE ALLOCATED
TO THE REMAINING PERFORMANCE OBLIGATIONS
The transaction price allocated
to the Company’s remaining performance obligations amounts to € 505,048 thousand as of December 31, 2023 (December 31,
2022: € 479,243 thousand). This relates to the long-term contract project business of RVS and EVS as well as Modernization and
includes only customer contracts with an original contractual term of more than one year. The projects have an average term of 5 years.
As of December 31, 2023, contracts from the project business will run until the year 2036.
INFORMATION ON CONTRACT BALANCES
IN CONNECTION WITH IFRS 15
Contract assets and contract
liabilities primarily relate to the presentation of the long-term contract project business according to the method of revenue recognition
over a period of time.
Contract assets result from any
services performed, unless these are invoiced to the customer. Advance payments from customers have an offsetting effect. Depending on
the percentage of completion of the respective project, invoices issued as well as advance payments received, may either result in the
recognition of contract assets or contract liabilities.
The impairment recorded under
IFRS 9 on contract assets was € 1,914 thousand as of December 31, 2023 (December 31, 2022: € 52 thousand).
The following tables present
the reconciliation from the balance of contract assets and contract liabilities as of December 31, 2023 and December 31, 2022.
10. RECONCILIATION OF CONTRACT ASSETS AND
LIABILITIES 2023
| in € thousand | |
Contract
assets | | |
Contract
liabilities | |
| | |
2023 fiscal year | |
| As of Jan. 1, 2023 | |
| 21,244 | | |
| 75,425 | |
| Increase in contract liabilities from invoices and effects from changes in advance payments | |
| – | | |
| 85,701 | |
| Transfer of the opening balance for contract assets to trade receivables through invoices | |
| (9,860 | ) | |
| – | |
| Change as a result of the recognition of revenue | |
| 18,139 | | |
| (95,161 | ) |
| Change of impairment on contract assets | |
| (1,862 | ) | |
| – | |
| Closing balance as of Dec. 31, 2023 | |
| 27,661 | | |
| 65,965 | |
11. RECONCILIATION OF CONTRACT ASSETS AND
LIABILITIES 2022
| in € thousand | |
Contract
assets | | |
Contract
liabilities | |
| | |
2022 fiscal year | |
| As of Jan. 1, 2022 | |
| 18,439 | | |
| 64,641 | |
| Increase in contract liabilities from invoices and effects from changes in advance payments | |
| – | | |
| 83,385 | |
| Transfer of the opening balance for contract assets to trade receivables through invoices | |
| (11,163 | ) | |
| – | |
| Change as a result of the recognition of revenue | |
| 14,003 | | |
| (72,601 | ) |
| Change of impairment on contract assets | |
| (35 | ) | |
| – | |
| Closing balance as of Dec. 31, 2022 | |
| 21,244 | | |
| 75,425 | |
Revenue of the reporting period
included in the opening balance of contract liabilities as of January 1, 2023, amounts to € 12,330 thousand (January 1, 2022:
€ 17,264 thousand). The following table presents the development of revenue recognized over time and at a point in time.
12. REVENUE RECOGNIZED AT A POINT IN TIME
AND OVER TIME
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Over time | |
| 109,647 | | |
| 86,883 | | |
| 71,725 | |
| Point in time | |
| 43,160 | | |
| 32,905 | | |
| 37,540 | |
| | |
| 152,807 | | |
| 119,788 | | |
| 109,265 | |
For additional disclosures related
to revenue refer to Note G.
| C.2 | Change in inventory and own work capitalized |
The development of finished and
unfinished goods is covered in Note D.6.
13. CHANGE IN INVENTORY AND OWN WORK CAPITALIZED
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Change in inventory of finished and unfinished goods | |
| (3,032 | ) | |
| (4,377 | ) | |
| 1,360 | |
| Own work capitalized | |
| 3,167 | | |
| 3,468 | | |
| 3,734 | |
Own work capitalized results
from the capitalization of development costs reclassified from the line item “cost of materials” in the combined statements
of loss.
| C.3 | Other operating income |
14. OTHER OPERATING INCOME
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Income from other services | |
| 1,388 | | |
| 630 | | |
| 851 | |
| Currency translation gains | |
| 637 | | |
| 35 | | |
| 1,273 | |
| Income from government grants | |
| 55 | | |
| 77 | | |
| 59 | |
| Income from shareholder resolution | |
| – | | |
| 2,330 | | |
| – | |
| Income from disposals of assets held for sale | |
| – | | |
| – | | |
| 2,804 | |
| Other | |
| 484 | | |
| 462 | | |
| 857 | |
| | |
| 2,564 | | |
| 3,534 | | |
| 5,844 | |
The income from other services
mainly relates to intercompany services, such as human resources and rental income, provided to other KB Group entities. In 2023,
the increase is due to recharges of development costs to KB SfS for Intelligent Air Compressor (“IAC”) inverter, which is
used to control the air supply within a rail vehicle unit.
In 2022, income from shareholder
resolution results of an earn-out agreement of the KB Group with the former shareholder of Kiepe GmbH in the amount of € 2,330
thousand.
In 2021, the Kiepe Electric Group
realized a gain from the sale of Kiepe Electric Ges. m. b. H., Vienna, Austria of € 2,804 thousand which consisted of property,
plant and equipment at the date of disposal.
The line item “other”
includes income from the reversal of accruals as well as customer payments of freight cost and cost reimbursements from suppliers.
15. COST OF MATERIALS
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Expenses for raw materials, consumables and for purchased goods | |
| (47,877 | ) | |
| (33,186 | ) | |
| (38,054 | ) |
| Expenses for purchased services | |
| (19,520 | ) | |
| (20,464 | ) | |
| (18,525 | ) |
| | |
| (67,397 | ) | |
| (53,650 | ) | |
| (56,579 | ) |
The cost of materials comprises
expenditures for raw materials, consumables and purchased goods as well as purchased services. In 2023 revenue increased by 27.6% and
cost of materials increased by 25.6%, The relative higher increase in revenues is due to a resolution of project risks in the reporting
year.
The expenses for raw materials,
consumables and for purchased goods includes increases in write-downs on inventories in the amount of € 3,326 thousand,
for the year ended December 31, 2023 (2022: € 914 thousand; 2021: € 1,707 thousand).
In 2023, the expenses for purchased
services decreased as the project mix is characterized by a lower proportion of external services. The increase in expenses for purchased
services in 2022 is a compensation of reduced workforce of approximately 60 full-time equivalents (“FTE”).
16. PERSONNEL EXPENSES
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Wages and salaries | |
| (43,569 | ) | |
| (46,847 | ) | |
| (49,737 | ) |
| Social security contributions | |
| (6,510 | ) | |
| (6,582 | ) | |
| (7,351 | ) |
| Expenses for temporary employees | |
| (4,355 | ) | |
| (3,419 | ) | |
| (3,113 | ) |
| Termination benefits | |
| (640 | ) | |
| (520 | ) | |
| (750 | ) |
| Expenses in connection with defined benefit plans | |
| (137 | ) | |
| (61 | ) | |
| (345 | ) |
| | |
| (55,211 | ) | |
| (57,429 | ) | |
| (61,296 | ) |
The personnel expenses primarily
include wages and salaries as well as social security contributions and expenses for temporary employees.
The decrease in wages and salaries
by 7.0% in 2023 compared to 2022 is primarily based on the reduction of employees, reduced bonus payments of € 1,357
thousand (2022: € 2,442 thousand; 2021: € 1,389 thousand) and one-time payments in 2022 based on a collective labor contract
in the amount of € 1,513. Additionally, wages and salaries for the previous periods included severance payments arising from a restructuring
program (2022: € 2,747 thousand; 2021: € 4,718 thousand).
| C.6 | Other operating expenses |
17. OTHER OPERATING EXPENSES
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Warranty expenses and freight costs | |
| (9,016 | ) | |
| (6,514 | ) | |
| (2,423 | ) |
| Headquarter fees | |
| (4,761 | ) | |
| (4,722 | ) | |
| (4,535 | ) |
| Legal, consulting and audit costs | |
| (3,833 | ) | |
| (2,236 | ) | |
| (3,338 | ) |
| Maintenance expenses | |
| (1,579 | ) | |
| (1,397 | ) | |
| (1,228 | ) |
| Travel and other employee expenses | |
| (1,430 | ) | |
| (1,311 | ) | |
| (991 | ) |
| Impairment losses and reversals | |
| (3,445 | ) | |
| 367 | | |
| (4,183 | ) |
| Other taxes | |
| (741 | ) | |
| (71 | ) | |
| (3,614 | ) |
| Currency translation losses | |
| (542 | ) | |
| (153 | ) | |
| (760 | ) |
| Rents and leases | |
| (222 | ) | |
| (215 | ) | |
| (286 | ) |
| Losses from the disposal of land and buildings | |
| (132 | ) | |
| (73 | ) | |
| (222 | ) |
| License and patent fees | |
| (62 | ) | |
| (370 | ) | |
| (331 | ) |
| Provisions for potential liquidated damages | |
| – | | |
| (5,700 | ) | |
| – | |
| Other | |
| (2,370 | ) | |
| (1,986 | ) | |
| (1,718 | ) |
| | |
| (28,133 | ) | |
| (24,381 | ) | |
| (23,629 | ) |
Other operating expenses increased
in 2023 by 15.4% and in 2022 by 3.2%. The increase in 2023 results mainly from additional warranty provisions, increased costs for
consultants and auditors as well as impairment losses.
Impairment losses and reversals
consist mainly of allowances for customer receivables. In 2023, a one-time allowance for trade receivables and contract assets was recorded
due to insolvent customers. In 2022, € 511 thousand previously recorded impairment losses were recovered resulting in total
in a reversal. In 2021, also a one-time allowance for trade receivables was recorded due to an insolvent customer.
The line item “other”
mainly includes miscellaneous services such as insurance and cleaning fees as well as phone services.
| C.7 | Depreciation, amortization and impairment |
18. DEPRECIATION, AMORTIZATION AND IMPAIRMENT
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Amortization and impairment of intangible assets | |
| (1,005 | ) | |
| (2,089 | ) | |
| (3,448 | ) |
| thereof regular amortization of intangible assets | |
| (1,005 | ) | |
| (2,089 | ) | |
| (3,433 | ) |
| thereof impairment of intangible assets | |
| – | | |
| – | | |
| (15 | ) |
| Depreciation of property, plant, and equipment | |
| (2,596 | ) | |
| (2,879 | ) | |
| (3,221 | ) |
| thereof depreciation of property, plant, and equipment | |
| (2,596 | ) | |
| (2,879 | ) | |
| (3,221 | ) |
| | |
| (3,601 | ) | |
| (4,968 | ) | |
| (6,669 | ) |
Depreciation of property, plant
and equipment includes depreciation of leased assets of € 782 thousand (2022: € 900 thousand; 2021: € 882
thousand).
19. FINANCIAL RESULT
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Interest income from financial instruments | |
| 963 | | |
| 67 | | |
| 32 | |
| Interest income from defined benefit plans | |
| 145 | | |
| 23 | | |
| 1 | |
| Other | |
| 94 | | |
| 60 | | |
| – | |
| Interest income | |
| 1,202 | | |
| 150 | | |
| 33 | |
| | |
| | | |
| | | |
| | |
| Interest expenses from financial instruments | |
| (583 | ) | |
| (659 | ) | |
| (711 | ) |
| Compounding of provisions | |
| (298 | ) | |
| (135 | ) | |
| (54 | ) |
| Lease interest expenses | |
| (31 | ) | |
| (1 | ) | |
| (2 | ) |
| Interest expenses from defined benefit plans | |
| – | | |
| – | | |
| (4 | ) |
| Lease interest expenses | |
| (31 | ) | |
| (1 | ) | |
| (2 | ) |
| Other | |
| (367 | ) | |
| (266 | ) | |
| (884 | ) |
| Interest expenses | |
| (1,279 | ) | |
| (1,061 | ) | |
| (1,655 | ) |
| | |
| | | |
| | | |
| | |
| Currency translation differences | |
| 457 | | |
| 300 | | |
| 14 | |
| Other | |
| 1 | | |
| 1 | | |
| 1 | |
| Other financial income | |
| 458 | | |
| 301 | | |
| 15 | |
| Currency translation differences | |
| (344 | ) | |
| (338 | ) | |
| – | |
| Other | |
| (6 | ) | |
| – | | |
| – | |
| Other financial expenses | |
| (350 | ) | |
| (338 | ) | |
| – | |
| Other financial result from other financial income and other financial expenses | |
| 108 | | |
| (37 | ) | |
| 15 | |
| | |
| | | |
| | | |
| | |
| Financial result | |
| 31 | | |
| (948 | ) | |
| (1,607 | ) |
Interest income from financial
instruments mainly relates to cash-pooling with KB Group. The increase in interest income from financial instruments is due to high cash-pooling
receivables in 2023.
Interest expenses mainly consist
of fees for bank guarantees. The line item “other” mainly includes interest from a financing component. In 2021, remaining
other interest expenses relate to interest accrued for a tax audit in 2021. Additionally, remaining interest expenses include interest
expenses of € 44 thousand (2022: € 19 thousand, 2021: € 9 thousand) resulting from a loan provided by Knorr-Bremse
AG to Kiepe Electric Schweiz AG.
The remaining other financial
income includes dividends received from the investment in Heiterblick Projektgesellschaft mbH in 2022 and 2021.
The remaining other financial
expenses include the disposal loss of the investment in Kiepe Electric India Pvt. Ltd.
Foreign currency gains or losses
on financial instruments carried at amortized cost (AC) mainly result from the currency translation differences of cash and cash equivalents
at the closing rate. These foreign currency gains or losses are presented net.
INCOME TAXES RECOGNIZED IN
THE COMBINED STATEMENTS OF PROFIT AND LOSS
20. INCOME TAXES RECOGNIZED IN COMBINED
STATEMENTS OF PROFIT AND LOSS
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Current year | |
| (375 | ) | |
| (459 | ) | |
| (301 | ) |
| Previous years | |
| (100 | ) | |
| (1,056 | ) | |
| (1,114 | ) |
| Current tax expense | |
| (475 | ) | |
| (1,515 | ) | |
| (1,415 | ) |
| | |
| | | |
| | | |
| | |
| Deferred taxes due to temporary differences | |
| (794 | ) | |
| 3,247 | | |
| (450 | ) |
| Deferred taxes due to tax loss carryforwards | |
| 481 | | |
| (2,827 | ) | |
| 2,783 | |
| Deferred tax (expense) income | |
| (313 | ) | |
| 420 | | |
| 2,333 | |
| | |
| | | |
| | | |
| | |
| Income tax (expense) benefit | |
| (788 | ) | |
| (1,095 | ) | |
| 918 | |
The income tax expense / benefit
includes current and deferred taxes. Current and deferred taxes are reported in the combined statements of profit and loss, except to
the extent that they are associated with items reported directly in net investment or in the other comprehensive income (loss).
Current tax expenses as well
as deferred tax benefits due to tax loss carryforwards were recognized as non-cash contributions or withdrawals by KB Group for Kiepe
Electric entities that historically did not constitute separate income tax payers.
Kiepe Electric GmbH is domiciled
in Germany with an applicable income tax rate of 31.255% in 2023 (2022: 31.255%, 2021: 31.265%). It consists of a federal corporate income
tax rate of 15.0%, a solidarity tax surcharge of 5.5% on each year’s federal corporate income taxes and a trade tax rate of in total
15.43% in 2023 (2022: 15.43%, 2021: 15.44%). The deferred taxes were measured applying the substantively enacted tax rates of the respective
tax jurisdictions.
Table à 21
shows a reconciliation of expected income tax benefit, determined using the combined statutory tax rate of Kiepe Electric GmbH, to the
income tax expense / benefit recognized in the combined statements of profit and loss.
The difference between the effective
and expected income taxes in all fiscal years is in large part attributable to the change of unrecognized deferred tax assets on tax loss
carryforwards and on temporary differences as well as for 2022 and 2021 to income taxes related to previous periods. The item “income
taxes from previous periods” of € 171 thousand (2022: € 3,778 thousand, 2021: € 1,115 thousand) includes
current tax expenses related to previous periods of € 100 thousand (2022: € 1,056 thousand, 2021: € 1,114 thousand)
and deferred tax benefits of € 271 thousand (2022: € 4,834 thousand, 2021: € 1 thousand). These deferred tax
benefits mainly relate to Kiepe Electric GmbH.
In 2021, the item “effects
from tax-free income” includes a one-time effect related to the sale of Kiepe Electric Ges. m. b. H. The item “effects
from permanent differences” mainly relates to Kiepe Electric GmbH for 2023 and Kiepe Electric LLC for 2022 and 2021.
21. RECONCILIATION OF THE EFFECTIVE TAX
RATE
| | |
Dec. 31, 2023 | | |
Dec. 31, 2022 | | |
Dec. 31, 2021 | |
| | |
% | | |
in €
thousand | | |
% | | |
in €
thousand | | |
% | | |
in €
thousand | |
| Earnings / (loss) before taxes | |
| – | | |
| 1,195 | | |
| – | | |
| (18,963 | ) | |
| – | | |
| (29,577 | ) |
| Expected taxes | |
| 31.3 | | |
| 373 | | |
| 31.3 | | |
| (5,927 | ) | |
| 31.3 | | |
| (9,247 | ) |
| Differences from foreign tax rates | |
| 11.6 | | |
| 139 | | |
| 0.5 | | |
| (88 | ) | |
| 0.4 | | |
| (107 | ) |
| Tax rate changes | |
| 3.3 | | |
| 40 | | |
| (0.1 | ) | |
| 26 | | |
| – | | |
| (14 | ) |
| Effects from permanent differences | |
| 43.7 | | |
| 522 | | |
| 2.2 | | |
| (416 | ) | |
| – | | |
| (10 | ) |
| Effects from non-deductible expenses | |
| 11.4 | | |
| 136 | | |
| (0.3 | ) | |
| 51 | | |
| – | | |
| 4 | |
| Effects from tax-free income | |
| (6.0 | ) | |
| (71 | ) | |
| – | | |
| (8 | ) | |
| 2.4 | | |
| (719 | ) |
| Change of unrecognized deferred tax assets on tax loss carryforwards | |
| 328.3 | | |
| 3,925 | | |
| (35.9 | ) | |
| 6,812 | | |
| (27.3 | ) | |
| 8,064 | |
| Change of unrecognized deferred tax assets on temporary differences | |
| (341.8 | ) | |
| (4,087 | ) | |
| (23.4 | ) | |
| 4,436 | | |
| – | | |
| – | |
| Income taxes from previous periods | |
| (14.3 | ) | |
| (171 | ) | |
| 19.9 | | |
| (3,778 | ) | |
| (3.8 | ) | |
| 1,115 | |
| Other | |
| (1.7 | ) | |
| (18 | ) | |
| 0.1 | | |
| (13 | ) | |
| – | | |
| (4 | ) |
| Effective taxes | |
| 65.8 | | |
| 788 | | |
| (5.7 | ) | |
| 1,095 | | |
| 3.0 | | |
| (918 | ) |
INCOME TAXES RECOGNIZED IN
OTHER COMPREHENSIVE INCOME (LOSS) AND DIRECTLY IN NET INVESTMENT
As of December 31, 2023, and
2022, no income taxes were reported directly in net investment.
The breakdown of income taxes
reported in other comprehensive income is presented in the following table:
22. INCOME TAXES RECOGNIZED IN OTHER COMPREHENSIVE
INCOME
| in € thousand | |
Before tax | | |
Deferred tax assets (-)/ liabilities (+) | | |
After tax | |
| | |
| | |
| | |
Dec. 31,
2023 | |
| | |
| | |
| | |
| |
| Revaluation of net debt from defined benefit plans | |
| 2,292 | | |
| (340 | ) | |
| 1,952 | |
| Currency translation differences | |
| (296 | ) | |
| 25 | | |
| (271 | ) |
| Total | |
| 1,996 | | |
| (315 | ) | |
| 1,681 | |
| | |
| | |
| | |
Dec. 31,
2022 | |
| Revaluation of net debt from defined benefit plans | |
| 2,795 | | |
| (644 | ) | |
| 2,151 | |
| Currency translation differences | |
| (108 | ) | |
| 20 | | |
| (88 | ) |
| Total | |
| 2,687 | | |
| (624 | ) | |
| 2,063 | |
DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets and deferred
tax liabilities are offset if deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority
and if there is the right to offset current tax assets against current tax liabilities. In the combined statements of financial position
deferred tax assets and deferred tax liabilities are presented as follows:
23. DEFERRED TAX ASSETS AND LIABILITIES
| | |
| | |
| | |
| | |
| | |
Net | | |
| | |
As of Dec. 31 | |
| in € thousand | |
Net as of January 1 | | |
In profit/loss | | |
In other income | | |
Other | | |
currency translation differences | | |
Net | | |
Deferred tax assets | | |
Deferred tax liabilities | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
2023 fiscal year | |
| Intangible assets | |
| (2,536 | ) | |
| (1,637 | ) | |
| – | | |
| – | | |
| (2 | ) | |
| (4,175 | ) | |
| 1 | | |
| 4,176 | |
| Property, plant and equipment | |
| (1,706 | ) | |
| (69 | ) | |
| – | | |
| – | | |
| (18 | ) | |
| (1,793 | ) | |
| 5 | | |
| 1,798 | |
| Investments | |
| (1 | ) | |
| (732 | ) | |
| – | | |
| – | | |
| – | | |
| (733 | ) | |
| 53 | | |
| 786 | |
| Inventories | |
| 2,523 | | |
| 11,318 | | |
| – | | |
| – | | |
| (19 | ) | |
| 13,822 | | |
| 14,315 | | |
| 493 | |
| Trade receivables | |
| 8,306 | | |
| 457 | | |
| – | | |
| – | | |
| (1 | ) | |
| 8,762 | | |
| 8,762 | | |
| – | |
| Other assets | |
| (2,229 | ) | |
| (7,141 | ) | |
| – | | |
| – | | |
| (20 | ) | |
| (9,390 | ) | |
| 1,088 | | |
| 10,478 | |
| Tax loss carry-forwards | |
| 191 | | |
| 480 | | |
| – | | |
| – | | |
| 39 | | |
| 710 | | |
| 710 | | |
| – | |
| Pension obligations | |
| 379 | | |
| (178 | ) | |
| 304 | | |
| 62 | | |
| 4 | | |
| 571 | | |
| 2,279 | | |
| 1,708 | |
| Other provisions | |
| 3,376 | | |
| (7,204 | ) | |
| – | | |
| – | | |
| (17 | ) | |
| (3,845 | ) | |
| 1,481 | | |
| 5,326 | |
| Liabilities | |
| (3,270 | ) | |
| 878 | | |
| – | | |
| – | | |
| 44 | | |
| (2,348 | ) | |
| 21,333 | | |
| 23,681 | |
| Valuation allowance | |
| (5,016 | ) | |
| 3,516 | | |
| – | | |
| – | | |
| (5 | ) | |
| (1,505 | ) | |
| (1,505 | ) | |
| – | |
| Tax assets (liabilities) before netting | |
| 17 | | |
| (312 | ) | |
| 304 | | |
| 62 | | |
| 5 | | |
| 76 | | |
| 48,522 | | |
| 48,446 | |
| Netting of taxes | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (48,443 | ) | |
| (48,443 | ) |
| Net tax assets (liabilities) | |
| 17 | | |
| (312 | ) | |
| 304 | | |
| 62 | | |
| 5 | | |
| 76 | | |
| 79 | | |
| 3 | |
| | |
| 2022 fiscal year | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Intangible assets | |
| (2,852 | ) | |
| 319 | | |
| – | | |
| – | | |
| (3 | ) | |
| (2,536 | ) | |
| – | | |
| 2,536 | |
| Property, plant and equipment | |
| (1,978 | ) | |
| 294 | | |
| – | | |
| – | | |
| (22 | ) | |
| (1,706 | ) | |
| 196 | | |
| 1,902 | |
| Investments | |
| (1 | ) | |
| – | | |
| – | | |
| – | | |
| – | | |
| (1 | ) | |
| – | | |
| 1 | |
| Inventories | |
| (373 | ) | |
| 2,889 | | |
| – | | |
| – | | |
| 7 | | |
| 2,523 | | |
| 2,739 | | |
| 216 | |
| Trade receivables | |
| 171 | | |
| 8,135 | | |
| – | | |
| – | | |
| – | | |
| 8,306 | | |
| 8,306 | | |
| – | |
| Other assets | |
| (1,108 | ) | |
| (1,111 | ) | |
| – | | |
| – | | |
| (10 | ) | |
| (2,229 | ) | |
| 3,174 | | |
| 5,403 | |
| Tax loss carry-forwards | |
| 167 | | |
| 16 | | |
| – | | |
| – | | |
| 8 | | |
| 191 | | |
| 191 | | |
| – | |
| Pension obligations | |
| 1,051 | | |
| 63 | | |
| (746 | ) | |
| – | | |
| 11 | | |
| 379 | | |
| 2,417 | | |
| 2,038 | |
| Other provisions | |
| 2,493 | | |
| 876 | | |
| – | | |
| – | | |
| 7 | | |
| 3,376 | | |
| 3,634 | | |
| 258 | |
| Liabilities | |
| 377 | | |
| (3,673 | ) | |
| – | | |
| – | | |
| 26 | | |
| (3,270 | ) | |
| 2,324 | | |
| 5,594 | |
| Valuation allowance | |
| (320 | ) | |
| (4,672 | ) | |
| (7 | ) | |
| – | | |
| (17 | ) | |
| (5,016 | ) | |
| (5,016 | ) | |
| – | |
| Tax assets (liabilities) before netting | |
| (2,373 | ) | |
| 3,136 | | |
| (753 | ) | |
| – | | |
| 7 | | |
| 17 | | |
| 17,965 | | |
| 17,948 | |
| Netting of taxes | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (17,922 | ) | |
| (17,922 | ) |
| Net tax assets (liabilities) | |
| (2,373 | ) | |
| 3,136 | | |
| (753 | ) | |
| – | | |
| 7 | | |
| 17 | | |
| 43 | | |
| 26 | |
DEFERRED TAX ASSETS ON TAX
LOSS CARRYFORWARDS
Deferred tax assets on tax loss
carryforwards were recognized in an amount of € 710 thousand; (December 31, 2022: € 191 thousand). The respective
tax losses can be carried forward indefinitely.
UNRECOGNIZED DEFERRED TAX
ASSETS
Deferred tax assets were not
recognized with regard to the following items, as it is not likely that taxable income, against which the Company can settle deferred
tax assets, will be available in the future.
24. UNRECOGNIZED DEFERRED TAX ASSETS
| | |
Dec. 31, 2023 | | |
Dec. 31, 2022 | |
| in € thousand | |
Gross | | |
Tax effect | | |
Gross | | |
Tax effect | |
| from deductible temporary differences | |
| 3,571 | | |
| 907 | | |
| 16,048 | | |
| 5,016 | |
| from tax loss carryforwards | |
| 2,809 | | |
| 601 | | |
| – | | |
| – | |
ADDITIONAL DISCLOSURES
The Company incurred tax losses
in 2023 and 2022 in some legal entities. After offsetting the deferred tax assets against deferred tax liabilities, the deferred tax assets
recognized from these legal entities amount to € - thousand (December 31, 2022: € 5,137 thousand). Kiepe Electric believes
it is probable that there will be sufficient future taxable income to utilize these deferred tax assets. The Company’s current estimate
of deferred tax assets which are considered to be realizable may change in the future, resulting in higher or lower deferred tax assets.
Kiepe Electric did not recognize
deferred tax liabilities related to temporary differences associated with investments in subsidiaries, branches and associates, and interests
in joint arrangements of € 346 thousand (December 31, 2022: € 264 thousand).
Kiepe Electric believes that
it has recognized adequate income tax liabilities for any future income taxes that may be owed as a result of any tax audit not completed
and in consideration of all available information, including the interpretation of tax law and previous experience.
| D. | NOTES TO THE COMBINED STATEMENTS OF FINANCIAL POSITION |
25. INTANGIBLE ASSETS
| in € thousand | |
Internally
generated
intangible
assets | | |
Customer relationships | | |
Licenses
and
acquired
rights | | |
Other | | |
Total | |
| Acquisition and production cost | |
| | |
| | |
| | |
| | |
| |
| As of Jan. 1, 2022 | |
| 8,295 | | |
| 11,729 | | |
| 8,542 | | |
| 3,011 | | |
| 31,577 | |
| Currency translation differences | |
| – | | |
| 23 | | |
| 8 | | |
| – | | |
| 31 | |
| Additions | |
| 3,292 | | |
| – | | |
| 176 | | |
| – | | |
| 3,468 | |
| Disposals | |
| – | | |
| – | | |
| (1,731 | ) | |
| – | | |
| (1,731 | ) |
| As of Dec. 31, 2022 | |
| 11,587 | | |
| 11,752 | | |
| 6,995 | | |
| 3,011 | | |
| 33,345 | |
| As of Jan. 1, 2023 | |
| 11,587 | | |
| 11,752 | | |
| 6,995 | | |
| 3,011 | | |
| 33,345 | |
| Currency translation differences | |
| – | | |
| 30 | | |
| 11 | | |
| – | | |
| 41 | |
| Additions | |
| 3,020 | | |
| – | | |
| 177 | | |
| – | | |
| 3,197 | |
| As of Dec. 31, 2023 | |
| 14,607 | | |
| 11,782 | | |
| 7,183 | | |
| 3,011 | | |
| 36,583 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Accumulated amortization | |
| | | |
| | | |
| | | |
| | | |
| | |
| As of Jan. 1, 2022 | |
| (1,689 | ) | |
| (9,110 | ) | |
| (7,932 | ) | |
| (2,752 | ) | |
| (21,483 | ) |
| Currency translation differences | |
| – | | |
| (12 | ) | |
| (7 | ) | |
| – | | |
| (19 | ) |
| Additions | |
| (170 | ) | |
| (1,388 | ) | |
| (470 | ) | |
| (61 | ) | |
| (2,089 | ) |
| Disposals | |
| – | | |
| – | | |
| 1,731 | | |
| – | | |
| 1,731 | |
| As of Dec. 31, 2022 | |
| (1,859 | ) | |
| (10,510 | ) | |
| (6,678 | ) | |
| (2,813 | ) | |
| (21,860 | ) |
| As of Jan. 1, 2023 | |
| (1,859 | ) | |
| (10,510 | ) | |
| (6,678 | ) | |
| (2,813 | ) | |
| (21,860 | ) |
| Currency translation differences | |
| – | | |
| (20 | ) | |
| (10 | ) | |
| – | | |
| (30 | ) |
| Additions | |
| (21 | ) | |
| (708 | ) | |
| (215 | ) | |
| (61 | ) | |
| (1,005 | ) |
| As of Dec. 31, 2023 | |
| (1,880 | ) | |
| (11,238 | ) | |
| (6,903 | ) | |
| (2,874 | ) | |
| (22,895 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Carrying amount as of Dec. 31, 2022 | |
| 9,728 | | |
| 1,242 | | |
| 317 | | |
| 198 | | |
| 11,485 | |
| Carrying amount as of Dec. 31, 2023 | |
| 12,727 | | |
| 544 | | |
| 280 | | |
| 137 | | |
| 13,688 | |
Intangible assets mainly comprise
internally generated intangible assets and customer relationships. Internally generated intangible assets consist of capitalized direct
costs of material and services as well as employee-related expenses in connection with the development, enhancements and upgrade of internally
developed applications. These are subject to straight-line amortization over the respective useful life of the corresponding asset. In
2023, internally generated intangible assets increased by € 2,999 thousand (December 31, 2022: € 3,122 thousand). This
is caused by the capitalization of intangible assets under construction.
The research and development
costs recognized in “cost of materials” in the combined statements of profit and loss as expense is € 2,665 thousand
(2022: € 3,003 thousand).
Customer relationships consist
of capitalized acquisition-related items resulting from the respective purchase price allocation.
There were no impairment losses
recognized for intangible assets for the periods presented. There are no intangible assets pledged as security.
Goodwill amounts to € 4,321
thousand as of December 31, 2023 (December 31, 2022: € 4,321 thousand) According to IFRS, goodwill is not amortized but is tested
for impairment annually. Goodwill represents the amount attributed to Kiepe Electric and resulted from the acquisition of the Company
by KB. Kiepe Electric consists of a single CGU for purposes of impairment testing of Goodwill.
The cash flow forecasts contain
specific projections from management for three years for the respective CGU. The forecast for the fourth year and terminal period was
estimated based on the first three years and a sustainable growth rate.
To discount the cash flows, the
weighted average cost of capital (WACC) was estimated based on the risk-free rate, peers’ unlevered beta factor and capital structure,
market risk premium, average credit ratings and tax rate.
The key assumptions the Company
has used in estimating the cash flows and the respective recoverable amount are set out as follows:
In the detailed planning phase,
sales growth rates are projected on the detailed bottom-up plans of the significant legal entities and reflect past order data as well
as industry-specific market information from external sources. Sales growth rates for the subsequent planning period are determined in
line with inflation per IHS forecast.
The forecast of the EBITDA margin
in the detailed planning phase takes into account historical data as well as current data from the respective order backlogs. Average
EBITDA margins extrapolated from the past and the detailed planning phase are used for the subsequent periods.
The following table shows the
average sales growth rates used in the course of determining the amount of the cash-generating unit.
26. CASH-GENERATING UNIT
| in % | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | | |
Dec. 31,
2021 | |
| average sales growth rates in the detailed planning phase | |
| 10.7 | | |
| 16.1 | | |
| 17.1 | |
| average EBITDA margin in the detailed planning phase | |
| 3.8 | | |
| 4.2 | | |
| 3.1 | |
| Weighted average cost of capital (WACC) | |
| 8.0 | | |
| 8.2 | | |
| 6.9 | |
| Weighted average cost of capital (WACC) - pre tax | |
| 10.6 | | |
| 10.7 | | |
| 9.4 | |
| Sustainable growth rate | |
| 2.2 | | |
| 2.2 | | |
| 2.0 | |
The sustainable growth rate was
calculated on the basis of estimated long-term inflation expectations as per IHS forecast and on the assumptions that a market participant
would make.
Kiepe Electric reviews the carrying
amount of Goodwill at the end of each fiscal year for impairment.
The impairment test did not result
in any impairment loss for the years ended December 31, 2023 and 2022.
The Company has performed sensitivity
analysis by changing the discount rate as well as the cash flows. The sensitivity did not result in an impairment loss.
| D.3 | Property, plant and equipment |
27. PROPERTY, PLANT AND EQUIPMENT
| in € thousand | |
Land, land
rights and
buildings,
including
buildings
on land
owned by
others | | |
Technical
equipment
and
machinery | | |
Other
equipment,
factory and
office
equipment | | |
Advance
payments
and assets
under
construction | | |
Total | |
| Acquisition and production
cost | |
| | |
| | |
| | |
| | |
| |
| As of Jan.
1, 2022 | |
| 34,238 | | |
| 2,281 | | |
| 30,245 | | |
| 722 | | |
| 67,486 | |
| Currency translation differences | |
| 106 | | |
| 16 | | |
| 35 | | |
| – | | |
| 157 | |
| Additions | |
| 79 | | |
| 106 | | |
| 531 | | |
| 913 | | |
| 1,629 | |
| Disposals | |
| – | | |
| (95 | ) | |
| (1,050 | ) | |
| – | | |
| (1,145 | ) |
| Reclassifications | |
| – | | |
| 73 | | |
| – | | |
| (73 | ) | |
| – | |
| As of Dec. 31, 2022 | |
| 34,423 | | |
| 2,381 | | |
| 29,761 | | |
| 1,562 | | |
| 68,127 | |
| As of Jan. 1, 2023 | |
| 34,423 | | |
| 2,381 | | |
| 29,761 | | |
| 1,562 | | |
| 68,127 | |
| Currency translation differences | |
| 96 | | |
| 7 | | |
| 25 | | |
| 1 | | |
| 129 | |
| Additions | |
| 1,192 | | |
| 17 | | |
| 396 | | |
| 399 | | |
| 2,004 | |
| Disposals | |
| (17 | ) | |
| – | | |
| (37 | ) | |
| – | | |
| (54 | ) |
| Reclassifications | |
| – | | |
| – | | |
| 105 | | |
| (1,434 | ) | |
| (1,329 | ) |
| As
of Dec. 31, 2023 | |
| 35,694 | | |
| 2,405 | | |
| 30,250 | | |
| 528 | | |
| 68,877 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Accumulated depreciation | |
| | | |
| | | |
| | | |
| | | |
| | |
| As of Jan. 1, 2022 | |
| (19,290 | ) | |
| (2,132 | ) | |
| (20,549 | ) | |
| – | | |
| (41,971 | ) |
| Currency translation differences | |
| (17 | ) | |
| (13 | ) | |
| (24 | ) | |
| – | | |
| (54 | ) |
| Additions | |
| (1,283 | ) | |
| (50 | ) | |
| (1,545 | ) | |
| (1 | ) | |
| (2,879 | ) |
| Disposals | |
| – | | |
| 96 | | |
| 970 | | |
| – | | |
| 1,066 | |
| As of Dec. 31, 2022 | |
| (20,590 | ) | |
| (2,099 | ) | |
| (21,148 | ) | |
| (1 | ) | |
| (43,838 | ) |
| As of Jan. 1, 2023 | |
| (20,590 | ) | |
| (2,099 | ) | |
| (21,148 | ) | |
| (1 | ) | |
| (43,838 | ) |
| Currency translation differences | |
| (19 | ) | |
| (4 | ) | |
| (17 | ) | |
| – | | |
| (40 | ) |
| Additions | |
| (1,244 | ) | |
| (37 | ) | |
| (1,315 | ) | |
| – | | |
| (2,596 | ) |
| Disposals | |
| – | | |
| – | | |
| 37 | | |
| – | | |
| 37 | |
| Reclassifications | |
| – | | |
| – | | |
| (1 | ) | |
| 1 | | |
| – | |
| As
of Dec. 31, 2023 | |
| (21,853 | ) | |
| (2,140 | ) | |
| (22,444 | ) | |
| – | | |
| (46,437 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Carrying amount as of Dec.
31, 2022 | |
| 13,833 | | |
| 282 | | |
| 8,613 | | |
| 1,561 | | |
| 24,289 | |
| Carrying amount as of Dec.
31, 2023 | |
| 13,841 | | |
| 265 | | |
| 7,806 | | |
| 528 | | |
| 22,440 | |
Property, plant, and equipment
decreased by € 1,849 thousand to € 22,440 thousand in 2023 (December 31, 2022: € 24,289 thousand).
This decrease is mainly driven by an increase in accumulated depreciation over the years.
Right-of-use assets under IFRS
16 were recognized under land, land rights and buildings as well as under other equipment, factory and office equipment. In 2023, the
right-of-use assets for land, land rights and buildings amount to € 2,725 thousand (December 31, 2022: € 2,427 thousand).
Within other equipment, factory and office equipment, an amount of € 51 thousand (December 31, 2022: € 94 thousand)
relates to right-of-use assets.
Investments in technical equipment
and machinery as well as other equipment, factory and office equipment focused on replacement of machinery in the factory as well as building
equipment and installations in third-party buildings.
Property, plant and equipment
is subject to straight-line depreciation. There were no impairment losses recognized for property, plant and equipment for the periods
presented. There is no property, plant and equipment pledged as security.
As of December 31, 2023, financial
assets of € 119 thousand (December 31, 2022: € 48 thousand) consist of investments held by Kiepe Electric GmbH, Germany
of € 12 thousand (December 31, 2022: € 40 thousand) and long-term deposits.
Refer to Note D.13.2 for more
information on Company’s investments.
| D.5 | Trade receivables, other financial assets and other assets |
28. TRADE RECEIVABLES
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Trade receivables | |
| 46,302 | | |
| 41,454 | |
| | |
| | | |
| | |
| Trade receivables, gross | |
| 46,940 | | |
| 48,151 | |
| Loss allowances | |
| (638 | ) | |
| (6,697 | ) |
| Trade receivables, net | |
| 46,302 | | |
| 41,454 | |
Trade receivables result from
the sale of goods and services. Trade receivables, excluding trade receivables from KB Group companies, increased in fiscal year
2023 by € 4,484 thousand reflecting the increase in revenues. Due to the default of a customer the loss allowance and the
respective gross trade receivables have been eliminated.
For further information on trade
receivables from KB Group companies refer to Note F.3.4.
The development of loss allowances
due to expected credit losses for trade receivables is shown in Note F.1.
29. OTHER FINANCIAL ASSETS
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Suppliers with debit balances | |
| 963 | | |
| 421 | |
| Receivables from German consortium for constructions | |
| 554 | | |
| 1,498 | |
| Deposits | |
| 44 | | |
| 41 | |
| Other financial assets | |
| 1,561 | | |
| 1,960 | |
All amounts of other financial
assets are due within one year.
30. OTHER ASSETS
| in € thousand | |
Dec. 31, 2023 | | |
Dec. 31, 2022 | |
| Receivables from other taxes | |
| 4,396 | | |
| 2,269 | |
| Advance payments | |
| 1,683 | | |
| 1,201 | |
| Other | |
| 475 | | |
| 718 | |
| Other assets | |
| 6,554 | | |
| 4,188 | |
Other assets primarily consist
of receivables from other taxes and advance payments. Other assets increased by € 2,366 thousand in fiscal year 2023 primarily
attributable to the increase in other taxes.
Advance payments are comprised
of prepayments for inventories.
The line item “other”
includes employment related receivables and other prepaid expenses.
31. INVENTORIES
| in € thousand | |
Materials
and
supplies | | |
Unfinished
goods | | |
Finished
goods | | |
Merchandise | | |
Goods in
transit | | |
Total | |
| Gross inventory as of Jan. 1, 2022 | |
| 25,856 | | |
| 11,165 | | |
| 14,941 | | |
| 581 | | |
| 2,021 | | |
| 54,564 | |
| Write-down to net realizable value | |
| (4,543 | ) | |
| (1,004 | ) | |
| (1,709 | ) | |
| (483 | ) | |
| – | | |
| (7,739 | ) |
| As of Jan. 1, 2022 | |
| 21,313 | | |
| 10,161 | | |
| 13,232 | | |
| 98 | | |
| 2,021 | | |
| 46,825 | |
| Gross inventory as of Dec. 31, 2022 | |
| 29,700 | | |
| 12,527 | | |
| 10,129 | | |
| 530 | | |
| 875 | | |
| 53,761 | |
| Write-down to net realizable value | |
| (5,432 | ) | |
| (1,149 | ) | |
| (1,795 | ) | |
| (365 | ) | |
| – | | |
| (8,741 | ) |
| As of Dec. 31, 2022 | |
| 24,268 | | |
| 11,378 | | |
| 8,334 | | |
| 165 | | |
| 875 | | |
| 45,020 | |
| Gross inventory as of Dec. 31, 2023 | |
| 42,558 | | |
| 10,715 | | |
| 9,973 | | |
| 640 | | |
| 611 | | |
| 64,497 | |
| Write-down to net realizable value | |
| (8,076 | ) | |
| (1,071 | ) | |
| (1,940 | ) | |
| (338 | ) | |
| – | | |
| (11,425 | ) |
| As of Dec. 31, 2023 | |
| 34,482 | | |
| 9,644 | | |
| 8,033 | | |
| 302 | | |
| 611 | | |
| 53,072 | |
Inventories primarily include
materials and supplies as well as unfinished and finished goods. Compared to 2022, materials and supplies have been significantly increased
to mitigate the risk relating to the supply chain in the electrical market.
| D.7 | Cash and cash equivalents |
32. CASH AND CASH EQUIVALENTS
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Cash and cash equivalents | |
| 32,535 | | |
| 8,462 | |
In 2023, cash and cash equivalents
increased by € 24,073 thousand caused by the termination of the cash-pooling agreement between Kiepe Electric and KB as
of December 31, 2023, and the respective payment by KB to Kiepe Electric.
Cash and cash equivalents include
cash at credit institutions. The cash and cash equivalents are measured at cost.
| D.8 | Total net investment attributable to Parent |
Total net investment
attributable to Parent
Total net investment attributable
to Parent consist of the Net investment attributable to Parent and other comprehensive income (loss).
Net investment attributable
to Parent
The net investment attributable
to Parent represents KB Group’s historical investment in Kiepe Electric, the net effect of transactions with and allocations
from KB Group, and Kiepe Electric’s accumulated earnings. Changes in net investment attributable to KB Group result from
withdrawals and contributions from KB Group in addition to the net loss for the period.
Contributions and withdrawals
mainly comprise transactions with KB Group, such as profit and loss transfer agreements, allocated costs from KB Group as well
as income tax liabilities and deferred tax assets on loss carryforwards of Kiepe Electric entities, which do not constitute separate tax
subjects in the reporting periods.
Other comprehensive
income (loss)
Other comprehensive income (loss)
includes all re-measurements of the net defined benefit liability for the defined benefit obligation of pension plans and pension plan
assets that are recognized outside of loss after income taxes as well as the respective deferred tax assets and liabilities, and foreign
currency translation differences.
33. EMPLOYEE BENEFITS
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Assets from employee benefits – Pensions | |
| (6,053 | ) | |
| (6,381 | ) |
| Defined Benefit Obligation – Pensions | |
| 10,084 | | |
| 9,587 | |
| Effect of asset ceiling/onerous liability – Pensions | |
| – | | |
| 385 | |
| Provisions for pensions | |
| 4,031 | | |
| 3,591 | |
| | |
| | | |
| | |
| Other personnel related provisions | |
| 1,516 | | |
| 1,473 | |
| | |
| | | |
| | |
| Provisions for employee benefits | |
| 5,547 | | |
| 5,064 | |
| Non-current | |
| 4,999 | | |
| 4,522 | |
| Current | |
| 548 | | |
| 542 | |
The provisions for employee benefits
include provisions for pension commitments and other personnel provisions.
Kiepe Electric provides pension
commitments to its employees based on defined benefit plans, the benefits of which depend either on the employee’s pensionable remuneration
or contain other guarantees. Pension commitments are measured based on actuarial principles using the projected unit credit method. The
pension plan accruals reported in the combined statements of financial position correspond to the present value of the defined benefit
obligation in consideration of future salary and pension increases as of the reporting date, less the fair value of the plan assets. The
amount of the net defined benefit liability (net asset) so determined is adjusted for any effect of limiting a net defined benefit asset
out of an asset ceiling.
In Switzerland, pension entitlements
and plan assets are managed in multi-employer pension funds. The employees accumulate a pension capital in these institutions, which is
converted into a lifelong pension at the time of retirement according to the conditions valid at that time. These pension funds are managed
conservatively on the basis of state requirements. Plan assets that exceed the defined benefit obligation are not available to the company
as an economic benefit (asset ceiling). If the claims are no longer covered by capital due to negative market developments, restructuring
contributions can be claimed from the affiliated employers and their employees.
| D.9.2 | Change in pension liability |
34. CHANGE IN PENSION LIABILITY
| | |
Defined benefit obligation | | |
Fair value of plan asset | | |
Net liabilities (net assets)
from defined benefit plans | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| in € thousand | |
2023 | | |
2022 | | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| As of Jan. 1 | |
| 9,587 | | |
| 12,705 | | |
| (6,381 | ) | |
| (5,916 | ) | |
| 3,591 | | |
| 6,789 | |
| Current service cost | |
| 180 | | |
| 242 | | |
| 24 | | |
| 25 | | |
| 204 | | |
| 267 | |
| Past service cost | |
| (21 | ) | |
| (249 | ) | |
| – | | |
| – | | |
| (21 | ) | |
| (249 | ) |
| Gains/losses from settlements | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| Interest income (including effect of asset ceiling) | |
| – | | |
| – | | |
| (155 | ) | |
| (23 | ) | |
| (146 | ) | |
| (23 | ) |
| Interest expense | |
| 293 | | |
| 90 | | |
| – | | |
| – | | |
| 293 | | |
| 90 | |
| Net cash flow | |
| (1,451 | ) | |
| (475 | ) | |
| 1,045 | | |
| 174 | | |
| (405 | ) | |
| (301 | ) |
| Remeasurements | |
| 945 | | |
| (3,215 | ) | |
| 154 | | |
| (19 | ) | |
| 1,099 | | |
| (3,234 | ) |
| a) Return on plan assets | |
| – | | |
| – | | |
| 154 | | |
| (19 | ) | |
| 154 | | |
| (19 | ) |
| b) Actuarial gains/losses (change in demographic assumptions) | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| c) Actuarial gains/losses (change in financial assumptions) | |
| 934 | | |
| (3,100 | ) | |
| – | | |
| – | | |
| 934 | | |
| (3,100 | ) |
| d) Effect of experience adjustments | |
| 11 | | |
| (115 | ) | |
| – | | |
| – | | |
| 11 | | |
| (115 | ) |
| Changes in asset ceiling/onerous liability (excluding interest income) | |
| – | | |
| – | | |
| – | | |
| – | | |
| (400 | ) | |
| 385 | |
| Currency translation differences (including effect of asset ceiling) | |
| 380 | | |
| 336 | | |
| (370 | ) | |
| (294 | ) | |
| 15 | | |
| 42 | |
| Employer contributions | |
| – | | |
| – | | |
| (199 | ) | |
| (175 | ) | |
| (199 | ) | |
| (175 | ) |
| Participant contributions | |
| 171 | | |
| 153 | | |
| (171 | ) | |
| (153 | ) | |
| – | | |
| – | |
| Increase/decrease due to effect of business combinations/divestitures | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| Transfers | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| As of Dec. 31 | |
| 10,084 | | |
| 9,587 | | |
| (6,053 | ) | |
| (6,381 | ) | |
| 4,031 | | |
| 3,591 | |
| thereof | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Germany & Austria | |
| 3,565 | | |
| 3,362 | | |
| – | | |
| – | | |
| 3,565 | | |
| 3,362 | |
| Italy | |
| 152 | | |
| 229 | | |
| – | | |
| – | | |
| 152 | | |
| 229 | |
| Switzerland | |
| 6,367 | | |
| 5,996 | | |
| (6,053 | ) | |
| (6,381 | ) | |
| 314 | | |
| – | |
Only the pension obligations
in Switzerland are financed by assets that meet the definition of plan assets according to IAS 19. For these pension obligations, the
net liability from the defined benefit obligation and the fair value of the plan assets is recognized and reduced by any effect of an
asset ceiling. The plan assets comprise the investments shown in Table à 35.
35. PLAN ASSETS
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Cash and cash equivalents | |
| – | | |
| – | |
| Equity instruments | |
| – | | |
| – | |
| Debt instruments | |
| – | | |
| – | |
| Real estate | |
| – | | |
| – | |
| Assets held by insurance companies | |
| (6,053 | ) | |
| (6,381 | ) |
| Investment funds | |
| – | | |
| – | |
| Other | |
| – | | |
| – | |
| Fair value of plan assets | |
| (6,053 | ) | |
| (6,381 | ) |
| | |
| | | |
| | |
| Return on plan assets (including interest income) | |
| 2 | | |
| 42 | |
| D.9.4 | Actuarial assumptions |
The Table à 36
and 37 list the key actuarial assumptions for the pension plans as of the reporting dates. The pension plans represent the majority
of the total recognized defined benefit obligation.
36. ACTUARIAL ASSUMPTIONS - GERMANY
| in % | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Discount rate | |
| 3.50 | | |
| 4.17 | |
| Salary increase | |
| – | | |
| – | |
| Pension increases | |
| 2.20 | | |
| 2.20 | |
| Mortality Tables | |
| Richttafeln 2018G Prof. K. Heubeck | | |
| Richttafeln 2018G Prof. K. Heubeck | |
37. ACTUARIAL ASSUMPTIONS - SWITZERLAND
| in % | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Discount rate | |
| 1.50 | | |
| 2.40 | |
| Salary increase | |
| 1.75 | | |
| 1.75 | |
| Pension increases | |
| 0.00 | | |
| 0.00 | |
| Mortality Tables | |
| BVG 2020 and CMI 2019 LTR improve-ment factor of 1,50% | | |
| BVG 2020 and CMI 2019 LTR improve-ment factor of 1,50% | |
In fiscal year 2023, employer
payments into the plan assets amounted to € 199 thousand. Pension payments of € 1,451 thousand were paid for
2023 (2022: € 475 thousand). The expected pension payments for 2024 are € 607 thousand.
As of December 31, 2023, the
duration for the defined benefit obligation was 10.9 years (December 31, 2022: 11.5 years) for the German and 13.5 years (December
31, 2022: 17.7 years) for the Swiss pension plans, respectively.
| D.9.6 | Sensitivity analysis |
The following sensitivity analysis
presents the effects of reasonable changes of individual factors on the defined benefit obligation as of the reporting date.
38. SENSITIVITY ANALYSIS - GERMANY
| | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| in € thousand | |
Increase | | |
Decrease | | |
Increase | | |
Decrease | |
| Present value of defined benefit obligation | |
| 3,156 | | |
| 3,156 | | |
| 2,992 | | |
| 2,992 | |
| Change in discount rate 0.5% | |
| (204 | ) | |
| 230 | | |
| (181 | ) | |
| 200 | |
| Change in salary increase rate 0.5% | |
| – | | |
| – | | |
| – | | |
| – | |
| Change in future pension increases 0.5% | |
| 170 | | |
| (156 | ) | |
| 151 | | |
| (139 | ) |
39. SENSITIVITY
ANALYSIS - SWITZERLAND
| | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| in € thousand | |
Increase | | |
Decrease | | |
Increase | | |
Decrease | |
| Present value of defined benefit obligation | |
| 6,367 | | |
| 6,367 | | |
| 5,996 | | |
| 5,996 | |
| Change in discount rate 0.5% | |
| (425 | ) | |
| 479 | | |
| (380 | ) | |
| 421 | |
| Change in salary increase rate 0.5% | |
| 40 | | |
| (39 | ) | |
| 31 | | |
| (30 | ) |
| Change in future pension increases 0.5% | |
| 310 | | |
| – | | |
| 282 | | |
| – | |
Although the analysis does not
take into account the complete distribution of the expected cash flows according to the plan, it provides an approximate value of the
sensitivity of the presented assumptions.
40. OTHER PROVISIONS
| in € thousand | |
Warranty
provisions | | |
Provisions
for onerous
contracts | | |
Restructuring
provision | | |
Other | | |
Total | |
| As of Jan. 1, 2022 | |
| 12,474 | | |
| 6,869 | | |
| 4,979 | | |
| 12,194 | | |
| 36,516 | |
| Currency translation differences | |
| 125 | | |
| – | | |
| – | | |
| 4 | | |
| 129 | |
| Additions | |
| 6,970 | | |
| 73 | | |
| 3,464 | | |
| 14,969 | | |
| 25,476 | |
| Utilization | |
| (4,340 | ) | |
| (1,735 | ) | |
| (6,011 | ) | |
| (1,087 | ) | |
| (13,173 | ) |
| Reversals | |
| (500 | ) | |
| (1,890 | ) | |
| (300 | ) | |
| (5,117 | ) | |
| (7,807 | ) |
| Compounding | |
| 41 | | |
| – | | |
| – | | |
| 9 | | |
| 50 | |
| As of Dec. 31, 2022 | |
| 14,770 | | |
| 3,317 | | |
| 2,132 | | |
| 20,972 | | |
| 41,191 | |
| thereof current | |
| 5,533 | | |
| – | | |
| 2,132 | | |
| 20,908 | | |
| 28,573 | |
| thereof non-current | |
| 9,237 | | |
| 3,317 | | |
| – | | |
| 64 | | |
| 12,618 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| As of Jan. 1, 2023 | |
| 14,770 | | |
| 3,317 | | |
| 2,132 | | |
| 20,972 | | |
| 41,191 | |
| Currency translation differences | |
| (34 | ) | |
| – | | |
| – | | |
| 2 | | |
| (32 | ) |
| Additions | |
| 8,329 | | |
| 1,661 | | |
| – | | |
| 2,940 | | |
| 12,930 | |
| Utilization | |
| (4,310 | ) | |
| (927 | ) | |
| (668 | ) | |
| (2,676 | ) | |
| (8,581 | ) |
| Reversals | |
| (1,534 | ) | |
| – | | |
| – | | |
| (4,320 | ) | |
| (5,854 | ) |
| Compounding | |
| – | | |
| – | | |
| – | | |
| 6 | | |
| 6 | |
| As of Dec. 31, 2023 | |
| 17,221 | | |
| 4,051 | | |
| 1,464 | | |
| 16,924 | | |
| 39,660 | |
| thereof current | |
| 4,012 | | |
| – | | |
| 1,464 | | |
| 16,858 | | |
| 22,334 | |
| thereof non-current | |
| 13,209 | | |
| 4,051 | | |
| – | | |
| 66 | | |
| 17,326 | |
In 2023, other provisions decreased
by € 1,531 thousand to € 39,660 thousand (December 31, 2022: € 41,191 thousand). The main reason for this
decrease was a reversal of a provision for risks related to Value Added Taxes (“VAT”) in the line item “other”,
which was partially offset by an increase in warranty provisions.
The warranty provisions cover
both obligations arising from cases that have already occurred as well as future obligations based on past experience. In principle, the
latter is directly related to the development and composition of sales revenue. The provisions are based on estimates of historical warranty
data for similar products and services. The warranty provisions increased by € 2,451 thousand to € 17,221 thousand
(December 31, 2022: € 14,770 thousand), mainly due to two specific projects. For the long-term warranty provisions, outflows
are expected within the next two to five years.
The provisions for onerous contracts
increased by € 734 thousand to € 4,051 thousand (December 31, 2022: € 3,317 thousand) mainly due
to two contracts.
The restructuring provision decreased
by € 668 thousand to € 1,464 thousand (December 31, 2022: € 2,132 thousand) due to the utilization for staff
redundancy costs for a restructuring program recognized as of December 31, 2021.
The other provisions decreased
by € 4,048 thousand to € 16,924 thousand (December 31, 2022: € 20,972 thousand). Other provisions mainly
consist of indemnity provisions, provisions for follow-up costs and provisions for VAT. The decrease mainly results from a reversal of
a provision for risks related to VAT of € 3,729.
| D.11 | Trade payables and other liabilities |
Trade payables, excluding trade
payables to KB Group companies, totaled € 23,827 thousand as of December 31, 2023 (December 31, 2022: € 18,365
thousand). For further information on trade payables to KB Group companies, see Note F.3.4.
Trade payables consist mainly
of payables due to sub-contractors that provide services, suppliers of parts and modules, as well as outstanding invoices. All amounts
are due within one year.
41. OTHER LIABILITIES
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Liabilities to employees | |
| 3,430 | | |
| 3,223 | |
| Liabilities from other taxes | |
| 2,964 | | |
| 2,541 | |
| Advance payments received | |
| 1,557 | | |
| 4,614 | |
| Social security liabilities | |
| 41 | | |
| 31 | |
| Other | |
| 493 | | |
| 964 | |
| | |
| | | |
| | |
| Current | |
| 8,350 | | |
| 11,109 | |
| Non-current | |
| 135 | | |
| 264 | |
Other liabilities decreased by
€ 2,888 thousand to € 8,485 thousand (December 31, 2022: € 11,373 thousand). This was mainly due to
a decrease of project-related prepayments of € 3,057 thousand.
Liabilities to employees mainly
include vacation and bonuses that are due within one year.
The line item “other”
mainly consist of consulting and audit fees.
| D.12 | Financial liabilities |
42. FINANCIAL LIABILITIES
| in
€ thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Lease liabilities | |
| 2,792 | | |
| 2,528 | |
| Other financial liabilities | |
| 500 | | |
| 378 | |
| Liabilities towards credit institutions | |
| 250 | | |
| – | |
| | |
| | | |
| | |
| Current | |
| 1,305 | | |
| 1,017 | |
| Non-current | |
| 2,237 | | |
| 1,889 | |
Financial liabilities amount
to € 3,542 thousand as of December 31, 2023 (December 31, 2022: € 2,906 thousand) and primarily comprise lease
liabilities.
The lease liabilities increased
to € 2,792 thousand (December 31, 2022: € 2,528 thousand) due to a material lease modification of € 934
thousand. This effect is compensated to some extent by decreases due to repayments.
The following tables show a reconciliation
of movements of financial liabilities to cash flows arising from financing activities as of December 31, 2023 and December 31, 2022.
43. RECONCILIATION OF MOVEMENTS OF LIABILITIES
TO CASH FLOWS ARISING FROM FINANCING ACTIVITIES 2023
| | |
| | |
| | |
| | |
Liabilities | | |
Net investment | | |
| |
| in € thousand | |
Liabilities to banks | | |
Loan from Parent companies | | |
Other financial liabilities | | |
Lease liabilities | | |
Net investment attributable to Parent | | |
Total | |
| As of Jan. 1, 2023 | |
| – | | |
| 2,539 | | |
| 379 | | |
| 2,528 | | |
| 56,613 | | |
| 62,059 | |
| Change in cash flow from financing activities | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Proceeds from Borrowings | |
| 250 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 250 | |
| Disbursements for lease liabilities | |
| – | | |
| – | | |
| – | | |
| (772 | ) | |
| – | | |
| (772 | ) |
| Interest paid | |
| – | | |
| (44 | ) | |
| (324 | ) | |
| (31 | ) | |
| – | | |
| (399 | ) |
| Dividends paid to parent Company shareholders | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| Other transaction with Parent | |
| – | | |
| – | | |
| – | | |
| – | | |
| 4,771 | | |
| 4,771 | |
| Cash flow from financing activities | |
| 250 | | |
| (44 | ) | |
| (324 | ) | |
| (803 | ) | |
| 4,771 | | |
| 3,850 | |
| Effects in foreign exchange
rates | |
| – | | |
| 208 | | |
| 16 | | |
| 60 | | |
| | | |
| 284 | |
| Other changes related to liabilities | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Other non-cash expenses and income | |
| – | | |
| – | | |
| 106 | | |
| – | | |
| – | | |
| 106 | |
| Interest expenses | |
| – | | |
| 44 | | |
| 324 | | |
| 31 | | |
| – | | |
| 399 | |
| New leases | |
| – | | |
| – | | |
| – | | |
| 976 | | |
| – | | |
| 976 | |
| Total other changes, related
to liabilities | |
| – | | |
| 44 | | |
| 430 | | |
| 1,007 | | |
| – | | |
| 1,481 | |
| Total other changes, related to net investment | |
| – | | |
| – | | |
| – | | |
| – | | |
| 27 | | |
| 27 | |
| As of Dec. 31, 2023 | |
| 250 | | |
| 2,747 | | |
| 501 | | |
| 2,792 | | |
| 61,411 | | |
| 67,700 | |
44. RECONCILIATION OF MOVEMENTS OF LIABILITIES
TO CASH FLOWS ARISING FROM FINANCING ACTIVITIES 2022
| | |
| | |
| | |
| | |
Liabilities | | |
Net investment | | |
| |
| in
€ thousand | |
Liabilities to banks | | |
Loan from Parent | | |
Other financial liabilities | | |
Lease liabilities | | |
Net investment attributable to Parent | | |
Total | |
| As
of Jan. 1, 2022 | |
| – | | |
| 2,420 | | |
| 148 | | |
| 3,210 | | |
| 53,249 | | |
| 59,027 | |
| Change in
cash flow from financing activities | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Proceeds from borrowings | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| Disbursements from the repayment of borrowings | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| Disbursements for lease liabilities | |
| – | | |
| – | | |
| – | | |
| (903 | ) | |
| – | | |
| (903 | ) |
| Interest paid | |
| – | | |
| (19 | ) | |
| (247 | ) | |
| (1 | ) | |
| – | | |
| (267 | ) |
| Dividends paid to parent Company shareholders | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| Proceeds from grants and subsidies | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| Other transaction with Parent | |
| – | | |
| – | | |
| – | | |
| – | | |
| 19,349 | | |
| 19,349 | |
| Cash flow
from financing activities | |
| – | | |
| (19 | ) | |
| (247 | ) | |
| (904 | ) | |
| 19,349 | | |
| 18,179 | |
| Effects
in foreign exchange rates | |
| – | | |
| 119 | | |
| 15 | | |
| 90 | | |
| | | |
| 224 | |
| Other changes related to liabilities | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Other non-cash expenses and income | |
| – | | |
| – | | |
| 216 | | |
| – | | |
| – | | |
| 216 | |
| Interest expenses | |
| – | | |
| 19 | | |
| 247 | | |
| 1 | | |
| – | | |
| 267 | |
| New leases | |
| – | | |
| – | | |
| – | | |
| 131 | | |
| – | | |
| 131 | |
| Total other
changes, related to liabilities | |
| – | | |
| 19 | | |
| 463 | | |
| 132 | | |
| – | | |
| 614 | |
| Total other changes, related to net investment | |
| – | | |
| – | | |
| – | | |
| – | | |
| (15,985 | ) | |
| (15,985 | ) |
| As of Dec.
31, 2022 | |
| – | | |
| 2,539 | | |
| 379 | | |
| 2,528 | | |
| 56,613 | | |
| 62,059 | |
The cash flows from financing
activities presented in the combined statements of cash flows includes interests paid resulting from off-balance-sheet commitments that
comprise of bank guarantees of € 583 thousand (2022: € 659 thousand) and the payment of the cash-pooling receivable of
€ 14,361 thousand that has been paid due to the termination of the cash-pooling agreement with KB.
| D.13 | Financial Instruments |
| D.13.1 | Financial Instruments |
The following table provides
an overview of the carrying amount of financial assets and liabilities. It does not include fair value information for financial assets
and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
45. INFORMATION IN ACCORDANCE WITH IFRS
9
| |
|
Dec.
31,
2023 |
|
|
Dec.
31,
2022 |
|
| in
€ thousand |
|
Carrying
amount |
|
|
Carrying
amount |
|
| Category |
|
Other |
|
|
At
amortized cost |
|
|
Total |
|
|
Other |
|
|
At
amortized cost |
|
|
Total |
|
| Financial assets |
|
|
– |
|
|
|
85,077 |
|
|
|
85,077 |
|
|
|
– |
|
|
|
105,912 |
|
|
|
105,912 |
|
| Trade receivables |
|
|
– |
|
|
|
46,302 |
|
|
|
46,302 |
|
|
|
– |
|
|
|
41,454 |
|
|
|
41,454 |
|
| Receivables from related parties |
|
|
– |
|
|
|
4,560 |
|
|
|
4,560 |
|
|
|
– |
|
|
|
53,988 |
|
|
|
53,988 |
|
| Other financial assets |
|
|
– |
|
|
|
1,680 |
|
|
|
1,680 |
|
|
|
– |
|
|
|
2,008 |
|
|
|
2,008 |
|
| Cash and cash equivalents |
|
|
– |
|
|
|
32,535 |
|
|
|
32,535 |
|
|
|
– |
|
|
|
8,462 |
|
|
|
8,462 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial liabilities |
|
|
2,792 |
|
|
|
28,835 |
|
|
|
31,627 |
|
|
|
2,528 |
|
|
|
24,091 |
|
|
|
26,619 |
|
| Liabilities towards credit institutions |
|
|
– |
|
|
|
250 |
|
|
|
250 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
| Lease liabilities |
|
|
2,792 |
|
|
|
– |
|
|
|
2,792 |
|
|
|
2,528 |
|
|
|
– |
|
|
|
2,528 |
|
| Other financial liabilities |
|
|
– |
|
|
|
500 |
|
|
|
500 |
|
|
|
– |
|
|
|
378 |
|
|
|
378 |
|
| Trade payables |
|
|
– |
|
|
|
23,827 |
|
|
|
23,827 |
|
|
|
– |
|
|
|
18,365 |
|
|
|
18,365 |
|
| Liabilities to related parties |
|
|
– |
|
|
|
4,258 |
|
|
|
4,258 |
|
|
|
– |
|
|
|
5,348 |
|
|
|
5,348 |
|
Lease liabilities are not allocated
to any of the measurement categories and therefore are included within the other column in the table above.
The fair values of cash and cash
equivalents, trade receivables, other financial assets, other financial liabilities, and trade payables approximate their carrying amounts
due to the short-term maturities of these instruments.
Receivables from related parties
include trade receivables and receivables from profit and loss transfer agreements. In the fiscal year 2022, the receivables from related
parties additionally included cash pool receivables. The fair values of receivables from related parties are approximately equal to their
carrying amount due to the short-term maturities.
The fair values of the liabilities
to related parties are approximately equal to their carrying amount due to the short-term maturities of the included trade accounts and
the market-based interest rate applied for the short-term loan provided by Knorr-Bremse AG to Kiepe Electric Schweiz AG.
Note C.8 provides information
on the net gains and net losses from financial instruments. For more information on loss allowances and write-offs on financial assets
refer to Note F.1.3.
Kiepe Electric GmbH holds an
investment in the company Heiterblick Projektgesellschaft mbH, Germany. Kiepe Electric GmbH has acquired a 49% shareholding for € 12
thousand. The main shareholder is HeiterBlick GmbH, Germany with 51% of outstanding shares. According to the profit and loss transfer
agreement entered into on October 13, 2011 between HeiterBlick GmbH and Heiterblick Projektgesellschaft mbH, Kiepe Electric GmbH receives
only a dividend in the amount of 10% of the nominal value of its shares for each fiscal year. Kiepe Electric GmbH has no control over
Heiterblick Projektgesellschaft mbH. The investment is reported at cost due to its immateriality.
As of December 31, 2022, Kiepe
Electric GmbH held an investment of 20% in the company Kiepe Electric India Pvt. Ltd., India in an amount of € 28 thousand and
is reported at cost on the combined statements of financial position. In 2023, Kiepe Electric GmbH sold its investment in Kiepe Electric
India Pvt. Ltd.
46. INCOME TAXES
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Income tax receivables | |
– | | |
– | |
| thereof non-current | |
– | | |
– | |
| thereof current | |
– | | |
– | |
| | |
| | |
| |
| Income tax liabilities | |
| 194 | | |
| 191 | |
| thereof non-current | |
| – | | |
| – | |
| thereof current | |
| 194 | | |
| 191 | |
Current income tax liabilities
relate mainly to the current tax calculations and refer to Kiepe Electric GmbH’s Vienna branch.
| E. | NOTES TO THE COMBINED STATEMENTS OF CASH FLOWS |
The Company’s combined
statements of cash flows show the sources and use of cash flows and the net increase or decrease in cash and cash equivalents.
Cash flows are presented as cash
flows from operating activities, from investing activities and from financing activities. The cash flows from operating activities are
derived indirectly based on the loss for the period.
| E.1 | Cash flow from operating activities |
The cash flow from operating
activities increased by € 21,567 thousand in 2023 compared with the previous year, mainly due to higher profit and the
change in receivables. This effect is compensated to some extent by the change in inventories, contract liabilities and other liabilities.
| E.2 | Cash flow from investing activities |
The cash flow from investing
activities decreased by a total of € 1,064 thousand in 2023.
The cash flow from investing
activities mainly results from the cash outflow for investments in intangible assets, property, plant and equipment as well as the cash
inflow for interest received. For further information, see Note C.8.
| E.3 | Cash flow from financing activities |
The cash flow from financing
activities mainly results from Other financing transactions with Parent. In 2023, the cash flow from financing activities includes the
payment of the cash-pooling receivable of € 14,361 thousand that has been paid due to the termination of the cash-pooling agreement
with KB.
Other financing transactions
with Parent for 2023 includes receivables related to the profit and loss transfer agreement of € 3,583 thousand (2022: € 16,324
thousand) as well as taxes using the separate tax return approach of € - thousand (2022: € -2,717 thousand).
| E.4 | Composition of Cash and Cash Equivalents |
47. FINANCIAL FUNDS AT THE END OF THE PERIOD
| in € thousand | |
2023 | | |
2022 | |
| Cash and cash equivalents | |
| 32,535 | | |
| 8,462 | |
| | |
| 32,535 | | |
| 8,462 | |
Cash and cash equivalents of
Kiepe Electric currently only comprise cash at banks.
In 2023, cash and cash equivalents
increased by € 24,073 thousand to € 32,535 thousand. The increase is due to the termination of the cash-pooling agreement
between Kiepe Electric and KB as of December 31, 2023, and the respective payment by KB to Kiepe Electric. The funds reported in the combined
statements of changes in net investment include cash at credit institutions, see Note D.7.
| F.1 | Managing of financial risks |
During the periods presented,
all financial risks of Kiepe Electric were managed by Knorr-Bremse AG on behalf of Kiepe Electric which manages all of the financial risks
within the KB Group.
Kiepe Electric is exposed to
various financial risks arising from its operating, investing and financing activities, especially market risks (currency risk and interest
rate risk), credit risks, and liquidity risks.
Currency risks arise from future
transactions involving both the purchase of intermediate products and the sale of end products. However, Kiepe Electric has a moderate
exposure towards currency risk arising from fluctuations in exchange rates in connection with international operations. Receivables and
liabilities recognized in the combined statements of financial position as well as highly probable expected cash flows in foreign currencies
are examined.
Some Kiepe Electric Group’s
entities are located outside the Eurozone. For the preparation of the Combined Financial Statements, financial statements of foreign operations
are translated into Euro, as Kiepe Electric’s presentation currency is the Euro. Effects from foreign currency exchange rate fluctuations
on the translation of net investment amounts into Euro are reflected in other comprehensive income (loss) for the period in the combined
statements of changes in net investment. Kiepe Electric does not hedge net investments in foreign operations.
The sensitivity analysis for
the currency risk mainly arises from cash and cash equivalents as of Dec. 31, 2023 and 2022. The following table demonstrates the approximate
effect on the Company’s post-tax profit or (loss) and net investment in response to fluctuations of the currencies other than the
respective functional currencies which the Kiepe Electric Group entities have exposure at the balance sheet date.
48. EXCHANGE RATE EFFECTS
| in € thousand | |
USD/EUR +10% | | |
USD/EUR -10% | | |
CHF/EUR +10% | | |
CHF/EUR -10% | |
| Dec. 31, 2022 | |
| | |
| | |
| | |
| |
| Effect on net result | |
| (34 | ) | |
| 38 | | |
| (6 | ) | |
| 3 | |
| Effect on net investment | |
| (34 | ) | |
| 38 | | |
| (6 | ) | |
| 3 | |
| | |
| | | |
| | | |
| | | |
| | |
| Dec. 31, 2023 | |
| | | |
| | | |
| | | |
| | |
| Effect on net result | |
| (36 | ) | |
| 39 | | |
| (76 | ) | |
| 84 | |
| Effect on net investment | |
| (36 | ) | |
| 39 | | |
| (76 | ) | |
| 84 | |
The Company uses the value at
risk as the primary risk measure to determine the risk potential for currency risks. It indicates the maximum loss. The value at risk
is calculated for the core currencies of USD and CHF.
49. VALUE AT RISK
| in €
thousand | |
2023 | | |
2022 | |
| CHF | |
| 2,021 | | |
| 60 | |
| USD | |
| 989 | | |
| 946 | |
The change in CHF value at risk
from € 60 thousand in 2022 to € 2,021 thousand in 2023 relates to higher amounts of cash held in CHF.
Exposures to other currencies
exist, however, such exposures usually do not have a material effect on earnings.
The Company has no off-balance-sheet
concentrations of credit risk such as foreign exchange contracts, option contracts or other foreign currency hedging arrangements.
Interest rate risks arise as
a result of market-related fluctuations in the interest rates. They affect the level of the Company’s interest expenses.
Interest bearing liabilities
with floating interest rates exist at Kiepe Electric from the loan provided by the lender KB SfS (lender as of Dec. 31, 2022: Knorr-Bremse
AG) to Kiepe Electric Schweiz AG. At the reporting date, Kiepe Electric has a very low exposure to a possible change in interest rates.
Due to low interest expenses arising from the loan the interest rate risk does not have a material effect on the Company’s loss
for the period. Refer to Note C.8 for further information on interest expenses.
CREDIT STRUCTURE FOR TRADE
RECEIVABLE AND CONTRACT ASSETS
Credit risks arise from an unexpected
loss in cash and earnings if the customer or contracting party payment is late, partial or is lacking payments of receivables without
compensation and to non-payment.
Kiepe Electric’s exposure
to credit risk arises primarily from trade receivables and receivables from related parties (see Note F.3.4 Balances with related parties
and management). The maximum exposure to credit risk represents the carrying amount of trade receivables, cash and cash equivalents and
other financial assets as reported in the combined financial statements. For trade receivables, as well as other financial assets that
are neither impaired nor past due, there were no indications as of December 31, 2023 and 2022, that defaults in payment obligations will
occur.
Credit risk is monitored regularly.
This includes the review of individual receivables and individual customer creditworthiness, the analysis of historical bad debts on a
portfolio basis. Decisions on financial transactions are made on the basis of this monitoring.
In principle, commercial transactions
are exposed to the risk of a possible loss of value due to the defaulting of business partners as customers.
SCREENING PROCESS FOR CUSTOMERS
When establishing new business
relationships, public sources, such as credit agencies, are used to obtain an economic business evaluation and credit opinion in advance.
During the business relationship, a regular monitoring process occurs via review of overdue positions.
EXPECTED CREDIT LOSSES
Receivables have been grouped
based on shared credit risk characteristics and the days past due to measure the expected credit losses. The expected credit loss is determined
individually if the receivables are considered credit impaired.
The below table shows the lifetime
expected credit losses that have been recognized for receivables in accordance with the simplified approach set out in IFRS 9 and the
respective movements during the fiscal years.
50. LIFETIME EXPECTED CREDIT LOSSES IN ACCORDANCE
WITH IFRS 9
| in € thousand | |
Current | | |
More than 30 days past due | | |
More than 60 days past due | | |
More than 90 days past due | | |
Total | |
| 2023 fiscal year | |
| | |
| | |
| | |
| | |
| |
| Trade receivables - gross carrying amount | |
| 38,220 | | |
| 2,183 | | |
| 2,237 | | |
| 4,300 | | |
| 46,940 | |
| Contract assets - gross carrying amount | |
| 29,575 | | |
| – | | |
| – | | |
| – | | |
| 29,575 | |
| 2022 fiscal year | |
| | | |
| | | |
| | | |
| | | |
| | |
| Trade receivables - gross carrying amount | |
| 30,501 | | |
| 1,106 | | |
| 2,864 | | |
| 13,680 | | |
| 48,151 | |
| Contract assets - gross carrying amount | |
| 21,296 | | |
| – | | |
| – | | |
| – | | |
| 21,296 | |
IMPAIRMENT OF RECEIVABLES
Impaired receivables and the respective accumulated
impairments are derecognized if there is no probability of payment. Trade receivables do not bear interest.
The respective movements of impairments for trade
receivables and contract assets during the fiscal years are as follows:
51. FINANCIAL INSTRUMENTS IN IMPAIRMENT
SCOPE 2023
| in € thousand | |
Impairment Jan. 1 | | |
Net change | | |
Derecognition | | |
Impairment Dec. 31, | |
| 2023 fiscal year | |
| | |
| | |
| | |
| |
| Trade receivables and contract assets | |
| 6,749 | | |
| (4,197 | ) | |
| – | | |
| 2,552 | |
| 2022 fiscal year | |
| | | |
| | | |
| | | |
| | |
| Trade receivables and contract assets | |
| 6,756 | | |
| 85 | | |
| (92 | ) | |
| 6,749 | |
Liquidity risks arise from the
possibility that funds required to satisfy payment obligations cannot be procured on time.
Within the Kiepe Electric Group,
liquidity risks arise from payment obligations arising from operating transactions or financing obligations. The liquidity and cash management
of Kiepe Electric is conducted through cash-pooling services provided by KB Group companies and profit and loss transfer arrangements
to ensure an efficient liquidity. For further information see Note F.3.4.
The Company monitors the expected
cash outflows on trade and other payables together with the level of expected cash inflows on trade and other receivables.
The following table shows the
remaining contractual maturities of the financial liabilities as of December 31, 2023, and 2022. This relates to undiscounted gross amounts,
including estimated interest payments.
52. MATURITIES
| in €
thousand | |
Carrying amount | | |
Contractually agreed cash flows | | |
Up to 1 year | | |
1 to 5 years | | |
Over 5 years | |
| | |
2023 fiscal year | |
| Liabilities towards credit institutions | |
| 250 | | |
| 250 | | |
| 250 | | |
| – | | |
| – | |
| Loan payables | |
| 2,747 | | |
| 2,747 | | |
| 2,747 | | |
| – | | |
| – | |
| Lease liabilities | |
| 2,792 | | |
| 2,846 | | |
| 578 | | |
| 1,790 | | |
| 478 | |
| Other financial liabilities | |
| 500 | | |
| 500 | | |
| 500 | | |
| – | | |
| – | |
| Trade payables | |
| 25,321 | | |
| 25,321 | | |
| 25,321 | | |
| – | | |
| – | |
| | |
| 31,610 | | |
| 31,664 | | |
| 29,396 | | |
| 1,790 | | |
| 478 | |
| | |
| 2022
fiscal year |
| Loan payables | |
| 2,539 | | |
| 2,539 | | |
| 2,539 | | |
| – | | |
| – | |
| Lease liabilities | |
| 2,528 | | |
| 2,529 | | |
| 639 | | |
| 1,453 | | |
| 437 | |
| Other financial liabilities | |
| 378 | | |
| 378 | | |
| 378 | | |
| – | | |
| – | |
| Trade payables | |
| 20,567 | | |
| 20,567 | | |
| 20,567 | | |
| – | | |
| – | |
| | |
| 26,012 | | |
| 26,013 | | |
| 24,123 | | |
| 1,453 | | |
| 437 | |
Total trade payables in the amount
of € 25,321 thousand (December 2022: € 20,567 thousand), including trade payables to related parties, are due within
one year.
The loan payables, including
accrued interest, totaling € 2,747 thousand (December 31, 2022: € 2,539 thousand) are deemed to be a short-term liability,
as at the reporting date the Company intended and was able to roll over the obligation. For further information see Note F.3.4.
| F.2 | Events after the reporting date |
On January 31, 2024, the PLTA
between KB SfS and Kiepe Electric GmbH was terminated.
On February 6, 2024, Knorr-Bremse
AG, Munich, Germany, (“KB”, together with its direct and indirect subsidiaries the “KB Group”) sold 85 percent
of the Kiepe Electric GmbH share that was held through KB’s wholly owned subsidiaries KB SfS and sold 100 percent of the Kiepe Electric
LLC share that was held through Knorr Brake Holding Corporation, Avon, USA to Heramba GmbH, Düsseldorf, Germany and Heramba Holdings
Inc., Newark, USA (the “Closing”).
A major consortium partner and
customer Van Hool has filed bankruptcy in April 2024. As a result of this at this stage it is uncertain if certain projects with Van Hool
can be fulfilled in the future. This exposes the backlog as of May 2024 of € 46 million. Impairment losses on related contract assets
and trade receivables recognized as of December 31, 2023 amount to € 2,042 thousand and on inventories to € 507 thousand.
In order to provide an opinion
on going concern of Kiepe Electric GmbH a professional services firm has been engaged to prepare an IDW S67
assessment.
On June 19, 2024, Kiepe Electric
GmbH entered into a bridge loan facility agreement with its minority shareholder KB SfS at an amount of up to € 20 million. The bridge
loan is subject to an at arm’s length interest rate. Conditions for the entering into this agreement was the appointment of an independent
expert to prepare an opinion according to the provisions of IDW S6 on the restructuring measures of the Company, the provision of a liquidity
forecast as well as the entering into a lock-up agreement, which prohibits the transfer of shares until the end of the lock-up period.
The repayment of the loan is the earlier of the finalization of the opinion according to the provision of IDW S6 or November 1, 2024.
| 7 | IDW ist the Institute der Wirtschaftsprüfer in Deutschland
e.V. (Institute of Public Auditors in Germany) and S6 referrs to its Standard S6 “Standard zu den Anforderungen an Sanierungskonzepte”. |
| F.3 | Transactions with related parties |
Related parties as defined by
IAS 24 are natural persons or companies that can be influenced by Kiepe Electric, that can exert an influence on Kiepe Electric or that
are under the influence of another related party of Kiepe Electric. Transactions with related parties were conducted at arm’s length.
| F.3.1 | Parent company and ultimate parent entity |
As of December 31, 2023, the
Company is directly controlled by Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, Germany (KB SfS) and Knorr Brake Holding USA which
are both wholly-owned subsidiaries of Knorr-Bremse AG, Germany.
Knorr-Bremse AG is directly controlled
by KB Holding GmbH, Grünwald, Germany, which holds 58.99% of the shares of the Knorr-Bremse AG. The shares in KB Holding are held
by TIB Vermögens- und Beteiligungsholding GmbH, Grünwald, Germany, of which Stella Vermögensverwaltungs GmbH, Grünwald,
Germany in turn holds a majority of the shares. Stella Vermögensverwaltungs GmbH is the ultimate controlling parent company.
| F.3.2 | Remuneration of key management personnel |
The key management personnel
are the Chief Executive Officer of Kiepe Electric GmbH, the Director responsible for E-Systems (KB Group business unit (“BU”)
which Kiepe Electric belongs to) at KB SfS, the members of the Executive Board and the Supervisory Board of Knorr-Bremse AG. For purpose
of the CFS, the remuneration of key management personnel includes:
53. REMUNERATION OF MANAGEMENT
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Compensation of the Managing directors | |
| | |
| |
| Short-term compensation | |
| 516 | | |
| 481 | |
| Other long-term benefits | |
| 100 | | |
| 96 | |
| Total | |
| 616 | | |
| 577 | |
| | |
| | | |
| | |
| Compensation of the Members of the Executive Board of Knorr-Bremse AG | |
| | | |
| | |
| Short-term compensation | |
| 230 | | |
| 124 | |
| Post-employment benefits | |
| 28 | | |
| 22 | |
| Termination benefits | |
| 49 | | |
| 94 | |
| Other long-term benefits | |
| 27 | | |
| – | |
| Share-based payment | |
| – | | |
| 8 | |
| Total | |
| 334 | | |
| 248 | |
| | |
| | | |
| | |
| Compensation of the Members of the Supervisory Board of Knorr-Bremse AG | |
| | | |
| | |
| Short-term compensation | |
| 47 | | |
| 49 | |
| Total | |
| 47 | | |
| 49 | |
The remuneration of the managing
directors responsible for E-Systems includes salaries, pension contributions and long-term incentive payments.
The remuneration of the members
of the Executive Board of Knorr-Bremse AG includes salaries, contributions in kind, pension contributions, termination benefits and share-based
payments. The remuneration of the members of the Supervisory Board of Knorr-Bremse AG includes salary, committee compensation and attendance
fee. Since the Executive and the Supervisory Board of Knorr-Bremse AG mainly provided service to non-Kiepe Electric businesses, their
compensation is only included with the proportional share of allocated services to Kiepe Electric. The proportional share was determined
based on the internal compensation charge relating to Kiepe Electric business.
Income and expense resulting
from transactions with KB group:
| F.3.3 | Transactions with related parties |
54. TRANSACTIONS WITH RELATED PARTIES
| in € thousand | |
2023 | | |
2022 | | |
2021 | |
| Revenue | |
| | |
| | |
| |
| with other related companies | |
| 572 | | |
| 2,650 | | |
| 1,751 | |
| | |
| | | |
| | | |
| | |
| Other operating income | |
| | | |
| | | |
| | |
| with other related companies | |
| 1,199 | | |
| 633 | | |
| 887 | |
| | |
| | | |
| | | |
| | |
| Other operating expenses | |
| | | |
| | | |
| | |
| with Knorr-Bremse AG | |
| (324 | ) | |
| (158 | ) | |
| (572 | ) |
| with other related companies | |
| (5,457 | ) | |
| (3,651 | ) | |
| (4,317 | ) |
| | |
| | | |
| | | |
| | |
| Interest income and expenses | |
| | | |
| | | |
| | |
| with Knorr-Bremse AG | |
| 787 | | |
| 49 | | |
| 6 | |
| with other related companies | |
| 133 | | |
| – | | |
| 18 | |
| | |
| (3,090 | ) | |
| (477 | ) | |
| (2,227 | ) |
The revenue includes the sale
of goods and services to related parties. Other operating income comprises services provided such as human resources and rental income.
Other operating expenses include headquarter fees provided by other related companies of KB Group. Interest income and expenses are further
discussed in Note C.8.
| F.3.4 | Balances with related parties and management |
55. BALANCES WITH RELATED PARTIES AND MANAGEMENT
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Right-of-use assets pursuant to IFRS 16 | |
| | |
| |
| Other related companies | |
| – | | |
| 41 | |
| | |
| | | |
| | |
| Receivables from | |
| | | |
| | |
| Knorr-Bremse AG | |
| | | |
| | |
| thereof trade receivables | |
| 39 | | |
| – | |
| thereof receivables under cash-pooling agreement | |
| – | | |
| 34,033 | |
| Other related companies | |
| | | |
| | |
| thereof receivables from profit and loss transfer agreement | |
| 3,583 | | |
| 16,324 | |
| thereof receivables under cash-pooling agreement | |
| – | | |
| 2,746 | |
| thereof trade receivables | |
| 411 | | |
| 885 | |
| thereof advance payments | |
| 527 | | |
| – | |
| | |
| 4,560 | | |
| 53,988 | |
| | |
| | | |
| | |
| Liabilities to | |
| | | |
| | |
| Knorr-Bremse AG | |
| | | |
| | |
| thereof loan payables | |
| – | | |
| 2,539 | |
| thereof trade payables | |
| – | | |
| 50 | |
| Other related companies | |
| | | |
| | |
| thereof loan payables | |
| 2,747 | | |
| – | |
| thereof trade payables | |
| 1,494 | | |
| 2,152 | |
| thereof advance payments received | |
| 17 | | |
| 607 | |
| | |
| 4,258 | | |
| 5,348 | |
The receivables from the profit
and loss transfer agreement relate to an agreement with KB SfS under which Kiepe Electric GmbH is obligated to transfer its entire profit
for the respective year to KB SfS or to claim compensation of any loss for the year from KB SfS. The basis for measurement of the PLTA
are the results under German GAAP of Kiepe Electric GmbH.
The receivables under the cash-pooling
agreement relate to the liquidity of Kiepe Electric transferred to KB, while the latter dispose, control and allocate its necessary and
available liquidity and provides Kiepe Electric with the required liquidity on a daily basis. As of December 31, 2023, the cash-pooling
agreement has been terminated and the respective receivable has been paid to Kiepe Electric.
The loan payables relate to the
granted loans to Kiepe Electric Schweiz AG. In 2023, this loan agreement has been transferred within KB from KB AG to KB SfS as the lender.
The carrying amount includes one loan of CHF 2,000 thousand that was granted in fiscal year 2018, and a further loan of CHF 500 thousand
that was granted in fiscal year 2020. The interest is based on LIBORCHF plus 0.70% - 1.64% p.a. that is adapted on a 6-months basis, and
0.90% p.a. that is adapted on a 1-month basis, respectively.
The loans are agreed for periods
of one year with an option to extend the term for another twelve months.
| F.4 | Other financial obligations |
56. OTHER FINANCIAL OBLIGATIONS
| in € thousand | |
Up to 1 year | | |
1 to 5 years | | |
Over 5 years | | |
Total | |
| Dec. 31, 2023 | |
| | |
| | |
| | |
| |
| Purchase obligations | |
| 28,949 | | |
| 8,478 | | |
| 2,485 | | |
| 39,912 | |
| Bank guarantees8 | |
| 15,975 | | |
| 31,740 | | |
| 240,268 | | |
| 287,983 | |
| Rent and lease obligations | |
| 24 | | |
| – | | |
| – | | |
| 24 | |
| | |
| 44,948 | | |
| 40,218 | | |
| 242,753 | | |
| 327,919 | |
| | |
| | | |
| | | |
| | | |
| | |
| Dec. 31, 2022 | |
| | | |
| | | |
| | | |
| | |
| Purchase obligations | |
| 26,886 | | |
| 3,059 | | |
| 89 | | |
| 30,034 | |
| Bank guarantees | |
| 13,770 | | |
| 23,119 | | |
| 269,671 | | |
| 306,560 | |
| Rent and lease obligations | |
| 27 | | |
| – | | |
| – | | |
| 27 | |
| | |
| 40,683 | | |
| 26,178 | | |
| 269,760 | | |
| 336,621 | |
| 8 | Due to the Closing on February 6, 2024, Kiepe Electric GmbH
was released from bank guarantees by KB. |
Future rent and lease obligations
result from low-value or short-term leases, which are exempted from recognition in the combined statements of financial position in accordance
with IFRS 16.5.
| F.5 | Legal Disputes and Litigation |
THREAT OF LITIGATION FROM
RUHRBAHN GMBH
In February 2022, Ruhrbahn GmbH
claimed damages in the amount of € 9,080 thousand against the consortium of Kiepe Electric and HeiterBlick GmbH and notified
its intention to take legal actions if payment is not made. Ruhrbahn is basing its claim on the violation of duties and consideration
associated with an appeal on an award procedure from December 31, 2022. The Company successfully defended itself against the claim, as
the Regional Court of Essen rejected Ruhrbahn’s lawsuit in full. Ruhrbahn decided not to file an appeal against the judgment.
SETTLEMENT AGREEMENT WITH
STADLER
Kiepe Electric initiated an independent
evidence procedure regarding alleged defects in vehicles for the Wuppertal suspension railroad. The value in dispute amounts to € 8,000
thousand. The parties have found an agreement on some of the alleged defects. The proceeding continued in respect of a number of remaining
defects. A settlement agreement has been reached with STADLER and payment of € 1,600 thousand has been received. The expert proceedings
have been concluded with reimbursement of unused costs disbursed by Kiepe Electric.
LITIGATION WITH TRAKTIONSSYSTEME
AUSTRIA GMBH
Kiepe Electric as respondent
is party to a litigation initiated by Traktionssysteme Austria GmbH (TSA) as claimant in 2020. TSA claims payment of fees for the delivery
of different drive units in the amount of € 1,955 thousand. Kiepe Electric as a customer and TSA as a supplier have entered
into various supply agreements for drive units and other components in the past. A mediation agreement was signed. In the first six months
of 2023 the litigation has been terminated by a Settlement Agreement between Kiepe Electric and TSA.
LITIGATION WITH FORMER EMPLOYEES
Compared to the period ended
as of December 31, 2022, all litigation claims from former employees of Kiepe Electric have been resolved, and no further claims with
former employees are outstanding.
Kiepe Electric received performance
related government grants in the amount of € 56 thousand in 2023 (2022: € 185 thousand). These government grants include
mainly grants for the reimbursement of social security contributions in connection with the payment of short-time working allowances as
well as grants for research and development projects and integration subsidies.
Refunds of social security contribution
for short-time working allowances in connection with the corona virus pandemic were deducted from personnel expenses of € 108 thousand
in the fiscal year 2022. There are no unfulfilled conditions or other contingencies attached to these grants.
Government grants recognized
in other operating income include mainly grants related to research and development in the amount of € 52 thousand in 2023 (2022:
€ 66 thousand). There were no government grants related to assets in 2023 and 2022.
ACCOUNTING FOR LEASES
The Company has entered into
leases primarily for real estate and vehicles. The respective useful lives are specified in Note B.10. The Company’s commitments
from its leases are collateralized by the lessor’s ownership of the leased assets. Several leases, largely for real estate, include
extension and termination options. The extension and termination options not taken into account amount to € 2,864 thousand
as of December 31, 2023. (December 31, 2022: € 1,755 thousand).
The Company has also concluded
leases for real estate and vehicles and other equipment that have a lease term of twelve months or less and leases for which the underlying
asset is of low value. The Company applies both practical exemptions.
The following table presents
carrying amounts of the right-of-use assets recognized:
57. RIGHT-OF-USE ASSETS
| in €
thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Assets | |
| | |
| |
| Non-current assets | |
| | |
| |
| Right-of-use assets – land and buildings | |
| 2,725 | | |
| 2,427 | |
| Right-of-use assets – other equipment, furniture and fixtures | |
| 51 | | |
| 94 | |
| Total | |
| 2,776 | | |
| 2,521 | |
The following table lists the
additions to right-of-use assets as shown in non-current assets:
58. ADDITIONS TO RIGHT-OF-USE ASSETS
| in €
thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Assets | |
| | |
| |
| Non-current assets | |
| | |
| |
| Right-of-use assets – land and buildings | |
| 976 | | |
| 75 | |
| Right-of-use assets – other equipment, furniture and fixtures | |
| – | | |
| 56 | |
| Total | |
| 976 | | |
| 131 | |
The following table shows the
carrying amounts of the lease liabilities (which are included in financial liabilities) and the changes during the reporting period:
59. LEASE LIABILITIES
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Liabilities | |
| | |
| |
| Non-current financial liabilities | |
| | |
| |
| Lease liabilities | |
| 2,237 | | |
| 1,889 | |
| Current financial liabilities | |
| | | |
| | |
| Lease liabilities | |
| 555 | | |
| 639 | |
| Total | |
| 2,792 | | |
| 2,528 | |
The following amounts were recognized
in profit or loss in the reporting period:
60. AMOUNTS AFFECTING PROFIT OR LOSS
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | | |
Dec. 31,
2021 | |
| Operating expenses | |
| (221 | ) | |
| (215 | ) | |
| (285 | ) |
| Expenses from short-term leases | |
| (4 | ) | |
| (1 | ) | |
| – | |
| Expenses from leases of low value assets | |
| (103 | ) | |
| (118 | ) | |
| – | |
| Expenses from variable lease payments | |
| (55 | ) | |
| (40 | ) | |
| (42 | ) |
| Other expenses from leases (e.g.; incidental expenses) | |
| (59 | ) | |
| (56 | ) | |
| (243 | ) |
| Depreciation, amortization and impairment | |
| (782 | ) | |
| (900 | ) | |
| (882 | ) |
| Depreciation of right-of-use assets – land and buildings | |
| (738 | ) | |
| (796 | ) | |
| (749 | ) |
| Depreciation of right-of-use assets – other | |
| (44 | ) | |
| (104 | ) | |
| (133 | ) |
| Impairment of right-of-use assets | |
| – | | |
| – | | |
| – | |
| Financial result | |
| (31 | ) | |
| (1 | ) | |
| (1 | ) |
| Interest expense on lease liabilities | |
| (31 | ) | |
| (1 | ) | |
| (1 | ) |
The Company had cash outflows
for leases in 2023 of € 901 thousand (2022: € 1,096 thousand). The future cash outflows for short-term leases
and low value leases are disclosed in Note F.4.
JUDGEMENTS
When applying the Company’s
accounting policies, the management made the following judgments that materially influence the amounts in the combined financial statements:
Determination of the
term of leases with extension and termination options – the Company as lessee
The Company determines the lease
terms based on the non-cancelable period of the lease and takes into account periods covered by an option to extend the lease if the Company
is reasonably certain to exercise that option or periods covered by an option to terminate the lease if the Company is reasonably certain
not to exercise that option. The Company has concluded several leases that include extension and termination options. The Company makes
judgments when assessing whether it is reasonably certain to exercise or not to exercise the lease’s extension or termination option.
This means it takes into account all relevant factors that represent an economic incentive for it to exercise the extension or the termination
option. After the commencement date, the Company reassesses the lease term upon the occurrence of a significant event or a change in circumstances
that is within its control and affects whether it is reasonably certain to exercise an option or not to exercise an option to extend or
terminate the lease (e.g.; conducting significant leasehold improvements or significant customization of the underlying asset).
ASSUMPTIONS AND ESTIMATES
When applying the Company’s
accounting policies, the management made the following assumptions and estimates that materially influence the amounts in the combined
financial statements:
Leases – estimate
of the incremental borrowing rate
The Company cannot readily determine
the interest rate implicit in the lease. It therefore uses its incremental borrowing rates to measure lease liabilities. The incremental
borrowing rate is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security,
the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The incremental
borrowing rate thus reflects the interest that the Company would have to pay. If no observable interest rates are available (e.g.; at
subsidiaries that do not enter into financing transactions) or if the interest rate has to be adjusted in order to reproduce the terms
of the lease (e.g.; if the lease was not entered into in the subsidiary’s functional currency), the incremental borrowing rate must
be estimated. The Company estimates the incremental borrowing rate using observable inputs (e.g.; market interest rates), if these are
available, and must make certain company-specific estimates (e.g.; standalone credit assessment of the subsidiary). For purposes of preparation
of these Combined Financial Statements, the incremental borrowing rates of KB Group have been applied due to the fact that Kiepe
Electric was financed by KB Group for the periods presented.
GROUP AS A LESSOR
The Company leased real estate
of their owned commercial properties as well as leased property to tenants under operating leases with monthly rental payments. All leases
are classified as operating (sub)leases. Lease income from operating leases where the Company is a lessor is recognized in other income
on a straight-line basis over the lease term.
The carrying amount of the assets
underlying operating leases relating to land and buildings and other equipment is fully depreciated for the periods presented.
Minimum lease payments receivable
on leases are as follows:
61. MINIMUM LEASE PAYMENTS
| in €
thousand | |
2023 | | |
2022 | |
| | |
| | |
| |
| Within 1 year | |
| 95 | | |
| 95 | |
| Between 1 and 2 years | |
| 95 | | |
| 95 | |
| Between 2 and 3 years | |
| 95 | | |
| 95 | |
| Between 3 and 4 years | |
| 95 | | |
| 95 | |
| Between 4 and 5 years | |
| 95 | | |
| 95 | |
| Later than 5 years | |
| – | | |
| 95 | |
Kiepe Electric GmbH entered into
a lease agreement as a lessor with fixed lease payments until 2028.
| G. | ENTITY-WIDE INFORMATION |
| G.1 | Basics of segmentation |
The Company operates as one reportable
segment since it is managed as one integrated business. Kiepe Electric focuses on offering environmentally friendly e-engineering solutions
for a range of vehicles.
The Company plays a key role
in the development, sales and services of environmentally friendly electrical equipment for tramcars, light rail vehicles, metro vehicles
and regional vehicles as well as battery buses, trolleybuses and In- Motion-Charging buses.
The Chief Operating Decision
Maker (“CODM”) reviews internal management reports on a monthly basis and is able to allocate resources and assess the performance
of the whole Company.
| G.2 | Information on the business |
Revenue within the segment is
presented on a consolidated basis. Internal reporting does not contain any segment-specific information on assets and liabilities or any
profit information.
Revenue from the Original Equipment
Manufacturer (“OE”) project business (RVS and EVS) includes revenue generated with the sale of electrical equipment for vehicles.
The aftermarket & sales, modernization revenue mainly comes from spare parts, the repair center, cost-saving maintenance contracts
as well as test and measuring instruments. The following table shows the revenue split into OE projects and aftermarket & sales, modernization.
63 REVENUE BY TYPE OF PRODUCT
| in €
thousand | |
2023 | | |
2022 | | |
2021 | |
| OE projects (RVS and EVS) | |
| 115,216 | | |
| 75,484 | | |
| 69,477 | |
| Aftermarket & Sales, Modernization | |
| 37,591 | | |
| 44,304 | | |
| 39,788 | |
| | |
| 152,807 | | |
| 119,788 | | |
| 109,265 | |
| G.3 | Geographical information |
The following table shows the
Company’s revenue by region of the respective customer and non-current assets, broken down by country of domicile of the legal entities
of the Company.
In 2023, the revenues in “other”
increased due to a volume increase of a service and modernization agreement in the Asia-Pacific region.
The negative revenue of € 85
thousand in 2021, results from a carve-out adjustment made to revenue which was previously not recognized over time due to immateriality.
64. REVENUE BY REGION
| in €
thousand | |
2023 | | |
2022 | | |
2021 | |
| Europe/Africa | |
| 136,670 | | |
| 109,579 | | |
| 100,519 | |
| thereof Germany | |
| 73,911 | | |
| 46,930 | | |
| 59,321 | |
| North America | |
| 13,328 | | |
| 9,846 | | |
| 8,831 | |
| thereof USA | |
| 5,764 | | |
| 6,068 | | |
| 6,286 | |
| Other | |
| 2,809 | | |
| 363 | | |
| (85 | ) |
| | |
| 152,807 | | |
| 119,788 | | |
| 109,265 | |
65. NON-CURRENT ASSETS BY REGION
| in € thousand | |
Dec. 31,
2023 | | |
Dec. 31,
2022 | |
| Europe/Africa | |
| 36,021 | | |
| 35,496 | |
| thereof Germany | |
| 34,148 | | |
| 33,531 | |
| North America | |
| 107 | | |
| 278 | |
| thereof USA | |
| 62 | | |
| 217 | |
| | |
| | | |
| | |
| Goodwill | |
| 4,321 | | |
| 4,321 | |
| | |
| 40,449 | | |
| 40,095 | |
Non-current assets consist of
property, plant and equipment, goodwill and other intangible assets.
The business is not significantly
dependent on external third parties. The Company did not generate more than 10% of its revenue with one customer in any of the years presented.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
Audited
Financial Statements
As
of and for the years ended December 31, 2023 and 2022
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
INDEX
TO FINANCIAL STATEMENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Shareholders and Board of Directors of
Project
Energy Reimagined Acquisition Corp.
Opinion
on the Financial Statements
We
have audited the accompanying balance sheets of Project Energy Reimagined Acquisition Corp. (the “Company”) as of December
31, 2023 and 2022, the related statements of operations, changes in shareholders’ deficit, and cash flows for each of the two years
in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In
our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023,
in conformity with accounting principles generally accepted in the United States of America.
Explanatory
Paragraph - Going Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note
1 to the financial statements, the Company is a Special Purpose Acquisition Corporation that was formed for the purpose of completing
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more
businesses on or before May 2, 2024. The Company entered into a business combination agreement with a business combination target on
October 2, 2023; however, the completion of this transaction is subject to the approval of the Company’s shareholders among other
conditions. There is no assurance that the Company will obtain the necessary approvals, satisfy the required closing conditions, raise
the additional capital it needs to fund its operations, and complete the transaction prior to May 2, 2024, if at all. The Company also
has no approved plan in place to extend the business combination deadline and fund operations for any period of time after May 2, 2024,
in the event that it is unable to complete a business combination by that date. These matters raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans with regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or
fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the
purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express
no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
/s/
Marcum llp
Marcum
llp
We
have served as the Company’s auditor since 2021.
Houston,
TX
April 16, 2024
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
BALANCE SHEETS
| | |
December 31,
2023 | | |
December 31,
2022 | |
| | |
| | |
| |
| Assets | |
| | |
| |
| Current assets | |
| | | |
| | |
| Cash | |
$ | 127,624 | | |
$ | 515,534 | |
| Prepaid expenses and other current assets | |
| - | | |
| 226,094 | |
| Total current assets | |
| 127,624 | | |
| 741,628 | |
| Investments held in trust account | |
| 115,981,606 | | |
| 267,475,787 | |
| Deferred offering costs | |
| 17,393,949 | | |
| - | |
| Total Assets | |
$ | 133,503,179 | | |
$ | 268,217,415 | |
| | |
| | | |
| | |
| Liabilities and Shareholders’ Deficit: | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable | |
$ | 1,605,457 | | |
$ | 97,919 | |
| Accrued expenses | |
| 2,435,615 | | |
| 437,406 | |
| Accrued expenses - related party | |
| 395,000 | | |
| 65,000 | |
| Promissory note - related party | |
| 500,000 | | |
| - | |
| Total current liabilities | |
| 4,936,072 | | |
| 600,325 | |
| Warrant liabilities | |
| 660,831 | | |
| 864,575 | |
| Derivative liability - forward purchase agreement | |
| - | | |
| 318,735 | |
| Accrued offering costs | |
| 17,393,949 | | |
| - | |
| Deferred underwriting fee payable | |
| - | | |
| 9,232,181 | |
| Total Liabilities | |
| 22,990,852 | | |
| 11,015,816 | |
| | |
| | | |
| | |
| Commitments (Note 6) | |
| | | |
| | |
| Class A ordinary shares, $0.0001 par value, subject to possible redemption; 10,879,358 and 26,377,660 shares at redemption value as of December 31, 2023 and 2022, respectively | |
| 115,881,606 | | |
| 267,375,787 | |
| | |
| | | |
| | |
| Shareholders’ Deficit: | |
| | | |
| | |
| Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | |
| - | | |
| - | |
| Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 6,594,414 and 0 issued and outstanding (excluding 10,879,358 and 26,377,660 shares subject to possible redemption) as of December 31, 2023 and 2022, respectively | |
| 660 | | |
| - | |
| Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 1 and 6,594,415 shares issued and outstanding as of December 31, 2023 and 2022, respectively | |
| - | | |
| 660 | |
| Additional paid-in capital | |
| - | | |
| - | |
| Accumulated deficit | |
| (5,369,939 | ) | |
| (10,174,848 | ) |
| Total Shareholders’ Deficit | |
| (5,369,279 | ) | |
| (10,174,188 | ) |
| Total Liabilities and Shareholders’ Deficit | |
$ | 133,503,179 | | |
$ | 268,217,415 | |
The
accompanying notes are an integral part of these financial statements
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
STATEMENTS OF OPERATIONS
| | |
For the years ended
December 31, | |
| | |
2023 | | |
2022 | |
| Operating costs | |
$ | 4,949,751 | | |
$ | 1,785,935 | |
| Loss from operations | |
| (4,949,751 | ) | |
| (1,785,935 | ) |
| Gain on investments held in Trust Account | |
| - | | |
| 2,900 | |
| Interest and dividend income on investments held in Trust Account | |
| 9,786,497 | | |
| 3,699,187 | |
| Unrealized (loss) gain on fair value of derivative liability - forward purchase agreement | |
| (1,849,265 | ) | |
| 119,065 | |
| Unrealized gain on fair value of warrant liabilities | |
| 203,744 | | |
| 11,239,468 | |
| Gain on waiver of deferred underwriting commissions by underwriter | |
| 456,993 | | |
| - | |
| Net income | |
$ | 3,648,218 | | |
$ | 13,274,685 | |
| | |
| | | |
| | |
| Basic and diluted weighted average shares outstanding, Class A ordinary shares | |
| 22,669,740 | | |
| 26,377,660 | |
| Basic and diluted net income per share, Class A ordinary shares | |
$ | 0.14 | | |
$ | 0.40 | |
| Basic and diluted weighted average shares outstanding, Class B ordinary shares | |
| 3,848,248 | | |
| 6,594,415 | |
| Basic and diluted net income per share, Class B ordinary shares | |
$ | 0.14 | | |
$ | 0.40 | |
The
accompanying notes are an integral part of these financial statements.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR
THE YEAR ENDED DECEMBER 31, 2023
| | |
Ordinary Shares | | |
Additional | | |
| | |
Total | |
| | |
Class A | | |
Class B | | |
Paid-in | | |
Accumulated | | |
Shareholders’ | |
| | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
| Balance as of January 1, 2023 | |
| - | | |
$ | - | | |
| 6,594,415 | | |
$ | 660 | | |
$ | - | | |
$ | (10,174,848 | ) | |
$ | (10,174,188 | ) |
| Waiver of deferred underwriting commissions by underwriter (see Note 6) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 8,775,188 | | |
| 8,775,188 | |
| Conversion of Class B common shares to Class A common shares | |
| 6,594,414 | | |
| 660 | | |
| (6,594,414 | ) | |
| (660 | ) | |
| - | | |
| - | | |
| - | |
| Remeasurement of ordinary shares subject to redemption, to redemption value | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (9,786,497 | ) | |
| (9,786,497 | ) |
| Extinguishment of forward purchase agreement | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,168,000 | | |
| 2,168,000 | |
| Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 3,648,218 | | |
| 3,648,218 | |
| Balance as of December 31, 2023 | |
| 6,594,414 | | |
$ | 660 | | |
| 1 | | |
$ | - | | |
$ | - | | |
$ | (5,369,939 | ) | |
$ | (5,369,279 | ) |
FOR
THE YEAR ENDED DECEMBER 31, 2022
| | |
Ordinary Shares | | |
Additional | | |
| | |
Total | |
| | |
Class A | | |
Class B | | |
Paid-in | | |
Accumulated | | |
Shareholders’ | |
| | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
| Balance as of January 1, 2022 | |
| - | | |
$ | - | | |
| 6,594,415 | | |
$ | 660 | | |
$ | - | | |
$ | (19,850,346 | ) | |
$ | (19,849,686 | ) |
| Remeasurement of ordinary shares subject to redemption, to redemption value | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (3,599,187 | ) | |
| (3,599,187 | ) |
| Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 13,274,685 | | |
| 13,274,685 | |
| Balance as of December 31, 2022 | |
| - | | |
| - | | |
| 6,594,415 | | |
$ | 660 | | |
$ | - | | |
$ | (10,174,848 | ) | |
$ | (10,174,188 | ) |
The
accompanying notes are an integral part of these financial statements.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
STATEMENTS OF CASH FLOWS
| | |
For the years ended
December 31, | |
| | |
2023 | | |
2022 | |
| Cash Flows from Operating Activities: | |
| | |
| |
| Net income | |
$ | 3,648,218 | | |
$ | 13,274,685 | |
| Adjustments to reconcile net income to net cash used in operating activities: | |
| | | |
| | |
| Gain on investments held in Trust Account | |
| - | | |
| (2,900 | ) |
| Interest and dividend income on investments held in Trust Account | |
| (9,786,497 | ) | |
| (3,699,187 | ) |
| Unrealized loss (gain) on fair value of derivative liability - forward purchase agreement | |
| 1,849,265 | | |
| (119,065 | ) |
| Unrealized gain on fair value of warrant liabilities | |
| (203,744 | ) | |
| (11,239,468 | ) |
| Gain on waiver of deferred underwriting commissions by underwriter | |
| (456,993 | ) | |
| - | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Prepaid expenses and other current assets | |
| 226,094 | | |
| 387,642 | |
| Accounts payable | |
| 1,507,538 | | |
| 8,842 | |
| Accrued expenses | |
| 1,998,209 | | |
| 358,684 | |
| Accrued offering costs | |
| - | | |
| (12,632 | ) |
| Accrued expenses - related party | |
| 330,000 | | |
| 65,000 | |
| Net cash used in operating activities | |
| (887,910 | ) | |
| (978,399 | ) |
| | |
| | | |
| | |
| Cash Flows from Investing Activities: | |
| | | |
| | |
| Withdrawal from Trust Account for payment to redeeming shareholders | |
| 161,280,678 | | |
| - | |
| Net cash provided by investing activities | |
| 161,280,678 | | |
| - | |
| | |
| | | |
| | |
| Cash Flows from Financing Activities: | |
| | | |
| | |
| Proceeds from promissory note - related party | |
| 500,000 | | |
| - | |
| Payment to redeeming shareholders | |
| (161,280,678 | ) | |
| - | |
| Net cash used in financing activities | |
| (160,780,678 | ) | |
| - | |
| | |
| | | |
| | |
| Net Change in Cash | |
| (387,910 | ) | |
| (978,399 | ) |
| Cash - Beginning of period | |
| 515,534 | | |
| 1,493,933 | |
| Cash - End of period | |
$ | 127,624 | | |
$ | 515,534 | |
| | |
| | | |
| | |
| Non-cash investing and financing activities: | |
| | | |
| | |
| Deferred offering costs | |
$ | 17,393,949 | | |
$ | - | |
| Remeasurement of Class A ordinary shares to redemption amount | |
$ | 9,786,497 | | |
$ | 3,599,187 | |
| Extinguishment of forward purchase agreement | |
| 2,168,000 | | |
| - | |
| Waiver of deferred underwriting commissions by underwriter (see Note 6) | |
$ | 9,232,181 | | |
$ | - | |
The
accompanying notes are an integral part of these financial statements.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE
1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN
Project
Energy Reimagined Acquisition Corp. (the “Company”) is a blank check company incorporated in the Cayman Islands on February
10, 2021. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company
is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and
emerging growth companies.
As
of December 31, 2023, the Company had not commenced any operations. All activity for the period from February 10, 2021 (inception) through
December 31, 2023 relates to the Company’s formation and the preparation of its initial public offering (“Initial Public
Offering”), as described below, and since the closing of the Initial Public Offering, the search for a target for the Business
Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at
the earliest. The Company generates non-operating income in the form of dividend income, interest income or gains on investments on the
cash and investments held in a trust account from the proceeds derived from the Initial Public Offering. The Company has selected December
31 as its fiscal year end.
The
registration statement for the Company’s Initial Public Offering was declared effective on October 28, 2021. On November 2, 2021,
the Company consummated the Initial Public Offering of 25,000,000 units (the “Units” and, with respect to the Class A ordinary
shares included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $250,000,000, which
is discussed in Note 3.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 8,150,000 warrants (the “Private Placement
Warrants”), at a price of $1.00 per Private Placement Warrant, in a private placement to Smilodon Capital, LLC (the “Sponsor”),
generating gross proceeds of $8,150,000, which is discussed in Note 4.
The
Company had granted the underwriters in the Initial Public Offering a 45-day option to purchase up to 3,750,000 additional Units to cover
over-allotments, if any (see Note 6). On November 12, 2021, the underwriters partially exercised the over-allotment option and on November
17, 2021 purchased an additional 1,377,660 Units (the “Over-Allotment Units”), generating gross proceeds of $13,776,600.
Simultaneously
with the closing of the partial exercise of the over-allotment option, the Company consummated the sale of 275,532 warrants (the “Over-Allotment
Warrants”) at a purchase price of $1.00 per warrant in a private placement to the Sponsor, generating gross proceeds of $275,532.
Upon
the closing of the Initial Public Offering and the sales of the Over-Allotment Units and Over-Allotment Warrants, an amount of $263,776,600
($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering, the sale of the Private Placement Warrants,
the sale of the Over-Allotment Units, and the sale of the Over-Allotment Warrants was placed in a trust account (the “Trust Account”)
and invested only in U.S. government treasury obligations with maturities of 185 days or less or in money market funds meeting certain
conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury
obligations, until the earlier of: (i) the completion of the initial Business Combination; (ii) the redemption of any Public Shares properly
tendered in connection with a shareholder vote to amend the amended and restated memorandum and articles of association (the “Amended
and Restated Memorandum and Articles of Association”) to modify the substance or timing of the Company’s obligation to redeem
100% of the Public Shares if the Company does not complete the initial Business Combination within the Combination Period (as defined
below) or with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity;
and (iii) absent an initial Business Combination within the Combination Period, the return of the funds held in the Trust Account to
the holders of the Public Shares (the “Public Shareholders”) as part of the redemption of the Public Shares. If the Company
is unable to complete the initial Business Combination, the Company’s Public Shareholders may only receive their pro rata portion
of the funds in the Trust Account that are available for distribution to Public Shareholders, and the warrants will expire worthless.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The
Company will provide its Public Shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion
of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means
of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender
offer will be made by the Company, in its sole discretion. The Public Shareholders will be entitled to redeem their Public Shares for
a pro rata portion of the amount held in the Trust Account (initially $10.00 per share), calculated as of two business days prior to
the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its tax obligations. There will be no redemption rights upon the completion of a Business Combination
with respect to the Company’s warrants. The Class A ordinary shares are recorded at redemption value and classified as temporary
equity upon the completion of the Initial Public Offering, in accordance with the Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity (“ASC 480”).
The
Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation of such
Business Combination and a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not
required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business
or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association as then in effect, conduct
the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer
documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a
Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s
management team have agreed to vote any Founder Shares (as defined in Note 5) held by them, and any Public Shares purchased by them in
or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to
redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or vote at all.
If
the Company seeks shareholder approval of the initial Business Combination and the Company does not conduct redemptions in connection
with the initial Business Combination pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association
provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is
acting in concert or as a “group” (as defined in Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the
Initial Public Offering without the Company’s prior consent (the “Excess Shares”). However, the Company would not be
restricting the shareholders’ ability to vote all of their shares (including Excess Shares) for or against the initial Business
Combination. The shareholders’ inability to redeem the Excess Shares will reduce their influence over the ability to complete the
initial Business Combination, and such shareholders could suffer a material loss in their investment if they sell such Excess Shares
on the open market. Additionally, such shareholders will not receive redemption distributions with respect to the Excess Shares if the
Company completes the initial Business Combination. As a result, such shareholders will continue to hold that number of shares exceeding
15% and, in order to dispose such shares would be required to sell their shares in open-market transactions, potentially at a loss.
The
Sponsor, Anchor Investors (as defined below in Note 5) and management team have agreed to (i) waive their redemption rights with respect
to any Founder Shares and, solely with respect to the Sponsor and management team, Public Shares they hold in connection with the completion
of an initial Business Combination, (ii) waive their redemption rights with respect to any Founder Shares and, solely with respect to
the Sponsor and management team, Public Shares they hold in connection with a shareholder vote to approve an amendment to the Amended
and Restated Memorandum and Articles of Association to modify the substance or timing of the Company’s obligation to redeem 100%
of the Public Shares if the Company has not consummated an initial Business Combination within the Combination Period or with respect
to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity and (iii) waive
their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to
complete an initial Business Combination within the Combination Period (as defined below). However, if the Sponsor or Anchor Investors
acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from
the Trust Account if the Company fails to complete a Business Combination within the Combination Period (as defined below).
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The
Anchor Investors are not required to (i) hold any Units, Class A ordinary shares or warrants they may purchase in the Initial Public
Offering or thereafter for any amount of time, (ii) vote any Class A ordinary shares they may own at the applicable time in favor of
the Business Combination or (iii) refrain from exercising their right to redeem their Public Shares at the time of the Business Combination.
The Anchor Investors have the same rights to the funds held in the Trust Account with respect to the Class A ordinary shares.
The
Amended and Restated Memorandum and Articles of Association provided that the Company would have only 18 months from the closing of Initial
Public Offering (or 21 months from the closing of the Initial Public Offering if the Company executed a letter of intent, agreement in
principle, or definitive agreement for an initial Business Combination within 18 months from the closing of the Initial Public Offering,
but had not completed an initial Business Combination within such 18-month period) to complete an initial Business Combination. The Company
entered into a non-binding letter of intent, dated as of April 25, 2023, with respect to an initial Business Combination, that automatically
extended the period that the Company had to complete an initial Business Combination to August 2, 2023 pursuant to the Amended and Restated
Memorandum and Articles of Association. On August 1, 2023, the Company held an extraordinary general meeting in lieu of the 2023 annual
general meeting of shareholders of the Company (the “Extraordinary General Meeting”). At the Extraordinary General Meeting,
the Company’s shareholders approved, among other matters, the extension of the date by which the Company must consummate an initial
Business Combination from August 2, 2023 to May 2, 2024, or such earlier date as determined by the Company’s board of directors
(the “Combination Period”), for a total extension of up to nine months (collectively, the “Extension”). If the
Company is unable to complete an initial Business Combination within the Combination Period (or such later date as may be approved by
the Company’s shareholders at a meeting called for such purpose at which the Company’s shareholders will be given the opportunity
to have their Public Shares redeemed for a pro rata portion of the funds in the Trust Account), the Company will then liquidate in accordance
with the Amended and Restated Memorandum and Articles of Association. If the Company is unable to complete an initial Business Combination
within the Combination Period or during any extension period, the Company will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the
Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights
as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve,
subject, in the case of clauses (ii) and (iii) to the obligations under Cayman Islands law to provide for claims of creditors and the
other requirements of applicable law. There will be no redemption rights or liquidating distributions with respect to the warrants, which
will expire worthless if the Company fails to complete an initial Business Combination within the Combination Period.
The
underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the
event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included
with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In April 2023, the
underwriters further waived their rights to 100% of the deferred underwriting commission (see Note 6).
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent
any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company
has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the
amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held
in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in
the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable)
nor will it apply to any claims under the indemnity of the underwriters of the Initial Public Offering against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor
to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds
to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore,
the Company cannot assure you that the Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully
made against the Trust Account, the funds available for the initial Business Combination and redemptions could be reduced to less than
$10.00 per Public Share. In such event, the Company may not be able to complete the initial Business Combination, and you would receive
such lesser amount per share in connection with any redemption of the Public Shares. None of the officers or directors will indemnify
the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
On
July 25, 2023, the Company entered into one or more agreements (the “Non-Redemption Agreements”) with one or more unaffiliated
third parties in exchange for them each agreeing not to redeem an aggregate of 760,000 Public Shares in connection with certain proposals
considered and voted upon at the Extraordinary General Meeting, in exchange for the Company agreeing to issue or cause to be issued to
each such investor 138,000 Class A ordinary shares (“Post-Combination Shares”) at the time of the Company’s initial
Business Combination. The Company subsequently entered into additional Non-Redemption Agreements with unaffiliated third parties on the
same or similar terms reflecting the above ratio of non-redeemed Class A ordinary shares to Post-Combination Shares, in each case with
respect to the Extraordinary General Meeting. Pursuant to all such Non-Redemption Agreements, the Company has agreed to issue or cause
to be issued to such investors an aggregate of 1,645,596 Post-Combination Shares. In addition, the Company has agreed that it will not
utilize any funds from the Trust Account to pay any potential excise taxes that may become due pursuant to the Inflation Reduction Act
of 2022 upon a redemption of Public Shares, including in connection with the Extension, an initial Business Combination or liquidation
of the Company.
At
the Extraordinary General Meeting, the Company’s shareholders approved the following items: (i) a proposal to amend the Amended
and Restated Memorandum and Articles of Association to provide for the Extension (the “Extension Amendment Proposal”); (ii)
a proposal to amend the Amended and Restated Memorandum and Articles of Association to eliminate (a) the limitation that the Company
shall not redeem Public Shares in an amount that would cause the Company’s net tangible assets to be less than $5,000,001 following
such redemptions and (b) the limitation that the Company shall not consummate an initial Business Combination unless the Company has
net tangible assets of at least $5,000,001 upon consummation of such Business Combination (the “Redemption Limitation Amendment
Proposal”); (iii) a proposal to amend the Amended and Restated Memorandum and Articles of Association to provide for the right
of holders of Class B ordinary shares to convert such Class B ordinary shares into Class A ordinary shares on a one-for-one basis at
any time and from time to time at the option of the holder (the “Founder Share Amendment Proposal”, and collectively with
the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal, the “Articles Amendment Proposals”); (iv)
a proposal to amend the investment management trust agreement, dated as of October 28, 2021, by and between the Company and Continental
Stock Transfer & Trust Company, to provide for the Extension (the “Trust Amendment”, and such proposal, the “Trust
Amendment Proposal”); (v) a proposal to re-appoint Michael Browning to the board of directors to serve until the third annual general
meeting of shareholders following the Extraordinary General Meeting or until his successor is elected and qualified; and (vi) a proposal
to ratify the selection by the Company’s audit committee of Marcum LLP to serve as the Company’s independent registered public
accounting firm for the fiscal year ending December 31, 2023.
Effective
upon the approval of the Articles Amendment Proposals and the Trust Amendment Proposal, on August 1, 2023, (i) the Amended and Restated
Memorandum and Articles of Association were amended pursuant to the resolutions set forth in the Articles Amendment Proposals, and (ii)
the Company entered into the Trust Amendment with Continental Stock Transfer & Trust Company, as trustee.
On
August 1, 2023, in connection with and following the approval of the Articles Amendment Proposals and the Trust Amendment Proposal, (i)
holders of 6,594,414 Class B ordinary shares voluntarily elected to convert such Class B ordinary shares to Class A ordinary shares,
on a one-for-one basis, in accordance with the Amended and Restated Memorandum and Articles of Association as amended pursuant to the
Articles Amendment Proposals (collectively, the “Class B Conversion”), and (ii) the Public Shareholders elected to redeem
15,498,302 Class A ordinary shares at a redemption price of approximately $10.41 per share, for an aggregate redemption amount of approximately
$161.3 million (the “Redemption”). After the satisfaction of the Redemption, the balance in the Trust Account was approximately
$113.2 million. Upon completion of the Class B Conversion followed by the Redemption, 17,473,772 Class A ordinary shares (including 10,879,358
shares subject to possible redemption) and one Class B ordinary share remain issued and outstanding.
Proposed
Business Combination
On
October 2, 2023, the Company entered into a business combination agreement (as may be amended, supplemented, or otherwise modified from
time to time, the “Business Combination Agreement”) with Heramba Electric plc, an Irish public limited company duly incorporated
under the laws of Ireland (“Holdco”), Heramba Merger Corp., an exempted company incorporated in the Cayman Islands with limited
liability (“Merger Sub”), Heramba Limited, an Irish private company limited by shares duly incorporated under the laws of
Ireland (the “Seller”), and Heramba GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung)
established under the laws of Germany (“Heramba”), which provides for a proposed business combination through a series of
related transactions (collectively, the “Proposed Business Combination”).
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
On
December 6, 2023, Holdco initially filed with the SEC a registration statement on Form F-4 (the “Form F-4”) in connection
with the Proposed Business Combination, which was subsequently amended on January 16, 2024, February 27, 2024 and March 15, 2024. The
Form F-4 contains a preliminary proxy statement/prospectus that constitutes (i) a preliminary proxy statement relating to the Proposed
Business Combination in connection with the Company’s solicitation of proxies for the vote by its shareholders regarding the Proposed
Business Combination and related matters, as described in the Form F-4, and (ii) a preliminary prospectus relating to, among other things,
the offer of the securities to be issued by Holdco in connection with the Proposed Business Combination.
On
March 19, 2024, the Form F-4 was declared effective by the SEC, and Holdco and the Company filed the definitive proxy statement/prospectus
with the SEC. On or about March 19, 2024, the Company commenced the mailing of the definitive proxy statement/prospectus related to the
Proposed Business Combination (the “definitive proxy statement/prospectus”) and other relevant documents to its shareholders
as of March 1, 2024, the record date established for voting on the Proposed Business Combination. The terms of the Business Combination
Agreement and other related ancillary agreements, including those noted below, are summarized in more detail in the Form F-4 and the
definitive proxy statement/prospectus.
On
March 28, 2024, the Company held an extraordinary general meeting of shareholders (the “Business Combination Meeting”) to
consider and vote upon the proposals set forth in the definitive proxy statement/prospectus. At the Business Combination Meeting, the
Company’s shareholders approved the Proposed Business Combination and related matters. The Company expects the Proposed Business
Combination to close as soon as practicable.
Business
Combination Agreement
Pursuant
to the Business Combination Agreement, each of the following transactions will occur in the following order: (i) immediately prior to
the effective time of the Merger (as defined below) (the “Merger Effective Time”), (1) each of the Company’s issued
and outstanding Units will be automatically separated into its component securities (the “Unit Separation”) and (2) the sole
issued and outstanding Class B ordinary share will be automatically converted into one Class A ordinary share (such conversion, the “Closing
Class B Conversion”); (ii) at the Merger Effective Time, the Company will enter into a plan of merger with Merger Sub, pursuant
to which Merger Sub will merge with and into our company (the “Merger”), with the Company being the surviving company in
the Merger (the “Surviving Company”) and becoming a direct, wholly owned subsidiary of Holdco; (iii) at the Merger Effective
Time, (a) each Class A ordinary share issued and outstanding immediately prior to the Merger Effective Time (which, for the avoidance
of doubt, will include the Class A ordinary shares held as a result of the Unit Separation and the Closing Class B Conversion) will be
automatically cancelled in exchange for the right to be issued one ordinary share in the capital of Holdco with a nominal value of €0.0001
(“Holdco Ordinary Shares”), (b) each Public Warrant will remain outstanding but will be automatically adjusted to become
one Holdco public warrant (“Holdco Public Warrants”), (c) each Private Placement Warrant will remain outstanding but will
be automatically adjusted to become one Holdco private warrant (“Holdco Private Warrants”), (d) each Class A ordinary share
properly tendered for redemption and issued and outstanding immediately prior to the Merger Effective Time will be automatically cancelled
and cease to exist and will thereafter represent only the right to be paid a pro rata portion of the Trust Account pursuant to the Articles,
(e) each dissenting ordinary share issued and outstanding immediately prior to the Merger Effective Time held by a dissenting shareholder
will be automatically cancelled and cease to exist and will thereafter represent only the right to be paid the fair value of such dissenting
ordinary share and such other rights as are granted by the Companies Act (As Revised) of the Cayman Islands and (f) each ordinary share
of Merger Sub issued and outstanding at the Merger Effective Time will be automatically cancelled in consideration for the issuance of
one validly issued, fully paid and non-assessable ordinary share of par value $1.00 in the Surviving Company; (iv) immediately following
the Merger Effective Time, pursuant to a transfer agreement to be entered into by and between the Seller and Holdco, the Seller will
transfer as a contribution to Holdco, and Holdco will assume from the Seller, the shares in Heramba, all of which are held by the Seller,
in exchange for the issuance by Holdco of 36,700,000 Holdco Ordinary Shares (the “Share Consideration”) to Seller; and (v)
all deferred ordinary shares in the capital of Holdco with a nominal value of €1.00 each (“Holdco Deferred Shares”)
shall within one month of the Merger Effective Time be surrendered by the holder thereof to Holdco for nil consideration and such Holdco
Deferred Shares shall thereafter be held as treasury shares by Holdco in satisfaction of the minimum capital requirements for a public
limited company under Irish law.
The
consummation of the Proposed Business Combination is subject to a number of conditions set forth in the Business Combination Agreement
including, among others, the Holdco Ordinary Shares being approved for listing on Nasdaq or another national securities exchange and
the execution of various transaction agreements. There can be no assurance as to whether or when the Proposed Business Combination will
be consummated.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
Heramba
Sole Shareholder Written Consent
Concurrently
with the execution and delivery of the Business Combination Agreement, the Seller, as the sole shareholder of Heramba, delivered to the
Company a written consent pursuant to which, among other things, it approved the execution of the Business Combination Agreement and
related ancillary agreements, and approved the transactions contemplated thereby.
Sponsor
Support Agreement
Concurrently
with the execution and delivery of the Business Combination Agreement, the Company entered into a sponsor support agreement with Heramba
and the Sponsor, pursuant to which, among other things, the Sponsor (a) agreed to vote any ordinary shares held by it as of the record
date established for voting on the Proposed Business Combination in favor of the Business Combination Agreement, the Proposed Business
Combination and each of the proposals set forth in the Form F-4, and against any action that would reasonably be expected to impede the
completion of the Proposed Business Combination as described therein, (b) agreed not to transfer such shares until the earliest of the
closing of the Proposed Business Combination (the “Closing”) or the termination of the Business Combination Agreement, except
as set forth therein, (c) agreed not to redeem such shares in connection with the Proposed Business Combination (which waiver of redemption
rights was initially provided in connection with the Initial Public Offering in consideration for receipt of Founder Shares, and for
certain covenants and commitments pursuant to a letter agreement entered into at the time of the Initial Public Offering, and without
any separate consideration paid in connection with providing such waiver) and (d) waived certain anti-dilution rights with respect to
any such shares that are Class B ordinary shares.
Share
Contribution Agreement
In
connection with the Closing, the Seller and Holdco will enter into a transfer agreement immediately following the Merger Effective Time,
pursuant to which the Seller will transfer as a contribution to Holdco, and Holdco will assume from the Seller, all of the shares in
Heramba, in exchange for the issuance by Holdco of the Share Consideration to the Seller.
Lock-Up
Agreement
In
connection with the Closing, Holdco and certain holders of Holdco securities upon the Closing, including the Sponsor, certain of the
Company’s directors and executive officers and certain Heramba shareholders holding greater than 5% of the outstanding Holdco Ordinary
Shares upon the Closing, will enter into a lock-up agreement (the “Lock-Up Agreement”), pursuant to which, among other things,
each of such holders will agree to not effect any sale or distribution of the Lock-Up Securities (as defined therein), subject to certain
customary exceptions set forth in the Lock-Up Agreement, until the earliest of: (i) the twelve month anniversary of the date of the Closing
(the “Closing Date”), (ii) such time that the trading price of the Holdco Ordinary Shares equals or exceeds $12.00 per share
(as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading
day period commencing at least 150 calendar days after the Closing Date, and (iii) such date on which Holdco completes a liquidation,
merger, share exchange, reorganization or other similar transaction that results in all Holdco shareholders having the right to exchange
their Holdco Ordinary Shares for cash, securities or other property. The Lock-Up Securities include up to 5,422,698 Holdco Ordinary Shares
to be issued in exchange for the Founder Shares held by the Sponsor and certain of the Company’s officers and directors, and 34,000,000
Holdco Ordinary Shares to be held by certain Heramba shareholders.
Registration
Rights Agreement
In
connection with the Closing, Holdco and certain holders of Holdco securities upon the Closing, including the Sponsor, will enter into
a registration rights agreement, pursuant to which, among other things, Holdco will agree to register for resale, pursuant to Rule 415
under the Securities Act, certain Holdco Ordinary Shares and other equity securities of Holdco that are held by the parties thereto from
time to time. In addition, Holdco will agree to provide such holders with customary demand and piggyback registration rights with respect
to the Registrable Securities (as defined therein). Such Registrable Securities are expected to include up to 6,594,415 Holdco Ordinary
Shares to be issued in exchange for the Founder Shares, 8,425,532 Holdco Private Warrants resulting from the automatic adjustment of
the Private Placement Warrants at the Merger Effective Time (and the Holdco Ordinary Shares underlying such Holdco Private Warrants),
1,645,596 Holdco Ordinary Shares to be issued as the Post-Combination Shares under the Non-Redemption Agreements, and 36,700,000 Holdco
Ordinary Shares to be held by certain Heramba shareholders.
Amended
and Restated Warrant Agreement
In
connection with the Closing, prior to the Merger Effective Time, the Company will enter into an amended and restated warrant agreement
with Holdco and Continental Stock Transfer & Trust Company, as warrant agent, and any successor warrant agent, pursuant to which
the terms and conditions of the warrant agreement entered into at the time of the Initial Public Offering will be amended and restated
to, among other things, reflect the automatic adjustment of the Public Warrants to Holdco Public Warrants and the Private Placement Warrants
to Holdco Private Warrants.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
Risks
and Uncertainties
In
February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action,
various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further,
the impact of this action and related sanctions on the world economy are not determinable as of the date of these condensed financial
statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable
as of the date of these financial statements.
On
August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for,
among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S.
domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1,
2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount
of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes
of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against
the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The
U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry
out and prevent the abuse or avoidance of the excise tax.
On
December 27, 2022, the Treasury released Notice 2023-2, which provides taxpayers with interim guidance on the excise tax that may be
relied upon until the Internal Revenue Service issues proposed Treasury regulations on such matter. Notice 2023-2 includes as one of
its exceptions to the excise tax a distribution in complete liquidation of a “covered corporation”, to which Sec. 331 of
the U.S. Internal Revenue Code of 1986, as amended (the “Code”), applies (so long as Sec. 332(a) of the Code also does not
also apply).
Although
the Company was incorporated in the Cayman Islands and is currently not a “covered corporation”, there is a possibility that
the Company may acquire a U.S. domestic corporation, redomicile as a U.S. domestic corporation or engage in a transaction in which a
U.S. domestic corporation becomes the Company’s parent or its affiliate. Although it remains uncertain whether, and/or to what
extent, the excise tax could apply to any redemptions of the Company’s Public Shares after December 31, 2022 if the Company was
to become a “covered corporation” in the future, including any redemptions in connection with the Extension, the Company’s
initial Business Combination or in the event the Company does not consummate an initial Business Combination by May 2, 2024, the Company
would not expect the excise tax to apply to redemptions of its Public Shares that occur during a taxable year in which the Company completely
liquidates under Sec. 331 of the Code.
If
the Company was to become a “covered corporation” in the future, there is a possibility that any redemption or other repurchase
that occurs after December 31, 2022 may be subject to the excise tax, including in connection with the Company’s initial Business
Combination, certain amendments to the Amended and Restated Memorandum and Articles of Association (including in connection with the
Extension) or otherwise. Whether and to what extent the Company would be subject to the excise tax would depend on a number of factors,
including (i) the fair market value of the redemptions and repurchases in connection with the initial Business Combination, certain amendments
to the Amended and Restated Memorandum and Articles of Association (including in connection with the Extension) or otherwise, (ii) the
structure of the initial Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection
with the initial Business Combination (or otherwise issued not in connection with the initial business combination but issued within
the same taxable year of the initial Business Combination) and (iv) the content of regulations and other guidance from the Treasury.
In addition, because the excise tax would be payable by the corporation and not by the redeeming holder, the mechanics of any required
payment of the excise tax have not been determined. However, the Company has agreed that it will not utilize any funds from the Trust
Account to pay any potential excise taxes that may become due pursuant to the IR Act upon a redemption of Public Shares, including in
connection with the Extension, an initial Business Combination or liquidation. The foregoing could cause a reduction in the cash available
on hand to complete the Company’s initial Business Combination and in the Company’s ability to complete an initial Business
Combination.
In
October 2023, the military conflict between Israel and militant groups led by Hamas has also caused uncertainty in the global markets.
The full impact of the war between Israel and Hamas and related global economic disruptions on the Company’s financial condition
and results of operations, as well as the Company’s ability to consummate an initial Business Combination, also remains uncertain.
The Company’s management will continuously evaluate the effect of the conflict on the Company. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Liquidity
and Going Concern
As
of December 31, 2023, the Company had $127,624 in cash held outside of the Trust Account and a working capital deficit of $4,808,448.
The cash held outside the Trust Account is not expected to be sufficient for the Company to operate for the next 12 months from the issuance
of the financial statements. In connection with the Company’s assessment of going concern considerations in accordance with FASB’s
Accounting Standards Update 2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management
has determined that if the Company is unable to complete a Business Combination by May 2, 2024 (or such later date as may be approved
by the Company’s shareholders at a meeting called for such purpose at which the Company’s shareholders will be given the
opportunity to have their Public Shares redeemed for a pro rata portion of the funds in the Trust Account), then the Company will cease
all operations except for the purpose of liquidating. The expected liquidity concerns, the date for mandatory liquidation and subsequent
dissolution, raise substantial doubt about the Company’s ability to continue as a going concern one year from the date that these
financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be
unable to continue as a going concern. The Company intends to complete a Business Combination before the mandatory liquidation date or
obtain approval for an extension.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United
States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. The Company has elected
to implement the aforementioned exemptions.
Further,
section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with
the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected
not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application
dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another
public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of expenses during the reporting period.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of
a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ
from those estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of December 31, 2023 or 2022.
Investments
Held in Trust Account
As
of December 31, 2023 and 2022, the assets held in the Trust Account were held in money market funds which were invested in U.S. Treasury
securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Any gain and loss
resulting from the change in fair value of these securities is included in gain (loss) on investments held in Trust Account in the accompanying
statements of operations. Interest and dividend income on these securities is included in interest and dividend income on investments
held in Trust Account in the accompanying statements of operations.
Class
A Ordinary Shares Subject to Possible Redemption
All
of the 26,377,660 Class A ordinary shares sold as part of the Units in the Initial Public Offering and the partial exercise of the over-allotment
option contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation,
if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments
to the Amended and Restated Memorandum and Articles of Association. In accordance with ASC 480-10-S99, redemption provisions not solely
within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore,
all Public Shares have been classified outside of permanent equity.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares
to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary
shares are affected by charges against additional paid-in capital and accumulated deficit. The redemption value of the redeemable ordinary
shares as of December 31, 2023 increased as the income earned on the Trust Account exceeds the Company’s expected dissolution expenses
(up to $100,000). As such, the Company recorded an increase in the carrying amount of the redeemable ordinary shares of $9,786,497 for
the year ended December 31, 2023.
As
of December 31, 2023 and 2022, the Class A ordinary shares subject to possible redemption reflected in the balance sheets are reconciled
in the following table:
| Class A ordinary shares subject to possible redemption as of December 31, 2021 | |
| 263,776,600 | |
| Remeasurement of carrying value to redemption value | |
| 3,599,187 | |
| Class A ordinary shares subject to possible redemption as of December 31, 2022 | |
$ | 267,375,787 | |
| Redemption of Class A common shares subject to redemption | |
| (161,280,678 | ) |
| Remeasurement of carrying value to redemption value | |
| 9,786,497 | |
| Class A ordinary shares subject to possible redemption as of December 31, 2023 | |
$ | 115,881,606 | |
Offering
Costs associated with the Initial Public Offering
The
Company complies with the requirements of ASC Topic 340, Other Assets and Deferred Costs and SEC Staff Accounting Bulletin Topic 5A -
Expenses of Offering (“SAB Topic 5A”). Offering costs consist principally of professional and registration fees incurred
through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance
of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are
classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $34,696,193 as a result
of the Initial Public Offering (consisting of a $5,275,532 underwriting discount, $9,232,181 of deferred underwriting fees, $19,381,703
of Anchor Investor offering costs, $1,334,330 of other offering costs, partially offset by $527,553 in reimbursements of offering expenses
by the underwriters). The Company recorded $32,606,933 of offering costs as a reduction of temporary equity in connection with the Public
Shares. The Company immediately expensed $2,089,260 of offering costs in connection with the Public Warrants (as defined in Note 3) and
the Private Placement Warrants that were classified as liabilities.
Income
Taxes
The
Company accounts for income taxes under ASC Topic 740, Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred
tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities
and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination
by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain
tax positions requiring recognition in the Company’s financial statements.
The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized
tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of
any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered
an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands
or the United States. Consequently, income taxes are not reflected in the Company’s financial statements.
Net
Income Per Ordinary Share
The
Company complies with the accounting and disclosure requirements of ASC 260, Earnings Per Share. Net income per ordinary share is computed
by dividing net income by the weighted-average number of ordinary shares outstanding during the period. Remeasurement associated with
the redeemable Class A ordinary shares is excluded from net income per share as the redemption value approximates fair value. Therefore,
the net income per share calculation allocates income and losses shared pro rata between Class A and Class B ordinary shares. As a result,
the calculated net income per share is the same for Class A and Class B ordinary shares. The Company has not considered the effect of
the warrants sold in the Initial Public Offering, the partial exercise of the over-allotment option, and private placements to purchase
an aggregate of 21,614,362 shares in the calculation of diluted income per share, since the exercise of the warrants is contingent upon
the occurrence of future events. As a result, diluted net income per share is the same as basic net income per share for the periods
presented.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The
following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):
| | |
Year Ended
December 31, 2023 | | |
Year Ended
December 31, 2022 | |
| | |
Class A | | |
Class B | | |
Class A | | |
Class B | |
| Basic and diluted net income per share | |
| | |
| | |
| | |
| |
| Numerator: | |
| | |
| | |
| | |
| |
| Net income | |
$ | 3,118,794 | | |
$ | 529,424 | | |
$ | 10,619,748 | | |
$ | 2,654,937 | |
| Denominator: | |
| | | |
| | | |
| | | |
| | |
| Basic and diluted weighted average shares outstanding | |
| 22,669,740 | | |
| 3,848,248 | | |
| 26,377,660 | | |
| 6,594,415 | |
| Basic and diluted net income per share | |
$ | 0.14 | | |
$ | 0.14 | | |
$ | 0.40 | | |
$ | 0.40 | |
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account
and management believes the Company is not exposed to significant risks on such account.
Fair
Value of Financial Instruments
The
Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value
and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that
would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly
transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an
entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs
reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained
from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data
and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to
be developed based on the best information available in the circumstances.
The
carrying amounts reflected in the balance sheet for current assets and current liabilities approximate fair value due to their short-term
nature.
Level
1 - Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are
observable inputs, such as quoted prices in active markets for identical assets or liabilities.
Level
2 - Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying
terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted
intervals.
Level
3 - Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little
or no market data exists for the assets or liabilities.
See
Note 9 for additional information on assets and liabilities measured at fair value.
Derivative
Financial Instruments
The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). For derivative financial instruments that are
accounted for as assets or liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then
re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative instruments are
classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument
could be required within 12 months of the balance sheet date.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The
Public Warrants and Private Placement Warrants are accounted for as a derivative instrument in accordance with ASC 815 and are presented
as warrant liabilities on the balance sheet. The Public Warrants and Private Placement Warrants were measured at fair value at the Initial
Public Offering and on a recurring basis, with subsequent changes in fair value to be recorded in the statements of operations.
The
forward purchase agreement is accounted for as a derivative instrument in accordance with ASC 815 and is presented as a derivative forward
purchase agreement liability on the balance sheet. The Company was to issue and sell up to 2,000,000 forward purchase units at a purchase
price of $10.00 per unit, for an aggregate purchase price of up to $20,000,000. The amounts actually sold were to be determined solely
by the Company, and the Company was not obligated to issue or sell any forward purchase units. The forward purchase agreement was measured
at fair value at the Initial Public Offering and on a recurring basis, with subsequent changes in fair value to be recorded in the statements
of operations. See Note 5 for additional information on the forward purchase agreement.
Recent
Accounting Standards
In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated
information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to
enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for the annual period ending December
31, 2025. The Company is currently evaluating the timing and impacts of adoption of ASU 2023-09.
Management
does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on the Company’s financial statements.
NOTE
3. INITIAL PUBLIC OFFERING
The
registration statement for the Company’s Initial Public Offering was declared effective on October 28, 2021. On November 2, 2021,
the Company completed its Initial Public Offering of 25,000,000 Units, at $10.00 per Unit, generating gross proceeds of $250,000,000.
Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant (“Public Warrant”). Each Public Warrant
entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole share (see Note 7). On November 12,
2021, the underwriters partially exercised the over-allotment option and on November 17, 2021 purchased an additional 1,377,660 Over-Allotment
Units, generating gross proceeds of $13,776,600. Gross proceeds from the Initial Public Offering and closing of the partial exercise
of the over-allotment option totaled $263,776,600.
NOTE
4. PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 8,150,000 warrants at a price of $1.00 per Private
Placement Warrant, generating gross proceeds of $8,150,000. Simultaneously with the closing of the partial exercise of the over-allotment
option, the Company consummated the sale of 275,532 Over-Allotment Warrants at a purchase price of $1.00 per warrant in a private placement
to the Sponsor, generating gross proceeds of $275,532, for an aggregate total of $8,425,532 in gross proceeds from the sale of the Private
Placement Warrants and Over-Allotment Warrants. Each Private Placement Warrant and Over-Allotment Warrant is exercisable to purchase
one Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants
and Over-Allotment Warrants were added to the net proceeds from the Initial Public Offering and the Over-Allotment Units held in the
Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the
Private Placement Warrants and Over-Allotment Warrants that are included in the Trust Account will be used to fund the redemption of
the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants and Over-Allotment Warrants will
expire worthless.
NOTE
5. RELATED PARTY TRANSACTIONS
Founder
Shares
On
February 18, 2021, the Sponsor was issued 8,625,000 Class B ordinary shares (the “Founder Shares”) for an aggregate of $25,000
paid to cover certain expenses on behalf of the Company. In June 2021, the Sponsor surrendered 1,437,500 Class B ordinary shares for
no consideration, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. All shares and associated amounts have
been retroactively restated to reflect the share surrender. The Founder Shares included an aggregate of up to 937,500 Class B ordinary
shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option was not exercised in full
or in part, so that the Sponsor and its permitted transferees would own, on an as-converted basis, 20% of the Company’s issued
and outstanding shares after the Initial Public Offering. On November 17, 2021, with the partial exercise of the underwriters’
over-allotment option, 344,415, Class B ordinary shares were no longer subject to forfeiture, leaving 593,085 Class B ordinary shares
subject to forfeiture. On December 12, 2021, the remaining over-allotment option expired and the 593,085 Class B ordinary shares were
forfeited.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The
Sponsor and the Additional Anchor Investors (as defined below) have each agreed with the Company that, subject to certain limited exceptions,
the Founder Shares are not transferable, assignable or salable (except to the officers and directors and other persons or entities affiliated
with the Sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the completion
of the initial Business Combination or earlier if, subsequent to the initial Business Combination, the closing price of the Class A ordinary
shares equals or exceeds $12.00 per share (as adjusted for share divisions, share capitalizations, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination,
and (B) the date following the completion of the initial Business Combination on which the Company completes a liquidation, merger, capital
stock exchange or other similar transaction that results in all of the shareholders having the right to exchange their Class A ordinary
shares for cash, securities or other property.
A
total of eleven Anchor Investors (the “Anchor Investors,” representing both the Original Anchor Investors and the Additional
Anchor Investors, as such terms are defined below) purchased Units in the Initial Public Offering at the offering price of $10.00 per
Unit. Pursuant to such Units, the Anchor Investors have not been granted any shareholder or other rights in addition to those afforded
to the Company’s other Public Shareholders.
Three
Anchor Investors (the “Original Anchor Investors”) entered into separate subscription agreements in March and July 2021 with
the Sponsor for direct interests in the Founder Shares held by the Sponsor. The Original Anchor Investors purchased interests representing
1,379,850 Founder Shares at a purchase price of $0.004 per share or $5,519 in the aggregate.
The
other eight Anchor Investors (the “Additional Anchor Investors”) entered into separate subscription agreements in September
2021 with the Sponsor for the purchase of Founder Shares from the Sponsor. The Additional Anchor Investors purchased 1,171,717 Founder
Shares at a purchase price of $0.004 per share or $4,687 in the aggregate.
The
Anchor Investors have not been granted any shareholder or other rights in addition to those afforded to the Company’s other Public
Shareholders. Further, the Anchor Investors are not required to (i) hold any Units, Class A ordinary shares or warrants they may purchase
in the Initial Public Offering or thereafter for any amount of time, (ii) vote any Class A ordinary shares they may own at the applicable
time in favor of the Business Combination or (iii) refrain from exercising their right to redeem their Public Shares at the time of the
Business Combination. The Anchor Investors have the same rights to the funds held in the Trust Account with respect to the Class A ordinary
shares underlying the Units they purchased in the Initial Public Offering as the rights afforded to the Company’s other Public
Shareholders.
The
Company estimated the fair value of the Founder Shares attributable to the Anchor Investors to be $19,391,909 or $7.60 per share. The
excess of the fair value of the Founder Shares sold over the aggregate purchase price of $10,206 (or $0.004 per share) was determined
to be an offering cost in accordance with SAB Topic 5A. Accordingly, the offering cost was allocated to the separable financial instruments
issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. On August 1, 2023, pursuant
to the Class B Conversion, the holders of the Founder Shares converted 6,594,414 Founder Shares from Class B ordinary shares to 6,594,414
Class A ordinary shares, which shares include these same transfer restrictions.
Forward
Purchase Agreement
In
September 2021, the Company amended and restated the forward purchase agreement pursuant to which EWI Capital SPAC I LLC, which is an
affiliate of Srinath Narayanan (the Company’s President and Chief Executive Officer) and a member of the Sponsor (“EWI”
or the “forward purchase investor”), had subscribed to purchase from the Company up to 2,000,000 units (the “forward
purchase units”), with each unit consisting of one Class A ordinary share, par value of $0.0001 per share, (the “forward
purchase shares”) and one-half of one redeemable warrant (the “forward purchase warrants”), for $10.00 per unit, or
up to $20,000,000, in a private placement to close substantially concurrently with the closing of a Business Combination. The terms of
the forward purchase units would have been identical to the terms of the Units sold in the Initial Public Offering, except that the forward
purchase securities would have certain registration rights as described below and the forward purchase warrants would have been the same
as the Private Placement Warrants.
The
Company would have determined in its sole discretion the specific number of forward purchase units (up to 2,000,000) that it would have
sold to the forward purchase investor, if any, and the obligation of the forward purchase investor to purchase the forward purchase units
was subject to the approval of the forward purchase investor’s manager following notice to the forward purchase investor that the
Company intended to enter into an agreement for a Business Combination.
The
forward purchase agreement also provided that the forward purchase investor was entitled to registration rights with respect to the forward
purchase securities. The proceeds from the sale of the forward purchase units may have been used as part of the consideration to the
sellers in an initial Business Combination, expenses in connection with an initial Business Combination or for working capital in the
post-Business Combination company. These purchases were required to be made regardless of whether any Class A ordinary shares were redeemed
by the Public Shareholders and were intended to provide the Company with a minimum funding level for an initial Business Combination.
The forward purchase units would have been issued only in connection with the closing of an initial Business Combination.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The
Company accounted for the forward purchase agreement in accordance with the guidance contained in ASC 815-40. Such guidance provides
that because the forward purchase units did not meet the criteria for equity treatment thereunder, the Company classified the securities
underlying the forward purchase agreement as an asset or liability at its fair value. This asset or liability was subject to re-measurement
at each balance sheet date. With each such remeasurement, the asset or liability was adjusted to fair value, with the change in fair
value recognized in the Company’s statements of operations.
On
October 2, 2023, the Company and EWI entered into a mutual termination agreement to terminate the forward purchase agreement. In consideration
of the termination of the forward purchase agreement, the Company determined that, under ASC 405-20-40, Liabilities - Extinguishment
of Liabilities - Derecognition, the derivative liability for the forward
purchase agreement should be extinguished and removed from the balance sheet as of October 2, 2023. Pursuant to ASC 850, Related Party
Disclosures, as the forward purchase agreement was determined to have been entered into with a related party, the liability extinguishment
of $2,168,000 was recorded to accumulated deficit in absence of an available balance in additional paid-in capital.
Administrative
Services Agreement
On
October 28, 2021, in connection with the Initial Public Offering, the Company entered into an agreement with EWI to pay a total of $30,000
per month to EWI for office space, secretarial and administrative services. Upon the completion of an initial Business Combination or
liquidation, the Company will cease paying these monthly fees. For the year ended December 31, 2023 and 2022, the Company incurred $360,000
of expenses under this agreement and included within operating costs on the statements of operations. For the year ended December 31,
2023 and 2022, the Company paid $30,000 and $295,000 of expenses under this agreement and included within operating costs on the statements
of operations, respectively. As of December 31, 2023 and 2022, $395,000 and $65,000 remain unpaid and are recorded in Accrued expenses
- related party, respectively.
Related
Party Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor,
or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the
proceeds held in the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held
outside the Trust Account. In the event that a Business Combination is not completed, the Company may use a portion of the proceeds held
outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working
Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements
exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants at a
price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. There were no Working Capital Loans outstanding
as of December 31, 2023 or 2022.
The
Company issued an unsecured promissory note in the principal amount of up to $500,000 to the Sponsor (the “Promissory Note”).
The Promissory Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company’s initial
Business Combination is consummated and (ii) the date that the winding up of the Company is effective. On August 21, 2023, September
27, 2023, and November 6, 2023, the Company drew $50,000, $250,000, and $200,000 from the Promissory Note, respectively. As of December
31, 2023 the outstanding balance of these loans was $500,000 which has not yet been repaid as of December 31, 2023.
Non-Redemption
Agreements
On
July 25, 2023, the Company entered into one or more Non-Redemption Agreements with one or more unaffiliated third parties in exchange
for them each agreeing not to redeem an aggregate of 760,000 Public Shares in connection with certain proposals considered and voted
upon at the Extraordinary General Meeting, in exchange for the Company agreeing to issue or cause to be issued to each such investor
138,000 Post-Combination Shares at the time of the Company’s initial Business Combination. The Company subsequently entered into
additional Non-Redemption Agreements with unaffiliated third parties on the same or similar terms reflecting the above ratio of non-redeemed
Class A ordinary shares to Post-Combination Shares, in each case with respect to the Extraordinary General Meeting. Pursuant to all such
Non-Redemption Agreements, the Company has agreed to issue or cause to be issued to such investors an aggregate of 1,645,596 Post-Combination
Shares.
The
Company determined that the fair value of shares that will be issued to such investors upon the consummation of the offering was $10.39
per share on the grant date of August 1, 2023. As such, the fair value of the shares was recorded as a deferred offering cost as of August
1, 2023, and will be remeasured at each reporting date. At the time of the closing of the offering and issuance of shares in connection
with the initial Business Combination, the deferred offering costs will be offset against the proceeds of the issued shares to such investors.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE
6. COMMITMENTS
Registration
Rights
The
holders of the Founder Shares, Private Placement Warrants, Over-Allotment Warrants and warrants that may be issued upon conversion of
Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants, the Over-Allotment
Warrants and warrants issued upon conversion of the Working Capital Loans) are entitled to registration rights pursuant to a registration
rights agreement signed on the effective date of the Initial Public Offering. The holders of these securities are entitled to make up
to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to consummation of a Business Combination. The Company will
bear the expenses incurred in connection with the filing of any such registration statements. Pursuant to the forward purchase agreement
with EWI, the Company had agreed that the forward purchase securities would be entitled to registration rights pursuant to the registration
rights agreement.
Underwriting
Agreement
In
connection with the Initial Public Offering, the underwriters were granted a 45-day option from the date of the Initial Public Offering
to purchase up to 3,750,000 additional Units to cover over-allotments. On November 12, 2021, the underwriters partially exercised the
over-allotment option and on November 17, 2021 purchased an additional 1,377,660 Units at an offering price of $10.00 per Unit, generating
additional gross proceeds of $13,776,600 to the Company.
In
connection with the closing of the Initial Public Offering and subsequent partial exercise of the over-allotment option, the underwriters
were paid a cash underwriting discount of $0.20 per Unit, or $5,275,532 in the aggregate. In addition, $0.35 per Unit, or $9,232,181
was payable to the underwriters for deferred underwriting commission from the amounts held in the Trust Account solely in the event that
the Company completed a Business Combination, subject to the terms of the underwriting agreement. On April 17, 2023 and April 27, 2023,
J.P. Morgan Securities LLC and BofA Securities, Inc., respectively, constituting all of the underwriters, waived their rights to 100%
of the deferred underwriting commission. Upon the waiver, the Company reduced the liability by recording a portion of the waiver to accumulated
deficit, and a portion as a gain on the waiver, in a manner consistent with the original allocation of the deferred underwriting fee
payable. The waiver of the deferred underwriting fee payable does not impact the carrying value of the Public Shares as the Public Shares
are recorded at their redemption value.
Vendor
Agreements
On
September 22, 2021, the Company entered into an agreement with a financial advisor (the “First Financial Advisor” and such
agreement, the “First Financial Advisor Agreement”) for services to be rendered in connection with the Company’s Initial
Public Offering, pursuant to which the Company would pay the First Financial Advisor (i) an amount equal to the aggregate number of securities
sold in the Initial Public Offering multiplied by 0.02 and then further multiplied by 0.07, (ii) an amount equal to the aggregate number
of securities sold upon the underwriters’ partial exercise of the over-allotment option multiplied by 0.02 and then further multiplied
by 0.07, and (iii) on the date of any additional or deferred payment to any underwriters or other persons performing similar services
in connection with the Initial Public Offering an amount equal to the aggregate number of securities sold in the Initial Public Offering,
plus, the aggregate number of securities sold upon the underwriters’ partial exercise of the over-allotment option multiplied by
0.035 and then further multiplied by 0.13. The Company paid the First Financial Advisor a total of $369,287 in the aggregate pursuant
to (i) and (ii) noted above. Those fees were considered offering costs of the Company (see Note 2 for accounting policy for offering
costs). The Company determined that upon the waiver of the deferred underwriting fees by J.P. Morgan Securities LLC and BofA Securities,
Inc., the fees pursuant to (iii) noted above became void.
On
September 28, 2021, the Company entered into an agreement with a financial advisor (the “Second Financial Advisor” and such
agreement, the “Second Financial Advisor Agreement”) for services to be rendered in connection with the Company’s Initial
Public Offering, pursuant to which the Company would pay the Second Financial Advisor (i) an amount equal to the aggregate number of
securities sold in the Initial Public Offering multiplied by 0.02 and then further multiplied by 0.03 and (ii) an amount equal to the
aggregate number of securities sold upon the underwriters’ partial exercise of the over-allotment option multiplied by 0.02 and
then further multiplied by 0.03. The Company paid the Second Financial Advisor a total of $158,266 in the aggregate pursuant to (i) and
(ii) noted above. Those fees were considered offering costs of the Company (see Note 2 for accounting policy for offering costs).
On
August 18, 2022, the Company entered into an agreement with a legal advisor (the “Advisor”) for services to be rendered in
connection with the consummation of a Business Combination, pursuant to which the Company would pay the Advisor a fee of 50,000 euros
in connection with certain milestones, and a success fee of 600,000 euros contingent upon the successful completion of a Business Combination.
Half of the 50,000 euro milestone fee became due and payable thirty days after the execution of the agreement, and the fee was paid to
the Advisor in October 2022. On January 23, 2023, the Company and the Advisor entered into an amended agreement, pursuant to which, the
previous unpaid portion of the milestone fee and the success fee were cancelled. Pursuant to the amended agreement, the Company would
pay the advisor 25,000 euros upon the execution of the amended agreement, 25,000 euros on each of February 28, 2023 and March 31, 2023,
200,000 euros upon the execution of a share purchase agreement, and a success fee of 450,000 euros contingent upon the successful completion
of a Business Combination. On April 30, 2023, Heramba and the Advisor entered into a second amended agreement, pursuant to which, Heramba
assumed responsibility for the payment of the 25,000 euros due on each of February 28, 2023 and March 31, 2023, the 200,000 euro fee
upon the execution of a share purchase agreement, and the success fee of 450,000 euros upon the completion of a Business Combination.
The fees of 25,000 euros that were due to the Advisor on February 28, 2023 and March 31, 2023 that had previously been accrued were removed
from the Company’s balance sheet, statement of operations, statement of shareholders’ equity, and statement of cash flows
in connection with the second amended agreement.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
On
August 24, 2022, the Company entered into an agreement with a consultant (the “Consultant”) for general project management
and coordination of activities in connection with consummating a Business Combination, pursuant to which the Company shall pay a retainer
of $25,000 upon each of signing of the letter of engagement and the acceptance of the terms of a Business Combination agreement. In addition
a final retainer fee of $550,000 would be paid to the Consultant, contingent upon the closing of a Business Combination. In August 2023,
the Company informed the Consultant of their intention to terminate the agreement in accordance with the terms of the agreement. The
Company paid the Consultant the first retainer upon the signing of the letter of engagement. All other fees under the agreement were
waived upon the termination.
On
May 22, 2023, the Company entered into an agreement with a financial advisor (the “Third Financial Advisor”) for financial
and market related advice customary with the consummation of a Business Combination, for the Company’s proposed Business Combination
with Heramba. Pursuant to the agreement, the Company will pay an amount equal to (i) 2.0% of the enterprise value of Heramba as set forth
in the Business Combination Agreement; plus (ii) 2.0% of (a) net cash remaining in the Trust Account that is actually delivered to Heramba
at Closing plus (b) the net proceeds that are actually delivered to Heramba at Closing from any financing transaction by the Company
or Heramba (the “Net Closing Proceeds”) up to and including $50,000,000; plus (iii) 4.0% of the amount (if any) by which
the Net Closing Proceeds exceed $50,000,000 (collectively the “Transaction Fee”). In no event shall the Transaction Fee be
less than $3,500,000. The Transaction Fee is due to the Third Financial Advisor only if the Business Combination is consummated, and
as such is considered contingent upon the consummation of the Business Combination.
On
July 20, 2023, the Company entered into an agreement with a capital markets advisor (the “Capital Markets Advisor”) for services
such as securing an extension of the Business Combination Period, providing capital markets advice, advising on structure and terms of
the Business Combination Agreement, and identifying finance opportunities in connection with a Business Combination. Pursuant to the
agreement, the Company will pay the Capital Markets Advisor (i) an advisor fee in connection with the Extension and the Business Combination
in an amount equal to $750,000 in the aggregate, plus an additional $750,000 if, in connection with the Extension, (a) the Capital Markets
Advisor secures non-redemption agreements with the Company shareholders (the “Non-Redeeming Shareholders”) with respect to
more than 7,500,000 Class A ordinary shares, in the aggregate, initially issued as part of units sold in the Company’s Initial
Public Offering (the “Non-Redemption Shares”), (b) pursuant to the Non-Redemption Agreements, the Non-Redeeming Shareholders
agree to receive less than or equal to 1,400,000 promote shares, in the aggregate, to be issued by the Company (or its successor) following
the Business Combination, and (c) the Non-Redeeming Shareholders do not redeem the Non-Redemption Shares in connection with the Extension
(the “Advisor Fee”); and (ii) a transaction fee in connection with a possible private placement of equity, equity-linked,
convertible and/or debt securities or other capital or debt raising transaction to be consummated in connection with the Business Combination
(the “Offering”), of an amount equal to (a) 4.0% of the gross proceeds from the private placement of $15,000,000 or more
of equity or equity-linked securities or (b) 2.5% of the gross proceeds from the private placement of $30,000,000 or more of debt or
convertible debt securities, in each case raised from investors first identified to the Company by the Capital Markets Advisor and received
by the Company or any target simultaneously with or before the closing of the Offering (the “Offering Fee” and together with
the Advisor Fee, the “CMA Transaction Fee”). No CMA Transaction Fee shall be payable if the Business Combination is not consummated.
and as such the CMA Transaction Fee is considered contingent upon the consummation of the Business Combination.
NOTE
7. WARRANTS
As
of December 31, 2023 and 2022, there were 13,188,830 Public Warrants and 8,425,532 Private Placement Warrants outstanding.
Public
Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only
whole warrants will trade. Accordingly, unless holders purchase at least two Units, they will not be able to receive or trade a whole
warrant. The warrants will expire five years after the date on which they first become exercisable, at 5:00 p.m., New York City time,
or earlier upon redemption or liquidation.
The
Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares
underlying the warrants is then effective and a prospectus relating thereto is current, subject to the satisfying the obligations described
below with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary
share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified
or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The
Company has agreed that as soon as practicable, but in no event later than fifteen (15) business days after the closing of the initial
Business Combination, the Company will use commercially reasonable efforts to file with the SEC a registration statement for the registration,
under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use commercially reasonable
efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus
relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration
statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after
the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement
and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A
ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the
definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at the option, require
holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act and, in the event the Company so elect, the Company will not be required to file or maintain in effect a registration
statement, and in the event the Company does not so elect, the Company will use commercially reasonable efforts to register or qualify
the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption
of warrants the price Class A ordinary share equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem
the outstanding warrants (except with respect to the Private Placement Warrants and the forward purchase warrants):
| ● | in
whole and not in part; |
| ● | at
a price of $0.01 per warrant; |
| ● | upon
not less than 30 days’ prior written notice of redemption (the “30-day redemption
period”) to each warrant holder; and |
| ● | if,
and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per
share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30-trading day period ending three trading
days before the Company sends the notice of redemption to the warrant holders. |
The
Company will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance
of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class
A ordinary shares is available throughout the 30-day redemption period or the Company has elected to permit exercise on a “cashless”
basis. If and when the warrants become redeemable by the Company, the Company may exercise the redemption right even if the Company is
unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption
of warrants when the price Class A ordinary share equals or exceeds $10.00. Once the warrants become exercisable, the Company may
redeem the outstanding warrants (except with respect to the Private Placement Warrants and the forward purchase warrants):
| ● | in
whole and not in part; |
| ● | at
$0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided
that holders will be able to exercise their warrants on a cashless basis prior to redemption
and receive that number of shares based on the redemption date and the “fair market
value” of the Class A ordinary shares except as otherwise described below; |
| ● | if,
and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per
Public Share (as adjusted for share subdivisions, share capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within the 30-trading day period
ending three trading days before the Company sends the notice of redemption to the warrant
holders; and |
| ● | if
the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading
day period ending on the third trading day prior to the date on which the Company sends the
notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for
share subdivisions, share capitalizations, reorganizations, recapitalizations and the like),
the Private Placement Warrants and the forward purchase warrants must also be concurrently
called for redemption on the same terms as the outstanding Public Warrants, as described
above. |
The
“fair market value” of the Class A ordinary shares for the above purpose shall mean the volume-weighted average price of
the Class A ordinary shares during the 10 trading days ending on the third trading day immediately following the date on which the notice
of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in
other blank check offerings. The Company will provide our warrant holders with the final fair market value no later than one business
day after the 10-trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption
feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment).
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
In
addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities, excluding forward purchase units,
for capital raising purposes in connection with the closing of the initial Business Combination (excluding any forward purchase units)
at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price
to be determined in good faith by the board of directors and, in the case of any such issuance to the Sponsor or their affiliates, without
taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance, or the “Newly
Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and
interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business
Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 10 trading
day period starting on the trading day after the day on which the Company consummates the initial Business Combination, or, such price,
the Market Value, is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to
115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described adjacent to
“Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest
cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price
described adjacent to the caption “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00”
will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The
Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except
that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will
not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.
The
Company accounts for the 13,188,830 Public Warrants and 8,425,532 Private Placement Warrants, issued pursuant with the Initial Public
Offering and partial exercise of the over-allotment option, in accordance with the guidance contained in ASC 815-40. Such guidance provides
that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
The
accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair
value upon the closing of the Initial Public Offering. The warrant liabilities are subject to re-measurement at each balance sheet date.
With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in
the Company’s condensed statements of operations. The Company will reassess the classification at each balance sheet date. If the
classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes
the reclassification.
NOTE
8. SHAREHOLDERS’ DEFICIT
Preference
shares - The Company is authorized to issue 1,000,000 preference shares of $0.0001, par value. As of December 31, 2023 and 2022,
there were no preference shares issued or outstanding.
Class
A ordinary shares - The Company is authorized to issue 200,000,000 Class A ordinary shares, $0.0001 par value. Holders of the
Company’s ordinary shares are entitled to one vote for each share. As of December 31, 2023 and 2022, there were 17,473,772 and
26,377,660 Class A ordinary shares issued and outstanding, of which 10,879,358 and 26,377,660 Class A ordinary shares are subject to
possible redemption, respectively. As of December 31, 2023, the remaining 6,594,414 shares are classified as permanent equity and are
comprised of 6,594,414 shares that were converted from Class B common stock into Class A common stock.
Class
B ordinary shares - The Company is authorized to issue 20,000,000 Class B ordinary shares, $0.0001 par value. Holders of the
Company’s ordinary shares are entitled to one vote for each share. As of December 31, 2023 and 2022, there were 1 and 6,594,415
Class B ordinary shares issued and outstanding.
Ordinary
shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Holders of Class A
ordinary shares and holders of Class B ordinary shares will vote together as a single Class on all matters submitted to a vote of the
shareholders except as required by law.
The
Founder Shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of
the initial Business Combination on a one-for-one basis, subject to adjustment for share divisions, share dividends, reorganizations,
recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares
or equity-linked securities are issued or deemed issued in connection with the initial Business Combination, the number of Class A ordinary
shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number
of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by Public
Shareholders), including the total number of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise
of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation
of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities or rights exercisable for or convertible
into Class A ordinary shares issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants
issued to the Sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of Founder Shares
will never occur on a less than one-for-one basis.
On
August 1, 2023, pursuant to the Class B Conversion, the holders of the Founder Shares converted 6,594,414 Founder Shares from Class B
ordinary shares to 6,594,414 Class A ordinary shares.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE
9. FAIR VALUE MEASUREMENTS
The
following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a
recurring basis as of December 31, 2023 and 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized
to determine such fair value:
| Description | |
Amount at Fair Value | | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| December 31, 2023 | |
| | |
| | |
| | |
| |
| Assets | |
| | |
| | |
| | |
| |
| Investments held in Trust Account: | |
| | |
| | |
| | |
| |
| Money market funds | |
$ | 115,981,606 | | |
$ | 115,981,606 | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Deferred offering costs | |
$ | 17,393,949 | | |
$ | 17,393,949 | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Liabilities | |
| | | |
| | | |
| | | |
| | |
| Accrued offering costs | |
$ | 17,393,949 | | |
$ | 17,393,949 | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Warrant liability - Public Warrants | |
$ | 395,665 | | |
$ | 395,665 | | |
$ | - | | |
$ | - | |
| Warrant liability - Private Placement Warrants | |
| 265,166 | | |
| - | | |
| 265,166 | | |
| - | |
| Warrant Liabilities | |
$ | 660,831 | | |
$ | 395,665 | | |
$ | 265,166 | | |
$ | - | |
| Description | |
Amount at Fair Value | | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| December 31, 2022 | |
| | |
| | |
| | |
| |
| Assets | |
| | |
| | |
| | |
| |
| Investments held in Trust Account: | |
| | |
| | |
| | |
| |
| Money market funds | |
$ | 267,475,787 | | |
$ | 267,475,787 | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Liabilities | |
| | | |
| | | |
| | | |
| | |
| Derivative liability - forward purchase agreement | |
$ | 318,735 | | |
$ | - | | |
$ | - | | |
$ | 318,735 | |
| | |
| | | |
| | | |
| | | |
| | |
| Warrant liability - Public Warrants | |
$ | 527,553 | | |
$ | 527,553 | | |
$ | - | | |
$ | - | |
| Warrant liability - Private Placement Warrants | |
| 337,022 | | |
| - | | |
| 337,022 | | |
| - | |
| Warrant Liabilities | |
$ | 864,575 | | |
$ | 527,553 | | |
$ | 337,022 | | |
$ | - | |
The
Company utilized a Monte Carlo simulation model for the initial valuation of the Public Warrants. The subsequent measurement of the Public
Warrants as of December 31, 2023 and 2022 is classified as Level 1 due to the use of an observable market quote in an active market under
the ticker PEGRW. The quoted price of the Public Warrants was $0.03 and $0.04 per warrant as of December 31, 2023 and 2022, respectively.
The
Company utilized a Black-Scholes model for the initial valuation of the Private Placement Warrants. Inherent in pricing models are assumptions
related to expected share-price volatility, expected life, risk-free interest rate and dividend yield, which were considered Level 3
inputs. The estimated fair value of the Private Placement Warrants transferred from a Level 3 measurement to a Level 2 fair value measurement
as of December 31, 2022 due to the use of an observable market quote for a similar asset in an active market. The Company estimates the
volatility of its ordinary shares based on a back-solve lattice model which adjusts the trading price of the Public Warrants for the
estimated probability of completing the initial Business Combination. However, since the back-solve lattice model did not produce a meaningful
volatility for the Private Placement Warrants as of December 31, 2023 and 2022, the fair value of the Private Placement Warrants were
set equal to the fair value of the Public Warrants. The fair value of the Private Placement Warrants was $0.03 and $0.04 per warrant
as of December 31, 2023 and 2022, respectively.
Transfers
to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. For the year-ended December 31, 2023, there were no transfers
between either Level 1, 2 or 3 inputs.
The
model used to estimate the fair value of the derivative liability for the forward purchase agreement is based on the assumption that
the forward purchase securities are equivalent to the Company’s Units and determined, on a per unit basis, as the price of the
Company’s Units less the present value of the contractually stipulated forward price of $10.00.
PROJECT
ENERGY REIMAGINED ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The
following table provides the significant inputs to the model for the fair value of the forward purchase agreement:
| | |
At
October 2,
2023 | | |
At
December 31,
2022 | |
| | |
| | |
| |
| Fair value of unit | |
$ | 10.82 | | |
$ | 10.01 | |
| Unit forward price | |
$ | 10.00 | | |
$ | 10.00 | |
| Time to Business Combination (in years) | |
| 0.50 | | |
| 0.34 | |
| Risk-free rate | |
| 5.58 | % | |
| 4.54 | % |
| Discount factor | |
| 97.30 | % | |
| 98.50 | % |
| Fair value - derivative liability | |
$ | 1.084 | | |
$ | 0.159 | |
The
following table provides a summary of the changes in the fair value of the Company’s Level 3 financial instruments that are measured
at fair value on a recurring basis:
| Fair value as of January 1, 2022 | |
$ | 5,156,098 | |
| Unrealized gain | |
| (4,500,341 | ) |
| Transfer of Private Placement Warrants to Level 2 measurement | |
| (337,022 | ) |
| Fair value as of December 31, 2022 | |
| 318,735 | |
| Unrealized loss | |
| 1,849,265 | |
| Extinguishment of forward purchase agreement | |
| (2,168,000 | ) |
| Fair value as of December 31, 2023 | |
$ | - | |
The
Company recognized an unrealized gain on the fair value of warrant liabilities of $203,744 and $11,239,468, in the statement of operations
for the years ended December 31, 2023 and 2022, respectively. The Company recognized an unrealized loss on the fair value of derivative
liability - forward purchase agreement of $1,849,265 in the statement of operations for the year ended December 31, 2023. The Company
recognized an unrealized gain on the fair value of derivative liability - forward purchase agreement of $119,065 in the statement of
operations for the year ended December 31, 2022.
NOTE
10. SUBSEQUENT EVENTS
The
Company has evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial
statements were issued. Based upon this review, other than those subsequent events described below, the Company did not identify any
other subsequent events that would have required adjustment or disclosure in the financial statements.
On
January 26, 2024, the Company issued an unsecured promissory note (the “Note”) in the principal amount of up to $375,000
to Srinath Narayanan (the Company’s President and Chief Executive Officer), to be drawn down from time to time prior to the Maturity
Date (as defined below) upon request by the Company. The Note does not bear interest and the principal balance will be payable on the
earlier of: (i) the date on which the Company consummates its initial business combination and (ii) the date that the winding up of the
Company is effective (such date, the “Maturity Date”). In the event that the Company does not consummate an initial business
combination, the Note will be repaid only from amounts remaining outside of the Company’s trust account, if any. The Note is subject
to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the Note and
all other sums payable with regard to the Note becoming immediately due and payable. As of the date of this filing, the Company has an
outstanding balance under the Note of $350,000.
On
April 3, 2024, the Company and the First Financial Advisor entered into an amendment to the First Financial Advisor Agreement, pursuant
to which the First Financial Advisor agreed that any fees pursuant to (iii) were waived upon the date of the waiver of the deferred underwriting
fees by J.P. Morgan Securities LLC and BofA Securities, Inc., and agreed that any services that have been provided by the First Financial
Advisor after the Initial Public Offering will be paid by the Company to the First Financial Advisor, up to a maximum of $1,200,000,
only if the Business Combination is consummated, and as such the payment is considered contingent upon the consummation of the Business
Combination. See details relating to the First Financial Advisor Agreement at Note 6 of the financial statements.
On
April 3, 2024, the Company and the Second Financial Advisor entered into an amendment to the Second Financial Advisor Agreement, pursuant
to which the Company has agreed to cause 250,000 Class A ordinary shares of the Company (or equivalent securities of the post-combination
company) to be delivered to the Second Financial Advisor as compensation for any services that have been provided by the Second Financial
Advisor after the Initial Public Offering. Such shares will be delivered only if the Business Combination is consummated, and as such
the delivery is considered contingent upon the consummation of the Business Combination. See details relating to the Second Financial
Advisor Agreement at Note 6 of the financial statements.
F-97
Exhibit 1.1
COMPANY
NUMBER 744994
COMPANIES
ACT 2014
A
PUBLIC COMPANY LIMITED BY SHARES
CONSTITUTION
OF
HERAMBA
ELECTRIC PLC
COMPANY
NUMBER 744994
COMPANIES
ACT 2014
A
PUBLIC COMPANY LIMITED BY SHARES
MEMORANDUM
OF ASSOCIATION
OF
HERAMBA
ELECTRIC PLC
(As
adopted by special resolution passed on 3 July 2024)
| 1 | The
name of the company is Heramba Electric plc (the “Company”). |
| 2 | The
Company is a public limited company, registered under Part 17 of the Companies Act 2014. |
| 3 | The
objects for which the Company is established are as follows: |
| 3.1 | To
carry on the business of a holding company, to determine Company strategy, and to co-ordinate
the administration, finances and activities of any subsidiary companies or associated companies,
to do all lawful acts and things whatever that are necessary or convenient in carrying on
the business of such a holding company and, in particular, to carry on in all its branches
the business of a management services company, to act as managers and to direct or co-ordinate
the management of other companies or of the business, property and estates of any company
or person and to undertake and carry out all such services in connection therewith as may
be deemed expedient by the Company’s board of directors and to exercise its powers
as a shareholder of other companies. |
| 3.2 | To
carry on all, or any, business as a producer, designer, developer, manufacturer, researcher,
project manager, distributor, wholesaler, retailer, service provider, dealer and/or investor,
of and in, all kinds of power, technology, electrical, electronic and engineering products
and services, in any industry, sector, market or territory, including, but not limited, to
the transportation, technology and engineering industries, and to carry on any other business
of whatever nature (except the issuing of policies of insurance) in any industry, sector,
market or territory, which may seem to the Company’s board of directors capable of
being conveniently carried on in connection with these objects or calculated directly or
indirectly to enhance the value of or render more profitable any of the Company’s property,
and to hold all patents and intellectual property rights and to do all other things usually
dealt with by persons carrying on any of the said businesses or likely to be required in
connection with any of the said businesses. |
| 3.3 | To
carry on all or any of the businesses as mentioned herein either as a separate business or
as the principal business of the Company. |
| 3.4 | To
carry on the business of investing in shares, bonds and other securities including investments
in foreign currencies. |
| 3.5 | To
invest any moneys of the Company in such investments and in such manner as may from time
to time be determined, and to hold, sell or deal with such investments and generally to purchase,
take on lease or in exchange or otherwise acquire any real and personal property and rights
or privileges. |
| 3.6 | To
acquire shares, stocks, debentures, debenture stock, indentures, notes, loan notes, loan
stock, bonds, warrants, obligations and other securities of any description, by original
subscription, tender, purchase, exchange or otherwise and to subscribe for the same either
conditionally or otherwise, and to guarantee the subscription thereof and to exercise and
enforce all rights and powers conferred by or incidental to the ownership thereof. |
| 3.7 | To
facilitate, effect, and encourage the creation, issue or conversion of, and to offer for
public or private subscription, tender, purchase or exchange, shares, stocks, debentures,
debenture stock, indentures, notes, loan notes, loan stock, bonds, obligations and other
securities of any description of the Company, of any member of the group to which the Company
belongs or of any other person and to act as trustees in connection with any such securities
and to take part in the conversion of business concerns and undertakings into companies. |
| 3.8 | To
purchase or by any other means acquire any freehold, leasehold or other property and real
estate and in particular lands, tenements and hereditaments of any tenure, whether subject
or not to any charges or encumbrances, for any estate or interest whatever, and any rights,
privileges or easements over or in respect of any property and real estate, and any buildings,
factories, mills, works, wharves, roads, rigs, machinery, engines, plant, live and dead stock,
barges, vessels or things, and any real or personal property or rights whatsoever which may
be necessary for, or may conveniently be used with, or may enhance the value or property
of the Company, and to hold or to sell, let, alienate, mortgage, charge or otherwise deal
with all or any such freehold, leasehold, or other property and real estate, lands, tenements
or hereditaments, rights, privileges or easements. |
| 3.9 | To
establish and contribute to any scheme (including any share option scheme or similar scheme)
for the purchase of shares in the Company to be held for the benefit of current, or former,
directors, officers, employees and consultants of, or to, the Company or any of its subsidiaries
or associated undertakings, and to lend or otherwise provide money to such schemes or any
such directors, officers, employees and consultants to enable them to purchase shares of
the Company, in each case subject to applicable law. |
| 3.10 | To
sell, lease, exchange, grant, convey, transfer or otherwise dispose of any or all of the
property and real estate, investments or assets of the Company of whatever nature or tenure
for such price, consideration, sum or other return, whether equal to or less than the market
value thereof and whether by way of gift or otherwise, as the board of directors of the Company
shall deem appropriate and to grant any fee farm grant or lease or to enter into any agreement
for letting or hire of any such property or asset for a rent or return equal to or less than
the market or rack rent therefor or at no rent and subject to or free from covenants and
restrictions as the board of directors of the Company shall deem appropriate. |
| 3.11 | To
acquire and undertake the whole or any part of the business, good-will and assets of any
person, firm or company carrying on or proposing to carry on any of the businesses which
this Company is authorised to carry on, and as part of the consideration for such acquisition
to undertake all or any of the liabilities of such person, firm or company, or to acquire
an interest in, amalgamate with, or enter into any arrangement for sharing profits, or for
co-operation, or for limiting competition or for mutual assistance with any such person,
firm or company and to give or accept by way of consideration for any of the acts or things
aforesaid or property acquired, any shares, stocks, debentures, debenture stock, indentures,
notes, loan notes, loan stock, bonds, obligations and other securities of any description
that may be agreed upon, and to hold and retain or sell, mortgage or deal with any shares,
stocks, debentures, debenture stock, indentures, notes, loan notes, loan stock, bonds, obligations
and other securities of any description so received. |
| 3.12 | To
apply for, register, purchase, acquire, sell, lease, hold, use, administer, control, license
or otherwise deal with any patents, brevets d’invention, copyrights, trademarks, licences,
technical and industrial know-how, concessions and the like conferring any exclusive or non-exclusive
or limited rights to use or any secret or other inventing information as to any invention
which may seem capable of being used for any of the purposes of the Company or the acquisition
of which may seem calculated directly or indirectly to benefit the Company, and to use, exercise,
develop or grant licences in respect of or otherwise turn to account the property, rights
or information so acquired. |
| 3.13 | To
enter into partnership or into any arrangement for sharing profits, union of interests, co-operation,
joint venture, reciprocal concession or otherwise with any person or company carrying on
or engaged in or about to carry on or engage in any business or transaction which the Company
is authorised to carry on or engage in or any business or transaction capable of being conducted
so as to, directly or indirectly, benefit the Company. |
| 3.14 | To
incorporate or cause to be incorporated any one or more subsidiaries for the purpose of carrying
on any business. |
| 3.15 | To
invest and deal with the moneys of the Company not immediately required upon such securities
and in such manner as may from time to time be determined. |
| 3.16 | To
lend money to and guarantee the performance of the contracts or obligations of any company,
firm or person, and the repayment of the capital and principal of, and dividends, interest
or premiums payable on, any stock, shares and securities of any company, whether having objects
similar to those of this Company or not, and to give all kinds of indemnities. |
| 3.17 | To
enter into, invest or engage in, acquire, hold or dispose of any financial instruments or
risk management instruments, whether or not of a type currently in existence, and currency
exchange, interest rate or commodity or index linked transactions (whether in connection
with or incidental to any other contract, undertaking or business entered into or carried
on by the Company or whether as an independent object or activity), including securities
in respect of which the return or redemption amount is calculated by reference to any index,
price or rate, monetary and financial instruments of all kinds, futures contracts, swaps
and hedges (including credit default, interest rate and currency swaps and hedges of any
kind whatsoever), options contracts, contracts for differences, commodities (including bullion
and other precious metals), forward rate agreements, debentures, debenture stock, warrants,
commercial paper, promissory notes, mortgage backed securities, asset backed securities,
dealings in foreign currency, spot and forward rate exchange contracts, caps, floors, collars,
and any other foreign exchange, interest rate or commodity or index linked arrangements,
and such other instruments whether for the purpose of making a profit or avoiding a loss
or managing a currency or interest rate exposure or any other purpose and to enter into any
contract for and to exercise and enforce all rights and powers conferred by or incidental,
directly or indirectly, to such transactions or the termination of any such transactions. |
| 3.18 | To
guarantee, support or secure, whether by personal covenant or by mortgaging or charging all
or any part of the undertaking, property and assets (both present and future) and uncalled
capital of the Company, or by both such methods, the performance of the obligations of, and
the repayment or payment of the principal amounts of and premiums, interest and dividends
on any securities of, any person, firm or company including, without prejudice to the generality
of the foregoing, any company which is, for the time being, the Company’s subsidiary,
holding company, subsidiary of any such holding company or otherwise associated with the
Company in business. |
| 3.19 | To
borrow or raise finance or secure the payment of money in such manner as the Company shall
think fit, and in particular by the provision of a guarantee or by the issue of shares, stocks,
debentures, debenture stock, notes, loan notes, loan stock, bonds, obligations and other
securities of all kinds, either perpetual or terminable and either redeemable or otherwise
and to secure the repayment of any money borrowed, raised or owing by trust deed, mortgage,
charge, or lien upon the whole or any part of the Company’s property or assets (whether
present or future) including its uncalled capital, and also by a similar trust deed, mortgage,
charge or lien to secure and guarantee the performance by the Company of any obligation or
liability it may undertake. |
| 3.20 | To
carry on the business of financing and re-financing whether asset based or not (including
financing and re-financing of financial assets), including managing financial assets with
or without security in whatever currency including financing or re-financing by way of loan,
acceptance credits, commercial paper, euro medium term bonds, euro bonds, asset-backed securities,
securitisation, synthetic securitisation, collateralised debt obligations, bank placements,
leasing, hire purchase, credit sale, conditional sale, factoring, forfeiting, invoice discounting,
note issue facilities, project financing, bond issuances, participation and syndications,
assignment, novation, factoring, discounting, participation, sub-participation, derivative
contracts, securities/stock lending contracts, repurchase agreements or other appropriate
methods of finance and to discount mortgage receivables, loan receivables and lease rentals
for persons wherever situated in any currency whatsoever, and to do all of the foregoing
as principal, agent or broker. |
| 3.21 | To
draw, make, accept, endorse, discount, execute, negotiate and issue promissory notes, bills
of exchange, bills of lading, warrants, indentures, debentures and other negotiable or transferable
instruments. |
| 3.22 | To
subscribe for, take, purchase or otherwise acquire, hold, sell and transfer shares, stocks,
debentures, debenture stock, indentures, notes, loan notes, loan stock, bonds, obligations
and other securities of any description of, or other interests in, any other company or person. |
| 3.23 | To
hold in trust as trustees or as nominees and to deal with, manage and turn to account, any
real or personal property of any kind, and in particular shares, stocks, debentures, debenture
stock, indentures, notes, loan notes, loan stock, bonds, obligations and other securities
of any description, policies, book debts, claims and choses in actions, lands, buildings,
hereditaments, business concerns and undertakings, mortgages, charges, annuities, patents,
licences, and any interest in real or personal property, and any claims against such property
or against any person or company. |
| 3.24 | To
constitute any trusts with a view to the issue of preferred and, deferred or other special
stocks or securities based on or representing any shares, stocks and other assets specifically
appropriated for the purpose of any such trust and to settle and regulate and if thought
fit to undertake and execute any such trusts and to issue dispose of or hold any such preferred,
deferred or other special stocks or securities. |
| 3.25 | To
give any guarantee in relation to the payment of any debentures, debenture stock, indentures,
notes, loan notes, loan stock, bonds, obligations or other securities of any description
and to guarantee the payment of interest thereon or of dividends on any stocks or shares
of any company. |
| 3.26 | To
construct, erect and maintain buildings, houses, flats, shops and all other works, erections,
and things of any description whatsoever either upon the lands acquired by the Company or
upon other lands and to hold, retain as investments or to sell, let, alienate, mortgage,
charge or deal with all or any of the same and generally to alter, develop and improve the
lands and other property of the Company. |
| 3.27 | To
provide for the welfare of persons in the employment of or holding office with, or formerly
in the employment of or holding office with, the Company or any of its subsidiaries and associated
undertakings, including directors and ex-directors and the spouses, widows, widowers and
families, dependants or connections of such persons by grants of money, pensions or other
payments and by forming and contributing to pension, provident or benefit funds or profit
sharing or co-partnership schemes for the benefit of such persons, and to form, subscribe
to or otherwise aid charitable, benevolent, religious, scientific, national or other institutions,
exhibitions or objects which shall have any moral or other claims to support or aid by the
Company by reason of the locality of its operation or otherwise. |
| 3.28 | To
remunerate by cash payments or allotment of shares or securities of the Company credited
as fully paid-up or otherwise any person or company for services rendered or to be rendered
to the Company or any member of the group to which the Company belongs, whether in the course
of employment with the Company or any group company or the conduct or the management of the
business of the Company or any group company or in placing or assisting to place or guaranteeing
the placing of any of the shares or other securities of the Company’s, or any group
company’s capital, or any debentures or other securities of the Company or any group
company or in or about the formation or promotion of the Company or any group company. |
| 3.29 | To
enter into and carry into effect any arrangement for joint working in business or for sharing
of profits or for amalgamation with any other company or association or any partnership or
person carrying on any business within the objects of the Company. |
| 3.30 | To
distribute in specie or as otherwise may be resolved all or any portion of the assets
of the Company among its shareholders and, in particular, the shares, debentures or other
securities of any other company owned by the Company or which this Company may have the power
to dispose of. |
| 3.31 | To
vest any real or personal property, rights or interest acquired or belonging to the Company
in any person or company on behalf of or for the benefit of the Company, and with or without
any declared trust in favour of the Company. |
| 3.32 | To
transact or carry on any business which may seem to be capable of being conveniently carried
on in connection with any of these objects or calculated directly or indirectly to enhance
the value of or facilitate the realisation of or render profitable any of the Company’s
property or rights. |
| 3.33 | To
accept stock or shares in or indentures, debentures, mortgages or securities of any other
company in payment or part payment for any services rendered or for any sale made to or debt
owing from any such company, whether such shares shall be wholly or partly paid-up. |
| 3.34 | To
pay all costs, charges and expenses incurred or sustained in or about the promotion and establishment
of the Company or which the Company shall consider to be preliminary thereto and to issue
shares as fully or in part paid-up, and to pay out of the funds of the Company all brokerage
and charges incidental thereto. |
| 3.35 | To
procure the Company to be registered or recognised in Ireland or in any foreign country or
in any colony or dependency of any such foreign country and to establish branches, places
of business or subsidiaries in Ireland or any such foreign country or in any colony or dependency
of any such foreign country. |
| 3.36 | To
do all or any of the matters hereby authorised in any part of the world or in conjunction
with or as trustee or agent for any other company or person or by or through any factors,
trustees or agents. |
| 3.37 | To
make gifts or grant bonuses to the directors or any other persons who are, or have been,
in the employment of the Company including substitute and alternate directors. |
| 3.38 | To
carry on any business which the Company may lawfully engage in and to do all such things
incidental or conducive to the business of the Company. |
| 3.39 | To
make or receive gifts by way of capital contribution or otherwise. |
| 3.40 | To
reduce its share capital in any manner permitted by law. |
| 3.41 | To
the extent permitted by law, to give whether directly or indirectly, any kind of financial
assistance for the purpose of, or in connection with, the purchase of, or subscription for,
shares, stocks, debentures, debenture stock, indentures, notes, loan notes, loan stock, bonds,
obligations and other securities of any description of the Company or of any company which
is at any given time the Company’s holding company. |
| 3.42 | To
do and take all such things, measures, acts and actions (including, but not limited to, entering
into agreements, contracts, deeds and other documents or instruments and giving undertakings,
covenants, representations, warranties, indemnities and other commitments and promises) as
the Company considers may be necessary or required in connection with, or incidental or conducive
to, attainment of the above objects, or any of them, or as are capable of being conveniently
carried on in connection therewith. |
The
objects specified in each paragraph of this clause 3 shall, except where otherwise expressed in such paragraph, be in no way limited
or restricted by reference to, or inference from, the terms of any other paragraph. None of such paragraphs, the objects therein specified
nor the powers thereby conferred shall be deemed subsidiary or auxiliary merely to the objects set out in the first paragraph of this
clause 3, but the Company shall have full power to exercise all, or any, of the powers conferred by any part of this clause 3 in any
part of the world, notwithstanding that the business, property or acts proposed to be transacted, acquired or performed do not fall within
the objects set out in the first paragraph of this clause 3.
| 4 | The
liability of the shareholders is limited. |
| 5 | The
authorised share capital of the Company is: €49,990 divided into 200,000,000 ordinary
shares of €0.0001 each (nominal value) and 49,900,000 preference shares of €0.0001
each (nominal value) and 25,000 deferred ordinary shares of €1.00 each (nominal value). |
The
shares forming the capital, increased or reduced, may be increased or reduced and be divided into such classes and issued with any preferred,
deferred, qualified or other special rights and privileges and with such conditions, restrictions or qualifications, whether in regard
to preference, dividends, capital (including return of capital), voting or otherwise, and may be held upon such terms as may be attached
thereto or as may from time to time be provided by the original or any substituted or amended articles of association of the Company
for the time being, but so that where shares are issued with any preferential or special rights attached thereto, such rights shall not
be alterable otherwise than pursuant to the provisions of the Company’s articles of association for the time being in force.
For
the purposes of this memorandum of association: (a) a reference to the “Act” means the Companies Act 2014 (including
any statutory modification or re-enactment of it for the time being in force), (b) the terms “holding company”, “subsidiary”,
“associated undertaking” and “member” have the meanings ascribed to such terms in section 7, section
8, paragraph 20 of Schedule 4 and section 168 of the Act, respectively; (c) the term “group” means the group of companies
comprising the Company and its subsidiaries from time to time, (d) the term “shareholder”, insofar as it refers to
the Company means a member of the Company; (e) the term “company” (except where used in reference to the Company)
means and includes any body corporate, corporation, company, partnership, limited liability company or any body of persons, whether incorporated
or not incorporated in Ireland or elsewhere in any other part of the world, (f) the words “including” and “includes”
shall not be given a restrictive interpretation and shall be deemed to be followed by the words “without limitation”
and (g) unless a clear contrary intention appears, the word “or” shall be deemed to be used in the inclusive sense
of “and/or”.
COMPANY
NUMBER 744994
COMPANIES
ACT 2014
A
PUBLIC COMPANY LIMITED BY SHARES
ARTICLES
OF ASSOCIATION
OF
HERAMBA
ELECTRIC PLC
(As
adopted by special resolution passed on 3 July 2024)
CONTENTS
| |
Page |
| |
|
| PRELIMINARY |
14 |
| 1 |
DEFINITIONS |
14 |
| 2 |
OPTIONAL PROVISIONS OF THE ACT |
18 |
| CAPITAL |
18 |
| 3 |
SHARE CAPITAL |
18 |
| 4 |
ORDINARY SHARES |
19 |
| 5 |
PREFERRED SHARES |
19 |
| 6 |
DEFERRED SHARES |
21 |
| 7 |
SECTION 1021: ALLOTMENT AUTHORITY |
22 |
| 8 |
SECTION 1023: PRE-EMPTION DISAPPLICATION |
22 |
| 9 |
RESIDUAL ALLOTMENT PROVISIONS |
22 |
| 10 |
RIGHTS’ PLAN |
23 |
| 11 |
COMMISSIONS AND BROKERAGE |
24 |
| 12 |
TRUSTS NOT RECOGNISED |
24 |
| 13 |
FINANCIAL ASSISTANCE |
24 |
| 14 |
REDEMPTION AND REPURCHASE OF OWN SHARES |
24 |
| 15 |
VARIATION OF CLASS RIGHTS |
25 |
| 16 |
VARIATION OF COMPANY CAPITAL |
25 |
| 17 |
FRACTIONS |
25 |
| 18 |
REDUCTION OF SHARE CAPITAL |
26 |
| CERTIFICATED SHARES |
26 |
| 19 |
RIGHT TO CERTIFICATES |
26 |
| 20 |
REPLACEMENT CERTIFICATES |
27 |
| LIEN ON SHARES |
27 |
| 21 |
COMPANY’S LIEN ON SHARES NOT FULLY PAID |
27 |
| 22 |
ENFORCEMENT OF LIEN BY SALE |
28 |
| CALLS |
29 |
| 23 |
CALLS |
29 |
| 24 |
LIABILITY OF JOINT HOLDERS |
30 |
| 25 |
INTEREST |
30 |
| 26 |
DIFFERENTIATION |
30 |
| 27 |
PAYMENT IN ADVANCE OF CALLS |
30 |
| 28 |
RESTRICTIONS IF CALLS UNPAID |
30 |
| 29 |
SUMS DUE ON ALLOTMENT TREATED AS CALLS |
31 |
| FORFEITURE |
31 |
| 30 |
FORFEITURE AFTER NOTICE OF UNPAID CALL |
31 |
| 31 |
NOTICE AFTER FORFEITURE |
31 |
| 32 |
CONSEQUENCES OF FORFEITURE |
32 |
| 33 |
DISPOSAL OF FORFEITED SHARE |
32 |
| 34 |
PROOF OF FORFEITURE |
33 |
| UNTRACED MEMBERS |
33 |
| 35 |
SALE OF SHARES |
33 |
| 36 |
APPLICATION OF SALE PROCEEDS |
34 |
| 37 |
APPLICABLE ESCHEATMENT LAWS |
34 |
| TRANSFER OF SHARES |
35 |
| 38 |
FORM OF TRANSFER |
35 |
| 39 |
REGISTRATION OF A CERTIFICATED SHARE TRANSFER |
36 |
| 40 |
CLOSING OF REGISTER OF MEMBERS |
37 |
| TRANSMISSION OF SHARES |
37 |
| 41 |
ON DEATH |
37 |
| 42 |
ELECTION OF PERSON ENTITLED BY TRANSMISSION |
37 |
| 43 |
RIGHTS ON TRANSMISSION |
37 |
| GENERAL MEETINGS |
38 |
| 44 |
ANNUAL AND OTHER GENERAL MEETINGS |
38 |
| 45 |
ELECTRONIC GENERAL MEETINGS |
38 |
| 46 |
NOTICE OF A GENERAL MEETING |
39 |
| 47 |
QUORUM FOR A GENERAL MEETING |
40 |
| 48 |
PROCEDURE IF QUORUM NOT PRESENT |
41 |
| 49 |
CHAIRPERSON OF GENERAL MEETING |
41 |
| 50 |
RIGHTS OF DIRECTORS AND OTHERS TO ATTEND MEETINGS |
41 |
| 51 |
ACCOMMODATION OF MEMBERS AT MEETING |
41 |
| 52 |
SECURITY |
42 |
| 53 |
POWER TO ADJOURN |
42 |
| 54 |
NOTICE OF ADJOURNED MEETING |
42 |
| 55 |
BUSINESS OF ADJOURNED MEETING |
43 |
| 56 |
THE BUSINESS OF A GENERAL MEETING |
43 |
| 57 |
PROPOSED SHAREHOLDER RESOLUTIONS |
43 |
| 58 |
TIME FOR RECEIVING REQUESTS |
46 |
| VOTING |
47 |
| 59 |
VOTING AT A GENERAL MEETING |
47 |
| 60 |
POLL PROCEDURE |
47 |
| 61 |
VOTES OF MEMBERS |
48 |
| 62 |
CHAIRPERSON’S CASTING VOTE |
49 |
| 63 |
VOTING RESTRICTIONS ON AN OUTSTANDING CALL |
49 |
| 64 |
PROXY INSTRUMENT |
49 |
| 65 |
CORPORATE REPRESENTATIVES |
51 |
| 66 |
AMENDMENT TO RESOLUTIONS |
51 |
| 67 |
OBJECTION TO ERROR IN VOTING |
51 |
| FAILURE TO DISCLOSE INTERESTS IN SHARES |
52 |
| 68 |
FAILURE TO DISCLOSE INTERESTS IN SHARES |
52 |
| APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS |
54 |
| 69 |
NUMBER OF DIRECTORS |
54 |
| 70 |
STRUCTURE OF THE BOARD |
54 |
| 71 |
ANNUAL RE-ELECTION OF DIRECTORS |
55 |
| 72 |
BOARD POWER TO APPOINT DIRECTORS |
56 |
| 73 |
APPOINTMENT OF EXECUTIVE DIRECTORS |
56 |
| 74 |
APPOINTMENT OF OTHER OFFICERS |
56 |
| 75 |
ELIGIBILITY OF NEW DIRECTORS |
56 |
| 76 |
VACATION OF DIRECTOR’S OFFICE |
57 |
| BOARD POWERS |
57 |
| 77 |
BOARD POWERS |
57 |
| 78 |
DIRECTORS BELOW THE MINIMUM NUMBER |
58 |
| 79 |
DELEGATION TO EXECUTIVE DIRECTORS |
58 |
| 80 |
DELEGATION TO COMMITTEES |
58 |
| 81 |
LOCAL MANAGEMENT |
59 |
| 82 |
DELEGATION TO AGENTS |
59 |
| 83 |
EXERCISE OF VOTING POWER |
59 |
| 84 |
PROVISION FOR EMPLOYEES |
59 |
| 85 |
OVERSEAS REGISTERS |
60 |
| 86 |
ASSOCIATE DIRECTORS |
60 |
| 87 |
BORROWING POWERS |
60 |
| 88 |
CHANGE OF COMPANY NAME |
60 |
| DIRECTORS’ REMUNERATION, EXPENSES AND BENEFITS |
60 |
| 89 |
FEES |
60 |
| 90 |
EXPENSES |
60 |
| 91 |
REMUNERATION OF EXECUTIVE DIRECTORS |
61 |
| 92 |
SPECIAL REMUNERATION |
61 |
| 93 |
COMPANY PROPERTY |
61 |
| 94 |
PENSIONS AND OTHER BENEFITS |
61 |
| DIRECTORS’ PROCEEDINGS |
62 |
| 95 |
BOARD MEETINGS |
62 |
| 96 |
NOTICE OF BOARD MEETINGS |
62 |
| 97 |
QUORUM |
62 |
| 98 |
BOARD CHAIRPERSON |
62 |
| 99 |
VOTING |
62 |
| 100 |
TELEPHONE PARTICIPATION |
63 |
| 101 |
WRITTEN RESOLUTIONS |
63 |
| 102 |
COMMITTEE PROCEEDINGS |
64 |
| 103 |
MINUTES |
64 |
| 104 |
VALIDITY OF PROCEEDINGS |
64 |
| INTERESTS OF DIRECTORS |
64 |
| 105 |
CONTRACTING WITH THE COMPANY |
64 |
| 106 |
DECLARATION OF INTERESTS |
65 |
| 107 |
AUTHORISATION OF BOARD OF CONFLICTS OF INTERESTS |
66 |
| 108 |
PROHIBITION ON VOTING BY INTERESTED DIRECTORS |
67 |
| 109 |
ABILITY OF INTERESTED DIRECTORS TO VOTE |
67 |
| 110 |
DIVISION OF PROPOSALS |
68 |
| 111 |
RULINGS ON QUESTIONS OF ENTITLEMENT TO VOTE |
68 |
| 112 |
INTERESTS OF CONNECTED PERSONS |
68 |
| 113 |
ABILITY OF DIRECTOR TO HOLD OTHER OFFICES |
68 |
| 114 |
REMUNERATION FOR PROFESSIONAL SERVICES |
69 |
| 115 |
DIRECTORSHIPS OF OTHER COMPANIES |
69 |
| SECRETARY |
69 |
| 116 |
SECRETARY |
69 |
| SEALS AND DOCUMENT AUTHENTICATION |
69 |
| 117 |
SEAL |
69 |
| 118 |
DIRECTORS OR SECRETARY TO AUTHENTICATE OR CERTIFY |
70 |
| DIVIDENDS AND OTHER PAYMENTS |
70 |
| 119 |
DECLARATION |
70 |
| 120 |
INTERIM DIVIDENDS |
70 |
| 121 |
ENTITLEMENT TO DIVIDENDS |
70 |
| 122 |
PAYMENT METHODS |
71 |
| 123 |
DEDUCTIONS |
72 |
| 124 |
INTEREST |
72 |
| 125 |
UNCLAIMED DIVIDENDS |
72 |
| 126 |
UNCASHED DIVIDENDS |
72 |
| 127 |
DIVIDENDS IN KIND |
72 |
| 128 |
SCRIP DIVIDENDS |
73 |
| 129 |
RESERVES |
74 |
| 130 |
CAPITALISATION OF PROFITS AND RESERVES |
75 |
| RECORD DATES |
76 |
| 131 |
BOARD TO FIX DATE |
76 |
| ACCOUNTS |
76 |
| 132 |
ACCOUNTING RECORDS |
76 |
| 133 |
ACCESS TO ACCOUNTING RECORDS |
77 |
| 134 |
DISTRIBUTION OF ANNUAL ACCOUNTS |
77 |
| AUDIT |
78 |
| 135 |
APPOINTMENT OF AUDITORS |
78 |
| COMMUNICATIONS |
79 |
| 136 |
COMMUNICATIONS |
79 |
| 137 |
COMMUNICATIONS TO THE COMPANY |
79 |
| 138 |
COMMUNICATIONS BY THE COMPANY OR THE BOARD IN HARD COPY FORM |
79 |
| 139 |
COMMUNICATIONS BY THE COMPANY IN ELECTRONIC FORM |
80 |
| 140 |
COMMUNICATIONS BY THE COMPANY BY MEANS OF A WEBSITE |
80 |
| 141 |
COMMUNICATIONS BY OTHER MEANS |
81 |
| 142 |
FAILURE TO DELIVER BY ELECTRONIC MEANS |
82 |
| 143 |
WHEN SERVICE IS EFFECTED ON A MEMBER |
82 |
| 144 |
NOTICE BY ADVERTISEMENT |
82 |
| 145 |
DOCUMENTS AND INFORMATION TO JOINT HOLDERS |
83 |
| 146 |
SERVICE OF DOCUMENTS AND INFORMATION ON PERSONS ENTITLED TO SHARES BY TRANSMISSION |
83 |
| 147 |
MEMBERS NOT ENTITLED TO NOTICES, DOCUMENTS AND INFORMATION |
83 |
| 148 |
DOCUMENT DESTRUCTION |
83 |
| MISCELLANEOUS |
84 |
| 149 |
WINDING-UP |
84 |
| 150 |
INDEMNITY AND INSURANCE |
85 |
| 151 |
DISPUTE RESOLUTION |
86 |
COMPANY
NUMBER 744994
COMPANIES
ACT 2014
A
PUBLIC COMPANY LIMITED BY SHARES
ARTICLES
OF ASSOCIATION
OF
HERAMBA
ELECTRIC PLC
(As
adopted by special resolution passed on 3 July 2024)
PRELIMINARY
| 1.1 | In
these Articles (unless the context requires otherwise) the following words have the following
meanings: |
“Act”
means the Companies Act 2014 (including any statutory modification or re-enactment of it for the time being in force);
“acting
in concert” has the meaning given to it in the Irish Takeover Rules;
“Articles”
means the articles of association, as amended from time to time by Special Resolution;
“Auditors”
means the statutory auditors for the time being of the Company;
“beneficial
ownership” of any person or group of affiliated or associated persons shall have the meaning given to such term under the United
States federal securities laws, including the Exchange Act;
“Board”
means the Directors or any of them duly acting as the board of directors of the Company;
“certificated”
means in relation to a share in the Company, a share which is recorded in the Share Register as being held in certificated form;
“chairperson”
means the Director who is elected by the Directors from time to time to preside as chairperson at all meetings of the Board and at general
meetings of the Company;
“clear
days” means in relation to the period of a notice, that period excluding the day when the notice is given or deemed to be given
and the day for which it is given or on which it is to take effect;
“Company”
means Heramba Electric plc a public limited company organised under the laws of Ireland with company number 744994;
“Deferred
Shares” means the deferred ordinary shares of €1.00 each (par value) in the capital of the Company;
“Depositary”
means any depositary, clearing agency, custodian, nominee or similar entity appointed under arrangements entered into by the Company
or otherwise approved by the Board that holds, or is interested directly or indirectly, including through a nominee, in, shares, or rights
or interests in respect thereof, and which issues certificates, instruments, securities or other documents of title, or maintains accounts,
evidencing or recording the entitlement of the holders thereof, or account holders, to or to receive such shares, rights or interests
(and shall include, where so approved by the Board, the trustees (acting in their capacity as such) of any employees’ share scheme
established by the Company);
“Depositary
Interest” means any certificate, instrument, security or other document of title issued, or account maintained, by a Depositary
to evidence or record the entitlement of the holder, or account holder, to or to receive shares, or rights or interests in respect thereof;
“Directors”
means the directors of the Company from time to time;
“document”
includes, unless otherwise specified, any document sent or supplied in electronic form;
“electronic
communication” has the meaning given in the Electronic Commerce Act 2000 (including any statutory modification or re-enactment
of it for the time being in force);
“electronic
general meeting” a general meeting hosted on an electronic platform, whether that general meeting is physically hosted at a
specific location simultaneously or not;
“electronic
means” has the meaning given to it in section 2 of the Act, and includes it being done by means of all forms of electronic
communication as the Board may, from time to time, prescribe, either generally or for a particular purpose;
“electronic
platform”, means any form of electronic platform and includes, without limitation, website addresses, application technology
and conference call systems;
“electronic
signature” has the meaning given in the Electronic Commerce Act 2000 (including any statutory modification or re-enactment
of it for the time being in force);
“Exchange”
means any securities exchange or other system on which the shares of the Company may be listed or otherwise authorised for trading from
time to time in circumstances where the Company has approved such listing or trading;
“Exchange
Act” means the Securities Exchange Act of 1934 of the United States of America, as amended from time to time;
“execution”
means any mode of execution, including such forms of electronic signature or other means of verifying the authenticity of a communication
by electronic means as the Board may, from time to time, prescribe, either generally or for a particular purpose(and “executed”
shall be construed accordingly);
“Group”
means the group comprising the Company and its subsidiaries within the meaning of section 7 of the Act for the time being;
“Group
Member” means any member of the Group, including the Company;
“holder”
or “shareholder”, means in relation to a share, the member whose name is entered in the Share Register as the holder
of that share or, where the context permits, the members whose names are entered in the Share Register as the joint holders of shares
in the Company;
“interest
in shares” includes, where the context permits, “interests in securities” as defined in the Irish Takeover Rules
and, for the avoidance of doubt, includes, without duplication, beneficial ownership and Depository Interests, and “interested
in shares” will be construed accordingly;
“Irish
Takeover Rules” means the Irish Takeover Panel Act, 1997, Takeover Rules, 2022, (including any statutory modification or re-enactment
of it for the time being in force);
“member”
means a member within the meaning of section 168 of the Act;
“Ordinary
Resolution” means an ordinary resolution of the Company’s shareholders within the meaning of the Act;
“Ordinary
Shares” means ordinary shares of €0.0001 each (par value) in the capital of the Company, which shall rank pari passu
in all respects;
“paid”
or “paid-up” means paid-up or credited as paid-up;
“Preferred
Shares” means the preferred shares of €0.0001 each (par value) in the capital of the Company;
“Redeemable
Shares” means redeemable shares within the meaning of sections 64 and 66(4) of the Act;
“Registered
Office” means the registered office for the time being of the Company or, as appropriate, in the case of sending or supplying
documents or information by electronic means, the address specified by the Board for the purpose of receiving documents or information
by electronic means;
“Rights”
has the meaning given to that term in Article 10;
“Rights’
Plan” has the meaning given to that term in Article 10;
“Seal”
means the common seal of the Company or any official or securities seal that the Company has or may have as permitted by the Statutes;
“Secretary”
means the secretary of the Company or any other person appointed to perform any of the duties of the secretary of the Company including
a joint, temporary, assistant or deputy secretary;
“share”
means a share in the capital of the Company;
“Share
Register” means the Company’s register of shareholders kept pursuant to the Statutes or, as the case may be, any overseas
branch register kept pursuant to these Articles;
“Special
Resolution” means a special resolution of the Company’s shareholders within the meaning of the Act;
“Statutes”
means the Act and every other legislation, statute, order regulation, instrument or other subordinate legislation for the time being
in force concerning companies and affecting the Company, including any statutory re-enactment or modification of the Act or any other
act, order, regulation, instrument, subordinate legislation or statutory instrument;
“treasury
shares” means treasury shares within the meaning of section 109 of the Act;
“uncertificated”
means in relation to a share, a share to which title is recorded in the Share Register as being held in uncertificated form;
“working
day” means a day that is not a Saturday, Sunday or public holiday in Ireland or the United States;
“writing”
includes printing, typewriting, lithography, photography, electronic mail and any other mode or modes of presenting or reproducing words
in a visible form including communications by electronic means; and
“€”
means euro, the lawful currency of Ireland.
| (A) | words
or expressions which are not defined in Article 1.1 or elsewhere in these Articles have the
same meanings (where applicable) as in the Statutes as in force on the date of the adoption
of these Articles; |
| (B) | a
reference to any Statute or any provision of a Statute includes a reference to any statutory
modification or re-enactment of it for the time being in force, as (where applicable) amended
or modified or extended by any other Statute or any order, regulation, instrument or other
subordinate legislation made under such Statute or statutory provision or under the Statute
under which such statutory instrument was made; |
| (C) | words
in the singular include the plural and vice versa, words importing any gender include all
genders and a reference to a “person” includes any individual, firm, partnership,
unincorporated association, company, corporation or other body corporate; |
| (D) | “mental
disorder” means mental disorder as defined in section 3 of the Mental Health Act
2001 (including any statutory modification or re-enactment of it for the time being in force); |
| (E) | where
an Ordinary Resolution is expressed to be required for any purpose, a Special Resolution
is also effective for such purpose; |
| (F) | headings
do not affect the interpretation of any Article; |
| (G) | any
phrase introduced by the terms “including”, “include”, “in
particular” or any similar expression shall be construed as illustrative and shall
not limit the sense of the words preceding the terms; |
| (H) | any
reference to a dividend includes any dividend or other distribution, in cash or by the distribution
of assets, paid or distributed to shareholders out of the profits of the Company available
for distribution, and includes final dividends, interim dividends and bonus dividends; |
| (I) | reference
to “officer” or “officers” in these Articles means any executive
that has been designated by the Company as an “officer” and, for the avoidance
of doubt, shall not have the meaning given to such term in the Act, and any such officers
shall not constitute officers of the Company within the meaning of section 2(1) of the Act;
and |
| (J) | the
masculine gender shall include the feminine and neuter, and vice versa, and the singular
number shall include the plural, and vice versa, and words importing persons shall include
firms or companies. |
| 1.3 | These
Articles shall be governed by and construed in accordance with Irish law. |
| 2 | OPTIONAL
PROVISIONS OF THE ACT |
| 2.1 | Without
prejudice to section 1007(4) of the Act and save as otherwise expressly provided in these
Articles, where a provision of these Articles covers substantially the same subject matter
as any optional provisions (as defined in section 1007(2) of the Act) of the Act, any such
optional provisions shall be deemed not to apply to the Company and, for the avoidance of
doubt, these Articles shall be deemed to have effect and prevail over the terms of such optional
provisions. |
| 2.2 | Sections
43(2), 43(3), 77 to 81, 95(1)(a), 96(2) to (11), 124, 125, 126, 144(3), 144(4), 148(2), 158,
159, 160, 161, 162, 165, 181(6), 182(2) and (5), 183(3) and (6), 187, 188, 338(5), 338(6),
618(1)(b), 620(8), 1090, 1092 and 1113 of the Act shall not apply to the Company. |
CAPITAL
| 3.1 | The
authorised share capital of the Company is: €49,990 divided into 200,000,000 ordinary
shares of €0.0001 each (nominal value) and 49,900,000 preference shares of €0.0001
each (nominal value) and 25,000 deferred ordinary shares of €1.00 each (nominal value). |
| 3.2 | Subject
to the provisions of the Statutes and of these Articles and without prejudice to any special
rights previously conferred on the holders of any existing shares or class of shares, any
shares in the capital of the Company may be issued with such preferred, deferred, qualified
or other special rights and privileges and with such conditions restrictions or qualifications,
whether in regard to preference, dividend, capital (including return of capital), voting
or otherwise (including, but without prejudice to the generality of the foregoing, and subject
to the provisions of the Statutes, shares which are to be redeemed or are liable to be redeemed
at the option of the Company or the holders) as the Company may from time to time by Ordinary
Resolution determine or, if the Company does not so determine, as the Directors may determine. |
| 3.3 | If
two or more persons are registered as joint holders of any share any one of such persons
may give effective receipts for any dividends or other monies payable in respect of such
share, but such power shall not apply to the legal personal representatives of a deceased
shareholder. |
| 3.4 | The
Company shall not be bound to register more than four persons as joint holders of any share. |
| 4.1 | The
Ordinary Shares shall, among other rights, entitle the holders thereof to the rights set
out below: |
| (A) | subject
to the right of the Board to set record dates for the purposes of determining the identity
of members entitled to notice of and/or to vote at a general meeting of the Company and to
the provisions of Article 61 and any rules or regulations applicable to the conduct of any
general meeting of the Company, each holder of an Ordinary Share shall have the right to
attend and speak at any general meeting of the Company and to exercise one vote for every
Ordinary Share of which he, she or it is the holder; |
| (B) | subject
to the right of the Board to set record dates for the purpose of determining the identity
of members entitled to participate, to participate pro rata in all dividends declared
on the Ordinary Shares in accordance with the terms of Article 119 to Article 130 (inclusive);
and |
| (C) | upon
a liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary,
to participate pro rata in the assets of the Company available for distribution to
the holders of Ordinary Shares in accordance with the terms of Article 149. |
| 4.2 | Unless
the Directors specifically elect to treat such acquisition as a purchase for the purposes
of the Act, an Ordinary Share shall be automatically deemed to be a Redeemable Share on,
and from the time of, the existence or creation of an agreement, transaction or trade between
the Company (including any agent or broker acting on behalf of the Company) and any person
pursuant to which the Company acquires, agrees to acquire or will acquire Ordinary Shares,
or an interest in Ordinary Shares, from such person. In these circumstances, the acquisition
of such shares or interest in shares by the Company, save where acquired otherwise than for
valuable consideration in accordance with the Act, shall constitute the redemption of a Redeemable
Share in accordance with the Act. No resolution, whether special or otherwise, shall be required
to be passed to deem any Ordinary Share a Redeemable Share. |
| 4.3 | The
rights conferred upon any holder of any pre-existing shares in the share capital of the Company
shall be deemed not to be varied by the operation of Article 4.2. |
| 4.4 | The
rights attaching to the Ordinary Shares may be made subject to the preferential terms of
any class or series of Preferred Shares which may be allotted and issued from time to time
by the Directors. In accordance with Article 5. |
| 5.1 | The
Preferred Shares may, from time to time, be allotted and issued, in one or more classes or
series designated by the Board, and the Board is authorised to fix for each such class or
series such voting power, full or limited, or no voting power, and such designations, preferences
and relative, participating, optional or other special rights and such qualifications, limitations
or restrictions thereof, as shall be stated and expressed in the resolution or resolutions
adopted by the Board providing for the issuance of such class or series, including, without
limitation: |
| (A) | the
distinctive designation of such class or series of Preferred Shares and the number of shares
which shall constitute such class or series, which number may be increased (except as otherwise
provided by the Board in creating such series) or decreased (but not below the number of
shares thereof then in issue) from time to time by resolution of the Board; |
| (B) | the
rate of dividends payable on such class or series of Preferred Shares, if any, whether or
not and upon what conditions dividends on shares of such class or series shall be cumulative
and, if cumulative, the date or dates from which dividends shall accumulate, and the preference
or relation which such dividends shall bear to the dividends payable on any other class or
series of shares in the capital of the Company; |
| (C) | the
terms, if any, on which shares of such class or series of Preferred Shares may be redeemed,
including without limitation, the redemption price or prices for such class or series, which
may consist of a redemption price or scale of redemption prices applicable only to redemption
in connection with a sinking fund (which term as used herein shall include any fund or requirement
for the periodic purchase or redemption of shares), and the same or a different redemption
price or scale of redemption prices applicable to any other redemption, and the preference
or relation which such redemption price or prices shall bear to the redemption price or prices
payable on any other class or series of shares in the capital of the Company; |
| (D) | the
terms and amount of any sinking fund provided for the purchase or redemption of shares of
such class or series of Preferred Shares; |
| (E) | the
amount or amounts which shall be paid to the holders of shares of such class or series of
Preferred Shares on a liquidation, dissolution or winding-up of the Company, whether voluntary
or involuntary, or upon a return of capital by the Company, and the preference or relation
which such amount or amounts shall bear to the amount or amounts payable to the holders of
any other class or series of shares in the capital of the Company in such circumstances; |
| (F) | the
terms, if any, upon which the holders of shares of such class or series of Preferred Shares
may convert such shares into shares of any other class or series in the capital of the Company; |
| (G) | the
voting rights, full or limited, if any, of the shares of such class or series of Preferred
Shares, and whether or not and under what conditions the shares of such class or series (alone
or together with the shares of one or more other classes or series of shares in the capital
of the Company) shall be entitled to vote separately as a single class, either generally,
in respect of specific matters and/or upon the occurrence of specified events (including
in respect of the nomination or election of one or more additional Directors); |
| (H) | whether
or not the holders of shares of such class or series of Preferred Shares, in their capacity
as such, shall have any pre-emptive or preferential rights to subscribe for or purchase shares
of any class or series of shares in the capital of the Company, whether now or hereafter
authorised, or any securities convertible into, or warrants or other evidences of optional
rights to purchase or subscribe for, shares of any class or series of shares in the capital
of the Company, whether now or hereafter authorised; |
| (I) | the
limitations and restrictions, if any, to be effective while any shares of such class or series
of Preferred Shares are outstanding, in respect of (i) the payment of dividends on, (ii)
the making of other distributions on, (iii) the participation in any assets of the Company
available for distribution upon a liquidation, dissolution or winding-up of the Company by,
(iv) a return of capital on and/or (v) the purchase, redemption or other acquisition by the
Company of, any other class or series ranking junior to the shares of such class or series,
whether as to dividends, distribution and/or returns of capital on a winding-up or otherwise; |
| (J) | the
conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon
the issuance of any additional shares (including additional shares of such class or series
of Preference Shares or of any other class or series of shares in the capital of the Company)
ranking on a parity with or in priority to the shares of such class or series of Preferred
Shares as to entitlements to dividends, distributions, redemptions, participation in the
assets of the Company available for distribution upon a liquidation, dissolution or winding-up
of the Company and/or upon a return of capital; and |
| (K) | such
other rights, preferences and limitations as may be permitted to be fixed by the Board of
the Company under the laws of Ireland as in effect at the time of the creation of such class
or series. |
| 5.2 | The
Board may at any time before the allotment of any Preferred Share (or class or series thereof)
by further resolution in any way amend the designations, preferences, rights, qualifications,
limitations or restrictions, or vary or revoke the designations of such Preferred Shares
(or class or series thereof). |
| 5.3 | The
rights conferred upon any holder of any pre-existing shares in the share capital of the Company
shall be deemed not to be varied by the creation, issue and allotment of Preferred Shares
(or class or series thereof) in accordance with Article 5.1. |
| 6.1 | The
holders of the Deferred Shares shall not be entitled to receive notice of, attend, speak
or vote at, any general meeting. |
| 6.2 | The
holders of the Deferred Shares shall not be entitled to receive any dividend or distribution
declared, made or paid or any return of capital (save as provided for in this Article) and
shall not be entitled to any further or other right of participation in the assets of the
Company. |
| 6.3 | On
a winding-up of the Company, or other return of capital by the Company (other than on a redemption
of any class of shares in the capital of the Company), the holders of the Deferred Shares
shall be entitled to participate in such winding-up or return of capital, provided that such
entitlement shall be limited to the repayment of the amount paid-up or credited as paid-up
on the Deferred Shares and shall be paid only after the holders of Ordinary Shares shall
have received payment in respect of such amount as is paid-up or credited as paid-up on the
Ordinary Shares held by them at that time, plus the payment in cash of €5,000,000 on
each such Ordinary Share. |
| 6.4 | The
Company as agent for the holders of Deferred Shares shall have the irrevocable authority
to authorise and instruct the Secretary (or any other person as the Directors determine)
to acquire, or to accept the surrender of, the Deferred Shares for no consideration or for
valuable consideration and to execute on behalf of such holders such documents as are necessary
in connection with such acquisition or surrender, and pending such acquisition or surrender
to retain the certificates, to the extent issued, for such Deferred Shares. Any request by
the Company to acquire, or for the surrender of, any Deferred Shares may be made by the Directors
depositing at the Registered Office a notice addressed to such person as the Directors shall
have nominated on behalf of the holders of Deferred Shares. A person whose shares have been
acquired or surrendered in accordance with this Article shall cease to be a shareholder in
respect of such Deferred Shares but shall notwithstanding remain liable to pay the Company
all monies which, at the date of acquisition or surrender, were payable by him or her to
the Company in respect of such shares, but his or her liability shall cease if and when the
Company has received payment in full of all such monies in respect of such shares. A notice
issued pursuant to this Article shall be deemed to be validly issued notwithstanding the
provisions of Articles 137 to 143 inclusive. The provisions of Article 4.2 shall apply to
any acquisition of Deferred Shares for valuable consideration as if reference therein to
an Ordinary Share was to a Deferred Share. |
| 7 | SECTION
1021: ALLOTMENT AUTHORITY |
The
Directors are, for the purposes of section 1021 of the Act, generally and unconditionally authorised to exercise all powers of the Company
to allot relevant securities (as defined by the said section 1021) up to the amount of Company’s authorised share capital as of
the date of adoption of these Articles (including any shares acquired or redeemed by the Company pursuant to the provisions of the Act
and held as treasury shares), and, unless it is renewed or a longer period of time is allowed under applicable law, this authority shall
expire five years from the date of adoption of these Articles. The Company may, before the expiry of such authority, make an offer or
agreement which would, or might, require relevant securities to be allotted after such expiry and the Directors may allot relevant securities
in pursuance of such an offer or agreement as if the authority conferred by this Article 7 had not expired.
| 8 | SECTION
1023: PRE-EMPTION DISAPPLICATION |
The
Directors are hereby empowered pursuant to sections 1022 and 1023(3) of the Act to allot equity securities (within the meaning of the
said section 1023) for cash pursuant to the authority conferred by Article 7 as if section 1022(1) of the Act did not apply to any such
allotment, and, unless it is renewed or a longer period of time is allowed under applicable law, this power shall expire five years from
the date of adoption of these Articles. The Company may, before the expiry of such power, make an offer or agreement which would, or
might, require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such
an offer or agreement as if the power conferred by this Article 8 had not expired.
| 9 | RESIDUAL
ALLOTMENT PROVISIONS |
| 9.1 | Subject
to the provisions of these Articles relating to new shares, the shares shall be at the disposal
of the Directors, and they may (subject to the provisions of the Act) allot, re-classify,
grant options over or otherwise dispose of them to such persons, on such terms and conditions
and at such times as they may consider to be in the interests of the Company, but so that
no share shall be issued at a discount save in accordance with the Act, and so that the amount
payable on application on each share shall not be less than one-quarter of the nominal amount
of the share and the whole of any premium thereon. To the extent permitted by the Act, shares
may also be allotted by a committee of the Directors or by any other person where such committee
or person is so authorized by the Directors. |
| 9.2 | Subject
to any requirement to obtain the approval of shareholders under any laws, regulations or
the rules of any stock exchange to which the Company is subject, the Board is authorized,
from time to time, in its discretion, to grant such persons, for such periods and upon such
terms as the Board deems advisable, options to purchase or subscribe for such number of shares
of any class or classes or of any series of any class as the Board may deem advisable, and
to cause warrants or other appropriate instruments evidencing such options to be issued. |
| 9.3 | The
Company may issue permissible letters of allotment (as defined by section 1019 of the Act). |
| 9.4 | Nothing
in these Articles shall preclude the Directors from recognising a renunciation of the allotment
of any shares by any allottee in favour of some other person. |
| 9.5 | If
by the conditions of allotment of any share the whole or part of the amount or issue price
thereof shall be payable by instalments, every such instalment when due shall be paid to
the Company by the person who for the time being shall be the holder of the share. |
| 10.1 | Subject
to applicable law, the Directors are hereby expressly authorised to adopt any shareholder
rights’ plan (a “Rights’ Plan”) upon such terms and conditions
as the Directors deem expedient in the interests of the Company, including, without limitation,
where the Directors are of the opinion that a Rights’ Plan could grant them additional
time to gather relevant information or pursue strategies in response to or anticipation of,
or could prevent, a potential change of control of the Company or accumulation of shares
in the Company or interests therein. |
| 10.2 | The
Directors may exercise any power of the Company to grant rights (including approving the
execution of any documents relating to the grant of such rights) to subscribe for Ordinary
Shares or Preferred Shares in the share capital of the Company (“Rights”)
in accordance with the terms of a Rights’ Plan. |
| 10.3 | For
the purposes of effecting an exchange of Rights for Ordinary Shares or Preferred Shares (an
“Exchange of Rights”), the Directors may: |
| (A) | resolve
to capitalise an amount standing to the credit of the reserves of the Company (including,
but not limited to, the share premium account, capital redemption reserve, any merger reserve,
any undenominated capital and profit and loss account), whether or not available for distribution,
being an amount equal to the nominal value of the Ordinary Shares or Preferred Shares which
are to be exchanged for the Rights; and |
| (B) | apply
that sum in paying up in full Ordinary Shares or Preferred Shares and allot such shares,
credited as fully paid, to those holders of Rights who are entitled to them under an Exchange
of Rights effected pursuant to the terms of a Rights’ Plan. |
| 10.4 | The
duties of the Directors to the Company under applicable law, including, but not limited to,
the Act and common law, are hereby deemed amended and modified such that the adoption of
a Rights’ Plan and any actions taken thereunder by the Directors (if so approved by
the Directors) shall be deemed to constitute an action in the interests of the Company in
all circumstances, and any such action shall be deemed to be immediately confirmed, approved
and ratified. |
| 11 | COMMISSIONS
AND BROKERAGE |
The
Company may pay commission to any person in consideration of any person subscribing or agreeing to subscribe, whether absolutely or conditionally,
for any shares in the capital of the Company or procuring or agreeing to procure subscriptions, whether absolute or conditional, for
any shares in the Company on such terms and subject to the provisions of the Act and such conditions as the Directors may determine,
including, without limitation, by paying cash or allotting and issuing fully or partly paid shares or any combination of the two. The
Company may also, on any issue of shares, pay such brokerage as may be lawful.
Except
as otherwise expressly provided by these Articles or as required by law or as ordered by a court of competent jurisdiction, no person
shall be recognised by the Company as holding any share on any trust, and the Company shall not be bound by or required to recognise
(even when having notice thereof) any equitable, contingent, future or partial interest in any share or any right whatsoever in respect
of any share or any interest in any fractional part of a share other than an absolute right to the entirety thereof in the registered
holder. This shall not preclude the Company from requiring the shareholders or a transferee of shares to furnish the Company with information
as to the beneficial ownership of any share when such information is reasonably required by the Company.
Save
as permitted by the Statutes, the Company shall not give, whether directly or indirectly and whether by means of a loan, guarantee, the
provisions of security or otherwise, any financial assistance for the purpose of an acquisition made or to be made by any person of any
shares in the Company or, where the Company is a subsidiary, in its holding company.
| 14 | REDEMPTION
AND REPURCHASE OF OWN SHARES |
| 14.1 | Subject
to the provisions of the Act and the other provisions of these Articles, and without prejudice
to the provisions of Articles 4.3 and 5.3, the Company may: |
| (A) | pursuant
to section 66(4) of the Act, issue any shares which are to be redeemed or are liable to be
redeemed at the option of the Company or the shareholders on such terms and in such manner
as may be determined by the Directors; |
| (B) | redeem
shares of the Company on such terms as may be contained in, or be determined pursuant to
the provisions of, these Articles; |
| (C) | cancel
any shares so redeemed or may hold them as treasury shares and re-issue such treasury shares
as shares of any class or classes or cancel them; |
| (D) | subject
to or in accordance with the provisions of the Act and without prejudice to any relevant
special rights attached to any class of shares, acquire any of its own shares (including
any Redeemable Shares and without any obligation to purchase on any pro rata basis
as between shareholders, including shareholders of the same class) and may cancel any shares
so purchased or hold them as treasury shares and may reissue any such shares as shares of
any class or classes or cancel them; or |
| (E) | convert
any of its shares into Redeemable Shares. |
| 14.2 | The
Company may make a payment in respect of the redemption or purchase of its own shares in
any manner permitted by the Act. |
| 14.3 | Unless
the Board determines otherwise, the holder of any shares being purchased or redeemed shall
be bound to deliver up to the Company at its Registered Office or such other place as the
Board shall specify, the certificate(s) (if any) thereof for cancellation and thereupon the
Company shall pay to him or her the purchase or redemption monies or consideration in respect
thereof. |
| 15 | VARIATION
OF CLASS RIGHTS |
| 15.1 | Subject
to the provisions of the Act and the other provisions of these Articles and without prejudice
to the provisions of Articles 4.3 and 5.3, if at any time the share capital is divided into
different classes of shares, the rights attached to any class of shares may, whether or not
the Company is being wound up, be varied or abrogated: |
| (A) | with
the consent in writing from the holders of at least 75% in nominal value of the issued shares
of that class (excluding any shares held as treasury shares); or |
| (B) | with
the sanction of a Special Resolution passed at a separate general meeting of the holders
of the shares of that class sanctioning the variation, provided that, if the relevant class
of holders has only one holder, that person present in person or by proxy shall constitute
the necessary quorum for such a meeting, and to every such meeting the provisions of Article
44.5 shall apply. |
| 15.2 | Subject
to the terms of issue of or rights attached to any shares, the rights or privileges attached
to any class of shares shall be deemed not to be varied or abrogated by: |
| (A) | the
creation or issue of any new shares ranking pari passu in all respects (save as to
the date from which such new shares shall rank for dividend) therewith; |
| (B) | the
operation of Article 4.2; |
| (C) | the
issue and allotment of Preferred Shares (or class or series thereof) in accordance with Article
5.1; or |
| (D) | the
reduction of the capital paid-up on such shares or by the purchase or redemption by the Company
of any of its own shares in accordance with the Statutes and these Articles. |
| 16 | VARIATION
OF COMPANY CAPITAL |
| 16.1 | The
Company may by Ordinary Resolution vary its company capital as permitted by section 83 of
the Act. |
| 17.1 | If,
as the result of a consolidation and division or a sub-division of shares, fractions of shares
become attributable to shareholders, the Board may on behalf of the shareholders deal with
the fractions as it thinks fit, including (without limitation) in either of the ways prescribed
in this Article below. |
| 17.2 | The
Board may sell shares representing the fractions to any person (including, subject to the
Statutes, the Company) for the best price reasonably obtainable and distribute the net proceeds
of sale (subject to any applicable tax, abandoned property laws and the reasonable expenses
of sale) in due proportion amongst the persons to whom such fractions are attributable (except
that if the amount due to a person is less than €5.00, or such other sum as the Board
may decide, the Company may retain such sum for its own benefit). To give effect to such
sale the Board may authorise a person to execute an instrument of transfer of shares to the
purchaser or as the purchaser may direct. |
| 17.3 | The
purchaser will not be bound to see to the application of the purchase monies in respect of
any such sale. The title of the transferee to the shares will not be affected by any irregularity
in or invalidity of the proceedings connected with the sale or transfer. Any instrument or
exercise referred to in Article 17.2 shall be effective as if it had been executed or exercised
by the holder of the shares to which it relates. |
| 17.4 | In
relation to such fractions, the Board may issue, subject to the Statutes, to a shareholder
credited as fully paid by way of capitalisation the minimum number of shares required to
round up his or her holding of shares to a number which, following a consolidation and division
or a sub-division, leaves a whole number of shares (such issue being deemed to have been
effected immediately before the consolidation or the sub-division, as the case may be). The
amount required to pay up those shares may be capitalised as the Board thinks fit out of
amounts standing to the credit of any reserve or fund of the Company (including any share
premium account, un-denominated capital account, revaluation reserve, capital redemption
reserve and profit and loss account), whether or not available for distribution, and applied
in paying up in full the appropriate number of shares. A resolution of the Board capitalising
part of any such reserve or fund will have the same effect as if the capitalisation had been
made with the sanction of an Ordinary Resolution of the Company pursuant to Article 130.
In relation to the capitalisation, the Board may exercise all the powers conferred on it
by Article 130 without the sanction of an Ordinary Resolution of the Company. |
| 18 | REDUCTION
OF SHARE CAPITAL |
| 18.1 | The
Company may by Special Resolution reduce its company capital in any way it thinks expedient
as permitted by section 84 of the Act and in accordance with sections 84 to 87 of the Act. |
| 18.2 | Unless
the Special Resolution provides otherwise, a reserve arising from the reduction of company
capital is to be treated for all purposes as a realised profit in accordance with section
117(9) of the Act. Nothing in this Article shall, however, prejudice or limit the Company’s
ability to perform or engage in any of the actions described in section 83(1) of the Act
by way of Ordinary Resolution only. |
CERTIFICATED
SHARES
| 19.1 | The
shares of the Company may be either represented by certificates or, if permissible by applicable
Statutes and the conditions of issue of the relevant shares so provide, by uncertificated
shares. Except as required by law, the rights and obligations of the holders of uncertificated
shares and the rights and obligations of the holders of shares represented by certificates
of the same class shall be identical. |
| 19.2 | Subject
to the Statutes, the requirements of (to the extent applicable) the rules of any stock exchange
to which the shares are admitted to trading, and these Articles, every person (except any
person in respect of whom the Company is not required by the Statutes to complete and have
ready for delivery a share certificate), upon becoming the holder of a certificated share
is entitled, without charge, to receive within one month after allotment or within one month
of lodgement of a transfer (unless the conditions of issue provide for a longer interval),
one certificate for all the certificated shares of a class registered in his or her name
or, in the case of certificated shares of more than one class being registered in his or
her name, to a separate certificate for each class of shares, unless the terms of issue of
the shares provide otherwise. |
| 19.3 | Where
a shareholder transfers part of his or her shares comprised in a certificate, the old certificate
shall be cancelled and he or she shall be entitled, without charge, to one certificate for
the balance of the certificated shares retained by him or her. |
| 19.4 | If
and so long as all the issued shares in the capital of the Company or all the issued shares
of a particular class are fully paid-up and rank pari passu for all purposes, then
none of those shares shall bear a distinguishing number. In all other cases each share shall
bear a distinguishing number. |
| 19.5 | In
the case of joint holders of shares held in certificated form the Company shall not be bound
to issue more than one certificate to all the joint holders, and delivery of such certificate
to any one of them shall be sufficient delivery to all. |
| 19.6 | A
certificate shall specify the number and class and the distinguishing numbers (if any) of
the shares in respect of which it is issued and the amount paid-up on the shares. It shall
be issued under the Seal, which may be affixed to or printed on it, or in such other manner
as the Board may approve, having regard to the terms of issue and the requirements of (to
the extent applicable) the rules of any stock exchange to which the shares are admitted to
trading (including by way of signature or facsimile of the signature of any person to be
applied to such share certificate by any mechanical or electronic means in place of that
person’s actual signature). |
| 20 | REPLACEMENT
CERTIFICATES |
If
any certificate is worn-out, defaced, lost or destroyed, the Company may cancel it and issue a replacement certificate subject to such
terms as the Board may decide as to evidence and indemnity (with or without security) and to payment of any exceptional out-of-pocket
expenses of the Company in investigating such evidence and preparing such indemnity or such security but otherwise free of charge, and
(if the certificate is worn-out or defaced) on delivery up of the old certificate.
LIEN
ON SHARES
| 21 | COMPANY’S
LIEN ON SHARES NOT FULLY PAID |
| 21.1 | The
Company shall have a first and paramount lien on each issued share (not being a fully paid
share) for all amounts payable to the Company (whether actually or contingently and whether
presently payable or not) in respect of such share. |
| 21.2 | The
lien applies to all dividends on any such share and to all amounts payable by the Company
in respect of such share. It also applies notwithstanding that: |
| (A) | the
Company may have notice of any equitable or other interest of any person in any such share;
or |
| (B) | any
such amounts payable may be the joint debts and liabilities of both the holder of the share
and one or more other persons. |
| 21.3 | The
Board may resolve that any share be exempt wholly or in part from this Article. |
| 22 | ENFORCEMENT
OF LIEN BY SALE |
| 22.1 | For
the purpose of enforcing the Company’s lien on any shares, the Board may sell them
in such manner as it decides if an amount in respect of which the lien exists is presently
payable and is not paid within fourteen (14) clear days following the giving of a notice
to the holder (or any person entitled by transmission to the share) demanding payment of
the amount due within such fourteen clear day period and stating that if the notice is not
complied with the shares may be sold. |
| 22.2 | To
give effect to such sale the Board may authorise a person to execute an instrument of transfer
of shares in the name and on behalf of the holder of, or the person entitled by transmission
to, them to the purchaser or as the purchaser may direct. |
| 22.3 | The
purchaser will not be bound to see to the application of the purchase monies in respect of
any such sale. The title of the transferee to the shares will not be affected by any irregularity
in or invalidity of the proceedings connected with the sale or transfer, and after the name
of the purchaser has been entered in the Share Register, the remedy of any person aggrieved
by the sale shall be in damages only and against the Company exclusively. Any instrument
or exercise referred to in Article 22.2 shall be effective as if it had been executed or
exercised by the holder of, or the person entitled by transmission to, the shares to which
it relates. |
| 22.4 | The
net proceeds of any sale of shares subject to the Company’s lien under these Articles
(after payment of the costs and expenses of sale) shall be applied in or towards satisfaction
of the amount then due to the Company in respect of the shares. Any balance shall be paid
to the original holder of, or the person entitled (but for such sale) by transmission to,
the shares on (in the case of certificated shares) surrender to the Company for cancellation
of the certificate for such shares and (in all cases) subject to the Company having
a lien on such balance on the same basis as applied to such shares for any amount not presently
payable as existed on such shares before the sale. |
| 22.5 | Whenever
any law for the time being of any country, state or place imposes or purports to impose any
immediate or future or possible liability upon the Company to make any payment or empowers
any government or taxing authority or government official to require the Company to make
any payment in respect of any shares registered in the Share Register as held either jointly
or solely by any shareholder or in respect of any dividends, bonuses or other monies due
or payable or accruing due or which may become due or payable to such shareholder by the
Company on or in respect of any shares registered as mentioned above or for or on account
or in respect of any shareholder and whether in consequence of: |
| (A) | the
death of such shareholder; |
| (B) | the
non-payment of any income tax or other tax by such shareholder; |
| (C) | the
non-payment of any estate, probate, succession, death, stamp or other duty by the executor
or administrator of such shareholder or by or out of her estate; or |
| (D) | any
other act or thing, |
in
every such case (except to the extent that the rights conferred upon holders of any class of shares render the Company liable to make
additional payments in respect of sums withheld on account of the foregoing):
| (1) | the
Company shall be fully indemnified by such shareholder or her executor or administrator from
all liability; |
| (2) | the
Company shall have a lien upon all dividends and other monies payable in respect of the shares
registered in the Share Register as held either jointly or solely by such shareholder for
all monies paid or payable by the Company as referred to above in respect of such shares
or in respect of any dividends or other monies thereon or for or on account or in respect
of such shareholder under or in consequence of any such law, together with interest at the
rate of 15% per annum (or such other rate as the Board may determine) thereon from the date
of payment to date of repayment, and the Company may deduct or set off against such dividends
or other monies so payable any monies paid or payable by the Company as referred to above
together with interest at the same rate; |
| (3) | the
Company may recover as a debt due from such shareholder or her executor or administrator
(wherever constituted) any monies paid by the Company under or in consequence of any such
law and interest thereon at the rate and for the period referred to above in excess of any
dividends or other monies then due or payable by the Company; and |
| (4) | the
Company may if any such money is paid or payable by it under any such law as referred to
above refuse to register a transfer of any shares by any such shareholder or her executor
or administrator until such money and interest is set off or deducted as referred to above
or in the case that it exceeds the amount of any such dividends or other monies then due
or payable by the Company, until such excess is paid to the Company. |
| 22.6 | Subject
to the rights conferred upon the holders of any class of shares, nothing in Article 22.5
will prejudice or affect any right or remedy which any law may confer or purport to confer
on the Company. As between the Company and every such shareholder as referred to above (and,
her executor, administrator and estate, wherever constituted), any right or remedy which
such law shall confer or purport to confer on the Company shall be enforceable by the Company. |
CALLS
| 23.1 | Subject
to the terms on which shares are allotted, the Board may make calls on the shareholders (and
any persons entitled by transmission) in respect of any amounts unpaid on their shares (whether
in respect of nominal value or premium) and not payable on a date fixed by or in accordance
with the allotment terms. Each such shareholder or other person shall pay to the Company
the amount called, subject to receiving at least fourteen (14) clear days’ notice specifying
when and where the payment is to be made, as required by such notice. |
| 23.2 | A
call may be made payable by instalments. A call may be revoked before receipt by the Company
of a sum due thereunder, in whole or in part and payment of a call may be postponed in whole
or in part as the Board may decide. A person upon whom a call is made shall remain liable
for calls made upon him or her notwithstanding the subsequent transfer of the shares in respect
of which the call was made. |
| 23.3 | A
call shall be deemed to have been made at the time when the resolution of the Board authorising
the call was passed. |
| 24 | LIABILITY
OF JOINT HOLDERS |
The
joint holders of a share shall be jointly and severally liable to pay all calls in respect of it.
If
the whole of the sum payable in respect of any call is not paid by the day it becomes due and payable, the person from whom it is due
shall pay all costs, charges and expenses that the Company may have incurred by reason of such non-payment, together with interest on
the unpaid amount from the day it became due and payable until it is paid at the rate fixed by the terms of the allotment of the share
or in the notice of the call or, if no rate is fixed, at such rate, not exceeding the appropriate rate (as defined by the Act), as the
Board shall determine. The Board may waive payment of such costs, charges, expenses or interest in whole or in part.
Subject
to the allotment terms, the Board may make arrangements on or before the issue of shares to differentiate between the holders of shares
in the amounts and times of payment of calls on their shares.
| 27 | PAYMENT
IN ADVANCE OF CALLS |
| 27.1 | The
Board may, if it thinks fit, receive from any shareholder (or any person entitled by transmission)
willing to advance the same or all or any part of the amount uncalled and unpaid on the shares
held by him or her (or to which he or she is entitled). The liability of each such shareholder
or other person on the shares to which such payment relates shall be reduced by such amount.
The Company may pay interest on such amount from the time of receipt until the time when
such amount would, but for such advance, have become due and payable at such rate not exceeding
the appropriate rate (as defined by the Act) as the Board may decide. |
| 27.2 | No
sum paid-up on a share in advance of a call shall entitle the holder to any portion of a
dividend subsequently declared or paid in respect of any period prior to the date on which
such sum would, but for such payment, become due and payable. |
| 28 | RESTRICTIONS
IF CALLS UNPAID |
Unless
the Board decides otherwise, no shareholder shall be entitled to receive any dividend or to be present or vote at any meeting or to exercise
any right or privilege as a shareholder until he or she has paid all calls due and payable on every share held by him or her, whether
alone or jointly with any other person, together with interest and expenses (if any) to the Company.
| 29 | SUMS
DUE ON ALLOTMENT TREATED AS CALLS |
Any
sum payable in respect of a share on allotment or at any fixed date, whether in respect of the nominal value of the share or by way of
premium or as an instalment of a call, shall be deemed to be a call. If such sum is not paid, these Articles shall apply as if it had
become due and payable by virtue of a call.
FORFEITURE
| 30 | FORFEITURE
AFTER NOTICE OF UNPAID CALL |
| 30.1 | If
a call or an instalment of a call remains unpaid after it has become due and payable, the
Board may give to the person from whom it is due not less than fourteen (14) clear days’
notice requiring payment of the amount unpaid together with any interest which may have accrued
and any costs, charges and expenses that the Company may have incurred by reason of such
non-payment. The notice shall state the place where payment is to be made and that if the
notice is not complied with the shares in respect of which the call was made will be liable
to be forfeited. If the notice is not complied with, any shares in respect of which it was
given may, before the payment required by the notice has been made, be forfeited by a resolution
of the Board. The forfeiture will include all dividends and other amounts payable in respect
of the forfeited shares which have not been paid before the forfeiture. |
| 30.2 | The
Board may accept the surrender of a share which is liable to be forfeited in accordance with
these Articles. All provisions in these Articles which apply to the forfeiture of a share
also apply to the surrender of a share. |
| 30.3 | The
provisions of these Articles as to forfeiture shall apply in the case of non-payment of any
sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on
account of the nominal value of the share or by way of premium, as if the same had been payable
by virtue of a call duly made and notified. |
| 30.4 | On
the trial or hearing of any action for the recovery of any money due for any call it shall
be sufficient to prove that the name of the shareholder sued is entered in the Share Register
as the holder, or one of the holders, of the shares in respect of which such debt accrued,
that the resolution making the call is duly recorded in the minute book and that notice of
such call was duly given to the shareholder sued, in pursuance of these Articles, and it
shall not be necessary to prove the appointment of the Directors who made such call nor any
other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence
of the debt. |
| 31 | NOTICE
AFTER FORFEITURE |
| 31.1 | When
a share has been forfeited, the Company shall give notice of the forfeiture to the person
who was before forfeiture the holder of the share or the person entitled by transmission
to the share. An entry that such notice has been given and of the fact and date of forfeiture
shall be made in the Share Register. No forfeiture will be invalidated by any omission to
give such notice or make such entry. |
| 31.2 | The
Board may accept a surrender of any share liable to be forfeited hereunder. |
| 32 | CONSEQUENCES
OF FORFEITURE |
| 32.1 | Subject
to the provisions of the Act, a share shall, on its forfeiture, become the property of the
Company and all interest in and all claims and demands against the Company in respect of
a share and all other rights and liabilities incidental to the share as between its holder
and the Company shall, on its forfeiture, be extinguished and terminate except as otherwise
stated in these Articles. |
| 32.2 | The
holder of a share (or the person entitled to it by transmission) which is forfeited or surrendered
shall: |
| (A) | on
its forfeiture or surrender cease to be a shareholder (or a person entitled) in respect of
it; |
| (B) | if
a certificated share, surrender to the Company for cancellation the certificate for the share; |
| (C) | remain
liable to pay to the Company all monies payable in respect of the share at the time of forfeiture,
with interest from such time of forfeiture until the time of payment, in the same manner
in all respects as if the share had not been forfeited; and |
| (D) | remain
liable to satisfy all (if any) claims and demands which the Company might have enforced in
respect of the share at the time of forfeiture without any deduction or allowance for the
value of the share at the time of forfeiture or for any consideration received on its disposal,
but his or her liability shall cease if and when the Company shall have received payment
in full of all such moneys in respect of the shares. |
| 32.3 | The
forfeiture or surrender of a share shall involve the extinction at the time of forfeiture
or surrender of all interest in and all claims and demands against the Company in respect
of the share as between the shareholder whose share is forfeited or surrendered and the Company,
except only such of those rights and liabilities as are by these Articles expressly saved,
or as are by the Act given or imposed in the case of past shareholders. |
| 32.4 | Notwithstanding
any such forfeiture as aforesaid, the Board may, at any time before the forfeited shares
have been otherwise disposed of, annul the forfeiture, on the terms of payment of all calls
and interest due thereon and all expenses incurred in respect of the share, or on the terms
of compliance with the terms of any notice served under section 1062 of the Act, as appropriate,
and on such further terms (if any) as it shall see fit. |
| 33 | DISPOSAL
OF FORFEITED SHARE |
| 33.1 | Subject
to the Act, a forfeited share may be sold, re-allotted or otherwise disposed of on such terms
and in such manner as the Board may decide either to the person who was before the forfeiture
the holder or to any other person. At any time before the disposal, the forfeiture may be
cancelled on such terms as the Board may decide. Where for the purpose of its disposal a
forfeited share is to be transferred to any transferee, the Board may authorise a person
to execute an instrument of transfer of shares in the name and on behalf of their holder
to the purchaser or as the purchaser may direct. |
| 33.2 | The
Company may receive the consideration, if any, given for the share on any sale or disposition
thereof and may execute a transfer of the share in favour of the person to whom the share
is sold or disposed of and thereupon he or she shall be registered as the holder of the share. |
| 33.3 | The
purchaser will not be bound to see to the application of the purchase monies in respect of
any such sale. The title of the transferee to the shares will not be affected by any irregularity
in or invalidity of the proceedings connected with the sale or transfer, and after the name
of the purchaser has been entered in the Share Register, the remedy of any person aggrieved
by the sale shall be in damages only and against the Company exclusively. Any instrument
or exercise referred to in Article 33.1 shall be effective as if it had been executed or
exercised by the holder of, or the person entitled by transmission to, the shares to which
it relates. |
A
statutory declaration by a Director or the Secretary that a share has been duly forfeited on a specified date shall be conclusive evidence
of the facts stated in it against all persons claiming to be entitled to the share. The declaration shall (subject to the execution of
any necessary instrument of transfer) constitute good title to the share. The person to whom the share is disposed of shall not be bound
to see to the application of the consideration (if any) given for it on such disposal. His or her title to the share will not be affected
by any irregularity in, or invalidity of, the proceedings connected with the forfeiture or disposal.
UNTRACED
MEMBERS
| 35.1 | The
Company may sell at the best price reasonably obtainable any share of a shareholder, or any
share to which a person is entitled by transmission, if: |
| (A) | during
the period of twelve (12) years prior to the date of the publication of the advertisements
referred to in this Article 35.1 (or, if published on different dates, the earlier or earliest
of them): |
| (1) | no
cheque, warrant or money order in respect of such share sent by or on behalf of the Company
to the shareholder or to the person entitled by transmission to the share, at his or her
address in the Share Register or other address last known to the Company has been cashed; |
| (2) | no
cash dividend payable on the shares has been satisfied by the transfer of funds to a bank
account of the shareholder (or person entitled by transmission to the share); and |
| (3) | the
Company has received no communication (whether in writing or otherwise) in respect of such
share from such shareholder or person, |
provided
that during such twelve (12) year period the Company has paid at least three cash dividends (whether interim or final) in respect of
shares of the class in question and no such dividend has been claimed by the person entitled to such share;
| (B) | on
or after the expiry of such twelve (12) year period the Company has given notice of its intention
to sell such share by advertisements in a national newspaper published in the country in
which the Registered Office is located and in a newspaper circulating in the area in which
the address in the Share Register or other last known address of the shareholder or the person
entitled by transmission to the share or the address for the service of notices on such shareholder
or person notified to the Company in accordance with these Articles is located; |
| (C) | such
advertisements, if not published on the same day, are published within thirty (30) days of
each other; and |
| (D) | during
a further period of three months following the date of publication of such advertisements
(or, if published on different dates, the date on which the requirements of this Article
35.1 concerning the publication of newspaper advertisements are met) and prior to the sale
the Company has not received any communication (whether in writing or otherwise) in respect
of such share from the shareholder or person entitled by transmission. |
| 35.2 | To
give effect to a sale pursuant to Article 35.1, the Board may authorise a person to execute
an instrument of transfer of shares in the name and on behalf of the holder of, or the person
entitled by transmission to, them to the purchaser or as the purchaser may direct. |
| 35.3 | The
transferee will not be bound to see to the application of the purchase monies in respect
of any such sale. The title of the transferee to the shares will not be affected by any irregularity
in or invalidity of the proceedings connected with the sale or transfer, and after the name
of the purchaser has been entered in the Share Register, the remedy of any person aggrieved
by the sale shall be in damages only and against the Company exclusively. Any instrument
or exercise referred to in Article 35.2 shall be effective as if it had been executed or
exercised by the holder of, or the person entitled by transmission to, the shares to which
it relates. |
| 36 | APPLICATION
OF SALE PROCEEDS |
The
Company shall account to the shareholder or other person entitled to such share for the net proceeds of such sale by carrying all monies
in respect of the sale to a separate account. The Company shall be deemed to be a debtor to, and not a trustee for, such shareholder
or other person in respect of such monies. Monies carried to such separate account may either be employed in the business of the Company
or invested as the Board may think fit. No interest shall be payable to such shareholder or other person in respect of such monies and
the Company shall not be required to account for any money earned on them.
| 37 | APPLICABLE
ESCHEATMENT LAWS |
| 37.1 | To
the extent necessary in order to comply with any laws or regulations to which the Company
is subject in relation to escheatment, abandonment of property or other similar or analogous
laws or regulations (“Applicable Escheatment Laws”), the Company may deal
with any share of any shareholder and any unclaimed cash payments relating to such share
in any manner which it sees fit, including (but not limited to) transferring or selling such
share and transferring to third parties any unclaimed cash payments relating to such share. |
| 37.2 | The
Company may only exercise the powers granted to it in Article 37.1 in circumstances where
it has complied with, or procured compliance with, the required procedures (as set out in
the Applicable Escheatment Laws) with respect to attempting to identify and locate the relevant
shareholder. |
| 37.3 | Any
stock transfer form to be executed by the Company in order to sell or transfer a share pursuant
to Article 35.1 may be executed in accordance with Article 38.2. |
TRANSFER
OF SHARES
| 38.1 | Subject
to these Articles, a shareholder may transfer all or any of his or her shares by an instrument
of transfer in writing in any usual form or in another form approved by the Board, which
must be executed by or on behalf of the transferor and (in the case of a transfer of a share
which is not fully paid) by or on behalf of the transferee. |
| 38.2 | The
instrument of transfer of any share may be executed for and on behalf of the transferor by
the Secretary or any person that the Secretary nominates for that purpose (whether in respect
of specific transfers or pursuant to a general standing authorisation), and the Secretary
or the relevant nominee of the Secretary shall be deemed to have been irrevocably appointed
agent for the transferor of such share or shares with full power to execute, complete and
deliver in the name of and on behalf of the transferor of such share or shares all such transfers
of shares held by the shareholders in the share capital of the Company. Any document which
records the name of the transferor, the name of the transferee, the class and number of shares
agreed to be transferred, the date of the agreement to transfer shares and the price per
share, shall, once executed by the transferor or the Secretary or the relevant nominee of
the Secretary as agent for the transferor, and by the transferee where required by the Act,
be deemed to be a proper instrument of transfer for the purposes of the Act. The transferor
shall be deemed to remain the holder of the share until the name of the transferee is entered
on the Share Register in respect thereof, and neither the title of the transferee nor the
title of the transferor shall be affected by any irregularity or invalidity in the proceedings
in reference to the sale should the Directors so determine. |
| 38.3 | The
Company, at its absolute discretion, may, or may procure that a subsidiary of the Company
shall, pay Irish stamp duty arising on a transfer of shares on behalf of the transferee of
such shares of the Company. If stamp duty resulting from the transfer of shares in the Company
which would otherwise be payable by the transferee is paid by the Company or any subsidiary
of the Company on behalf of the transferee, then in those circumstances, the Company shall,
on its behalf or on behalf of its subsidiary (as the case may be), be entitled to (a) seek
reimbursement of the stamp duty from the transferee, (b) set-off the stamp duty against any
dividends payable to the transferee of those shares and (c) claim a first and permanent lien
on the shares on which stamp duty has been paid by the Company or its subsidiary for the
amount of stamp duty paid. The Company’s lien shall extend to all dividends paid on
those shares. |
| 38.4 | The
transferor shall remain the holder of the share transferred until the name of the transferee
is entered in the Share Register in respect of it. |
| 38.5 | The
Board may at any time after the allotment of any share but before any person has been entered
in the Share Register as the holder thereof recognise a renunciation thereof by the allottee
in favour of some other person and may accord to any allottee of a share a right to effect
such renunciation upon and subject to such terms and conditions as the Board may think fit
to impose. |
| 38.6 | Notwithstanding
the provisions of these Articles and subject to any provision of the Act, title to any shares
in the Company may also be evidenced and transferred without a written instrument in accordance
with the Act or any regulations made thereunder. |
| 38.7 | Subject
to the Statutes and other applicable law, the Directors shall have power to permit any class
of shares to be held in uncertificated form and to implement any arrangements they think
fit for such evidencing and transfer which accord with such regulations and in particular
shall, where appropriate, be entitled to disapply or modify all or part of the provisions
in these Articles with respect to the requirement for written instruments of transfer and
share certificates (if any), in order to give effect to such regulations. |
| 38.8 | Subject
to such of the restrictions of these Articles and to such of the conditions of issue of share
warrants as may be applicable, any share warrant may be transferred by instrument in writing
in any usual or common for or any other form which the Directors may approve. |
| 39 | REGISTRATION
OF A CERTIFICATED SHARE TRANSFER |
| 39.1 | The
Directors in their absolute discretion and without assigning any reason therefor may decline
to register: |
| (A) | any
transfer of a share which is not fully paid; or |
| (B) | any
transfer to or by a minor or person of unsound mind. |
| 39.2 | Subject
to these Articles, the Board may, in its absolute discretion, refuse to register the transfer
of a share or the renunciation of a permissible letter of allotment unless: |
| (A) | it
is in respect of a share on which the Company has no lien; |
| (B) | it
is in respect of only one class of shares; |
| (C) | it
is in favour of a single transferee or renouncee or not more than four joint transferees
or renouncees; |
| (D) | it
is duly stamped, if required; and |
| (E) | it
is delivered for registration to the Registered Office or such other place as the Board may
decide, accompanied by the certificate for the shares to which it relates (except in the
case of a transfer of a share, for which a certificate has not been issued, by a person in
respect of whom the Company is not required by the Act to complete and have ready for delivery
a share certificate, and except in the case of a renunciation) and any other evidence as
the Board may reasonably require to prove the title to such share of the transferor or person
renouncing and the due execution by him or her of the transfer or renunciation or, if the
transfer or renunciation is executed by some other person on his or her behalf, the authority
of such person to do so. |
| 39.3 | If
the Board refuses to register a transfer or renunciation pursuant to this Article, it shall,
within two months after the date on which the transfer or renunciation was delivered to the
Company, send notice of the refusal to the transferee or renounce together with their reasons
for the refusal. An instrument of transfer or renunciation which the Board refuses to register
shall (except in the case of suspected fraud) be returned to the person delivering it. All
instruments of transfer which are registered may, subject to these Articles, be retained
by the Company. |
| 39.4 | The
instrument of transfer of a share shall be signed by or on behalf of the transferor. |
| 39.5 | In
the case of a partly paid-up share, the instrument of transfer must also be signed by or
on behalf of the transferee. |
| 39.6 | All
instruments of transfer which shall be registered shall (except in case of fraud) remain
the property of the Company and be retained by the Company, but any instrument of transfer
which the Board may refuse to register shall (except in case of fraud) be returned to the
party presenting the same. |
| 40 | CLOSING
OF REGISTER OF MEMBERS |
Subject
to the provisions of the Act, the registration of transfers of shares or of any class of shares may be suspended at such times and for
such periods, not exceeding thirty (30) days in any year, as the Board may decide.
TRANSMISSION
OF SHARES
If
a shareholder dies, the survivors or survivor where he or she was a joint holder, or his or her personal representatives where he or
she was the sole or only surviving holder, shall be the only persons recognised by the Company as having any title to his or her shares.
Nothing in these Articles shall release the estate of a deceased holder from any liability in respect of a share which has been held
by him or her solely or jointly.
| 42 | ELECTION
OF PERSON ENTITLED BY TRANSMISSION |
| 42.1 | A
person becoming entitled to a share in consequence of the death or bankruptcy of a shareholder,
or of any other event giving rise to a transmission of such entitlement by operation of law,
may, on such evidence as to his or her title being produced as the Board may require, elect
either to become registered as the holder of such share or to have some person nominated
by him or her so registered. If he or she elects to be registered himself or herself, he
or she shall give notice to the Company to that effect. If he or she elects to have some
other person registered, he or she shall execute an instrument of transfer of such share
to such person. |
| 42.2 | All
the provisions of these Articles relating to the transfer of shares shall apply to the notice
or instrument of transfer or instructions (as the case may be) referred to in Article 42.1
as if the notice were an instrument of transfer and as if the instrument of transfer was
executed, or the instructions were given, by the shareholder and the event giving rise to
the transmission had not occurred. |
| 42.3 | The
Board may give notice requiring a person to make the election referred to in Article 42.1.
If such notice is not complied with within sixty (60) days, the Board may withhold payment
of all dividends and other amounts payable in respect of the share until notice of election
has been made. |
A
person becoming entitled by transmission to a share shall have the rights to which he or she would be entitled if he or she were the
holder of the share, except that he or she shall not, before being registered as its holder, be entitled in respect of it to receive
notice of, or to attend or vote at, any general meeting or at any separate meeting of the holders of any class of shares.
GENERAL
MEETINGS
| 44 | ANNUAL
AND OTHER GENERAL MEETINGS |
| 44.1 | The
Company shall in each year hold a general meeting as its annual general meeting in addition
to any other meetings in that year, and shall specify the meeting as such in the notices
calling it. Not more than fifteen (15) months shall elapse between the date of one annual
general meeting of the Company and that of the next. This Article shall not apply in the
case of the first general meeting, in respect of which the Company shall convene the meeting
within the time periods required by the Act. |
| 44.2 | Subject
to the Act, all general meetings of the Company shall be held at such time and places, including
electronic platforms as the Board shall determine and may be held outside Ireland. |
| 44.3 | All
general meetings other than annual general meetings shall be called extraordinary general
meetings. The Board shall determine whether a general meeting is to be held as a physical
meeting and/or an electronic meeting, provided that all general meetings must be held in
accordance with the provisions of the Act. A general meeting may be held in two or more venues
(whether inside or outside of Ireland) at the same time using any technology that provides
members, as a whole, with a reasonable opportunity to participate, and such participation
shall be deemed to constitute presence in person at the meeting. The Board shall specify
in the notice calling the general meeting whether the meeting will be physical and/or electronic.
Such notice shall also specify the time, date and place and/or electronic platform(s) of
the general meeting. |
| 44.4 | The
Board may, whenever it thinks fit, and shall, on the requisition in writing of shareholders
holding such number of shares as is prescribed by, and made in accordance with section 178
of the Act, convene a general meeting in the manner required by the Act. |
| 44.5 | All
provisions of these Articles relating to general meetings of the Company shall, mutatis
mutandis, apply to every separate general meeting of the holders of any class of shares
in the capital of the Company, except that: |
| (A) | the
necessary quorum at any such meeting (or adjournment thereof) shall be shareholders of that
class who together represent at least the majority of the voting rights of all the shareholders
of that class entitled to vote, present in person or by proxy, at the relevant meeting; and |
| (B) | each
holder of shares of the class shall, on a poll, have one vote in respect of every share of
the class held by him or her. |
| 45 | ELECTRONIC
GENERAL MEETINGS |
| 45.1 | Subject
always to all general meetings being called and convened in accordance with the provisions
of the Act, the Directors may resolve to enable persons entitled to attend a general meeting
to do so by simultaneous attendance by electronic means with no member necessarily in physical
attendance at the electronic general meeting. The members or their proxies present shall
be counted in the quorum for, and entitled to vote at, the general meeting in question, and
that meeting shall be duly constituted and its proceedings valid if the chairman of the general
meeting is satisfied that adequate facilities are available throughout the electronic general
meeting to ensure that members attending the electronic general meeting who are not present
together at the same place may attend and participate in the business of the general meeting. |
| 45.2 | If
it appears to the chairman of the general meeting that the electronic platform(s), facilities
or security at the electronic general meeting have become inadequate for the purposes referred
to in Article 45.1 then the chairman may, without the consent of the meeting, interrupt or
adjourn the general meeting. All business conducted at that general meeting up to the time
of that adjournment shall be valid and the provisions of Article 53, 54 and 55 shall apply
to that adjournment. |
| 45.3 | In
relation to an electronic general meeting, the right of a member to participate in the business
of any general meeting shall include, without limitation, the right to speak, vote on a poll,
be represented by a proxy and have access (including electronic access) to all documents
which are required by the Act or these Articles to be made available at the meeting. |
| 45.4 | Nothing
in these Articles prevents a general meeting being held both physically and electronically. |
| 46 | NOTICE
OF A GENERAL MEETING |
| 46.1 | A
general meeting that is an annual general meeting shall be convened by not less than twenty-one
(21) clear days’ and no more than sixty (60) clear days’ notice (whether in electronic
form or otherwise). |
| 46.2 | Subject
to the provisions of the Act and these Articles, all extraordinary general meetings shall
be convened by not less than fourteen (14) clear days’ notice and no more than sixty
(60) clear days’ notice (whether in electronic form or otherwise). |
| 46.3 | Subject
to the provisions of the Act and notwithstanding that it is convened by shorter notice than
that specified in Articles 46.1 and 46.2, a general meeting shall be deemed to have been
duly convened if it is so agreed by: |
| (A) | all
the shareholders entitled to attend and vote at the meeting; and |
| 46.4 | Subject
to the provisions of the Act, a notice convening a general meeting shall specify: |
| (A) | whether
the meeting is an annual general meeting or an extraordinary general meeting; |
| (B) | the
place, the day and the time of the meeting; |
| (C) | the
general nature of that business to be transacted at the meeting; |
| (D) | if
the meeting is convened to consider a proposed Special Resolution, the text or substance
of that proposed Special Resolution; and |
| (E) | with
reasonable prominence, that (i) a shareholder entitled to attend and vote is entitled to
appoint one or more proxies to attend, speak and vote instead of him or her (ii) a proxy
need not also be a shareholder; and (iii) the time by which the proxy must be received at
the Registered Office (or some other place in Ireland as is specified for that purpose). |
| 46.5 | Subject
to the provisions of the Act, notice of every general meeting shall be given in any manner
permitted by these Articles to: |
| (B) | the
personal representative of a deceased shareholder; |
| (C) | the
assignee in bankruptcy of a bankrupt shareholder (being a bankrupt shareholder who is entitled
to vote at the meeting); |
| (D) | the
Directors and Secretary of the Company; and |
| 46.6 | The
notice of every general meeting may specify a time by which a person must be entered on the
Share Register in order for such person to have the right to attend or vote at the meeting. |
| 46.7 | The
Board may determine that the shareholders entitled to receive notice of a meeting are those
persons entered on the Share Register at the close of business on a day determined by the
Board. |
| 46.8 | The
accidental omission to send or give notice of a meeting to or, in cases where it is intended
that it be sent out or given with the notice, an instrument of proxy or any other document
to, or the non-receipt of any such item by, any person entitled to receive such notice shall
not invalidate the proceedings at that meeting. |
| 46.9 | Subject
to the Act, the Directors may postpone a general meeting of the shareholders (other than
a meeting requisitioned by a shareholder in accordance with section 178(3) of the Act or
where the postponement of which would be contrary to the Act or a court order pursuant to
the Act) after it has been convened, and notice of such postponement shall be served in accordance
with Article 46 upon all members entitled to notice of the meeting so postponed setting out,
where the meeting is postponed to a specific date, notice of the new meeting in accordance
with Article 46. |
| 46.10 | Subject
to the Act, the Directors may cancel a general meeting of the members (other than a meeting
requisitioned by a member in accordance with section 178(3) of the Act or where the cancellation
of which would be contrary to the Act or a court order pursuant to the Act) after it has
been convened, and notice of such cancellation shall be served in accordance with Article
44 upon all members entitled to notice of the meeting so cancelled. |
| 47 | QUORUM
FOR A GENERAL MEETING |
| 47.1 | No
business shall be transacted at a general meeting unless a quorum is present when the meeting
proceeds to business. Save as otherwise provided by these Articles, a quorum will comprise
qualifying persons who together are entitled to cast at least the majority of the voting
rights of all the shareholders entitled to vote at the relevant meeting, on a poll. For the
purposes of this Article a proxy, attorney or other representative of a shareholder will
be considered to be entitled to cast only the voting rights to which his or her appointment
relates and not any other voting rights held by the shareholder he or she represents. |
| 47.2 | For
the purposes of this Article, a “qualifying person” means (i) an individual
who is a shareholder (other than a shareholder who, under these Articles or any restrictions
imposed on any shares, is not entitled to attend, speak or vote, whether in person or by
proxy, at any general meeting of the Company) or his or her validly appointed attorney, (ii)
a person authorised under section 185 of the Act to act as the representative of a corporation
in relation to the meeting, or (iii) a person appointed as a proxy of a shareholder in relation
to the meeting. The Board is entitled, acting in good faith and without further enquiry,
to assume the validity of any votes cast in person or by proxy. |
| 47.3 | The
absence of a quorum will not prevent the appointment of a chairperson of the meeting. Such
appointment shall not be treated as being part of the business of the meeting. |
| 48 | PROCEDURE
IF QUORUM NOT PRESENT |
| 48.1 | If
within fifteen (15) minutes (or such longer time not exceeding one hour as the chairperson
of the meeting may decide to wait) after the time appointed for the holding of the meeting
a quorum is not present, the meeting: |
| (A) | if
convened on the requisition of shareholders, shall be dissolved; and |
| (B) | in
any other case, shall stand adjourned to the same day in the next week or to such other day
and at such other time and place as the chairperson (or, in default, the Board) may, subject
to the provisions of the Act, determine. |
| 48.2 | If
at such adjourned meeting a quorum is not present within fifteen (15) minutes after the time
appointed for holding it the adjourned meeting shall be dissolved. |
| 49 | CHAIRPERSON
OF GENERAL MEETING |
The
chairperson (if any) of the Board or, in his or her absence, the vice or deputy chairperson (if any) shall preside as chairperson at
a general meeting. If there is no chairperson or vice or deputy chairperson, or if at a meeting neither is present within five minutes
after the time fixed for the start of the meeting, or neither is willing to act, the Directors present shall select one of their number
to be chairperson of the meeting. If only one Director is present and willing to act, he or she shall be chairperson of the meeting.
In default, the shareholders present in person and entitled to vote shall choose one of their number to be chairperson of the meeting.
| 50 | RIGHTS
OF DIRECTORS AND OTHERS TO ATTEND MEETINGS |
A
Director (and any other person invited by the chairperson of the meeting to do so) shall be entitled to attend and speak at a general
meeting and at a separate meeting of the holders of any class of shares, whether or not he or she is a shareholder.
| 51 | ACCOMMODATION
OF MEMBERS AT MEETING |
If
it appears to the chairperson of the meeting that the meeting place specified in the notice convening the meeting is inadequate to accommodate
all shareholders entitled and wishing to attend, the meeting will be duly constituted and its proceedings valid if the chairperson is
satisfied that adequate facilities are available to ensure that a shareholder who is unable to be accommodated is able (whether at the
meeting place or elsewhere):
| (A) | to
participate in the business for which the meeting has been convened; |
| (B) | to
hear and see all persons present who speak (whether by the use of microphones, loud-speakers,
audio-visual communications equipment or otherwise); and |
| (C) | to
be heard and seen by all other persons present in the same way. |
In
addition to any measures which the Board may be required to take due to the location or venue of the meeting, the Board may make any
arrangement and impose any restriction it considers appropriate and reasonable in the circumstances to ensure the security of a meeting
including, without limitation, the searching of any person attending the meeting and the imposing of restrictions on the items of personal
property that may be taken into the meeting place. The Board may refuse entry to, or eject from, a meeting a person who refuses to comply
with any such arrangements or restrictions.
| 53.1 | The
chairperson of the meeting may, with the consent of any meeting at which a quorum is present,
and shall, if so directed by the meeting, adjourn the meeting, from time to time (or indefinitely)
and from place to place as the chairperson shall determine. |
| 53.2 | Without
prejudice to any other power of adjournment which the chairperson of the meeting may have
under these Articles, at common law or otherwise, the chairperson may, without the consent
of the meeting, adjourn the meeting from time to time (or indefinitely) and from place to
place if he or she decides that it is necessary or appropriate to do so in order to: |
| (A) | secure
the proper and orderly conduct of the meeting; or |
| (B) | give
all persons entitled to do so an opportunity of attending the meeting; or |
| (C) | give
all persons entitled to do so a reasonable opportunity of speaking and voting at the meeting;
or |
| (D) | ensure
that the business of the meeting is properly concluded or disposed of, including (without
limitation) for the purpose of determining the result of a poll. |
| 53.3 | Without
prejudice to the generality of the foregoing, the chairperson of the meeting may in such
circumstances direct that the meeting be held simultaneously in two or more venues connected
for the duration of the meeting by audio or audio visual links or in two or more consecutive
sessions with the votes taken being aggregated or that it be adjourned to a later time on
the same day or a later date at the same or any other venue. |
| 54 | NOTICE
OF ADJOURNED MEETING |
Whenever
a meeting is adjourned for fourteen (14) days or more or indefinitely, at least seven clear days’ notice, specifying the place,
the day and time of the adjourned meeting and the general nature of the business to be transacted, shall be given in the same manner
as in the case of an original meeting. Except in these circumstances, no shareholder shall be entitled to any notice of an adjournment
or of the business to be transacted at any adjourned meeting.
| 55 | BUSINESS
OF ADJOURNED MEETING |
No
business shall be transacted at any adjourned meeting other than the business which might properly have been transacted at the meeting
from which the adjournment took place.
| 56 | THE
BUSINESS OF A GENERAL MEETING |
| 56.1 | Subject
to the provisions of the Act and these Articles, the business of the annual general meeting
shall include those matters provided for in section 186 of the Act. |
| 56.2 | No
business may be transacted at a general meeting, other than business that: |
| (A) | is
proposed by, or at the direction of, the Directors; |
| (B) | is
proposed, in the case of an extraordinary general meeting called on requisition in writing
of shareholders in accordance with section 178 of the Act, in accordance with the provisions
of the Act; |
| (C) | is
proposed, in the case of an annual general meeting, by shareholders holding not less than
10% of the paid-up share capital of the Company carrying voting rights in accordance with
the provisions of Articles 57 and 58; |
| (D) | is
proposed, at the direction of the High Court of Ireland; or |
| (E) | the
chairperson of the general meeting determines, in his sole and absolute discretion, is business
that may properly be regarded as within the scope of the meeting. |
| 57 | PROPOSED
SHAREHOLDER RESOLUTIONS |
| 57.1 | Any
request by a shareholder or shareholders to propose a resolution at an annual general meeting
of the Company must, in order for the resolution to be properly moved at such meeting (i)
comply with the requirements of the Act and the requirements of this Article 57 and Article
58 and (ii) contain: |
| (A) | to
the extent that the request relates to the nomination of a Director, as to each person whom
the shareholder(s) propose(s) to nominate for election or re-election as a Director: |
| (1) | all
information relating to such person that is required to be disclosed in a proxy statement
or other filings required to be made in connection with solicitations of proxies for election
of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the
Exchange Act, and the regulations promulgated thereunder, including such person’s written
consent to being named in the proxy statement as a nominee and to serving as a Director if
elected; and |
| (2) | a
description of all direct and indirect compensation and other material monetary agreements,
arrangements and understandings during the past three years, and any other material relationships,
between or among such shareholder(s) and any Shareholder Associated Person (as defined below)
of such shareholder(s), on the one hand, and each proposed nominee, and his or her respective
affiliates and associates, or others acting in concert therewith, on the other hand, including,
without limitation, all information that would be required to be disclosed pursuant to Rule
404 promulgated under Regulation S-K of the Exchange Act if the shareholder(s) making the
nomination and any Shareholder Associated Person of such shareholder(s) were the “registrant”
for purposes of such rule and the nominee were a Director or executive officer of such registrant; |
| (B) | to
the extent that that request relates to any business other than the nomination of a Director
that the shareholder(s) propose(s) to bring before the meeting, a comprehensive description
of the business desired to be brought before the meeting, the reasons for conducting such
business at the meeting, the text of the proposal (including the complete text of any resolution(s)
proposed for consideration) and any material interest in such business of such shareholder(s)
and any Shareholder Associated Person of such shareholder(s), individually or in the aggregate,
including any anticipated benefit to the shareholder(s) or any Shareholder Associated Person
of such shareholder(s) therefrom; |
| (C) | as
to the shareholder(s) giving the notice and each Shareholder Associated Person of such shareholder(s),
if any: |
| (1) | the
name and address of such shareholder(s), as they appear on the Company’s books, and
of such Shareholder Associated Person(s), if any; |
| (2) | the
class and number of shares of the Company which are, directly or indirectly, owned beneficially
and of record by such shareholder(s) and such Shareholder Associated Person(s), if any; |
| (3) | any
“Derivative Instrument” owned beneficially, directly or indirectly, by
such shareholder(s) and such Shareholder Associated Person(s), if any, being any option,
warrant, convertible security, share appreciation right, or similar right with an exercise
or conversion privilege or a settlement payment or mechanism at a price related to any class
or series of shares of the Company or with a value derived in whole or in part from the value
of any class or series of shares of the Company, or any derivative or synthetic arrangement
having the characteristics of a long position in any class or series of shares of the Company,
or any contract, derivative, swap or other transaction or series of transactions designed
to produce economic benefits and risks that correspond substantially to the ownership of
any class or series of shares of the Company, including due to the fact that the value of
such contract, derivative, swap or other transaction or series of transactions is determined
by reference to the price, value or volatility of any class or series of shares of the Company,
whether or not such instrument, contract or right shall be subject to settlement in the underlying
class or series of shares of the Company, through the delivery of cash or other property,
or otherwise, and without regard to whether such shareholder(s) and such Shareholder Associated
Person(s), if any, may have entered into transactions that hedge or mitigate the economic
effect of such instrument, contract or right, or any other direct or indirect opportunity
to profit or share in any profit derived from any increase or decrease in the value of shares
of the Company; |
| (4) | any
proxy, contract, arrangement, understanding, or relationship pursuant to which such shareholder(s)
and such Shareholder Associated Person(s), if any, have the right to vote any class or series
of shares of the Company; |
| (5) | any
agreement, arrangement, understanding, relationship or otherwise, including any repurchase
or similar so-called “stock borrowing” agreement or arrangement, involving
such shareholder(s) and such Shareholder Associated Person(s), if any, directly or indirectly,
the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership
or otherwise) of any class or series of the shares of the Company by, manage the risk of
share price changes for, or increase or decrease the voting power of, such shareholder(s),
and such Shareholder Associated Person(s), if any, with respect to any class or series of
the shares of the Company, or which provides, directly or indirectly, the opportunity to
profit or share in any profit derived from any decrease in the price or value of any class
or series of the shares of the Company (any of the foregoing, a “Short Interest”); |
| (6) | any
rights to dividends on the shares of the Company owned beneficially by such shareholder(s)
and such Shareholder Associated Person(s), if any, that are separated or separable from the
underlying shares of the Company; |
| (7) | any
significant equity interests or any Derivative Instruments or Short Interests in any competitor
of the Company held by such shareholder(s) and such Shareholder Associated Person(s), if
any; |
| (8) | any
other information relating to such shareholder(s) or such Shareholder Associated Person(s),
if any, or any other beneficial owner that would be required to be disclosed in a proxy statement
or other filings required to be made in connection with solicitations of proxies for election
of Directors pursuant to section 14 of the Exchange Act and the rules and regulations promulgated
thereunder; and |
| (9) | to
the extent known by the shareholder(s) giving the notice, and such Shareholder Associated
Person(s), if any, the name and address of any other shareholder or, as the case may be,
the Shareholder Associated Person of such other shareholder, supporting the nominee for election
or re-election as a Director or the proposal of other business on the date of such request,
and |
| (D) | the
information required in Article 57.1(C) above shall be updated by such shareholder(s) as
of the record date for the meeting not later than three days after the record date for the
meeting. |
| 57.2 | To
be eligible to be a nominee of any shareholder(s) for election or re-election as a Director
of the Company, save where such election or re-election is at the recommendation of the Board,
a person must deliver (in accordance, in the case of a resolution proposed to be moved at
an annual general meeting of the Company, within the time periods prescribed in Article 58.1
for delivery of a request pursuant to Article 57.1) to the Secretary at the Registered Office,
a written questionnaire with respect to the background and qualifications of such individual
and the background of any other person or entity on whose behalf, directly or indirectly,
the nomination is being made (which questionnaire shall be provided by the Secretary upon
written request), and a written representation and agreement (in the form provided by the
Secretary upon written request) that such individual (a) is not and will not become a party
to any agreement, arrangement or understanding with, and has not given any commitment or
assurance to, any person or entity as to how such person, if elected as a Director of the
Company, will act or vote on any issue or question (a “Voting Commitment”)
that has not been disclosed therein, including without limitation any Voting Commitment that
could limit or interfere with such individual’s ability to comply, if elected as a
Director of the Company, with such individual’s fiduciary and other Director’s
duties under applicable law, (b) is not and will not become a party to any agreement, arrangement
or understanding with any person or entity other than the Company with respect to any direct
or indirect compensation, reimbursement or indemnification in connection with service or
action as a Director that has not been disclosed therein, (c) in such individual’s
personal capacity and on behalf of any person or entity on whose behalf, directly or indirectly,
the nomination is being made, would be in compliance, if elected as a Director of the Company,
and will comply, with all applicable corporate governance, conflict of interest, confidentiality
and stock ownership and trading policies and guidelines of the Company publicly disclosed
from time to time and (d) irrevocably submits his or her resignation as a Director effective
upon a finding by a court of competent jurisdiction that such person has breached such written
representation and agreement. |
| 57.3 | Except
as otherwise provided by law or the Articles, the chairperson of the meeting shall have the
power and duty to determine whether a nomination or any other business proposed to be brought
before the meeting was proposed in accordance with the procedures set out in this Article
57 and, in the case of an annual general meeting, in Article 58 and, if any proposed nomination
or other business is not in compliance with this Article 57 and, in the case of an annual
general meeting, Article 58, to declare that such defective proposal or nomination shall
be disregarded. |
| 57.4 | For
the purposes of this Article 57, where nominations of persons for appointment to the Board
and/or proposals of other business to be considered by the shareholders (as the case may
be) are made by or on behalf of more than one shareholder, references to a shareholder or
Shareholder Associated Person in relation to notice and other information requirements shall
apply to each shareholder or Shareholder Associated Person, respectively, as the context
requires. |
| 57.5 | If
the requesting shareholder(s) does/do not appear at the meeting to present the nominations
of persons for appointment to the Board and/or proposals of other business to be considered
by the shareholders (as the case may be) such business shall not be transacted, notwithstanding
that proxies in respect of such vote may have been received by the Company. |
| 57.6 | For
the purpose of this Article 57, a “Shareholder Associated Person” of any
shareholder shall mean (i) any person controlling, directly or indirectly, or acting in concert
with, such shareholder, (ii) any beneficial owner of shares of the Company owned of record
or beneficially by such shareholder or in which such shareholder is interested or in respect
of which such shareholder has the ability to direct votes, and (iii) any person controlling,
controlled by or under common control with a person of the kind referred to in sub-paragraphs
(i) or (ii), and for these purposes “control”, when used with respect to any
person, means the possession, directly or indirectly, of the power to manage or direct the
management, policies or activities of such person, whether through the ownership of voting
securities, by contract, or otherwise and “controlling”, “controlled by”
and “under common control with” shall be construed accordingly. |
| 58 | TIME
FOR RECEIVING REQUESTS |
| 58.1 | In
the case of a resolution proposed to be moved at an annual general meeting of the Company,
a shareholder or shareholders who make(s) a request to which Article 57.1 relates, must deliver
any such request in writing to the Secretary at the Registered Office not earlier than the
close of business on the one hundred and twentieth (120th) calendar day nor later than the
close of business on the ninetieth (90th) calendar day prior to the first anniversary of
the preceding year’s annual general meeting, provided, however, that if the date of
an annual meeting is more than thirty (30) calendar days before or more than sixty (60) calendar
days after the first anniversary of the preceding year’s annual general meeting, notice
by the shareholder must be so delivered in writing not earlier than the close of business
on the one hundred and twentieth (120th) calendar day prior to such annual general meeting
and not later than the close of business on the later of (i) the ninetieth (90th) calendar
day prior to such annual general meeting and (ii) the fifth (5th) calendar day after the
day on which public announcement of the date of such annual general meeting is first made
by the Company provided that in no event shall any adjournment or postponement of an annual
general meeting or the public announcement thereof commence a new time period for the giving
of a shareholder’s notice as described in this Article. |
| 58.2 | Notwithstanding
anything in the foregoing provisions of this Article to the contrary, if the number of Directors
to be elected to the Board is increased and there is no public announcement by the Company
naming all of the nominees for Director or specifying the size of the increased board of
Directors made by the Company at least one hundred (100) calendar days prior to the date
of the first anniversary of the preceding year’s annual general meeting, a shareholder’s
notice required by this Article 58 shall also be considered as validly delivered in accordance
with this Article 59, but only with respect to nominees for any new positions created by
such increase, if it shall be delivered to the Secretary at the Registered Office not later
than 5.00 p.m., Irish time, on the tenth (10th) calendar day after the day on which such
public announcement is first made by the Company. |
| 58.3 | For
purposes of this Article, “public announcement” shall mean disclosure
in a press release reported by Reuters, the Dow Jones News Service, Associated Press or a
comparable news service or in a document publicly filed by the Company with the US Securities
and Exchange Commission pursuant to section 13, 14 or 15(d) of the Exchange Act. |
| 58.4 | Notwithstanding
the provisions of Article 57 or the foregoing provisions of this Article 58, a shareholder
shall also comply with all applicable requirements of the Act and of the Exchange Act and
the rules and regulations thereunder with respect to the matters set forth in Article 59
and this Article 58. Nothing in Article 57 or this Article 58 shall be deemed to affect any
rights of shareholders to request inclusion of proposals in, nor the right of the Company
to omit proposals from, the Company’s proxy statement pursuant to Rule 14a-8 (or any
successor provision) under the Exchange Act or the Act. |
VOTING
| 59 | VOTING
AT A GENERAL MEETING |
A
resolution put to the vote of a general meeting shall be decided on a poll. This requirement for poll voting on resolutions at a general
meeting of the Company may only be removed, amended or varied by Ordinary Resolution of the shareholders passed unanimously by those
present at a general meeting of the Company.
| 60.1 | Each
poll shall be conducted in such a manner as the chairperson directs, and the result of the
poll shall be deemed to be the resolution in relation to the matter concerned, of the meeting
at which the poll was taken. |
| 60.2 | In
advance of any meeting, the chairperson shall appoint scrutineers or inspectors who need
not be shareholders, to act at the meeting. The chairperson may appoint one or more persons
as alternate scrutineers or inspectors to replace any scrutineer or inspector who fails to
act. If no scrutineer or inspector or alternate scrutineer is willing or able to act at a
meeting, the chairperson shall appoint one or more other persons to act as scrutineers or
inspectors at the meeting. The result of the poll shall be deemed to be the resolution of
the meeting at which the poll was conducted. |
| 60.3 | Each
scrutineer or inspector appointed in accordance with this Article 60 shall, prior to acting,
be required to provide an undertaking to the Company, in a form determined by the Board,
that he or she will execute the duties of a scrutineer or inspector with strict impartiality
and according to the best of his or her ability. |
| 60.4 | Any
poll conducted on the election of the chairperson or on any question of adjournment shall
be taken at the meeting and without adjournment. A poll conducted on another question shall
be taken at such time and place at the chairperson decides, either at once or after an interval
or adjournment. |
| 60.5 | The
date and time of the opening and the closing of a poll for each matter upon which the shareholders
will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor
any revocations thereof or changes thereto, shall be accepted by the scrutineers or inspectors
after the closing of the poll unless a court with relevant jurisdiction upon application
by a shareholder shall determine otherwise. |
| 60.6 | A
shareholder entitled to more than one vote need not, if he or she votes, use all his or her
votes or cast all the votes he or she uses in the same way. |
| 61.1 | Every
shareholder (other than a shareholder who, under these Articles or any restrictions imposed
on any shares, is not entitled to vote, whether in person or by proxy, at any general meeting
of the Company or any meeting of a class of shareholders of the Company) who (being an individual)
is present in person or by duly appointed proxy or (being a corporation) is present by duly
authorised representative or by duly appointed proxy shall have one vote for every share
of which he or she is the holder. |
| 61.2 | In
the case of joint holders, the vote of the senior who tenders a vote shall be accepted to
the exclusion of the votes of the other joint holders. Seniority shall be determined by the
order in which the names of the holders stand in the Share Register in respect of the joint
holding. |
| 61.3 | A
shareholder in respect of whom an order has been made by any court or official having jurisdiction
(whether in Ireland, the United States or elsewhere) in matters concerning mental disorder
or incapacity may vote by his or her guardian or other person duly authorised to act on his
or her behalf, who may vote by proxy. |
| 61.4 | Evidence
to the satisfaction of the Board of the authority of the person claiming the right to vote
shall be deposited at the Registered Office, or at such other place as is specified in accordance
with these Articles for the deposit of instruments of proxy, at a time not greater than forty-eight
(48) hours (or such shorter period as the Board may, at its absolute discretion, determine)
before the time appointed for holding the meeting or adjourned meeting at which the right
to vote is to be exercised, and in default the right to vote shall not be exercisable. |
| 61.5 | No
objection shall be raised to the qualification of any voter except at the meeting or adjourned
meeting at which the vote objected to is given or tendered, and every vote not disallowed
at such meeting shall be valid for all purposes. Any such objection made in due time shall
be referred to the chairperson of the meeting, whose decision shall be final and conclusive. |
| 62 | CHAIRPERSON’S
CASTING VOTE |
In
the case of an equality of votes, the chairperson of the meeting shall be entitled to a further or casting vote in addition to any other
vote he or she may have or be entitled to exercise.
| 63 | VOTING
RESTRICTIONS ON AN OUTSTANDING CALL |
Unless
the Board decides otherwise, no shareholder shall be entitled to be present or vote at any meeting either personally or by proxy until
he or she has paid all calls due and payable on every share held by him or her whether alone or jointly with any other person together
with interest and expenses (if any) to the Company.
| 64.1 | Every
shareholder entitled to attend and vote at a general meeting may appoint a proxy to attend,
speak and vote on his or her behalf and may appoint more than one proxy to attend, speak
and vote at the same meeting. The appointment of a proxy shall be in any usual form or in
any other form or manner of communication (including communication by electronic means) which
the Board may approve, subject to compliance with any requirements as to form under the Act,
and in the case of an instrument in writing, shall be executed by or on behalf of the appointor
but need not be witnessed. In the case of an instrument in writing, a corporation may execute
a form of proxy either under its common seal (or in any other manner permitted by law and
having the same effect as if executed under seal) or under the hand of a duly authorised
officer, attorney or other person. A shareholder may appoint more than one proxy to attend
on the same occasion, but only one proxy may be appointed in respect of any one share. A
proxy need not be a shareholder. The appointment of a proxy shall not preclude a shareholder
from attending and voting at the meeting or at any adjournment of it. A form of proxy shall,
unless it provides to the contrary, be valid for any adjournment of the meeting to which
it relates. |
| 64.2 | Subject
to the Act, the appointment of a proxy relating to shares in the capital of the Company registered
in the name of a Depository or its nominee may be in any form and communicated in any manner
which the Board may approve (including by electronic means), including, but not limited to,
a voter instruction form, provided by the Company to third parties on behalf of the Depository. |
| 64.3 | The
appointment of a proxy and any authority under which it is executed or a copy of the authority
certified notarially or in some other way approved by the Board shall: |
| (A) | in
the case of an instrument in writing be deposited at the Registered Office or at such other
place as is specified in the notice convening the meeting, or in any instrument of proxy
sent out by the Company in relation to the meeting, at a time not greater than forty-eight
(48) hours (or such shorter period as the Board may, at its absolute discretion, determine)
before the time for holding the meeting or adjourned meeting at which the person named in
the instrument proposes to vote; |
| (B) | in
the case of an appointment contained in a communication by electronic means, where an address
has been specified for the purpose of receiving communications by electronic means: |
| (1) | in
the notice convening the meeting; or |
| (2) | in
any instrument of proxy sent out by the Company in relation to the meeting; or |
| (3) | in
any invitation contained in an communication by electronic means to appoint a proxy issued
by the Company in relation to the meeting, |
be
received at such address at a time not greater than forty-eight (48) hours (or such shorter period as the Board may, at its absolute
discretion, determine) before the time for holding the meeting or adjourned meeting at which the person named in the appointment proposes
to vote;
| (C) | be
deemed to include the right to speak at the meeting and to vote on any amendment of a resolution
put to the meeting for which it is given as the proxy thinks fit; and |
| (D) | unless
the contrary is stated therein, be valid as well for any adjournment of the meeting as for
the meeting to which it relates, |
and
an appointment of proxy which is not deposited, delivered or received in a manner so permitted shall be invalid (unless, subject to the
requirements of the Act, the Board, in its absolute discretion in relation to any such appointment, waives any such requirement and decides
to treat such appointment as valid).
| 64.4 | When
two or more valid but differing appointments of proxy are delivered or received in respect
of the same share for use at the same meeting and in respect of the same matter, the one
which is last validly delivered or received (regardless of its date or of the date of its
execution) shall be treated as replacing and revoking the other or others as regards that
share. If the Company is unable to determine which appointment was last validly delivered
or received, none of them shall be treated as valid in respect of that share. |
| 64.5 | The
Board may at the expense of the Company send forms of appointment of proxy to the shareholders
by post, by communication by electronic means or otherwise (with or without provision for
their return by pre-paid post) for use at any general meeting or at any separate meeting
of the holders of any class of shares, either blank or nominating as proxy in the alternative
any one or more of the Directors or any other person and worded so as to enable the proxy
to vote either for or against or to withhold their vote in respect of the resolutions to
be proposed at the meeting at which the proxy is to be used. If for the purpose of any meeting
invitations to appoint as proxy a person or one of a number of persons specified in the invitations
are issued at the Company’s expense, they shall be issued to all (and not to some only)
of the shareholders entitled to be sent notice of the meeting and to vote at it. The accidental
omission to send such a form of appointment or to give such an invitation to, or the non-receipt
of such form of appointment by, any shareholder entitled to attend and vote at a meeting
shall not invalidate the proceedings at that meeting. |
| 64.6 | A
vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding
the death or mental disorder of the principal or the revocation of the instrument of proxy,
or of the authority under which the instrument of proxy was executed, or the transfer of
the share in respect of which the instrument of proxy is given, provided that no intimation
in writing of such death, mental disorder, revocation or transfer shall have been received
by the Company at the Registered Office, or at such other place as is referred to in Article
64.3, at a time not greater than forty-eight (48) hours (or such shorter period as the Board
may, at its absolute discretion, determine) before the commencement of the meeting or adjourned
meeting at which the instrument of proxy is used. |
| 65 | CORPORATE
REPRESENTATIVES |
In
accordance with the Act, any corporation which is a shareholder entitled to attend a meeting of the Company or a meeting of the holders
of any class of its shares may, by resolution of its Directors or other governing body, authorise such person or persons as it thinks
fit to act as its representative or representatives at any such meeting of the Company or at any such meeting of the holders of any class
of its shares. Any person so authorised shall be entitled to exercise the same powers on behalf of the corporation (in respect of that
part of the corporation’s holdings to which the authority relates) as the corporation could exercise if it were an individual shareholder.
The corporation shall for the purposes of these Articles be deemed to be present in person at any such meeting if a person so authorised
is present at it. All references in these Articles to attendance and voting in person shall be construed accordingly. A Director, the
Secretary or some other person authorised for the purpose by the Secretary may (but is not bound to) require the representative to produce
a certified copy of the resolution so authorising him or her or such other evidence of his or her authority reasonably satisfactory to
such person before permitting him or her to exercise his or her powers.
| 66 | AMENDMENT
TO RESOLUTIONS |
| 66.1 | If
an amendment shall be proposed to any resolution but shall in good faith be ruled out of
order by the chairperson of the meeting, any error in such ruling shall not invalidate the
proceedings on the substantive resolution. |
| 66.2 | In
the case of a resolution duly proposed as a Special Resolution, no amendment to it (other
than an amendment to correct a patent error) may be considered or voted on and in the case
of a resolution duly proposed as an Ordinary Resolution no amendment to it (other than an
amendment to correct a patent error) may be considered or voted on unless either at least
forty eight (48) hours prior to the time appointed for holding the meeting or adjourned meeting
at which such Ordinary Resolution is to be proposed notice in writing of the terms of the
amendment and intention to move it has been lodged at the Registered Office or the chairperson
of the meeting in his or her absolute discretion decides that it may be considered or voted
on. |
| 67 | OBJECTION
TO ERROR IN VOTING |
No
objection shall be raised to the qualification of any voter or to the counting of, or failure to count, any vote, except at the meeting
or adjourned meeting at which the vote objected to is given or tendered or at which the error occurs. Any such objection or error shall
be referred to the chairperson of the meeting, who shall not be obliged to take it into account unless he or she considers it to be of
sufficient magnitude to affect the decision of the meeting. The chairperson’s decision on such matters shall be final and binding
on all concerned.
FAILURE
TO DISCLOSE INTERESTS IN SHARES
| 68 | FAILURE
TO DISCLOSE INTERESTS IN SHARES |
| 68.1 | For
the purpose of this Article: |
| (A) | “Exempt
Transfer” means, in relation to shares held by a shareholder: |
| (1) | a
transfer pursuant to acceptance of a takeover (as defined in the Irish Takeover Panel Act,
1997) for the Company or in relation to any of its shares; |
| (2) | a
transfer in consequence of a sale made through a market recognised for the purpose of section
1072 of the Act or any stock exchange selected by the Company outside Ireland on which the
Company’s shares (or rights in respect of those shares) are normally traded; or |
| (3) | a
transfer made in consequence of a sale in good faith of the whole of the beneficial interest
in the shares to a bona fide unconnected third party, that is to say one who, in the reasonable
opinion of the Board, is unconnected with the shareholder or with any other person appearing
to be interested in such shares prior to such transfer (being a party which itself is not
the holder of any shares in the Company in respect of which a Direction Notice is then in
force or a person appearing to be interested in any such shares) and/or the Board does not
have reasonable grounds to believe that the transferor or any other person appearing to be
interested in such first mentioned shares will following such transfer have any interest
in such shares; |
| (B) | a
person shall be treated as appearing to be “interested” in any shares if the
shareholder holding such shares has given to the Company information in response to a notice
from the Company pursuant to section 1062 of the Act (a “Section 1062 Notice”)
which names such person as being so interested or if the Company (after taking into account
information provided in response to the relevant Section 1062 Notice and any other notification
under the Act or any relevant information otherwise available to the Company) knows or has
reasonable cause to believe that the person in question is, or may be, interested in the
shares, and references in this Article to persons interested in shares and to “interests
in shares” shall be construed in accordance with section 1059 of the Act; |
| (C) | a
person, other than the shareholder holding a share, shall be treated as appearing to be interested
in such share if the shareholder has informed the Company that the person is or may be so
interested, or if the Company (after taking account of information obtained from the shareholder
or, pursuant to a duly served Section 1062 Notice from anyone else) knows or has reasonable
cause to believe that the person is or may be so interested; |
| (D) | reference
to a person having failed to give to the Company information required by a Section 1062 Notice,
or being in default of supplying such information, includes references to his or her having: |
| (1) | failed
or refused to give all or any part of such information; and |
| (2) | given
information which he or she knows to be false in a material particular or recklessly given
information which is false in a material particular; and |
| (E) | “transfer”
means a transfer of a share or (where applicable) a renunciation of a renounceable letter
of allotment or other renounceable document of title relating to a share. |
| 68.2 | Where
a Section 1062 Notice is given by the Company to a shareholder, or another person appearing
to be interested in shares held by such shareholder, and the shareholder or other person
has failed in relation to any shares (“Default Shares”) (which expression
applies also to any shares issued after the date of the Section 1062 Notice in respect of
those shares and to any other shares registered in the name of such shareholder at any time
whilst the default subsists) to give the Company the information required within the time
period specified in such notice, then provided that ten (10) clear days have elapsed since
service of the Section 1062 Notice, the Board may at any time thereafter at its absolute
discretion by notice to such shareholder (a “Direction Notice”) direct
that: |
| (A) | the
shareholder which is the subject of a Direction Notice is not, in respect of the Default
Shares entitled to be present or to vote (either in person or by proxy) at a general meeting
or at a separate meeting of the holders of a class of shares or on a poll, or to exercise
other rights conferred by membership in relation to the meeting or poll. |
| (B) | in
respect of the Default Shares that represent, at the date of the Direction Notice, 0.25%
or more in nominal value of the issued shares of their class: |
| (1) | any
dividend (or any part of a dividend) or any monies which would otherwise be payable in respect
of the Default Shares (except on a winding-up of the Company) may be withheld by the Company,
which shall have no obligation to pay interest on such dividend; |
| (2) | the
shareholder shall not be entitled to elect, pursuant to Article 128 (scrip dividends) or
otherwise, to receive shares instead of a dividend; and |
| (3) | the
Board may, in its absolute discretion, refuse to register the transfer of any Default Shares
unless: |
| (i) | the
transfer is an Exempt Transfer; or |
| (ii) | the
shareholder is not himself or herself in default in supplying the information required and
proves to the satisfaction of the Board that no person in default of supplying the information
required is interested in any of the shares which are the subject of the transfer, and |
| (iii) | the
shareholder which is the subject of a Direction Notice is in breach of these Articles. |
| 68.3 | The
Company shall send a copy of the Direction Notice to each other person appearing to be interested
in the relevant Default Shares the address of whom has been notified to the Company, but
failure or omission by the Company to do so shall not invalidate such notice. |
| 68.4 | Where
any person appearing to be interested in any shares has been served with a Section 1062 Notice
and such shares are held by a Depositary, the provisions of this Article shall be deemed
to apply only to those shares held by the Depositary in which such person appears to be interested
and not (so far as that person’s apparent interest is concerned) to any other shares
held by the Depositary and references to Default Shares shall be construed accordingly. |
| 68.5 | Where
a person who has an interest in Depositary Interests receives a Section 1062 Notice, that
person is considered for the purposes of this Article to have an interest in the number of
shares represented by those Depositary Interests which is specified in the Section 1062 Notice
and not in the remainder of the shares held by the Depositary or in which the Depositary
is otherwise interested. |
| 68.6 | Where
the shareholder on whom a Section 1062 Notice has been served is a Depositary, the obligations
of the Depositary acting in its capacity as such shall be limited to disclosing to the Company
such information relating to any person appearing to be interested in the shares held by
it as has been recorded by the Depositary in accordance with the arrangements entered into
by the Company or approved by the Board pursuant to which it was appointed as a Depositary. |
| 68.7 | The
sanctions under Article 68.2 shall cease to apply seven days after the earlier of: |
| (A) | receipt
by the Company of notice of an Exempt Transfer, but only in relation to the shares transferred;
and |
| (B) | receipt
by the Company, in a form satisfactory to the Board, of all the information required by the
Section 1062 Notice. |
| 68.8 | None
of the provisions contained in this Article shall in any way limit or restrict the rights
of the Company under sections 1062 and 1066 of the Act or any order made by the court under
section 1066 or elsewhere under Part 17 Chapter 4 of the Act nor shall any sanction imposed
by the Board pursuant to this Article cease to have effect, otherwise than as provided in
this Article, unless it is so ordered by the court. |
APPOINTMENT,
RETIREMENT AND REMOVAL OF DIRECTORS
The
number of Directors shall be not more than thirteen (13) and not less than two (2), with the exact number of directors, from time to
time, to be determined solely by resolution of the Board.
| 70.1 | The
Directors shall be divided into three classes, designated Class I, Class II and Class III. |
| (A) | The
term of the initial Class I directors shall terminate at the conclusion of the Company’s
2024 annual general meeting; the term of the initial Class II directors shall terminate on
the conclusion of the Company’s 2025 annual general meeting; and the term of the initial
Class III directors shall terminate on the conclusion of the Company’s 2026 annual
general meeting. |
| (B) | At
each annual general meeting of the Company beginning with the Company’s 2024 annual
general meeting, all of the Directors of the class of directors whose term expires on the
conclusion of that annual general meeting shall retire from office, unless reelected, and
successors to that class of directors shall be elected for a three-year term. |
| (C) | The
resolution appointing any Director must designate the Director as a Class I, Class II or
Class III Director. |
| (D) | Every
Director of the class retiring shall be eligible to stand for re-election at an annual general
meeting. |
| (E) | If
the number of Directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of Directors in each class as nearly equal as possible
or as the Chairman may otherwise direct. In no case will a decrease in the number of Directors
shorten the term of any incumbent Director. |
| (F) | A
Director shall hold office until the conclusion of the annual general meeting for the year
in which his term expires and until his successor is elected or appointed by the Board pursuant
to Article 72, or until his, or her, earlier death, resignation, retirement, disqualification
or removal from office in accordance with these Articles and the Act. |
| (G) | Any
vacancy on the Board, including a vacancy that results from an increase in the number of
Directors or from the death, resignation, retirement, disqualification or removal of a Director,
shall be deemed a casual vacancy. Subject to the terms of any one or more classes or series
of preferred shares, any casual vacancy shall only be filled by the decision of a majority
of the Board then in office, provided that a quorum is present and provided that the appointment
does not cause the number of Directors to exceed any number fixed by, or in accordance with,
these Articles as the maximum number of Directors. |
| 70.2 | Any
Director of such class elected to fill a vacancy resulting from an increase in the number
of Directors of such class shall hold office for a term that shall coincide with the remaining
term of that class. Any Director elected to fill a vacancy not resulting from an increase
in the number of Directors shall have the same remaining term as that of his predecessor.
A Director retiring at a meeting shall retain office until the close or adjournment of the
meeting. |
| 71 | ANNUAL
RE-ELECTION OF DIRECTORS |
| 71.1 | The
Board, upon recommendations of the nomination and governance committee (or equivalent committee
established by the Board) shall propose nominees for election to the office of Director at
each annual general meeting, commencing with the annual general meeting of the Company in
2024. |
| 71.2 | The
Directors may be appointed by the members in general meeting, provided that no person other
than a Director retiring at the meeting shall, save where recommended by the Board, be eligible
for election to the office of Director at any general meeting unless the requirements of
Article 57 and 58 as to his or her eligibility for that purpose have been complied with. |
| 71.3 | Each
Director shall be elected by an Ordinary Resolution at such meeting, provided that if, as
of, or at any time prior to, fourteen days before the filing of the Company’s definitive
proxy statement with the SEC relating to such general meeting, the number of Director nominees
exceeds the number of Directors to be elected (a “contested election”),
each of those nominees shall be voted upon as a separate resolution and the Directors shall
be elected by a plurality of the votes of the shares present in person or represented by
proxy at any such meeting and entitled to vote on the election of Directors. For the purposes
of this Article, “elected by a plurality” means the election of those
Director nominees, equalling in number to the number of positions to be filled at the relevant
general meeting, that received the highest number of votes. |
| 71.4 | A
resolution for the appointment of two or more persons as Directors by a single resolution
at a general meeting shall be void unless an Ordinary Resolution that the resolution for
appointment be proposed in such way has first been agreed to by the meeting without any vote
being given against it. |
| 71.5 | Notwithstanding
that a Director might not be re-elected at an annual general meeting, such Director shall
nevertheless hold office until his or her successor is elected or is appointed by the Board
pursuant to Article 76, or until his, or her, earlier death, resignation, retirement, disqualification
or removal from office in accordance with these Articles or the Act. |
| 71.6 | A
Director whose term expires at an annual general meeting may, if willing to act, be re-appointed. |
| 72 | BOARD
POWER TO APPOINT DIRECTORS |
Without
prejudice to the Company’s power to appoint a person to be a Director pursuant to these Articles, the Board shall have power at
any time to appoint any person who is willing to act as a Director, either to fill a vacancy or as an addition to the existing Board
or as a successor to a Director who is not re-elected at an annual general meeting and whose successor is not elected at such annual
general meeting, subject to the total number of Directors not exceeding any maximum number fixed by or in accordance with these Articles.
| 73 | APPOINTMENT
OF EXECUTIVE DIRECTORS |
Subject
to the Act, the Board may appoint one or more of its members to an executive office or other position of employment with the Company
for such term (subject to the Act) and on any other conditions the Board thinks fit. The Board may revoke, terminate or vary the terms
of any such appointment, without prejudice to a claim for damages for breach of contract between the Director and the Company.
| 74 | APPOINTMENT
OF OTHER OFFICERS |
The
Board may appoint such other officers as the Directors may, from time to time, determine, including but not limited to, chief executive
officer, chief financial officer, president, vice president, vice chairperson, Secretary, assistant secretary, treasurer, controller
and assistant treasurer. The powers and duties of all other officers are at all times subject to the control of the Directors, and any
other officer may be removed from that office at any time at the pleasure of the Board.
| 75 | ELIGIBILITY
OF NEW DIRECTORS |
Subject
to the Act, no person shall be eligible for nomination for election or re-election as Director at any annual general meeting unless:
| (A) | he
or she is recommended by the Board for appointment or, in the case of a Director retiring,
re-appointment; or |
| (B) | in
any other case, the requirements of Article 57 and Article 58 in respect of nominations of
Directors are satisfied. |
| 76 | VACATION
OF DIRECTOR’S OFFICE |
| 76.1 | Without
prejudice to the provisions in these Articles for retirement, the office of a Director shall
be vacated if: |
| (A) | he
or she resigns by notice in writing delivered to the Secretary at the Registered Office or
tendered at a Board meeting; |
| (B) | he
or she only held office as a Director for a fixed term and such term expires; |
| (C) | he
or she ceases to be a Director by virtue of any provision of the Statutes, is removed from
office pursuant to these Articles or the Statutes or becomes prohibited by law from being
a Director; |
| (D) | he
or she becomes bankrupt, has an interim receiving order made against him or her, makes any
arrangement or compounds with his or her creditors generally or applies to the court for
an interim order in connection with a voluntary arrangement under any legislation relating
to insolvency; |
| (E) | an
order is made by any court of competent jurisdiction on the ground (however formulated) of
mental disorder for his or her detention or for the appointment of a guardian or receiver
or other person to exercise powers with respect to his or her property or affairs or he or
she is admitted to hospital in pursuance of an application for admission for treatment under
any legislation relating to mental health and the Board resolves that his or her office be
vacated; |
| (F) | he
or she is absent, without permission of the Board, from Board meetings for six consecutive
months and the Board resolves that his or her office be vacated; |
| (G) | he
or she, being a Class I or a Class II Director, is removed from office by notice in writing
addressed to him or her at his or her address as shown in the Company’s register of
directors and signed by not less than three-quarters of all the Directors in number (rounded
down to the nearest whole number and excluding the Director in question) (without prejudice
to any claim for damages which he or she may have for breach of contract against the Company);
or |
| (H) | in
the case of a Director who holds executive office, his or her appointment to such office
is terminated or expires and the Board resolves that his or her office be vacated. |
| 76.2 | A
resolution of the Board declaring a Director to have vacated office pursuant to this Article
shall be conclusive as to the fact and grounds of vacation stated in the resolution. |
BOARD
POWERS
| 77.1 | Subject
to the Statutes, the Company’s memorandum of association and these Articles and to
any directions given by Special Resolution of the Company, the business of the Company shall
be managed by the Board, which may exercise all the powers of the Company whether relating
to the management of the business or not. No alteration of the memorandum of association
or of these Articles nor any such direction shall invalidate any prior act of the Board which
would have been valid if such alteration had not been made or such direction had not been
given. The provisions in these Articles giving specific powers to the Board shall not limit
the general powers given by this Article. |
| 77.2 | The
Directors may from time to time and at any time by power of attorney appoint any company,
firm or person or body of persons, whether nominated directly or indirectly by the Directors,
to be the attorney or attorneys of the Company for such purposes and with such powers, authorities
and discretions (not exceeding those vested in or exercisable by the Directors under these
Articles) and for such period and subject to such conditions as they may think fit, and any
such power of attorney may contain such provisions for the protection of persons dealing
with any such attorney as the Directors may think fit, and may also authorise any such attorney
to delegate all or any of the powers, authorities and discretions vested in him or her. |
| 78 | DIRECTORS
BELOW THE MINIMUM NUMBER |
If
the number of Directors is less than the minimum prescribed in accordance with these Articles, the remaining Director or Directors shall
act only for the purposes of appointing an additional Director or Directors to make up such minimum or of convening a general meeting
of the Company for the purpose of making such appointment. If there are no Director or Directors able or willing to act, any two shareholders
may summon a general meeting for the purpose of appointing Directors. Any additional Director so appointed shall hold office (subject
to these Articles) only until the dissolution of the annual general meeting next following such appointment unless he or she is re-elected
during such meeting.
| 79 | DELEGATION
TO EXECUTIVE DIRECTORS |
The
Board may delegate to a Director holding executive office any of its powers, authorities and discretions for such time and on such terms
and conditions as it shall think fit. The Board may grant to a Director the power to sub-delegate, and may retain or exclude the right
of the Board to exercise the delegated powers, authorities or discretions collaterally with the Director. The Board may at any time revoke
the delegation or alter its terms and conditions.
| 80 | DELEGATION
TO COMMITTEES |
| 80.1 | The
Board may delegate any of its powers, authorities and discretions (including, without limitation,
those relating to the payment of monies or other remuneration to, and the conferring of benefits
on, a Director) for such time and on such terms and conditions as it shall think fit to a
committee consisting of one or more Directors and/or (if thought fit) one or more other persons.
The Board may grant to the committee the power to sub-delegate, and may retain or exclude
the right of the Board to exercise the delegated powers, authorities or discretions collaterally
with the committee. The Board may at any time revoke the delegation or alter its terms and
conditions or discharge the committee in whole or in part. Where a provision of the Articles
refers to the exercise of a power, authority or discretion by the Board and that power, authority
or discretion has been delegated by the Board to a committee, the provision shall be construed
as permitting the exercise of the power, authority or discretion by the committee. |
| 80.2 | The
Board’s power under these Articles to delegate to a committee: |
| (A) | includes
(without limitation) the power to delegate the determination of any fee, remuneration or
other benefit to be paid or provided to any Director; and |
| (B) | is
not limited by the fact that in some Articles but not others express reference is made to
particular powers being exercised by the Board or by a committee. |
| 80.3 | In
addition to the Board’s power to delegate to committees pursuant to this Article 80,
the Board may delegate any of its powers to any individual Director or member of the management
of the Company or any of associated companies as it sees fit; any such individual shall,
in the exercise of the powers so delegated, conform to any regulations that may be imposed
on them by the Board. |
The
Board may establish local or divisional boards, agencies or branch offices for managing the affairs of the Company in a specified locality,
either in Ireland or elsewhere, and may appoint persons to be members of a local or divisional board, agency or branch office and may
fix their remuneration. The Board may delegate to a local or divisional board, agency or branch office any of its powers, authorities
and discretions for such time and on such terms and conditions as it thinks fit. The Board may grant to such local or divisional board,
agency or branch office the power to sub-delegate, may retain or exclude the right of the Board to exercise the delegated powers, authorities
or discretions collaterally with the local or divisional board, agency or branch office and may authorise the members of a local or divisional
board, agency or branch (or any of them) to fill a vacancy or to act despite a vacancy. The Board may at any time revoke or alter the
terms and conditions of the appointment or delegation. Subject to the terms and conditions imposed by the Board, the proceedings of a
local or divisional board, agency or branch office with two or more members are governed by those Articles that regulate the proceedings
of the Board, so far as applicable.
The
Board may, by power of attorney or otherwise, appoint a person (including officers and employees) to be the agent of the Company and
may delegate to such person any of its powers, authorities and discretions for such purposes, for such time and on such terms and conditions
(including as to remuneration) as it thinks fit. The Board may grant the power to sub-delegate and may retain or exclude the right of
the Board to exercise the delegated powers, authorities or discretions collaterally with the agent. The Board may at any time revoke
or alter the terms and conditions of the appointment or delegation.
| 83 | EXERCISE
OF VOTING POWER |
The
Board may exercise or cause to be exercised the voting power conferred by shares in any other body corporate held or owned by the Company,
or any power of appointment to be exercised by the Company, in any manner it thinks fit (including the exercise of the voting power or
power of appointment in favour of the appointment of any Director as a director or other officer or employee of such company or in favour
of the payment of remuneration to the directors, officers or employees of such company).
| 84 | PROVISION
FOR EMPLOYEES |
The
Board may exercise any power conferred on the Company by the Statutes to make provision for the benefit of persons employed or formerly
employed by any Group Member in connection with the cessation or the transfer to any person of the whole or part of the undertaking of
such Group Member.
Subject
to the Statutes, the Board may exercise the powers conferred on the Company with regard to the keeping of an overseas branch, local or
other register in relation to shareholders and may make and vary such regulations as it thinks fit concerning the keeping of any such
register.
The
Board may appoint any person (not being a Director) to any office or employment having a designation or title including the word “director”
or attach to any existing office or employment with the Company such designation or title and may terminate any such appointment or the
use of such designation or title. The inclusion of the word “director” in the designation or title of any such office or
employment shall not imply that such person is, or is deemed to be, or is empowered in any respect to act as, a Director for any of the
purposes of the Statutes or these Articles.
Subject
to the Statutes, the Board may exercise all the powers of the Company to borrow money and to mortgage or charge all or part of the undertaking,
property and assets (present or future) and uncalled capital of the Company and, subject to section 1021 of the Act, to create and issue
debentures and other securities, whether outright or as collateral security for a debt, liability or obligation of the Company or of
any third party.
The
name of the Company may be changed, subject to the approval of the Registrar of Companies, by a Special Resolution of the Company.
DIRECTORS’
REMUNERATION, EXPENSES AND BENEFITS
The
Company shall pay to the Directors for their services as Directors such aggregate amount of fees, salary or remuneration as the Board
decides. The aggregate fees shall be divided among the Directors in such proportions as the Board decides or, if no decision is made,
equally. A fee payable to a Director pursuant to this Article shall be distinct from any salary or remuneration payable to him or her
under a service agreement or other amount payable to him or her pursuant to other provisions of these Articles and accrues from day to
day. The Board may from time to time determine that, subject to the requirements of the Act, all or part of any fees or other remuneration
payable to any Director shall be provided in the form of shares or other securities of the Company or any subsidiary of the Company,
or options to rights to acquire such shares or other securities, on such terms as the Board may decide.
A
Director may also be paid all travelling, hotel and other expenses properly incurred by him or her in connection with his or her attendance
at meetings of the Board or of committees of the Board or general meetings or separate meetings of the holders of any class of shares
or otherwise in connection with the discharge of his or her duties as a Director, including (without limitation) any professional fees
incurred by him or her (with the approval of the Board or in accordance with any procedures stipulated by the Board) in taking independent
professional advice in connection with the discharge of such duties.
| 91 | REMUNERATION
OF EXECUTIVE DIRECTORS |
The
salary or remuneration of a Director appointed to hold employment or executive office in accordance with the Articles may be a fixed
sum of money, in the form of shares or other securities of the Company or any subsidiary of the Company, or options to rights to acquire
such shares or other securities, on such terms as the Board may decide, and may be wholly or in part governed by business done or profits
made, or as otherwise decided by the Board (including, for the avoidance of doubt, by the Board acting through a duly authorised Board
committee), and may be in addition to or instead of a fee payable to him or her for his or her services as a Director pursuant to these
Articles.
A
Director who, at the request of the Board, goes or resides abroad, makes a special journey or performs a special service on behalf of
or for the Company (including, without limitation, services as a chairperson or vice-chairperson of the Board, services as a member of
any Board committee and services which the Board considers to be outside the scope of the ordinary duties of a Director) may be paid
such reasonable additional remuneration (whether by way of salary, bonus, commission, percentage of profits or otherwise) and expenses
as the Board (including, for the avoidance of doubt, the Board acting through a duly authorised Board committee) may decide.
Each
Director is expressly permitted (for the purposes of section 228(1)(d) of the Act) to use the property of the Company pursuant to or
in connection with the exercise or performance of his or her duties, functions and powers as Director or employee, the terms of any contract
of service or employment or letter of appointment; and/or in the alternative, any other usage authorised by the Directors (or a person
authorised by the Directors) from time to time; and including in each case for a Director’s own benefit or for the benefit of another
person.
| 94 | PENSIONS
AND OTHER BENEFITS |
The
Board may exercise all the powers of the Company to provide pensions or other retirement or superannuation benefits and to provide death
or disability benefits or other allowances or gratuities (by insurance or otherwise) for a person who is or has at any time been a Director,
an officer or a director or an employee of a company which is or was a Group Member, a company which is or was allied to or associated
with the Company or with a Group Member or a predecessor in business of the Company or of a Group Member (and for any member of his or
her family, including a spouse or former spouse, or a person who is or was dependent on him or her). For this purpose the Board may establish,
maintain, subscribe and contribute to any scheme, trust or fund and pay premiums. The Board may arrange for this to be done by the Company
alone or in conjunction with another person. A Director or former Director is entitled to receive and retain for his or her own benefit
any pension or other benefit provided in accordance with this Article and is not obliged to account for it to the Company.
DIRECTORS’
PROCEEDINGS
Subject
to these Articles, the Board may regulate its proceedings as it thinks fit. A Director may, and the Secretary at the request of a Director
shall, call a meeting of the Board.
| 96 | NOTICE
OF BOARD MEETINGS |
Notice
of a Board meeting shall be deemed to be duly given to a Director if it is given to him or her personally or by word of mouth or sent
in writing to his or her last known address or any other address given to the Company by him or her for such purpose or given by electronic
communications to an address for the time being notified to the Company by the Director. It shall not be necessary to give notice of
a Board meeting to a Director who is absent with leave unless the Director has notified the Company in writing of an address or an address
for electronic communications at which notice of such meetings is to be given to him or her when he or she is absent with leave. A Director
may be treated as having waived his or her entitlement to notice of a meeting of the Board if he or she has not supplied the Company
with the information necessary to ensure that he or she receives notice of a meeting before it takes place. A Director may waive the
requirement that notice of any Board meeting be given to him or her, either prospectively or retrospectively. In this Article “address”,
in relation to documents in electronic form, includes any number or address used for the supply of documents in electronic form.
No
business shall be transacted at any meeting of the Board unless a quorum is present. The quorum may be fixed by the Board and unless
so fixed at any other number shall be a majority in number of the Directors in office at the time when the meeting is convened. A duly
convened Board meeting at which a quorum is present shall be competent to exercise any and all of the authorities, discretions and powers
vested in or exercisable by the Board.
The
Board may appoint any Director to be, and may remove, a chairperson and a vice- or deputy chairperson of the Board. The chairperson or,
in his or her absence, the vice- or deputy chairperson, shall preside at all Board meetings. If there is no chairperson or vice- or deputy
chairperson, or if at a Board meeting neither the chairperson nor the vice- or deputy chairperson is present within ten minutes after
the time appointed for the meeting, or if neither of them is willing to act as chairperson, the Directors present may choose any Director
present to be chairperson of the meeting.
Questions
arising at a meeting shall be decided by a simple majority of votes of the Directors present at the meeting. Each Director present and
voting shall have one vote. For the avoidance of doubt, in the case of an equality of votes, the chairperson shall have a second or casting
vote.
| 100 | TELEPHONE
PARTICIPATION |
A
Director may participate in a meeting of the Board or a committee of the Board through the medium of conference telephone, video conferencing
or any other form of communication equipment if all persons participating in the meeting are able to hear and speak to each other throughout
the meeting. A person participating in this way shall be deemed to be present in person at the meeting and shall be counted in a quorum
and entitled to vote. Subject to the Statutes, all business transacted in this way by the Board or a committee of the Board shall be
deemed for the purposes of the Articles to be validly and effectively transacted at a meeting of the Board or a committee of the Board
even if one Director only is physically present at any one place. The meeting shall be deemed to take place where the largest group of
those participating is assembled or, if there is no such group, where the chairperson of the meeting then is.
| 101.1 | A
resolution in writing executed by all the Directors for the time being entitled to receive
notice of a Board meeting and unanimously in number, or by all the members of a committee
of the Board for the time being entitled to receive notice of the meetings of such committee
and unanimously in number, shall be as valid and effective for all purposes as a resolution
duly passed at a meeting of the Board (or committee, as the case may be). |
| (A) | may
consist of several documents in the same form each executed, or consented to in accordance
with Article 101.3, by one or more of the Directors or members of the relevant committee,
including executions or consents evidenced by electronic transmission (including but not
limited to email); and |
| (B) | to
be effective, need not be signed or consented to by a Director who is prohibited by these
Articles from voting on it. |
| 101.3 | For
the purposes of this Article, a resolution will be deemed to have been executed by a Director
if that Director gives his or her confirmation by electronic mail to the Chairperson, Secretary,
assistant Secretary or other person designated by the Board or the Secretary that he or she
approves the text of the resolution. |
| 101.4 | The
Company shall cause a copy of every email referred to in Article 101.3 to be entered in the
book kept pursuant to section 166 of the Act. |
| 101.5 | Subject
to Article 101.6, where one or more of the Directors (other than a majority of them) would
not, by reason of: |
| (A) | the
Act or any other enactment; |
| (C) | an
applicable rule of law or an Exchange, |
be
permitted to vote on a resolution such as is referred to in Article 101, if it were sought to pass the resolution at a meeting of the
Directors duly convened and held, then such a resolution, notwithstanding anything in Article 101, shall be valid for the purposes of
that section if the resolution is signed by those of the Directors who would have been permitted to vote on it had it been sought to
pass it at such a meeting.
| 101.6 | In
a case falling within Article 101.5, the resolution shall state the name of each Director
who did not sign it and the basis on which he or she did not sign it. |
| 101.7 | For
the avoidance of doubt, nothing in Articles 101.5 to 101.6 dealing with a resolution that
is signed by other than all of the Directors shall be read as making available, in the case
of an equality of votes, a second or casting vote to the one of their number who would, or
might have been, if a meeting had been held to transact the business concerned, chairperson
of that meeting. |
Proceedings
of committees of the Board shall be conducted in accordance with regulations prescribed by the Board (if any). Subject to those regulations,
such proceedings shall be conducted in accordance with applicable provisions of these Articles regulating the proceedings of the Board.
Where the Board resolves to delegate any of its powers, authorities and discretions to a committee and such resolution states that the
committee shall consist of any one or more unnamed Directors, it shall not be necessary to give notice of a meeting of such committee
to any Directors other than the Director or Directors who form the committee.
| 103.1 | The
Board shall cause minutes to be made of: |
| (A) | all
appointments of officers and committees made by the Board and of any such officer’s
remuneration; and |
| (B) | the
names of Directors present at every meeting of the Board, a committee of the Board, the Company
or the holders of any class of shares or debentures, and all orders, resolutions and proceedings
of such meetings. |
| 103.2 | Any
such minutes, if purporting to be signed by the chairperson of the meeting at which the proceedings
were held or by the chairperson of the next succeeding meeting or the Secretary, shall be
prima facie evidence of the matters stated in them. |
| 104 | VALIDITY
OF PROCEEDINGS |
All
acts done in good faith by a meeting of the Board, or of a committee of the Board, or by a person acting as a Director or a committee
member shall, notwithstanding that it may be discovered afterwards that there was a defect in the appointment of any person so acting
or that any of them were disqualified from holding office, or had vacated office, or were not entitled to vote, be as valid as if every
such person had been duly appointed and was qualified and had continued to be a Director or committee member and entitled to vote.
INTERESTS
OF DIRECTORS
| 105 | CONTRACTING
WITH THE COMPANY |
Subject
to the provisions of the Statutes, no Director or intending Director shall be disqualified by his or her office from contracting with
the Company either as vendor, purchaser or otherwise, nor shall any such contract or any transaction or arrangement entered into on behalf
of the Company in which any Director is in any way directly or indirectly interested be liable to be avoided, nor shall any Director
so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director
holding that office, or of the fiduciary relationship thereby established, provided that the nature of this interest has been declared
by him or her in accordance with Article 106.
| 106 | DECLARATION
OF INTERESTS |
| 106.1 | A
Director who is in any way (whether directly or indirectly) interested in a contract, transaction
or arrangement or proposed contract, transaction or arrangement with the Company shall, in
accordance with section 231 of the Act, declare the nature of his or her interest at the
first opportunity either (a) at a meeting of the Board at which the question of entering
into the contract, transaction or arrangement is first taken into consideration, if the Director
or officer of the Company knows this interest then exists, or in any other case, at the first
meeting of the Board after learning that he or she is or has become so interested or (b)
by providing a general notice to the Directors declaring that he or she is a director or
an officer of, or has an interest in, a person and is to be regarded as interested in any
transaction or arrangement made with that person, and after giving such general notice it
shall not be necessary to give special notice relating to any particular transaction. If
a declaration of interest under this Article proves to be, or becomes, inaccurate or incomplete,
a further declaration must be made. |
Provided
that a Director has declared the nature and extent of his or her interest to the other Directors, a Director notwithstanding his or her
office:
| (A) | may
be a party to, or otherwise interested in, any transaction or arrangement with the Company
or in which the Company is otherwise interested; |
| (B) | may
be counted in determining the presence of a quorum at a meeting of the Board which authorises
or approves the contract, transaction or arrangement in which he or she is interested and
he or she shall be at liberty to vote in respect of any contract, transaction or arrangement
in which he or she is interested, provided that the nature of the interest of any Director
in any such contract or transaction shall be disclosed by him or her in accordance with Article
106.1, at or prior to its consideration and any vote thereon; and |
| (C) | may
be a director or other officer of, or employed by, or a party to any transaction or arrangement
with, or otherwise interested in, any body corporate in which the Company is interested, |
and
(i) he or she shall not, by reason of his or her office, be accountable to the Company for any benefit which he or she derives from any
such office or employment or from any such transaction or arrangement or from any interest in any such body corporate; (ii) he or she
shall not infringe his duty to avoid a situation in which he or she has, or can have, a direct or indirect interest that conflicts, or
possibly may conflict, with the interests of the Company as a result of any such office or employment or any such transaction or arrangement
or any interest in such body corporate; (iii) he or she shall not be required to disclose to the Company, or use in performing his duties
as a Director of the Company, any confidential information relating to such office or employment if to make such disclosure or use would
result in a breach of a duty or obligation of confidence owed by the Director in relation to or in connection with such office or employment;
(iv) he or she may absent himself or herself from discussions, whether in meetings of the Directors or otherwise, and exclude himself
or herself from information which will or may relate to such office, employment, transaction, arrangement or interest; and (v) no such
transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit.
| 106.2 | For
the purposes of Article 106.1: |
| (A) | a
general notice given to the Directors that a Director is to be regarded as having an interest
of the nature and extent specified in the notice in any transaction or arrangement in which
a specified person or class of persons is interested shall be deemed to be a disclosure that
the Director has an interest in any such transaction of the nature and extent so specified; |
| (B) | an
interest of which a Director has no knowledge and of which it is unreasonable to expect him
or her to have knowledge shall not be treated as an interest of him or her; and |
| (C) | a
copy of every declaration made and notice given under Article 106.1 shall be entered within
three days after the making or giving thereof in a book kept for this purpose. Such book
shall be open for inspection without charge by any Director, Secretary, the Auditors or any
shareholder at the Registered Office and shall be produced at every general meeting of the
Company and at any meeting of the Directors if any Director so requests in sufficient time
to enable the book to be available at the meeting. |
| 107 | AUTHORISATION
OF BOARD OF CONFLICTS OF INTERESTS |
| 107.1 | A
Director may have regard to the interests of any other companies in a group of which the
Company is a member to the full extent permitted by the Act. |
| 107.2 | Subject
to any applicable law or the relevant code, rules and regulations applicable to the listing
of the shares on any Exchange, nothing in section 228(1)(f) of the Act shall restrict a Director
from entering into a commitment which has been authorised by the Board or has been authorised
pursuant to such authority as may be delegated by the Board in accordance with these Articles
which, if not so authorised, would infringe the duty to avoid conflicts of interest as set
out in section 228(1)(f) of the Act. As recognised by section 228(1)(e) of the Act, the Directors
may agree to restrict their power to exercise an independent judgement but only where this
has been expressly authorised by a resolution of the Board. The Directors may give such authorisations
upon such terms as they think fit in accordance with the Act. The Directors may vary or terminate
any such authorisations at any time. |
| 107.3 | If
a matter, or office, employment or position has been authorised by the Directors in accordance
with this Article 107 then (subject to such terms and conditions, if any, as the Directors
may think fit to impose from time to time, and always subject to their right to vary or terminate
such authorisations or the permissions set out below): |
| (A) | the
Director shall not be required to disclose any confidential information relating to such
matter, or office, employment or position to the Company if to make such a disclosure would
result in a breach of a duty or obligation of confidence owed by him or her in relation to
or in connection with that matter, or that office, employment or position; |
| (B) | the
Director may absent himself or herself from meetings of the Directors at which anything relating
to that matter will or may be discussed; and |
| (C) | the
Director may make such arrangements as such Director thinks fit for relevant papers to be
received and read by a professional adviser on behalf of that Director. |
| 107.4 | A
Director shall not, by reason of his or her office, be accountable to the Company for any
benefit which he or she derives from any matter which has been approved by the Directors
pursuant to this Article 107 (subject in any such case to any limits or conditions to which
such approval was subject). |
| 108 | PROHIBITION
ON VOTING BY INTERESTED DIRECTORS |
Except
as otherwise provided in these Articles, a Director shall not vote in respect of any contract or arrangement or any other proposal whatsoever
in which he or she has any material interest otherwise than by virtue of his or her interests in shares or debentures or other securities
of or otherwise in or through the Company or any resolution of the Directors granting him or her authorisation under Article 107. A Director
shall not be counted in the quorum of a meeting in relation to any resolution on which he or she is debarred from voting.
| 109 | ABILITY
OF INTERESTED DIRECTORS TO VOTE |
A
Director shall (in the absence of a material interest other than those indicated below) be entitled to vote (and be counted in the quorum)
in respect of any resolution concerning any of the following matters, namely:
| (A) | the
giving of any security or indemnity to him or her in respect of money lent or obligations
incurred by him or her at the request of or for the benefit of the Company or any of its
subsidiary undertakings; |
| (B) | the
giving of any security or indemnity to a third party in respect of a debt or obligation of
the Company or any of its subsidiaries for which he, himself or she, herself has assumed
responsibility in whole or in part under a guarantee or indemnity or by the giving of security; |
| (C) | any
proposal concerning an offer of shares or debentures or other securities of or by the Company
or any of its subsidiary undertakings for subscription or purchase in which offer he or she
is or is to be interested as a participant in the underwriting or sub underwriting thereof; |
| (D) | any
proposal concerning any other company in which he or she is interested, directly or indirectly
and whether as an officer or shareholder or otherwise howsoever, provided that he or she
is not interested (as that term is used in section 804 of the Act) in 1% or more of any class
of the equity share capital of such company (or of any third company through which his or
her interest is derived) or of the voting rights available to shareholders of the relevant
company (any such interest being deemed for the purpose of this Article to be a material
interest in all the circumstances); |
| (E) | any
proposal concerning the adoption, modification or operation of a superannuation fund or retirement,
death or disability benefits scheme under which he or she may benefit and which has been
approved by or is subject to and conditional upon approval by the Board of the Revenue Commissioners
for taxation purposes; |
| (F) | any
proposal relating to any arrangement for the benefit of employees under which he or she benefits
or may benefit in a similar manner as the employees and which does not accord to him or her
as a Director any privilege or advantage not generally accorded to the employees to whom
the arrangement relates; or |
| (G) | subject
to the Statutes, any proposal concerning the purchase and/or maintenance of any insurance
policy under which a Director may benefit. |
Where
proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more Directors
to offices or employments with the Company or any company in which the Company is interested, such proposals may be divided and considered
in relation to each Director separately. In such case each of the Directors concerned (if not debarred from voting under the proviso
to Article 109(D)) shall be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning his
or her own appointment.
| 111 | RULINGS
ON QUESTIONS OF ENTITLEMENT TO VOTE |
If
any question shall arise at any meeting as to the materiality of a Director’s interest or as to the entitlement of any Director
to vote and such question is not resolved by his or her voluntarily agreeing to abstain from voting, such question shall (unless the
Director in question is the chairperson in which case he or she shall withdraw from the meeting and the Board shall elect a deputy chairperson
to consider the question in place of the chairperson) be referred to the chairperson of the meeting and his or her ruling in relation
to any other Director shall be final and conclusive, except in a case where the nature or extent of the interest of the Director concerned
has not been fairly disclosed.
| 112 | INTERESTS
OF CONNECTED PERSONS |
For
the purposes of these Articles, an interest of any person who is for any purpose of the Act (excluding any statutory modification thereof
not in force when these Articles became binding on the Company) connected with a Director within the meaning of section 220 of the Act
shall be taken to be the interest of that Director.
| 113 | ABILITY
OF DIRECTOR TO HOLD OTHER OFFICES |
A
Director may hold any other office or place of profit under the Company (other than the office of its Auditors) in conjunction with his
or her office of Director for such period and on such terms as to remuneration and otherwise as the Board may determine. A Director may
be or become a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer
or member of any other company or otherwise interested in any company promoted by the Company or in which the Company may be interested
as shareholder or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received
by him or her as director, managing director, joint managing director, deputy managing director, executive director, manager or other
officer or member of such company; provided that he or she has declared the nature of his or her position with, or interest in, such
company to the Board in accordance with Article 106.1.
| 114 | REMUNERATION
FOR PROFESSIONAL SERVICES |
Any
Director may act by himself or herself or his or her firm in a professional capacity for the Company and he or his firm or she and her
firm shall be entitled to a remuneration for professional services as if he or she was not a Director, provided that nothing herein contained
shall authorise a Director or his or her firm to act as the Auditors.
| 115 | DIRECTORSHIPS
OF OTHER COMPANIES |
Any
Director may continue to be or become a Director of, or hold any other office or place of profit under, any other company in which the
Company may be interested, and no such Director shall be accountable for any remuneration, salary, commission, participation in profits,
pension, superannuation or other benefits received by him or her as a director of, or holder of any other office or place of profit under,
or shareholder of, any such other company. The Board may exercise the voting power conferred by the shares in any company held or owned
by the Company in such manner in all respects as it may think fit (including the exercise thereof in favour of any resolution appointing
the directors or any of the directors of such company, or voting or providing for the payment of remuneration to the directors of such
company).
SECRETARY
| 116.1 | Subject
to the Statutes, the Board shall appoint a Secretary on such terms and conditions as it thinks
fit. The Board may remove a person appointed pursuant to this Article from office and appoint
another or others in his or her place. |
| 116.2 | It
shall be the duty of the Secretary to make and keep records of the votes, doings and proceedings
of all meetings of the shareholders and Board of the Company, and of its Committees and to
authenticate records of the Company. |
| 116.3 | Any
provision of the Statutes or of these Articles requiring or authorising a thing to be done
by or to a Director and the Secretary shall not be satisfied by its being done by or to the
same person acting both as a Director and as, or in the place of, the Secretary. |
SEALS
AND DOCUMENT AUTHENTICATION
| 117.1 | The
Company shall have a common seal which shall only be used by the authority of the Board or
of a committee of the Board authorised by the Board in that regard and every instrument to
which the Seal has been affixed shall be signed by any person who shall be either a Director
or the Secretary or some other person authorised by the Board, either generally or specifically,
for the purpose, and the countersignature of a second such person shall not be required. |
| 117.2 | The
Company may have for use in any place or places outside Ireland, a duplicate Seal or Seals
each of which shall be a duplicate of the Seal of the Company except, in the case of a Seal
for use in sealing documents creating or evidencing securities issued by the Company, for
the addition on its face of the word “Securities” and if the Board so determines,
with the addition on its face of the name of every place where it is to be used. |
| 118 | DIRECTORS
OR SECRETARY TO AUTHENTICATE OR CERTIFY |
| 118.1 | A
Director or the Secretary or any person appointed by the Board for the purpose may authenticate
any documents affecting the constitution of the Company (including the memorandum of association
and these Articles) and any resolutions passed by the Company or holders of a class of shares
or the Board or any committee of the Board and any books, records, documents and accounts
relating to the business of the Company, and may certify copies of or extracts from any such
items as true copies or extracts. |
| 118.2 | A
document purporting to be a copy of a resolution of the Board or an extract from the minutes
of a meeting of the Board or any committee which is certified as aforesaid shall be conclusive
evidence in favour of all persons dealing with the Company upon the faith thereof that such
resolution has been duly passed or, as the case may be, that such extract is a true and accurate
record of the proceedings at a duly constituted meeting. |
DIVIDENDS
AND OTHER PAYMENTS
Subject
to the Statutes and these Articles, the Company may by Ordinary Resolution declare a dividend to be paid to shareholders according to
their respective rights and interests in the profits of the Company. No such dividend shall exceed the amount recommended by the Board.
Subject
to the Statutes, the Board may pay such interim dividends (including any dividend payable at a fixed rate) as appears to the Board to
be justified by the profits of the Company available for distribution. If at any time the share capital is divided into different classes,
the Board may pay such interim dividends on shares which rank after shares conferring preferential rights with regard to dividend as
well as on shares conferring preferential rights, unless at the time of payment any preferential dividend is in arrears. If the Board
acts in good faith, it shall not incur any liability to the holders of shares conferring preferential rights for any loss that they may
suffer by the lawful payment of an interim dividend on any shares ranking after those with preferential rights.
| 121 | ENTITLEMENT
TO DIVIDENDS |
| 121.1 | Except
as otherwise provided by these Articles or the rights attached to shares: |
| (A) | a
dividend shall be declared and paid according to the amounts paid-up (otherwise than in advance
of calls) on the nominal value of the shares on which the dividend is paid; and |
| (B) | dividends
shall be apportioned and paid proportionately to the amounts paid-up on the nominal value
of the shares during any portion or portions of the period in respect of which the dividend
is paid, but if any share is issued on terms that it shall rank for dividend as from a particular
date, it shall rank for dividend accordingly. |
| 121.2 | Except
as otherwise provided by these Articles or the rights attached to shares: |
| (A) | a
dividend may be paid in any currency or currencies decided by the Board; |
| (B) | the
Company may agree with a shareholder that any dividend declared or which may become due in
one currency will be paid to the shareholder in another currency; and |
| (C) | the
Directors can decide that a Depositary should receive dividends in a currency other than
the currency in which they were declared and can make arrangements accordingly In particular,
if a Depositary has chosen or agreed to receive dividends in another currency, the Directors
can make arrangements with the Depositary for payment to be made to the Depositary for value
on the date on which the relevant dividend is paid, or a later date decided by the Directors, |
for
which purpose the Board may use any relevant exchange rate current at any time as the Board may select for the purpose of calculating
the amount of any shareholder’s entitlement to the dividend.
| 122.1 | The
Company may pay a dividend, interest or other amount payable in respect of a share in cash
or by cheque, warrant or money order or by a bank or other funds transfer system by or on
behalf of the shareholder in a form or in a manner satisfactory to the Board. Any joint holder
or other person jointly entitled to a share may give an effective receipt for a dividend,
interest or other amount paid in respect of such share. |
| 122.2 | The
Company may send a cheque, warrant or money order by post: |
| (A) | in
the case of a sole holder, to his or her registered address; |
| (B) | in
the case of joint holders, to the registered address of the person whose name stands first
in the Share Register; |
| (C) | in
the case of a person or persons entitled by transmission to a share, as if it were a notice
given in accordance with Article 42 (notice to persons entitled by transmission); |
| (D) | in
the case of a Depositary, and subject to the approval of the Directors, to such persons and
postal addresses as the Depositary may direct; or |
| (E) | in
any case, to a person and address that the person or persons entitled to the payment may
in writing direct. |
| 122.3 | Every
cheque, warrant or money order shall be sent at the risk of the person or persons entitled
to the payment and shall be made payable to the order of the person or persons entitled or
to such other person or persons as the person or persons entitled may in writing direct.
The payment of the cheque, warrant or money order shall be a good discharge to the Company.
If payment is made by a bank or other funds transfer, the Company shall not be responsible
for amounts lost or delayed in the course of transfer. |
| 122.4 | The
Board may withhold payment of a dividend (or part of a dividend) payable to a person entitled
by transmission to a share until he or she has provided any evidence of his or her entitlement
that the Board may reasonably require. |
The
Board may deduct from any dividend or other amounts payable to any person in respect of a share all such sums as may be due from him
or her to the Company on account of calls or otherwise in relation to that share.
No
dividend or other money payable in respect of a share shall bear interest against the Company, unless otherwise provided by the rights
attached to the share.
All
unclaimed dividends or other monies payable by the Company in respect of a share may be invested or otherwise made use of by the Board
for the benefit of the Company until claimed. The payment of any unclaimed dividend or other amount payable by the Company in respect
of a share into a separate account shall not constitute the Company a trustee in respect of it. Any dividend unclaimed after a period
of twelve (12) years from the date the dividend became due for payment shall be forfeited and shall revert to the Company.
If,
in respect of a dividend or other amount payable in respect of a share:
| (A) | a
cheque, warrant or money order is returned undelivered or left uncashed; or |
| (B) | a
transfer made by or through a bank transfer system and/or other funds transfer system(s)
fails or is not accepted, |
on
two consecutive occasions, or one occasion and reasonable enquiries have failed to establish another address or account of the person
entitled to the payment, the Company shall not be obliged to send or transfer a dividend or other amount payable in respect of such share
to such person until he or she notifies the Company of an address or account to be used for such purpose.
A
general meeting declaring a dividend may, upon the recommendation of the Board, direct that it shall be satisfied wholly or partly by
the distribution of assets (including, without limitation, paid-up shares or securities of any other body corporate). Where any difficulty
arises concerning such distribution, the Board may settle it as it thinks fit. In particular (without limitation), the Board may:
| (A) | issue
fractional certificates or ignore fractions; |
| (B) | fix
the value for distribution of any assets, and may determine that cash shall be paid to any
shareholder on the footing of the value so fixed in order to adjust the rights of shareholders;
and |
| (C) | vest
any assets in trustees on trust for the persons entitled to the dividend. |
| 128.1 | The
Board may, with the prior authority of an Ordinary Resolution and subject to such terms and
conditions as the Board may determine, offer any holders of Ordinary Shares the right to
elect to receive Ordinary Shares, credited as fully paid, instead of cash in respect of the
whole (or some part, to be determined by the Board) of any dividend specified by the Ordinary
Resolution, subject to the Statutes and to the provisions of this Article. |
| 128.2 | An
Ordinary Resolution under Article 128.1 may specify a particular dividend (whether or not
declared), or may specify all or any dividends declared within a specified period, but such
period may not end later than the beginning of the fifth annual general meeting next following
the date of the meeting at which the Ordinary Resolution is passed. |
| 128.3 | The
entitlement of each holder of Ordinary Shares to new Ordinary Shares shall be such that the
relevant value of the entitlement shall be the cash amount, disregarding any tax credit,
(or as near to such cash amount as the Board considers appropriate) that such holder would
have received by way of dividend. For this purpose, “relevant value” shall
be calculated by reference to the average of the middle market quotations for the Ordinary
Shares for the day on which the Ordinary Shares are first quoted “ex” the relevant
dividend and the four subsequent dealing days, or in such other manner as may be determined
by or in accordance with the Ordinary Resolution. A written confirmation or report by the
Auditors as to the amount of the relevant value in respect of any dividend shall be conclusive
evidence of that amount. |
| 128.4 | The
Board may make any provision it considers appropriate in relation to an allotment made or
to be made pursuant to this Article (whether before or after the passing or the Ordinary
Resolution referred to in Article 128.1), including (without limitation): |
| (A) | the
giving of notice to holders of the right of election offered to them; |
| (B) | the
provision of forms of election and/or a facility and a procedure for making elections (whether
in respect of a particular dividend or dividends generally); |
| (C) | determination
of the procedure for making and revoking elections; |
| (D) | the
place at which, and the latest time by which, forms of election and other relevant documents
must be lodged in order to be effective; |
| (E) | the
disregarding or rounding up or down or carrying forward of fractional entitlements, in whole
or in part, or the accrual of the benefit of fractional entitlements to the Company (rather
than to the holders concerned); |
| (F) | the
exclusion from any offer of any holders of Ordinary Shares where the Board considers that
the making of the offer to them would or might involve the contravention of the laws of any
territory or that for any other reason the offer should not be made to them; and |
| (G) | the
exclusion from any offer of, or the making of any special formalities in connection with
any offer to, any holders of Ordinary Shares represented by Depositary Interests. |
| 128.5 | The
Directors can exclude or restrict the right to elect to receive new Ordinary Shares under
this Article 128 in the case of any shareholder or other person who is a Depositary if the
election by the people on whose behalf the Depositary holds the beneficial interest in the
shares would involve the contravention of the laws of any territory or if for any other reason
the Board determines that the offer should not be made to such persons. |
| 128.6 | The
dividend (or that part of the dividend in respect of which a right of election has been offered)
shall not be payable on Ordinary Shares in respect of which a valid election has been made
(the “elected Ordinary Shares”). Instead additional Ordinary Shares shall
be allotted to the holders of the elected Ordinary Shares on the basis of allotment determined
under this Article. For such purpose, the Board may capitalise out of any amount for the
time being standing to the credit of any reserve or fund of the Company (including any share
premium account, undenominated capital account, revaluation reserve, capital redemption reserve
and profit and loss account), whether or not available for distribution, a sum equal to the
aggregate nominal amount of the additional Ordinary Shares to be allotted on that basis and
apply it in paying up in full the appropriate number of unissued Ordinary Shares for allotment
and distribution to the holders of the elected Ordinary Shares on that basis. |
| 128.7 | The
additional Ordinary Shares when allotted shall rank pari passu in all respects with
the fully paid Ordinary Shares in issue on the record date for the dividend in respect of
which the right of election has been offered, except that they will not rank for any dividend
or other entitlement which has been declared, paid or made by reference to such record date. |
| (A) | do
all acts and things which it considers necessary or expedient to give effect to any such
capitalisation, and may authorise any person to enter on behalf of all the shareholders interested
into an agreement with the Company providing for such capitalisation and incidental matters
and any agreement so made shall be binding on all concerned; |
| (B) | establish
and vary a procedure for election mandates in respect of future rights of election and determine
that every duly effected election in respect of any Ordinary Shares shall be binding on every
successor in title to the holder of such shares; and |
| (C) | terminate,
suspend or amend any offer of the right to elect to receive Ordinary Shares in lieu of any
cash dividend at any time and generally implement any scheme in relation to any such offer
on such terms and conditions as the Board may from time to time determine and take such other
action as the Board may deem necessary or desirable from time to time in respect of any such
scheme. |
The
Board may set aside out of the profits of the Company and carry to reserve such sums as it thinks fit. Such sums standing to reserve
may be applied, at the Board’s discretion, for any purpose to which the profits of the Company may properly be applied and, pending
such application, may either be employed in the business of the Company or be invested in such investments as the Board thinks fit. The
Board may divide the reserve into such special funds as it thinks fit and may consolidate into one fund any special funds or any parts
of any special funds into which the reserve may have been divided as it thinks fit. The Board may also carry forward any profits without
placing them to reserve.
| 130 | CAPITALISATION
OF PROFITS AND RESERVES |
| 130.1 | Subject
to the Act and without prejudice to any powers conferred on the Directors as aforesaid, and
subject to the Directors’ authority to allot shares under Article 7, the Board may
with the authority of an Ordinary Resolution of the Company: |
| (A) | subject
to the provisions of this Article, resolve to capitalise any of the Company’s profits
available for distribution and/or any sum, for the time being, standing to the credit of
any of the Company’s other reserves, reserve accounts or funds, by whatever name called
and whether distributable or non-distributable (including, without limitation, the share
premium account, the undenominated capital account, any unrealised revaluation reserves,
any capital redemption reserves and any merger reserves), if any; |
| (B) | appropriate
the sum resolved to be capitalised to the members or any class of members on the record date
specified in the relevant board resolution who, unless provided otherwise in the Ordinary
Resolution, would have been entitled to it if it were distributed by way of dividend and
in the same proportions; |
| (C) | apply
that sum on behalf of the members or the members of any class either in or towards paying
up the amounts, if any, for the time being unpaid on any shares held by them respectively,
or in paying up in full shares, debentures or other obligations of the Company of a nominal
value or nominal value plus share premium, as the case may be, equal to the sum capitalised,
but the share premium account, the undenominated capital account, any revaluation reserves,
any capital redemption reserves, any merger reserves and any profits which are not available
for distribution may, for the purposes of this Article, only be applied in paying up in full
unissued shares to be allotted to the members or the members of any class of a nominal value
or nominal value plus share premium equal to the sum capitalised; |
| (D) | allot
the shares, debentures or other obligations credited as fully paid to those members or members
of any class, or as they may direct, in those proportions, or partly in one way and partly
in the other; |
| (E) | where
shares or debentures become, or would otherwise become, distributable under this Article
in fractions, make such provision as they think fit for any fractional entitlements including
without limitation authorising their sale and transfer to any person, resolving that the
distribution be made as nearly as practicable in the correct proportion but not exactly so,
ignoring fractions altogether or resolving that cash payments be made to any members in order
to adjust the rights of all parties; |
| (F) | authorise
any person to enter into an agreement with the Company on behalf of all the members or members
of any class concerned providing for either: |
| (1) | the
allotment to the members or members of any class respectively, credited as fully paid, of
any shares, debentures or other obligations to which they are entitled on the capitalisation;
or |
| (2) | the
payment up by the Company on behalf of the members of members of any class of the amounts,
or any part of the amounts, remaining unpaid on their existing shares by the application
of their respective proportions of the sum resolved to be capitalised, |
| (G) | and
any agreement made under that authority shall be binding on all such members or members of
any class, as the case may be; and |
| (H) | generally
do all acts and things required to give effect to the Ordinary Resolution. |
| 130.2 | Without
otherwise limiting their application, the provisions of Article 130.1 shall apply, mutatis
mutandis to give effect to any resolution of the Board to implement a Rights’ Plan. |
RECORD
DATES
Notwithstanding
any other provision of these Articles but without prejudice to the rights attached to any shares and subject to the Statutes the Company
or the Board may:
| (A) | fix
any date (the “record date”) as the date at the close of business (or
such other time as the Board may decide) on which persons registered as the holders of shares
or other securities shall be entitled to receipt of any dividend, distribution, interest,
allotment, issue, notice, information, document or circular; a record date may be on or at
any time before any date on which such item is paid, made, given or served or (in the case
of any dividend, distribution, interest, allotment or issue) after any date on which such
item is recommended, resolved, declared or announced; and |
| (B) | for
the purposes of determining which persons are entitled to attend and vote at a general meeting
of the Company, or a separate general meeting of the holders of any class of shares in the
capital of the Company, specify in the notice of meeting a time by which a person must be
entered on the register in order to have the right to attend or vote at the meeting. Changes
to the register after the time specified by virtue of this Article 131 shall be disregarded
in determining the rights of any person to attend or vote at the meeting. |
ACCOUNTS
| 132.1 | The
Company shall cause to be kept adequate accounting records, whether in the form of documents,
electronic form or otherwise, that: |
| (A) | correctly
record and explain the transactions of the Company; |
| (B) | will
at any time enable the assets, liabilities, financial position and profit or loss of the
Company to be determined with reasonable accuracy; |
| (C) | will
enable the Directors to ensure that any financial statements of the Company complies with
the requirements of the Act; and |
| (D) | will
enable those financial statements of the Company to be readily and properly audited. |
| 132.2 | The
accounting records shall be kept on a continuous and consistent basis and entries therein
shall be made in a timely manner and be consistent from year to year. Adequate accounting
records shall be deemed to have been maintained if they comply with the provisions of the
Act and explain the Company’s transactions and facilitate the preparation of financial
statements that give a true and fair view of the assets, liabilities, financial position
and profit and loss of the Company and, if relevant, the Group and include any information
and returns referred to in section 283(2) of the Act. |
| 132.3 | The
accounting records shall be kept at the Registered Office or, subject to the provisions of
the Act, at such other place as the Directors think fit and shall be open at all reasonable
times to the inspection of the Directors. |
| 132.4 | In
accordance with the provisions of the Act, the Directors shall cause to be prepared and to
be laid before the annual general meeting of the Company from time to time such statutory
financial statements of the Company and reports as are required by the Act to be prepared
and laid before such meeting. |
| 133 | ACCESS
TO ACCOUNTING RECORDS |
No
shareholder (other than an officer of the Company) shall have any right of inspecting any accounting record or other document of the
Company unless he or she is authorised to do so by statute, by order of the court, by the Board or by an Ordinary Resolution. No shareholder
shall be entitled to require discovery of or any information respecting any detail of the Company’s trading, or any matter which
is or may be in the nature of a trade secret, mystery of trade, or secret process which may relate to the conduct of the business of
the Company and which in the opinion of the Directors it would be inexpedient in the interests of the shareholders of the Company to
communicate to the public.
| 134 | DISTRIBUTION
OF ANNUAL ACCOUNTS |
| 134.1 | A
copy of the statutory financial statements of the Company (including every document required
by law to be annexed thereto) which is to be laid before the annual general meeting of the
Company together with a copy of the Directors’ report and Auditors’ report or
summary financial statements prepared in accordance with section 1119 of the Act shall be
sent by post, electronic mail or any other means of communication (electronic or otherwise),
not less than twenty-one (21) days before the date of the annual general meeting, to every
person entitled under the provisions of the Act to receive them; provided that in the case
of those documents sent by electronic mail or any other electronic means, such documents
shall be sent with the consent of the recipient, to the address of the recipient notified
to the Company by the recipient for such purposes, and provided further that where the Directors
elect to send summary financial statements to the shareholders, any shareholder may request
that he or she be sent a hard copy of the statutory financial statements of the Company. |
| 134.2 | For
the purposes of this Article, copies of those documents are also to be treated as sent to
a person where: |
| (A) | the
Company and that person have agreed to that person having access to the documents on a website
(instead of their being sent to such person); |
| (B) | the
documents are documents to which that agreement applies; and |
| (C) | that
person is notified, in a manner for the time being agreed for the purpose between such person
and the Company, of: |
| (1) | the
publication of the documents on a website; |
| (2) | the
address of that website; and |
| (3) | the
place on that website where the documents may be accessed, and how they may be accessed. |
In
this Article, “address” includes any number or address used for the purpose of communication by electronic means.
| (D) | For
the purposes of this Article, documents treated in accordance with Article 134.2 as sent
to any person are to be treated as sent to such person not less than twenty one (21) days
before the date of a meeting if, and only if: |
| (1) | the
documents are published on the website throughout a period beginning at least twenty one
(21) days before the date of the meeting and ending with the conclusion of the meeting; and |
| (2) | the
notification given for the purposes of Article 134.2(C) is given not less than twenty one
(21) days before the date of the meeting. |
| 134.3 | Nothing
in Article 134.2 shall invalidate the proceedings of a meeting where: |
| (A) | any
documents that are required to be published as mentioned in Article 134.2(C)(1) are published
for a part, but not all, of the period mentioned in that Article; and |
| (B) | the
failure to publish those documents throughout that period is wholly attributable to circumstances
which it would not be reasonable to have expected the Company to prevent or avoid. |
| 134.4 | This
Article shall not require a copy of the documents referred to in Article 134.1 to be sent
to any person who is not entitled to receive notices of general meetings, any person of whose
address the Company is not aware or to more than one of the joint holders of any shares or
debentures. |
| 134.5 | Where
copies of documents are sent out pursuant to this Article over a period of days, references
elsewhere in the Act to the day on which those copies are sent out shall be read as references
to the last day of that period. |
| 134.6 | Any
obligation by virtue of section 339(1) or (2) of the Act to furnish a person with a document
may, unless these Articles provide otherwise, be complied with by using electronic communications
for sending that document to such address as may for the time being be notified to the Company
by that person for that purpose. |
AUDIT
| 135 | APPOINTMENT
OF AUDITORS |
Auditors
shall be appointed and their duties regulated in accordance with the Act, any other applicable law and such requirements not inconsistent
with the Act as the Board may from time to time determine.
COMMUNICATIONS
Any
documents or information to be sent or supplied by or to the Company may be sent or supplied in hard copy form, in electronic form or
by means of a website to the extent permitted by the statutes and these Articles.
| 137 | COMMUNICATIONS
TO THE COMPANY |
| 137.1 | A
document or information is validly sent or supplied by a shareholder to the Company in hard
copy form if it is sent or supplied by hand or by post (in a prepaid envelope) to: |
| (A) | an
address specified by the Company for the purpose; |
| (B) | the
Registered Office; or |
| (C) | an
address to which any provision of the Statutes authorises the document or information to
be sent or supplied. |
| 137.2 | A
document or information may only be sent or supplied by a shareholder to the Company in electronic
form if the Company has agreed by notice to the shareholders that the document or information
may be sent or supplied in that form (and not revoked that agreement) or the Company is deemed
to have so agreed by a provision of the Statutes. |
| 137.3 | Subject
to Article 137.2 above, where a document or information is sent or supplied by electronic
means, it may only be sent or supplied to an address: |
| (A) | specified
for the purpose by the Company (generally or specifically); or |
| (B) | deemed
by a provision of the Statutes to have been so specified. |
| 137.4 | Without
prejudice or limitation to the foregoing provisions of this Article 137, for the purposes
of these Articles and the Act, a document shall be deemed to have been sent to a member if
a notice is given, served, sent or delivered to the member and the notice specifies the website
or hotlink or other electronic link at or through which the member may obtain a copy of the
relevant document. |
| 138 | COMMUNICATIONS
BY THE COMPANY OR THE BOARD IN HARD COPY FORM |
| 138.1 | A
document or information sent or supplied by the Company or the Board in hard copy form must
be: |
| (A) | handed
to the intended recipient; or |
| (B) | sent
or supplied by hand or by post (in a pre-paid envelope): |
| (1) | to
an address specified for the purpose by the intended recipient; |
| (2) | to
a company at its registered office; |
| (3) | to
a person in his or her capacity as a shareholder, at his or her address as shown in the register; |
| (4) | to
a person in his or her capacity as a Director, at his or her address as shown in the register
of Directors; or |
| (5) | to
an address to which any provision of the Statutes authorises the document or information
to be sent or supplied. |
| 138.2 | Where
the Company is unable to obtain any address falling within Article 137.1 above, the document
or information may be sent or supplied to the intended recipient’s last address known
to the company. |
| 139 | COMMUNICATIONS
BY THE COMPANY IN ELECTRONIC FORM |
| 139.1 | A
document or information (including the Company’s audited accounts and the directors’
and auditor’s reports thereon) may only be sent or supplied by the Company or the Board
by electronic means to a person or company who has agreed (generally or specifically) that
the document or information may be sent or supplied in that form (and not revoked that agreement).
Any such consent requirement shall be deemed to have been satisfied where the Company has
written to the shareholder informing him or her of its intention to use electronic communications
for such purposes and the shareholder has not, within four (4) weeks of the issue of such
notice, served an objection in writing on the Company to such proposal. Where a shareholder
has given, or is deemed to have given his or her consent to the receipt by such shareholder
of electronic mail or other electronic means approved by the Directors, he or she may revoke
such consent at any time by requesting the Company to communicate with him or her in documented
form; provided however that such revocation shall not take effect until five (5) days after
written notice of the revocation is received by the Company. |
| 139.2 | Where
the document or information is sent or supplied by electronic means, it may only be sent
or supplied to an address: |
| (A) | specified
for the purpose by the intended recipient (generally or specifically); or |
| (B) | where
the intended recipient is a company, deemed by a provision of the Statutes to have been so
specified. |
| 140 | COMMUNICATIONS
BY THE COMPANY BY MEANS OF A WEBSITE |
| 140.1 | A
document or information may only be sent or supplied by the Company to a person by being
made available on a website if the person: |
| (A) | has
agreed (generally or specifically) that the document or information may be sent or supplied
to him or her in that manner; or |
| (B) | is
taken to have so agreed in accordance with the Statutes, and has not revoked that agreement. |
| 140.2 | A
document or information authorised or required to be sent or supplied by means of a website
must be made available in a form, and by a means, that the Company reasonably considers will
enable the recipient to read it (and see any images contained in it) with the naked eye and
to retain a copy of it. |
| 140.3 | The
Company must notify the intended recipient of: |
| (A) | the
presence of the document or information on the website; |
| (B) | the
address of the website; |
| (C) | the
place on the website where it may be accessed; and |
| (D) | how
to access the document or information. |
| 140.4 | The
document or information is taken to be sent: |
| (A) | on
the date on which the notification required by Article 140.3 above is sent; or |
| (B) | if
later, the date on which the document or information first appears on the website after that
notification is sent. |
| 140.5 | The
Company must make the document or information available on the website throughout: |
| (A) | the
period specified by any applicable provision of the Statutes; or |
| (B) | if
no such period is specified, the period of twenty eight (28) days beginning with the date
on which the notification required by Article 140.3 is sent to the person in question. |
A
failure to make a document or information available on a website throughout the period mentioned in this Article 140.5 shall be disregarded
if (1) it is made available on the website for part of that period and (2) the failure to make it available throughout that period is
wholly attributable to circumstances that it would not be reasonable to have expected the Company to prevent or avoid.
| 140.6 | A
notice of a general meeting of the Company given by means of a website must: |
| (A) | state
that it concerns a notice of a meeting of the Company; |
| (B) | specify
the place, date and time of the meeting; and |
| (C) | state
whether the meeting is to be an annual general meeting. |
| 141 | COMMUNICATIONS
BY OTHER MEANS |
| 141.1 | A
document or information that is sent or supplied to the Company otherwise than in hard copy
form, by electronic means or by means of a website is validly sent or supplied if it is sent
or supplied in a form or manner that has been agreed by the Company. |
| 141.2 | A
document or information that is sent or supplied by the Company or the Board otherwise than
in hard copy form, by electronic means or by means of a website is validly sent or supplied
if it is sent or supplied in a form or manner that has been agreed by the intended recipient. |
| 142 | FAILURE
TO DELIVER BY ELECTRONIC MEANS |
If
any document or information has been sent or supplied by electronic means in accordance with Article 139 to any shareholder at his or
her address specified for the purpose or deemed to be so specified and the Company becomes aware of a failure in delivery (and subsequent
attempts to send or supply such document or information by electronic means also result in a failure in delivery), the Company shall
either:
| (A) | send
or supply a hard copy of such document or information to such shareholder; or |
| (B) | notify
such shareholder of the information set out in Article 140.3, |
in
each case in the manner described in Article 138.1.
| 143 | WHEN
SERVICE IS EFFECTED ON A MEMBER |
| 143.1 | Where
a document or information is, under Article 138.1, sent or supplied by post, service or delivery
to a shareholder it shall be deemed to be effected: |
| (A) | if
sent by first class post or special delivery post from an address in Ireland to another address
in Ireland or from an address in the United States to another address in the United States,
or by a postal service similar to first class post or special delivery post from an address
in another country to another address in that other country, at the expiration of twenty
four (24) hours after the time when the cover containing the same is posted; or |
| (B) | in
any other case, on the third day following that on which the document or information was
posted, and in proving such service or delivery it shall be sufficient to prove that such
cover was properly addressed and posted. |
| 143.2 | Where
a document or information is, under Article 139, sent or supplied by electronic means to
an address specified for the purpose by the intended recipient, service or delivery shall
be deemed to be effected on the same day on which it is sent or supplied and in proving such
service it will be sufficient to prove that it was properly addressed. |
| 143.3 | Where
a document or information is, under Article 140, sent or supplied by means of a website,
service or delivery shall be deemed to be effected when (a) the material is first made available
on the website or (b) if later, when the recipient received (or, in accordance with this
Article 143.3, is deemed to have received) notification of the fact that the material was
available on the website. |
| 144 | NOTICE
BY ADVERTISEMENT |
| 144.1 | If
at any time by reason of the suspension or curtailment of postal services within Ireland,
the United States or such other jurisdiction as the Board may consider appropriate for the
service of notice, the Company is unable effectively to convene a general meeting by notices
sent through the post, a general meeting may be convened by notice advertised on the same
date in at least one national newspaper in Ireland and/or the United States and/or such other
jurisdiction as the Board may consider appropriate for the service of notices (as applicable)
and such notice shall be deemed to have been duly served on all shareholders entitled thereto
on the day when the advertisement appears. In any such case the Company shall send confirmatory
copies of the notice by post if at least six clear days prior to the meeting the posting
of notices to addresses throughout Ireland, the United States or such other jurisdiction
as the Board may consider appropriate for the service of notices (as applicable) again becomes
practicable. |
| 144.2 | Notwithstanding
anything in the Statutes or these Articles, if by reason of suspension or curtailment of
postal services within Ireland, the United States or such other jurisdiction as the Board
may consider appropriate for the service of notices, the Company is unable in the opinion
of the Board to deliver the documents referred to in Article 134.1, as the case may be, to
persons entitled thereto by the time therein prescribed, the Company may nevertheless proceed
validly to convene and hold the general meeting before which such documents are to be laid
by giving notice of such meeting in accordance with Article 143.1, but so that the reference
in the final sentence of that Article to “confirmatory copies of the notice”
shall be read to include the relevant documents referred to in Article 134 and the reference
therein to “six clear days” shall be read as “three clear days” and
provided always that such documents shall be made available for inspection during normal
business hours at the Registered Office throughout the period from the date of publication
of the notice convening such meeting until the date of the meeting and also at the meeting
itself. |
| 145 | DOCUMENTS
AND INFORMATION TO JOINT HOLDERS |
All
notices directed to be given to the shareholders shall, with respect to any share to which persons are jointly entitled, be given to
whichever of such persons is named first in the register, and notice so given shall be sufficient notice to all the holders of such share.
| 146 | SERVICE
OF DOCUMENTS AND INFORMATION ON PERSONS ENTITLED TO SHARES BY TRANSMISSION |
A
person entitled to a share in consequence of the death or bankruptcy of a shareholder upon supplying to the Company such evidence as
the Board may reasonably require to show his or her title to the share, and upon supplying also an address in Ireland or the United States
or such other jurisdiction as the Board may consider appropriate for the service of notices, shall be entitled to have served upon or
delivered to him or her at such address any notice or document to which the shareholder, but for his or her death or bankruptcy, would
be entitled, and such service or delivery shall for all purposes be deemed to be sufficient service for delivery of such notice or document
on all persons interested (whether jointly with or as claiming through or under him or her) in the share. Save as aforesaid any notice
or document delivered or sent by post to or left at the address of any shareholder in pursuance of these presents shall, notwithstanding
that such shareholder be then dead or bankrupt, and whether or not the Company shall have notice of his or her death or bankruptcy, be
deemed to have been duly served or delivered in respect of any share registered in the name of such shareholder as sole or first named
joint holder.
| 147 | MEMBERS
NOT ENTITLED TO NOTICES, DOCUMENTS AND INFORMATION |
A
shareholder who has not supplied to the Company an address for the service of notices shall not be entitled to receive notices from the
Company.
| 148.1 | The
Company may destroy: |
| (A) | any
share certificate or other evidence of title to shares which has been cancelled at any time
after one year from the date of such cancellation; |
| (B) | any
mandate for the payment of dividends or other amounts or any variation or cancellation of
such mandate or any other instruction concerning the payment of monies or any notification
of change of name or address at any time after two years from the date such mandate, variation,
cancellation or notification was recorded by the Company; |
| (C) | any
instrument or other evidence of transfer of shares or renunciation of an allotment of shares
which has been registered at any time after six years from the date of registration; and |
| (D) | any
other document on the basis of which an entry in the Register is made at any time after six
years from the date an entry in the Register was first made in respect of it, |
and
the Company may destroy any such document earlier than the relevant date, provided that a permanent record of the document is made (on
microfilm, computer disc or otherwise) which is not destroyed before that date.
| 148.2 | It
shall be conclusively presumed in favour of the Company that every entry in the Share Register
purporting to have been made on the basis of a document destroyed in accordance with this
Article was duly and properly made, that every instrument of transfer so destroyed was duly
registered, that every share certificate so destroyed was valid and was duly cancelled and
that every other document so destroyed was valid and effective in accordance with the recorded
particulars in the records of the Company, provided that: |
| (A) | this
Article shall apply only to the destruction of a document in good faith and without express
notice of any claim (regardless of the parties to it) to which the document might be relevant; |
| (B) | nothing
in this Article imposes on the Company any liability in respect of the destruction of any
such document otherwise than as provided for in this Article which would not attach to the
Company in the absence of this Article; and |
| (C) | references
in this Article to the destruction of any document include references to the disposal of
it in any manner. |
MISCELLANEOUS
| 149.1 | If
the Company shall be wound up and the assets available for distribution among the shareholders
as such shall be insufficient to repay the whole of the paid-up or credited as paid-up share
capital, such assets shall be distributed so that, as nearly as may be, the losses shall
be borne by the shareholders in proportion to the nominal value of the share capital paid-up
or credited as paid-up at the commencement of the winding-up on the shares held by them respectively.
And if in a winding-up the assets available for distribution among the shareholders shall
be more than sufficient to repay the whole of the share capital paid-up or credited as paid-up
at the commencement of the winding-up, the excess shall be distributed among the shareholders
in proportion to the nominal value of the share capital at the commencement of the winding-up
paid-up or credited as paid-up on the said shares held by them respectively. Provided that
this Article shall not affect the rights of the holders of shares issued upon special terms
and conditions. |
| (A) | In
case of a sale by the liquidator under the Act, the liquidator may by the contract of sale
agree so as to bind all the shareholders for the allotment to the shareholders directly of
the proceeds of sale in proportion to their respective interests in the Company and may further
by the contract limit a time at the expiration of which obligations or shares not accepted
or required to be sold shall be deemed to have been irrevocably refused and be at the disposal
of the Company, but so that nothing herein contained shall be taken to diminish, prejudice
or affect the rights of dissenting shareholders conferred by the said section. |
| (B) | The
power of sale of the liquidator shall include a power to sell wholly or partially for debentures,
debenture stock, or other obligations of another company, either then already constituted
or about to be constituted for the purpose of carrying out the sale. |
| 149.3 | If
the Company is wound up, the liquidator, with the sanction of a Special Resolution and any
other sanction required by the Act, may divide among the shareholders in specie or kind the
whole or any part of the assets of the Company (whether they shall consist of property of
the same kind or not), and, for such purpose, may value any assets and determine how the
division shall be carried out as between the shareholders or different classes of shareholders.
The liquidator, with the like sanction, may vest the whole or any part of such assets in
trustees upon such trusts for the benefit of the contributories as, with the like sanction,
he or she determines, but so that no shareholder shall be compelled to accept any assets
upon which there is a liability. |
| 150 | INDEMNITY
AND INSURANCE |
| 150.1 | Subject
to the provisions of and insofar as permissible under the Act, each Covered Person (as defined
in Article 150.6, below) shall be entitled to be indemnified by the Company against all expenses
(including legal fees actually and reasonably incurred by him or her), damages, losses, liabilities,
judgments, penalties, fines, and settlement amounts relating to any Proceeding (as defined
in Article 150.6, below) to which he or she is made a party, or threatened to be made a party
or is otherwise involved by reason of the fact that he or she is or was a Covered Person,
provided however, that no such person shall be entitled to be indemnified for any such expenses,
damages, losses, liabilities, judgments, penalties, fines or settlement amounts relating
to any Proceeding in respect of, arising from, or relating to, his or her fraud or dishonesty. |
| 150.2 | As
far as permissible under the Act, expenses, including legal fees actually and reasonably
incurred by him or her in respect of any Proceeding for which indemnification is permitted
pursuant to this Article shall be paid by the Company in advance of the final disposition
of such Proceeding, subject to receipt by the Board from the Covered Person seeking indemnification
of (i) a representation that he or she has a good faith belief that the criteria for indemnification
have been satisfied and (ii) an undertaking to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the Company pursuant to this
Article. |
| 150.3 | Any
indemnification under this Article (unless ordered by a court of competent jurisdiction)
shall be made by the Company only as authorised in the specific case upon a determination
that indemnification of the Covered Person is proper in the circumstances because such person
has met the applicable standard of conduct set forth in this Article. Such determination
shall be made by any person or persons having the authority to act on the matter on behalf
of the Company. To the extent, however, that any Covered Person has been successful on the
merits or otherwise in defence of any proceeding, or in defence of any claim, issue or matter
therein, such Covered Person shall be indemnified against expenses (including attorneys’
fees) actually and reasonably incurred by such person in connection therewith, without necessity
of authorisation in the specific case. |
| 150.4 | The
indemnification provided by this Article shall not be deemed exclusive of any other rights
to which a Covered Person seeking indemnification or advancement of expenses in respect of
any Proceeding may be entitled under, or pursuant to, any other agreement, any insurance
purchased by the Company, any vote of shareholders or disinterested Directors, or pursuant
to the direction (however embodied) of any court of competent jurisdiction, or otherwise. |
| 150.5 | The
Company shall have power to purchase and maintain, for any Covered Person, insurance against
any such liability as referred to section 235 of the Act. |
| 150.6 | The
Company may additionally, by agreement, indemnify any Covered Person or any current or former
executive, employee or agent of the Company or any current or former director, executive,
officer, employee or agent of any subsidiary of the Company to the fullest extent permitted
by law, and purchase and maintain insurance for any such person, as appropriate. |
For
the purposes of this Article 150:
| (A) | a
“Covered Person” means each current and former Director, Secretary and
other officer of the Company, and each person who is or was serving, at the request of the
Company, as a director, secretary or other officer of another company, or of a partnership,
joint venture, trust or other enterprise, including service with respect to employee benefit
plans maintained or sponsored by the Company; and |
| (B) | a
“Proceeding” means any claim, suit or proceedings, civil or criminal. |
| 151.1 | Subject
to Article 151.4, the courts of Ireland shall have exclusive jurisdiction to determine any
dispute related to or connected with (a) any derivative claim in respect of a cause of action
vested in the Company or seeking relief on behalf of the Company, (b) any action asserting
a claim of breach of a fiduciary or other duty owed by any Director or officer or other employee
of the Company to the Company or the Company’s shareholders, or (c) any action asserting
a claim against the Company or any Director or officer or other employee of the Company arising
under the laws of Ireland or pursuant to any provision of the Articles (as either may be
amended from time to time). |
| 151.2 | Damages
alone may not be an adequate remedy for any breach of Article 151.1, so that, in the event
of a breach or anticipated breach, the remedies of injunction and/or an order for specific
performance would in appropriate circumstances be available. |
| 151.3 | The
governing law of the Articles is the substantive law of Ireland. |
| 151.4 | Unless
the Company consents in writing to the selection of an alternative forum, the federal district
courts of the United States of America shall, to the fullest extent permitted by law, be
the exclusive forum for the resolution of any complaint asserting a cause of action arising
under the Exchange Act or the Securities Act of 1933 of the United States. Any person or
entity purchasing or otherwise acquiring any interest in any security of the Company shall
be deemed to have notice of and consented to this provision. |
| 151.5 | For
the purposes of this Article 151: |
| (A) | a
“dispute” shall mean any dispute, controversy or claim; |
| (B) | references
to “Company” shall be read so as to include each and any of the Company’s
subsidiary undertakings from time to time; and |
| (C) | “Director”
shall be read so as to include each and any Director of the Company from time to time in
his or her capacity as such or as an employee of the Company and shall include any former
Director of the Company. |
We,
the several persons whose names and addresses are subscribed, wish to be formed into a company in pursuance of this constitution, and
we agree to take the number of shares in the capital of the company set opposite our respective names.
| Names, Addresses and Descriptions of Subscribers |
Number of Shares Taken by each Subscriber |
| 1. |
/s/ Fergus Bolster |
|
One |
| Fergus Bolster |
|
| For and on behalf of |
|
| Matsack Nominees Limited |
|
| 70 Sir John Rogerson’s Quay, Dublin 2, D02R296 |
|
| Body Corporate |
|
| Total shares taken |
One |
Signatures
of the above subscriber(s), attested by the following witness:
Dated the 11th day of July 2023
Name: Stephanie Hughes
Address: 70 Sir John Rogerson’s Quay, Dublin 2, D02R296
Signature of witness: /s/ Stephanie Hughes |
88
Exhibit
2.2
Plan
of Merger
The
Companies Act (As Revised) of the Cayman Islands
Plan
of Merger
This
plan of merger (the “Plan of Merger”) is made on 26 July 2024 between Project Energy Reimagined Acquisition Corp. (the
“Surviving Company”) and Heramba Merger Corp. (the “Merging Company”).
Whereas
the Merging Company is a Cayman Islands exempted company and is entering into this Plan of Merger pursuant to the provisions of Part
XVI of the Companies Act (As Revised) (the “Statute”).
Whereas
the Surviving Company is a Cayman Islands exempted company and is entering into this Plan of Merger pursuant to the provisions of Part
XVI of the Statute.
Whereas
the directors of the Merging Company and the directors of the Surviving Company deem it desirable and in the commercial interests of
the Merging Company and the Surviving Company, respectively, that the Merging Company be merged with and into the Surviving Company and
that the undertaking, property and liabilities of the Merging Company vest in the Surviving Company (the “Merger”).
Terms
not otherwise defined in this Plan of Merger shall have the meanings given to them under the business combination agreement dated as
of October 2, 2023 and made between, amongst others, the Surviving Company and the Merging Company (the “Business Combination
Agreement”) a copy of which is annexed at Annexure 1 hereto.
Now
therefore this Plan of Merger provides as follows:
| 1 | The
constituent companies (as defined in the Statute) to the Merger are the Surviving Company
and the Merging Company. |
| 2 | The
surviving company (as defined in the Statute) is the Surviving Company. |
| 3 | The
registered office of the Surviving Company is c/o Maples Corporate Services Limited of PO
Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands and the registered office of
the Merging Company is c/o Maples Corporate Services Limited of PO Box 309, Ugland House,
Grand Cayman, KY1-1104, Cayman Islands. |
| 4 | Immediately
prior to the Effective Date (as defined below), the authorised share capital of the Surviving
Company will be US$22,100 divided into 200,000,000 Class A ordinary shares of a par value
of US$0.0001 each, 20,000,000 Class B ordinary shares of a par value of US$0.0001 each and
1,000,000 preference shares of a par value of US$0.0001 each and the Surviving Company will
have 10,343,407 Class A ordinary shares, and no Class B ordinary shares and no preference
shares, in issue. |
| 5 | Immediately
prior to the Effective Date (as defined below), the authorised share capital of the Merging
Company will be US$50,000 divided into 50,000 ordinary shares of a par value of US$1.00 each
and the Merging Company will have 1,000 ordinary shares in issue. |
| 6 | The
date on which it is intended that the Merger is to take effect is the date that this Plan
of Merger is registered by the Registrar in accordance with section 233(13) of the Statute
(the “Effective Date”). |
| | |
Certified a True Copy
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| 7 | The
terms and conditions of the Merger are such that, on the Effective Date, each ordinary share
issued and outstanding in the Merging Company on the Effective Date shall be automatically
cancelled in consideration for the issuance of one validly issued, fully paid and non-assessable
ordinary share in the Surviving Company and each Class A ordinary share issued and outstanding
in the Surviving Company immediately prior to the Effective Date shall be automatically cancelled
in consideration for the issuance of one validly issued, fully paid and non-assessable Irish
Holdco Ordinary Share, as more particularly described in section 2.01 of the Business Combination
Agreement. |
| 8 | The
rights and restrictions attaching to the shares in the Surviving Company are set out in the
Amended and Restated Memorandum and Articles of Association of the Surviving Company in the
form annexed at Annexure 2 hereto. |
| 9 | Upon
the Effective Date, the authorised share capital of the Surviving Company shall be increased
from US$22,100 divided into 200,000,000 Class A ordinary shares of a par value of US$0.0001
each, 20,000,000 Class B ordinary shares of a par value of US$0.0001 each and 1,000,000 preference
shares of a par value of US$0.0001 each to US$50,000 divided into 50,000 ordinary shares
of a par value of US$1.00 each by the cancellation of (i) the 200,000,000 Class A ordinary
shares of a par value of US$0.0001 each, (ii) the 20,000,000 Class B ordinary shares of a
par value of US$0.0001 each and (iii) the 1,000,000 preference shares of a par value of US$0.0001
each and the creation of 50,000 ordinary shares of a par value of US$1.00 each to rank pari
passu in all respects with the existing shares, in accordance with paragraph 7 of this Plan
of Merger. |
| 10 | The
Memorandum and Articles of Association of the Surviving Company shall be amended and restated
by the deletion in their entirety and the substitution in their place of the Amended and
Restated Memorandum and Articles of Association in the form annexed at Annexure 2 hereto
on the Effective Date, and the authorised share capital of the Surviving Company shall be
as set out therein. |
| 11 | There
are no amounts or benefits which are or shall be paid or payable to any director of either
constituent company or the Surviving Company consequent upon the Merger. |
| 12 | The
Merging Company has granted no fixed or floating security interests that are outstanding
as at the date of this Plan of Merger. |
| 13 | The
Surviving Company has granted no fixed or floating security interests that are outstanding
as at the date of this Plan of Merger. |
| 14 | The
name and address of the sole director of the surviving company (as defined in the Statute)
is Srinath Narayanan of 1005 Almanor Avenue, Menlo Park, CA, 94025, United States of America. |
| 15 | This
Plan of Merger has been approved by the board of directors of each of the Surviving Company
and the Merging Company pursuant to section 233(3) of the Statute. |
| 16 | This
Plan of Merger has been authorised by the sole shareholder of the Merging Company pursuant
to section 233(6) of the Statute. |
| 17 | This
Plan of Merger has been authorised by the shareholders of the Surviving Company pursuant
to section 233(6) of the Statute by way of resolutions passed at an extraordinary general
meeting of the Surviving Company. |
| | |
Certified a True Copy
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| 18 | At
any time prior to the Effective Date, this Plan of Merger may be: |
| 18.1 | terminated
by the board of directors of either the Surviving Company or the Merging Company; |
| 18.2 | amended
by the board of directors of both the Surviving Company and the Merging Company to: |
| (a) | change
the Effective Date provided that such changed date shall not be a date later than the ninetieth
day after the date of registration of this Plan of Merger with the Registrar of Companies;
and |
| (b) | effect
any other changes to this Plan of Merger which the directors of both the Surviving Company
and the Merging Company deem advisable, provided that such changes do not materially adversely
affect any rights of the shareholders of the Surviving Company or the Merging Company, as
determined by the directors of both the Surviving Company and the Merging Company, respectively. |
| 19 | This
Plan of Merger may be executed in counterparts. |
| 20 | This
Plan of Merger shall be governed by and construed in accordance with the laws of the Cayman
Islands. |
[Intentionally
left blank. Signature page follows.]
| | |
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In
witness whereof the parties hereto have caused this Plan of Merger to be executed on the day and year first above written.
| SIGNED by
________________________ |
) |
|
| Duly authorised for |
) |
/s/ Srinath Narayanan |
| and on behalf of |
) |
Director |
| Project Energy Reimagined
Acquisition Corp. |
) |
|
| SIGNED by
________________________ |
) |
|
| Duly authorised for |
) |
/s/ Prakash Ramachandran |
| and on behalf of |
) |
Director |
| Heramba Merger Corp. |
) |
|
[Signature
Page – Plan of Merger]
| | |
Certified a True Copy
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Annexure
1
Business
Combination Agreement
| | |
Certified a True Copy
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Annexure
2
Amended
and Restated Memorandum and Articles of Association of the Surviving Company
| | |
Certified a True Copy
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Exhibit 2.3
SHARE CONTRIBUTION AGREEMENT
This SHARE CONTRIBUTION AGREEMENT
(this “Agreement”) is entered into as of June 27, 2024, by and between Heramba Limited, an Irish private company limited
by shares duly incorporated under the laws of Ireland, with company number 745130 and registered address at 70 Sir John Rogerson’s
Quay, Dublin 2, Ireland (the “Seller”), and Heramba Electric plc, an Irish public limited company duly incorporated
under the laws of Ireland, with company number 744994 and registered address at 70 Sir John Rogerson’s Quay, Dublin 2, Ireland (“Irish
Holdco”).
WHEREAS, this Agreement is
entered into pursuant to and in connection with that certain Business Combination Agreement, dated as of October 2, 2023 (as amended,
supplemented, restated or otherwise modified from time to time, the “BCA”), by and among Project Energy Reimagined
Acquisition Corp., an exempted company incorporated in the Cayman Islands with limited liability under company number 371458 (“SPAC”),
Irish Holdco, Heramba Merger Corp., an exempted company incorporated in the Cayman Islands with limited liability under company number
403111, the Seller and Heramba GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) established under
the Laws of Germany having its statutory seat in Düsseldorf, Germany, registered with the commercial register of the Local Court
of Düsseldorf under HRB 98529 (the “Company”), a copy of which is attached to the Reference Document as Schedule 1,
pursuant to which, among other things, SPAC and the Company shall enter into a business combination; and
WHEREAS, in connection with
the transactions contemplated by the BCA, the Seller desires to transfer as contribution to Irish Holdco, and Irish Holdco desires to
accept from the Seller, one hundred percent (100%) of the issued and outstanding shares of the Company, in particular the 25,000 shares
of the Company with the sequential numbers 1 through 25,000 and a nominal value of € 1.00 each (the “Contributed Shares”)
as consideration for the allotment and issuance by Irish Holdco of the Share Consideration to the Seller.
NOW, THEREFORE, in consideration
of the premises and mutual covenants contained herein and in the BCA, the parties hereto agree as follows:
ARTICLE
1
THE TRANSACTION
1.1 Application of Terms
of BCA and Interpretation.
(a) This Agreement is being
entered into pursuant to and in connection with the BCA and references in this Agreement to the BCA are to the BCA as amended, restated
or modified from time to time in accordance with the terms thereof.
(b) Capitalized terms used
in this Agreement but not otherwise defined herein have the meanings ascribed thereto in the BCA.
(c) It is the intention of
the parties that this Agreement be consistent with the terms of the BCA. Unless expressly provided otherwise in this Agreement, in the
event of any conflict or inconsistency between the terms of the BCA and the terms hereof, the terms of the BCA will control to the maximum
extent permitted under applicable Law and the parties agree that this Agreement is not intended, and will not be construed in any way,
to enhance, modify or decrease any of the rights or obligations of the parties from those contained in the BCA, in each case other than
in relation to the transfer of the Contributed Shares, which shall be governed solely by this Agreement.
1.2 Contribution of Contributed
Shares. On the terms set forth in this Agreement and in accordance with the BCA, subject to the condition precedent within the meaning
of Section 158 para. 1 of the German Civil Code (aufschiebende Bedingung im Sinne des § 158 Abs. 1 des Bürgerlichen Gesetzbuchs)
of the allotment and issuance of the Share Consideration in accordance with the provisions of Section 1.5, below (such allotment
and issuance of the Share Consideration, the “Share Consideration Closing”), and in accordance with the BCA, the Seller
hereby transfers to Irish Holdco, and Irish Holdco hereby accepts from the Seller, the Contributed Shares and all rights attaching to
them at the Share Consideration Closing (including the right to receive all distributions, returns of capital and dividends declared,
paid or made in respect of the Contributed Shares after the Share Consideration Closing) as consideration for the allotment and issuance
by Irish Holdco of the Share Consideration to the Seller.
1.3 The parties hereto hereby
explicitly confirm that the terms “contributed” and “contribution” in this Agreement do not refer to the Irish
law principles of a contribution of shares but refer to the German law principles, in particular under the German Civil Code, the German
Transformation Act and German Transformation Tax Act of a contribution of shares.
1.4 Share Consideration.
In consideration of the contribution of the Contributed Shares by the Seller to Irish Holdco in accordance with the provisions of Section
1.2, Irish Holdco shall allot and issue to the Seller, at the Share Consideration Closing, the Share Consideration credited as fully
paid-up.
1.5 Share Consideration
Closing. The Share Consideration Closing shall take place immediately after the SPAC Merger Effective Time, as defined in the BCA.
The Parties will confirm to the acting notary the occurrence of the SPAC Merger Effective Time. At the Share Consideration Closing, Irish
Holdco shall:
(a)
allot and issue the Share Consideration by entering the name of the Seller in the register of members of Irish Holdco as the holder of
the Share Consideration credited as fully paid-up; and
(b)
if requested, deliver to the Seller a share certificate in respect if the Share Consideration, so allotted and issued.
1.6 Representations and
Warranties of the Seller. The Seller hereby represents and warrants to Irish Holdco as follows:
(a) The
Seller has the power, authority and capacity to execute, deliver and perform its obligations pursuant to this Agreement.
(b) The
Seller is the sole shareholder of the Company and the legal and beneficial owner of the Company Shares, free and clear of all Liens, options,
rights of first refusal and limitations on voting or transfer rights other than transfer restrictions under applicable securities Laws
and the Company’s Organizational Documents.
(c) The
execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement do not and
will not (A) conflict with or violate any statute, law, ordinance, regulation, rule, code, executive order, injunction, judgement, decree
or other order applicable to the Seller, (B) require any consent, approval or authorization of, declaration, filing or registration with,
or notice to, any person or entity, on the part of the Seller, (C) result in or require the creation of any Lien upon any of its properties,
assets or Contributed Shares (other than under this Agreement, the BCA and the agreements contemplated by the BCA, including the other
Ancillary Agreements); or (D) conflict with or result in a breach of or constitute a default under any provisions of the Seller’s
Organizational Documents.
(d) There
is no litigation, adverse proceeding or investigation pending or threatened against the Seller before any Governmental Authority (A) asserting
the invalidity of this Agreement, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or
(C) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on Irish Holdco with respect
to this Agreement or the transactions contemplated by this Agreement.
1.5 Representations and
Warranties of Irish Holdco. Irish Holdco hereby represents and warrants to the Seller that it has the power, authority and capacity
to execute, deliver and perform it obligations pursuant to this Agreement, including to issue the Share Consideration, and that the Share
Consideration, when issued in accordance with the provisions of this Agreement (including the contribution of the Contributed Shares to
Irish Holdco as consideration therefor), will be duly and validly issued fully paid-up and free and clear of preemptive rights and all
Liens, other than transfer restrictions under applicable securities Laws, the Ancillary Agreements and the Organizational Documents of
Irish Holdco.
ARTICLE
2
MISCELLANEOUS
2.1 Articles of Association.
The Seller hereby irrevocably waives any and all rights under or in connection with the Company’s Articles of Association which
will be triggered as a consequence of the execution of this Agreement and/or the BCA or the consummation of the transactions contemplated
by the BCA, including, without limitation, rights of first refusal and pre-emption rights.
2.2 New List of Shareholders.
Immediately upon the issuance by Irish Holdco of the Share Consideration, the Seller shall notify the acting notary of the Share Consideration
Closing, providing sufficient proof in the form of a written confirmation that the Share Consideration has been issued by Irish Holdco.
The acting notary is hereby instructed to file with the commercial register of the Company immediately upon receipt of such notification
a new shareholder list in accordance with Section 40 para. 2 of the German Limited Liability Companies Act.
2.3 Amendments and Waivers.
Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the
case of an amendment, by the parties hereto, or in the case of a waiver, by the party against whom the waiver is to be effective unless
stricter form is required by mandatory Law, in which case such stricter form requirement shall apply.
2.4 Entire Agreement.
This Agreement (together with the BCA, to the extent referred to in this Agreement) constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof.
2.5 Notices. All notices,
requests, claims, demands and other communications hereunder shall be made in accordance with Section 10.01 of the BCA.
2.6 Severability. If
any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of law, or public
policy, in whole or in part, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
2.7 Governing Law; Consent
to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (regardless
of the laws that might otherwise govern under applicable principles of conflicts of laws thereof) as to all matters, including matters
of validity, construction, effect, performance and remedies with the exception of (and to the extent mandatorily required) the provisions
relating to the transfer of the Contributed Shares, that shall be governed by the Laws of Germany. Each party, and any Person asserting
rights as a third party beneficiary hereunder, irrevocably agrees that any action, suit or proceeding between or among the parties arising
in connection with any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or any related document
(a “Legal Dispute”) shall be brought exclusively in the courts of the State of Delaware; provided that if subject matter
jurisdiction over the Legal Dispute is vested exclusively in the United States federal courts, such Legal Dispute shall be heard in the
United States District Court for the District of Delaware. Each party, and any Person asserting rights as a third party beneficiary hereunder,
hereby irrevocably and unconditionally submits to the jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding
that is brought in any such court has been brought in an inconvenient forum. During the period a Legal Dispute that is filed in accordance
with this Section 2.7 is pending before a court, all actions, suits or proceedings with respect to such Legal Dispute or any other
Legal Dispute, including any counterclaim, cross-claim or interpleader, shall be subject to the exclusive jurisdiction of such court.
Each party and any Person asserting rights as a third party beneficiary hereunder may bring such Legal Dispute only if he, she or it hereby
waives, and shall not assert as a defense in any Legal Dispute, that (a) such party is not personally subject to the jurisdiction of the
above named courts for any reason, (b) such action, suit or proceeding may not be brought or is not maintainable in such court, (c) such
party’s property is exempt or immune from execution, (d) such action, suit or proceeding is brought in an inconvenient forum, or
(e) the venue of such action, suit or proceeding is improper. A final judgment in any action, suit or proceeding described in this Section
2.7 following the expiration of any period permitted for appeal and subject to any stay during appeal shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Laws. TO THE EXTENT NOT PROHIBITED
BY APPLICABLE LEGAL REQUIREMENTS WHICH CANNOT BE WAIVED, EACH OF THE PARTIES AND ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY
HEREUNDER MAY BRING A LEGAL DISPUTE ONLY IF HE, SHE OR IT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS
OR COUNTERCLAIMS ASSERTED IN ANY LEGAL DISPUTE RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
RELATING THERETO. IF THE SUBJECT MATTER OF ANY SUCH LEGAL DISPUTE IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS PROHIBITED, NO PARTY NOR
ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY SHALL ASSERT IN SUCH LEGAL DISPUTE A NONCOMPULSORY COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. FURTHERMORE, NO PARTY NOR ANY PERSON ASSERTING RIGHTS AS A THIRD
PARTY BENEFICIARY SHALL SEEK TO CONSOLIDATE ANY SUCH LEGAL DISPUTE WITH A SEPARATE ACTION OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL
CANNOT BE WAIVED.
2.8 Assignment. This
Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise), by any party without the express written
consent of the other party.
2.9 Headings. The headings
herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect
any of the provisions hereof.
2.10 Copies. The parties
each shall receive certified copies (in electronic form) and the tax office – section corporate income tax – a simple copy
of this deed.
2.11 Costs. The costs
of the notarization of this Agreement shall be borne solely by Seller. The parties agree and confirm to the acting notary that the value
of the Contributed Shares amounts to EUR 10,000,000.00.
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HERAMBA LIMITED |
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By: |
/s/ Zhe Zhang |
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Name: |
Zhe Zhang |
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Position: |
Director |
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HERAMBA ELECTRIC PLC |
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By: |
/s/ Hans-Jörg Grundmann |
| |
Name: |
Hans-Jörg Grundmann |
| |
Position: |
Director |
5
Exhibit 2.4
AMENDED AND RESTATED WARRANT AGREEMENT
THIS AMENDED AND RESTATED WARRANT
AGREEMENT (this “Agreement”), dated as of July 26, 2024 is by and among Heramba Electric plc, an Irish public
limited company duly incorporated under the laws of Ireland with company registration number 744994 (the “Company”),
Project Energy Reimagined Acquisition Corp., an exempted company incorporated in the Cayman Islands with limited liability under company
number 371458 (“PERAC”) and Continental Stock Transfer & Trust Company, a New York limited purpose trust
company (the “Warrant Agent”).
WHEREAS, PERAC and the
Warrant Agent are parties to that certain Warrant Agreement, dated as of October 28, 2021 (the “Existing Warrant Agreement”);
WHEREAS, Section 9.8
of the Existing Warrant Agreement provides that the parties thereto may amend the Existing Warrant Agreement without the consent of any
Registered Holder (as defined therein) (i) for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective
provision contained therein or adding or changing any other provisions with respect to matters or questions arising under the Existing
Warrant Agreement as the parties thereto may deem necessary or desirable and that the parties thereto deem shall not adversely affect
the interest of the Registered Holders (as defined therein), and (ii) to provide for the delivery of Alternative Issuance (as defined
therein);
WHEREAS, in accordance
with Section 9.8 of the Existing Warrant Agreement, PERAC and the Warrant Agent agree to amend and restate the Existing Warrant Agreement
in its entirety as contemplated hereunder;
WHEREAS, pursuant to
the Existing Warrant Agreement, PERAC issued 21,614,362 warrants as part of its initial public offering, including (i) 13,188,830 warrants
sold by PERAC to the public (the “Public Warrants”) and (ii) 8,425,532 warrants (the “Private Placement
Warrants”) sold by PERAC to Smilodon Capital, LLC, a Delaware limited liability company (the “Sponsor”);
WHEREAS, on October
2, 2023, PERAC, the Company, Heramba Merger Corp., an exempted company incorporated in the Cayman Islands with limited liability under
company number 403111 (“Merger Sub”), Heramba Limited, an Irish private company duly incorporated under the
laws of Ireland with company registration number 745130, and Heramba GmbH, a limited liability company (Gesellschaft mit beschränkter
Haftung) established under the Laws of Germany having its statutory seat in Düsseldorf, Germany, registered with the commercial
register of the Local Court of Düsseldorf under HRB 98529, entered into that certain Business Combination Agreement (as it may
be amended or supplemented from time to time pursuant to the terms thereof, the “Business Combination Agreement”);
WHEREAS, at the effective
time of the SPAC Merger (as defined below) (the “SPAC Merger Effective Time”) and upon the terms and subject
to the conditions of the Business Combination Agreement, Merger Sub shall merge with and into PERAC (the “SPAC Merger”),
with PERAC continuing as the surviving company after the SPAC Merger and a direct, wholly owned subsidiary of the Company;
WHEREAS, by virtue of,
and upon the consummation of the SPAC Merger, and without any action on the part of the parties to the Business Combination Agreement
or any of their respective shareholders and in accordance with Section 4.5 of the Existing Warrant Agreement: (i) the Public Warrants
and the Private Placement Warrants issued thereunder shall remain outstanding but will no longer be exercisable for Class A ordinary shares,
par value $0.0001 per share, of PERAC (the “PERAC Class A Shares”) but instead will be exercisable (on the terms
and subject to the conditions of this Agreement) for a number of ordinary shares of €0.0001 each (nominal value) in the capital of
the Company (the “Ordinary Shares”) equal to the number of PERAC Class A Shares for which such warrants were
exercisable immediately prior to the SPAC Merger subject to adjustment as described herein (such warrants as so adjusted and amended,
the “Warrants”) and (ii) the Warrants shall be assumed by the Company;
WHEREAS, the Company
desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act in connection with the issuance,
registration, transfer, exchange, redemption and exercise of the Warrants;
WHEREAS, the Company
desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective
rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and
things have been done and performed that are necessary to make the Warrants, when executed on behalf of the Company and countersigned
by or on behalf of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations
of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration
of the mutual agreements herein contained, the parties hereto agree as follows:
1. Assignment
and Assumption; Consent; Appointment of Warrant Agent.
1.1 Assignment
and Assumption. Pursuant to the SPAC Merger, PERAC assigns to the Company all of PERAC’s right, title and interest in and to
the Existing Warrant Agreement (as amended hereby) and the Warrants as of the SPAC Merger Effective Time. Pursuant to the SPAC Merger,
the Company assumes, and agrees to pay, perform, satisfy and discharge in full, as the same become due, all of PERAC’s liabilities
and obligations under the Existing Warrant Agreement (as amended hereby) and the Warrants arising from and after the SPAC Merger Effective
Time.
1.2 Consent.
The Warrant Agent hereby consents to the assignment of the Existing Warrant Agreement (as amended hereby) and the Warrants by PERAC to
the Company pursuant to the SPAC Merger and Section 1.1 hereof, effective as of the SPAC Merger Effective Time, the assumption
of the Warrants by the Company from PERAC pursuant to the SPAC Merger and Section 1.1 hereof, effective as of the SPAC Merger Effective
Time, and the continuation of the Warrants in full force and effect from and after the SPAC Merger Effective Time, subject at all times
to this Agreement and to all of the provisions, covenants, agreements, terms and conditions of this Agreement.
1.3 Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1 Form
of Warrant. Each Warrant shall initially be issued in registered form only.
2.2 Effect
of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement,
a certificated Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3 Registration.
2.3.1 Warrant
Register. The Warrant Agent shall maintain books (the “Warrant Register”) for the registration of original
issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants in book-entry form, the Warrant Agent
shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance
with instructions delivered to the Warrant Agent by the Company. Ownership of beneficial interests in the Public Warrants shall be shown
on, and the transfer of such ownership shall be effected through, records maintained by institutions that have accounts with the Depositary
Trust Company (the “Depositary”) (each such institution, with respect to a Warrant in its account, a “Participant”).
2.3.2 If
the Depositary subsequently ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct
the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible
for, or it is no longer necessary to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions
to the Depositary to deliver to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the
Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants (“Definitive
Warrant Certificate”) which shall be in the form annexed hereto as Exhibit A.
2.3.3 Physical
certificates, if issued, shall be signed by, or bear the facsimile signature of, the Chairperson of the Board, Chief Executive Officer,
Chief Financial Officer or other principal officer of the Company. In the event the person whose facsimile signature has been placed upon
any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be
issued with the same effect as if he or she had not ceased to be such at the date of issuance.
2.4 Registered
Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat
the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”) as the
absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on
any physical certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for
all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.5 No
Fractional Warrants. The Company shall not issue fractional Warrants. If a holder of Warrants would be entitled to receive a fractional
Warrant, the Company shall round down to the nearest whole number the number of Warrants to be issued to such holder.
2.6 Private
Placement Warrants. The Private Placement Warrants are identical to the Public Warrants, except that so long as they are held by the
Sponsor or any of its Permitted Transferees (as defined below), the Private Placement Warrants: (i) may be exercised for cash or on a
“cashless basis”, pursuant to subsection 3.3.1(c) hereof, (ii) may not be transferred, assigned or sold until the date
that is thirty (30) days after the date hereof, (iii) shall not be redeemable by the Company pursuant to Section 6.1 hereof, and
(iv) shall only be redeemable by the Company pursuant to Section 6.2 if the Reference Value (as defined below) is less than $18.00
per share (subject to adjustment in compliance with Section 4 hereof); provided, however, that in the case of clause
(ii), the Private Placement Warrants and any Ordinary Shares held by the Sponsor or any of its Permitted Transferees and issued upon exercise
of the Private Placement Warrants may be transferred by the holders thereof:
(a) to
the Company’s officers or directors, any affiliate or family member of any of the Company’s officers or directors, any affiliate
of the Sponsor or to any members of the Sponsor or any of their affiliates;
(b) in
the case of an individual, by gift to a member of such individual’s immediate family or to a trust, the beneficiary of which is
a member of such individual’s immediate family, an affiliate of such individual or to a charitable organization;
(c) in
the case of an individual, by virtue of laws of descent and distribution upon death of such individual;
(d) in
the case of an individual, pursuant to a qualified domestic relations order;
(e) by
private sales or transfers made in connection with any forward purchase agreement or similar arrangement at prices no greater than the
price at which the Ordinary Shares or Warrants were originally purchased;
(f) by
virtue of the laws of the State of Delaware or the limited liability company agreement of the Sponsor upon termination and winding-up
of the Sponsor; or
(g) in
the event that, subsequent to the date hereof, the Company completes a liquidation, merger, share exchange or other similar transaction
which results in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other
property;
provided, however,
that, in the case of clauses (a) through (e), these permitted transferees (the “Permitted Transferees”) must
enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement and the other applicable
restrictions contained in the letter agreement, dated as of October 28, 2021, by and among PERAC, the Sponsor and PERAC’s officers
and directors.
3. Terms
and Exercise of Warrants.
3.1 Warrant
Price. Each whole Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement,
to purchase from the Company the number of Ordinary Shares stated therein, at the price of $11.50 per share, subject to the adjustments
provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price”
as used in this Agreement shall mean the price per share (including in cash or by payment of Warrants pursuant to a “cashless exercise,”
to the extent permitted hereunder) described in the prior sentence at which Ordinary Shares may be purchased at the time a Warrant is
exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below)
for a period of not less than twenty (20) days on which banks in New York City are generally open for normal business (a “Business
Day”), provided, that the Company shall provide at least five (5) Business Days prior written notice of such reduction
to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants.
3.2 Duration
of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) (A) commencing on
the date that is thirty (30) days after the date hereof, and (B) terminating at the earliest to occur of (x) 5:00 p.m., New York City
time on the date that is five (5) years after the date hereof, (y) the liquidation of the Company, and (z) the Redemption Date (as defined
below) with respect to a Warrant, which, for the avoidance of doubt will not include (A) with respect to the Private Placement Warrants
then held by the Sponsor or any of its Permitted Transferees, a redemption pursuant to Section 6.1 hereof or, (B) if the Reference
Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof), a redemption pursuant to
Section 6.2 hereof (the earliest to occur of clause (x), (y) and (z) with respect to a Warrant, the “Expiration Date”);
provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as
set forth in subsection 3.3.2 below, with respect to an effective registration statement or a valid exemption therefrom being available.
Each outstanding Warrant not exercised on or before the Expiration Date of such Warrant shall become void, and all rights thereunder and
all rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in
its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided that the Company shall provide
at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further
that any such extension shall be identical in duration among all the Warrants.
3.3 Exercise
of Warrants.
3.3.1 Payment.
Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof by delivering
to the Warrant Agent at its corporate trust department (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised,
or, in the case of a Warrant represented by a book-entry, the Warrants to be exercised (the “Book-Entry Warrants”)
on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant
Agent to the Depositary from time to time, (ii) an election to purchase (“Election to Purchase”) any Ordinary
Shares pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the Definitive
Warrant Certificate or, in the case of a Book-Entry Warrant, properly delivered by the Participant in accordance with the Depositary’s
procedures, and (iii) payment in full of the Warrant Price for each Ordinary Share as to which the Warrant is exercised and any and all
applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the Ordinary Shares and the issuance
of such Ordinary Shares, as follows:
(a) in
lawful money of the United States, in good certified check, in good bank draft payable to the order of the Warrant Agent or by wire transfer
of immediately available funds;
(b) in
the event of a redemption pursuant to Section 6.1 hereof in which the Company’s board of directors (the “Board”)
has elected to require all holders of the Warrants to exercise such Warrants on a “cashless basis,” by surrendering the Warrants
for that number of Ordinary Shares equal to the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying
the Warrants, multiplied by the excess of the “Fair Market Value,” as defined in this subsection 3.3.1(b), over the
Warrant Price by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(b) and Section 6.3, the “Fair
Market Value” shall mean the average reported last sale price of the Ordinary Shares for the ten (10) trading days ending
on the third trading day prior to the date on which the notice of redemption is sent to the holders of Warrants, pursuant to Section
6.1 hereof;
(c) with
respect to any Private Placement Warrant, so long as such Private Placement Warrant is held by the Sponsor or its Permitted Transferees,
by surrendering the Warrants for that number of Ordinary Shares equal to (i) if in connection with a redemption of Private Placement Warrants
pursuant to Section 6.2 hereof, as provided in Section 6.2 hereof with respect to a Make-Whole Exercise (as defined below)
and (ii) in all other scenarios, the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the Warrants,
multiplied by the excess of the “Sponsor Exercise Fair Market Value” (as defined in this subsection 3.3.1(c)), over
the Warrant Price by (y) the Sponsor Exercise Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the “Sponsor
Exercise Fair Market Value” shall mean the average last reported sale price of the Ordinary Shares for the ten (10) trading
days ending on the third (3rd) trading day prior to the date on which notice of exercise of the Private Placement Warrant is sent to the
Warrant Agent;
(d) as
provided in Section 6.2 hereof with respect to a Make-Whole Exercise; or
(e) as
provided in Section 7.4 hereof.
3.3.2 Issuance
of Ordinary Shares on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment
of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such
Warrant a book-entry position or certificate, as applicable, for the number of Ordinary Shares to which he, she or it is entitled, registered
in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new book-entry
position or countersigned Warrant, as applicable, for the number of Ordinary Shares as to which such Warrant shall not have been exercised.
Notwithstanding the foregoing, the Company shall not be obligated to deliver any Ordinary Shares pursuant to the exercise of a Warrant
and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), with respect to the Ordinary Shares underlying the Public Warrants is then effective
and a prospectus relating thereto is current, subject to the Company’s satisfying its obligations under Section 7.4. No Warrant
shall be exercisable and the Company shall not be obligated to issue Ordinary Shares upon exercise of a Warrant unless the Ordinary Shares
issuable upon such Warrant exercise has been registered, qualified or deemed to be exempt from registration or qualification under the
securities laws of the state of residence of the Registered Holder of the Warrants. Subject to Section 4.6 of this Agreement, a
Registered Holder of Warrants may exercise its Warrants only for a whole number of Ordinary Shares. The Company may require holders of
Public Warrants to settle the Warrant on a “cashless basis” pursuant to Section 6.1 or Section 7.4. If, by reason
of any exercise of Warrants on a “cashless basis,” the holder of any Warrant would be entitled, upon the exercise of such
Warrant, to receive a fractional interest in an Ordinary Share, the Company shall round down to the nearest whole number, the number of
Ordinary Shares to be issued to such holder.
3.3.3 Valid
Issuance. Subject to provisions of Section 3.3.6, all Ordinary Shares issued upon the proper exercise of a Warrant in conformity
with this Agreement shall be validly issued, fully paid and non-assessable (“non-assessable” is a phrase which has no defined
meaning under Irish law, but, for the purposes of this Agreement, shall mean the registered holders of the relevant Ordinary Shares are
not subject to calls for additional payments of capital on such shares).
3.3.4 Date
of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for Ordinary Shares is issued shall
for all purposes be deemed to have become the holder of record of such Ordinary Shares on the date on which the Warrant, or book-entry
position representing such Warrant, was surrendered and payment of the Warrant Price (including any nominal value payment required to
be made in accordance with Section 3.3.6) was made, irrespective of the date of delivery of such certificate in the case of a certificated
Warrant, except that, if the date of such surrender and payment is a date when the share transfer books of the Company or book-entry system
of the Warrant Agent are closed, such person shall be deemed to have become the holder of such Ordinary Shares at the close of business
on the next succeeding date on which the share transfer books or book-entry system are open.
3.3.5 Maximum
Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained
in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she or it
makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s Warrant,
and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person
(together with such person’s affiliates), to the Warrant Agent’s actual knowledge, would beneficially own in excess of 4.9%
or 9.8% (or such other amount as a holder may specify) (the “Maximum Percentage”) of the Ordinary Shares outstanding
immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of Ordinary Shares beneficially
owned by such person and its affiliates shall include the number of Ordinary Shares issuable upon exercise of the Warrant with respect
to which the determination of such sentence is being made, but shall exclude Ordinary Shares that would be issuable upon (x) exercise
of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates and (y) exercise or conversion
of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates
(including, without limitation, any convertible notes or convertible preferred shares or warrants) subject to a limitation on conversion
or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph,
beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). For purposes of the Warrant, in determining the number of outstanding Ordinary Shares, the holder may rely on the number
of outstanding Ordinary Shares as reflected in (1) the Company’s most recent Annual Report on Form 20-F, Current Report on Form
6-K or other public filing with the U.S. Securities and Exchange Commission (the “Commission”) as the case may
be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the
number of Ordinary Shares outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company
shall, within two (2) Business Days, confirm orally and in writing to such holder the number of Ordinary Shares then outstanding. In any
case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of equity securities
of the Company by the holder and its affiliates since the date as of which such number of outstanding Ordinary Shares was reported. By
written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to
such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective
until the sixty-first (61st) day after such notice is delivered to the Company.
3.3.6 Payment
of Nominal Value. Notwithstanding any other provision of this Agreement, the issue of Ordinary Shares upon the exercise of Warrants
on a “cashless basis”, whether pursuant to Section 3.3.1(c), Section 6.2 or Section 7.4 or otherwise
pursuant to the terms of this Agreement, shall be conditional on the additional payment by, or on behalf of, the relevant exercising holder
to the Company, by way of additional subscription, of an amount in cash at least equal to the aggregate nominal value of the Ordinary
Shares to be issued upon such exercise.
3.3.7 Beneficial
Ownership Limitation. Notwithstanding any other provision of this Agreement, save with the consent of the Irish Takeover Panel in
accordance with Rule 9 of the Irish Takeover Panel Act, 1997, Takeover Rules 2022 (the “Irish Takeover Rules”),
no Ordinary Shares shall be issued upon the exercise, or purported exercise, of any Warrant to the extent that such exercise, or purported
exercise, would result (i) in a person and/or any person or persons “acting in concert” (within the meaning of the Irish Takeover
Rules) with such person holding, directly or indirectly, shares in the capital of the Company representing 30% or more of the voting rights
of the Company or (ii) where a person and/or any person or persons acting in concert with such person already, directly or indirectly,
hold(s) shares representing 30% or more of the voting rights in the Company, in the percentage of the voting rights in the Company held,
directly or indirectly, by such person and/or any person or persons acting in concert with such person, increasing by more than 0.05%
within a 12-month period, and any such exercise or purported exercise and the issuance of any Ordinary Shares pursuant thereto shall be
void.
4. Adjustments.
4.1 Share
Capitalizations.
4.1.1 Divisions.
If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding Ordinary Shares is increased
by a share capitalization payable in Ordinary Shares, or by a division of Ordinary Shares or other similar event, then, on the effective
date of such share capitalization, division or similar event, the number of Ordinary Shares issuable on exercise of each Warrant shall
be increased in proportion to such increase in the outstanding Ordinary Shares. A rights offering made to all or substantially all holders
of the Ordinary Shares entitling holders to purchase Ordinary Shares at a price less than the “Historical Fair Market Value”
(as defined below) shall be deemed a share capitalization of a number of Ordinary Shares equal to the product of (i) the number of Ordinary
Shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible
into or exercisable for the Ordinary Shares) multiplied by (ii) one (1) minus the quotient of (x) the price per Ordinary Share paid in
such rights offering divided by (y) the Historical Fair Market Value. For purposes of this subsection 4.1.1, (i) if the rights
offering is for securities convertible into or exercisable for Ordinary Shares, in determining the price payable for Ordinary Shares,
there shall be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or
conversion and (ii) “Historical Fair Market Value” means the volume weighted average price of the Ordinary Shares
as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the Ordinary Shares trade
on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
4.1.2 Extraordinary
Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution
in cash, securities or other assets to the holders of the Ordinary Shares on account of such Ordinary Shares (or other shares of the Company’s
share capital into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above or (b) Ordinary Cash
Dividends (as defined below) (any such non-excluded event being referred to herein as an “Extraordinary Dividend”),
then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount
of cash and/or the fair market value (as determined by the Company’s board of directors (the “Board”)
in good faith) of any securities or other assets paid on each Ordinary Share in respect of such Extraordinary Dividend. For purposes of
this subsection 4.1.2, “Ordinary Cash Dividends” means any cash dividend or cash distribution which,
when combined on a per share basis with the per share amounts of all other cash dividends and cash distributions paid on the Ordinary
Shares during the 365-day period ending on the date of declaration of such dividend or distribution (as adjusted to appropriately reflect
any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted
in an adjustment to the Warrant Price or to the number of Ordinary Shares issuable on exercise of each Warrant) does not exceed $0.50.
4.2 Aggregation
of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of outstanding Ordinary
Shares is decreased by a consolidation, combination, reverse share division or reclassification of Ordinary Shares or other similar event,
then, on the effective date of such consolidation, combination, reverse share division, reclassification or similar event, the number
of Ordinary Shares issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding Ordinary Shares.
4.3 Adjustments
in Warrant Price. Whenever the number of Ordinary Shares purchasable upon the exercise of the Warrants is adjusted, as provided in
subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant
Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of Ordinary Shares purchasable
upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of Ordinary
Shares so purchasable immediately thereafter.
4.4 [Reserved].
4.5 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Ordinary Shares (other
than a change under subsections 4.1.1 or 4.1.2 or Section 4.2 hereof or that solely affects the par value of such
Ordinary Shares), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation
or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the
outstanding Ordinary Shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property
of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of the Warrants
shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and
in lieu of the Ordinary Shares of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented
thereby, the kind and amount of shares or other securities or property (including cash) receivable upon such reclassification, reorganization,
merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received
if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the “Alternative Issuance”);
provided, however, that (i) if the holders of the Ordinary Shares were entitled to exercise a right of election as to the
kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities,
cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted
average of the kind and amount received per share by the holders of the Ordinary Shares in such consolidation or merger that affirmatively
make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the Ordinary
Shares under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any
group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or
associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such
affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding
Ordinary Shares, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash, securities
or other property to which such holder would actually have been entitled as a shareholder if such Warrant holder had exercised the Warrant
prior to the expiration of such tender or exchange offer, accepted such offer and all of the Ordinary Shares held by such holder had been
purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange
offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided further that if less
than 70% of the consideration receivable by the holders of the Ordinary Shares in the applicable event is payable in the form of ordinary
shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter
market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises
the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant
to a Current Report on Form 6-K filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference
(but in no event less than zero) of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration
(as defined below) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value”
means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for
a Capped American Call on Bloomberg Financial Markets (“Bloomberg”). For purposes of calculating such amount,
(1) Section 6 of this Agreement shall be taken into account, (2) the price of each Ordinary Share shall be the volume weighted
average price of the Ordinary Shares as reported during the ten (10) trading day period ending on the trading day prior to the effective
date of the applicable event, (3) the assumed volatility shall be the 90 day volatility obtained from the HVT function on Bloomberg determined
as of the trading day immediately prior to the day of the announcement of the applicable event, and (4) the assumed risk-free interest
rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. “Per Share Consideration”
means (i) if the consideration paid to holders of the Ordinary Shares consists exclusively of cash, the amount of such cash per Ordinary
Share, and (ii) in all other cases, the volume weighted average price of the Ordinary Shares as reported during the ten (10) trading day
period ending on the trading day prior to the effective date of the applicable event. If any reclassification or reorganization also results
in a change in Ordinary Shares covered by subsection 4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1
or Sections 4.2, 4.3 and this Section 4.5. The provisions of this Section 4.5 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced
to less than the par value per share issuable upon exercise of such Warrant.
4.6 Notices
of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of Ordinary Shares issuable upon exercise of a Warrant,
the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment
and the increase or decrease, if any, in the number of Ordinary Shares purchasable at such price upon the exercise of a Warrant, setting
forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event
specified in Sections 4.1, 4.2, 4.3 or 4.5, the Company shall give written notice of the occurrence of such
event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of the record date or the effective
date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.7 No
Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional
Ordinary Shares upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any
Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such
exercise, round down to the nearest whole number the number of Ordinary Shares to be issued to such holder.
4.8 Form
of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued
after such adjustment may state the same Warrant Price and the same number of Ordinary Shares as is stated in the Warrants initially issued
pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in
the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued
or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
4.9 Other
Events. In case any event shall occur affecting the Company as to which none of the provisions of the preceding subsections of this
Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an
adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company
shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which
shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent
and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment. The Company
shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
5. Transfer
and Exchange of Warrants.
5.1 Registration
of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register,
upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions
for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant
shall be cancelled by the Warrant Agent. In the case of certificated Warrants, the Warrants so cancelled shall be delivered by the Warrant
Agent to the Company from time to time upon request.
5.2 Procedure
for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer,
and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the
Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise
provided herein or with respect to any Book-Entry Warrant, each Book-Entry Warrant may be transferred only in whole and only to the Depositary,
to another nominee of the Depositary, to a successor depository, or to a nominee of a successor depository; provided further, however,
that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants),
the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received an opinion
of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive
legend.
5.3 Fractional
Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance
of a warrant certificate or book-entry position for a fraction of a warrant.
5.4 Service
Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5 Warrant
Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms
of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required
by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
5.6 Stamp
Duty. Notwithstanding the provisions of Section 5.1, the Company may require, as a condition to the registration of any transfer
of a Warrant, evidence from the transferor or intended transferee, which is satisfactory to the Company, that any Irish stamp duty liability
arising on such transfer has been duly paid (and any instrument of transfer, as the case may be, has been duly stamped for Irish stamp
duty purposes) or that the proposed transfer is otherwise exempt from such duty. The Company, at its absolute discretion, may, or may
procure that one of its subsidiaries shall, pay any Irish stamp duty arising on a transfer of Warrants on behalf of the transferee of
such Warrants. If stamp duty resulting from the transfer of Warrants in the Company which would otherwise be payable by the transferee
is paid by the Company or any subsidiary of the Company on behalf of the transferee, then in those circumstances, the Company shall, on
its behalf or on behalf of its subsidiary (as the case may be), be entitled to (i) reimbursement of the stamp duty from the transferee,
(ii) set-off the stamp duty against any dividends payable by the Company to the transferee and (iii) to the extent permitted by section
1042 of the Companies Act 2014 of Ireland, as amended, and every statutory modification and re-enactment thereof for the time being, claim
a first and paramount lien on the Warrants (or Ordinary Shares issued upon the exercise of Warrants) on which stamp duty has been paid
by the Company or its subsidiary for the amount of stamp duty paid. The Company’s lien shall extend to all dividends paid on Ordinary
Shares issued upon the exercise of such Warrants.
6. Redemption.
6.1 Redemption
of Warrants When Price Per Ordinary Share Equals or Exceeds $18.00. Subject to Section 6.5 hereof, not less than all of the
outstanding Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant
Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.01
per Warrant; provided that (a) the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with
Section 4 hereof) and (b) there is an effective registration statement covering the Ordinary Shares issuable upon exercise of the
Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as defined in Section 6.3
below) or the Company has elected to require the exercise of the Warrants on a “cashless basis” pursuant to subsection
3.3.1 and such cashless exercise is exempt from registration under the Securities Act. If the Company has elected to require the exercise
of the Warrants on a cashless basis in connection with any redemption pursuant to this Section 6.1, the Company shall provide the
Registered Holders with the Redemption Fair Market Value no later than one (1) Business Day after the ten (10) trading day period described
in subsection 3.3.1 ends.
6.2 Redemption
of Warrants When Price Per Ordinary Share Equals or Exceeds $10.00. Subject to Section 6.5 hereof, not less than all of the
outstanding Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant
Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.10
per Warrant; provided that (i) the Reference Value equals or exceeds $10.00 per share (subject to adjustment in compliance with
Section 4 hereof) and (ii) if the Reference Value is less than $18.00 per share (subject to adjustment in compliance with Section
4 hereof), the Private Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public
Warrants. During the 30-day Redemption Period in connection with a redemption pursuant to this Section 6.2, Registered Holders
of the Warrants may elect to exercise their Warrants on a “cashless basis” pursuant to subsection 3.3.1(d) and receive
a number of Ordinary Shares determined by reference to the table below, based on the Redemption Date (calculated for purposes of the table
as the period to expiration of the Warrants) and the “Redemption Fair Market Value” (as such term is defined in this Section
6.2) (a “Make-Whole Exercise”). Solely for purposes of this Section 6.2, the “Redemption
Fair Market Value” shall mean the average reported last sale price of the Ordinary Shares for the ten (10) trading days
ending on the third trading day prior to the date on which the notice of redemption pursuant to this Section 6.2 is sent to the
Registered Holders. In connection with any redemption pursuant to this Section 6.2, the Company shall provide the Registered Holders
with the Redemption Fair Market Value no later than one (1) Business Day after the ten (10) trading day period described above ends.
Redemption
Fair Market Value of Ordinary Shares
Redemption Date
(period
to expiration of
warrants) | |
| ≤$10.00 | | |
$ | 11.00 | | |
$ | 12.00 | | |
$ | 13.00 | | |
$ | 14.00 | | |
$ | 15.00 | | |
$ | 16.00 | | |
$ | 17.00 | | |
| ≥$18.00 | |
| 60 months | |
| 0.261 | | |
| 0.281 | | |
| 0.297 | | |
| 0.311 | | |
| 0.324 | | |
| 0.337 | | |
| 0.348 | | |
| 0.358 | | |
| 0.361 | |
| 57 months | |
| 0.257 | | |
| 0.277 | | |
| 0.294 | | |
| 0.310 | | |
| 0.324 | | |
| 0.337 | | |
| 0.348 | | |
| 0.358 | | |
| 0.361 | |
| 54 months | |
| 0.252 | | |
| 0.272 | | |
| 0.291 | | |
| 0.307 | | |
| 0.322 | | |
| 0.335 | | |
| 0.347 | | |
| 0.357 | | |
| 0.361 | |
| 51 months | |
| 0.246 | | |
| 0.268 | | |
| 0.287 | | |
| 0.304 | | |
| 0.320 | | |
| 0.333 | | |
| 0.346 | | |
| 0.357 | | |
| 0.361 | |
| 48 months | |
| 0.241 | | |
| 0.263 | | |
| 0.283 | | |
| 0.301 | | |
| 0.317 | | |
| 0.332 | | |
| 0.344 | | |
| 0.356 | | |
| 0.361 | |
| 45 months | |
| 0.235 | | |
| 0.258 | | |
| 0.279 | | |
| 0.298 | | |
| 0.315 | | |
| 0.330 | | |
| 0.343 | | |
| 0.356 | | |
| 0.361 | |
| 42 months | |
| 0.228 | | |
| 0.252 | | |
| 0.274 | | |
| 0.294 | | |
| 0.312 | | |
| 0.328 | | |
| 0.342 | | |
| 0.355 | | |
| 0.361 | |
| 39 months | |
| 0.221 | | |
| 0.246 | | |
| 0.269 | | |
| 0.290 | | |
| 0.309 | | |
| 0.325 | | |
| 0.340 | | |
| 0.354 | | |
| 0.361 | |
| 36 months | |
| 0.213 | | |
| 0.239 | | |
| 0.263 | | |
| 0.285 | | |
| 0.305 | | |
| 0.323 | | |
| 0.339 | | |
| 0.353 | | |
| 0.361 | |
| 33 months | |
| 0.205 | | |
| 0.232 | | |
| 0.257 | | |
| 0.280 | | |
| 0.301 | | |
| 0.320 | | |
| 0.337 | | |
| 0.352 | | |
| 0.361 | |
| 30 months | |
| 0.196 | | |
| 0.224 | | |
| 0.250 | | |
| 0.274 | | |
| 0.297 | | |
| 0.316 | | |
| 0.335 | | |
| 0.351 | | |
| 0.361 | |
| 27 months | |
| 0.185 | | |
| 0.214 | | |
| 0.242 | | |
| 0.268 | | |
| 0.291 | | |
| 0.313 | | |
| 0.332 | | |
| 0.350 | | |
| 0.361 | |
| 18 months | |
| 0.173 | | |
| 0.204 | | |
| 0.233 | | |
| 0.260 | | |
| 0.285 | | |
| 0.308 | | |
| 0.329 | | |
| 0.348 | | |
| 0.361 | |
| 21 months | |
| 0.161 | | |
| 0.193 | | |
| 0.223 | | |
| 0.252 | | |
| 0.279 | | |
| 0.304 | | |
| 0.326 | | |
| 0.347 | | |
| 0.361 | |
| 18 months | |
| 0.146 | | |
| 0.179 | | |
| 0.211 | | |
| 0.242 | | |
| 0.271 | | |
| 0.298 | | |
| 0.322 | | |
| 0.345 | | |
| 0.361 | |
| 15 months | |
| 0.130 | | |
| 0.164 | | |
| 0.197 | | |
| 0.230 | | |
| 0.262 | | |
| 0.291 | | |
| 0.317 | | |
| 0.342 | | |
| 0.361 | |
| 12 months | |
| 0.111 | | |
| 0.146 | | |
| 0.181 | | |
| 0.216 | | |
| 0.250 | | |
| 0.282 | | |
| 0.312 | | |
| 0.339 | | |
| 0.361 | |
| 9 months | |
| 0.090 | | |
| 0.125 | | |
| 0.162 | | |
| 0.199 | | |
| 0.237 | | |
| 0.272 | | |
| 0.305 | | |
| 0.336 | | |
| 0.361 | |
| 6 months | |
| 0.065 | | |
| 0.099 | | |
| 0.137 | | |
| 0.178 | | |
| 0.219 | | |
| 0.259 | | |
| 0.296 | | |
| 0.331 | | |
| 0.361 | |
| 3 months | |
| 0.034 | | |
| 0.065 | | |
| 0.104 | | |
| 0.150 | | |
| 0.197 | | |
| 0.243 | | |
| 0.286 | | |
| 0.326 | | |
| 0.361 | |
| 0 months | |
| — | | |
| — | | |
| 0.042 | | |
| 0.115 | | |
| 0.179 | | |
| 0.233 | | |
| 0.281 | | |
| 0.323 | | |
| 0.361 | |
The exact Redemption Fair Market
Value and Redemption Date may not be set forth in the table above, in which case, if the Redemption Fair Market Value is between two values
in the table or the Redemption Date is between two redemption dates in the table, the number of Ordinary Shares to be issued for each
Warrant exercised in a Make-Whole Exercise will be determined by a straight-line interpolation between the number of shares set forth
for the higher and lower Redemption Fair Market Values and the earlier and later redemption dates, as applicable, based on a 365- or 366-day
year, as applicable.
The share prices set forth
in the column headings of the table above shall be adjusted as of any date on which the number of shares issuable upon exercise of a Warrant
or the Warrant Price is adjusted pursuant to Section 4 hereof. If the number of shares issuable upon exercise of a Warrant is adjusted
pursuant to Section 4 hereof, the adjusted share prices in the column headings in the table above shall equal the share prices
immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise
of a Warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a
Warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number
of shares issuable upon exercise of a Warrant. If the Warrant Price is adjusted pursuant to Section 4.1.2 hereof, the adjusted
share prices in the column headings shall equal the share prices immediately prior to such adjustment less the decrease in the Warrant
Price pursuant to such Warrant Price adjustment. In no event shall the number of shares issued in connection with a Make-Whole Exercise
exceed 0.361 Ordinary Shares per Warrant (subject to adjustment).
6.3 Date
Fixed for, and Notice of, Redemption; Redemption Price; Reference Value. In the event that the Company elects to redeem the Warrants
pursuant to Sections 6.1 or 6.2, the Company shall fix a date for the redemption (the “Redemption Date”).
Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the
Redemption Date (such period, the “Redemption Period”) to the Registered Holders of the Warrants to be redeemed
at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the Registered Holder received such notice. As used in this Agreement, (a) “Redemption
Price” shall mean the price per Warrant at which any Warrants are redeemed pursuant to Sections 6.1 or 6.2
and (b) “Reference Value” shall mean the last reported sale price of the Ordinary Shares for any twenty (20)
trading days within the thirty (30) trading-day period ending on the third trading day prior to the date on which notice of the redemption
is given.
6.4 Exercise
After Notice of Redemption. The Warrants may be exercised for cash (or on a “cashless basis” in accordance with Section
6.2 of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.3
hereof and prior to the Redemption Date. On and after the Redemption Date, the record holder of the Warrants shall have no further rights
except to receive, upon surrender of the Warrants, the Redemption Price.
6.5 Exclusion
of Certain Warrants. The Company agrees that (a) the redemption rights provided in Section 6.1 hereof shall not apply to the
Private Placement Warrants if at the time of the redemption such Private Placement Warrants continue to be held by the Sponsor or any
of its Permitted Transferees and (b) if the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with
Section 4 hereof), the redemption rights provided in Section 6.2 hereof shall not apply to the Private Placement Warrants
if at the time of the redemption such Private Placement Warrants continue to be held by the Sponsor or any of its Permitted Transferees.
However, once such Private Placement Warrants are transferred (other than to Permitted Transferees in accordance with Section 2.6
hereof), the Company may redeem the Private Placement Warrants pursuant to Section 6.1 or 6.2 hereof, provided that
the criteria for redemption are met, including the opportunity of the holder of such Private Placement Warrants to exercise the Private
Placement Warrants prior to redemption pursuant to Section 6.4 hereof. The Private Placement Warrants that are transferred to persons
other than Permitted Transferees shall upon such transfer cease to be Private Placement Warrants and shall become Public Warrants under
this Agreement, including for purposes of Section 9.8 hereof.
7. Other
Provisions Relating to Rights of Holders of Warrants.
7.1 No
Rights as Shareholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a shareholder of the Company,
including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent
or to receive notice as shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other
matter.
7.2 Lost,
Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent
may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant,
include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or
destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3 Reservation
of Ordinary Shares. The Company shall at all times reserve and keep available a number of its authorized but unissued Ordinary Shares
that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4 Registration
of Ordinary Shares; Cashless Exercise at Company’s Option.
7.4.1 Registration
of the Ordinary Shares. The Company agrees that as soon as practicable, but in no event later than fifteen (15) Business Days after
the date hereof, it shall use its commercially reasonable efforts to file with the Commission a registration statement registering, under
the Securities Act, the issuance of the Ordinary Shares issuable upon exercise of the Warrants. The Company shall use its commercially
reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current
prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of this Agreement. If any such registration
statement has not been declared effective by the 60th Business Day following the date hereof, holders of the Warrants shall have the right,
during the period beginning on the 61st Business Day after the date hereof and ending upon such registration statement being declared
effective by the Commission, and during any other period when the Company shall fail to have maintained an effective registration statement
covering the Ordinary Shares issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging
the Warrants (in accordance with Section 3(a)(9) of the Securities Act or another exemption) for that number of Ordinary Shares equal
to the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the Warrants, multiplied by the excess
of the “Fair Market Value” (as defined below) over the Warrant Price by (y) the Fair Market Value. Solely for purposes of
this subsection 7.4.1, “Fair Market Value” shall mean the average last reported sale price of the Ordinary Shares as
reported during the ten (10) trading day period ending on the third trading day prior to the date that notice of exercise is received
by the Warrant Agent from the holder of such Warrants or its securities broker or intermediary. The date that notice of “cashless
exercise” is received by the Warrant Agent shall be conclusively determined by the Warrant Agent. In connection with the “cashless
exercise” of a Public Warrant, the Company shall, upon request, provide the Warrant Agent with an opinion of counsel for the Company
(which shall be an outside law firm with securities law experience) stating that (i) the exercise of the Warrants on a “cashless
basis” in accordance with this subsection 7.4.1 is not required to be registered under the Securities Act and (ii) the Ordinary
Shares issued upon such exercise shall be freely tradable under United States federal securities laws by anyone who is not an affiliate
(as such term is defined in Rule 144 under the Securities Act (or any successor rule)) of the Company and, accordingly, shall not be required
to bear a restrictive legend. Except as provided in subsection 7.4.2, for the avoidance of any doubt, unless and until all of the
Warrants have been exercised or have expired, the Company shall continue to be obligated to comply with its registration obligations under
the first three sentences of this subsection 7.4.1.
7.4.2 Cashless
Exercise at Company’s Option. If the Ordinary Shares are at the time of any exercise of a Public Warrant not listed on a national
securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities
Act (or any successor rule), the Company may, at its option, (i) require holders of Public Warrants who exercise Public Warrants to exercise
such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act (or any successor rule)
as described in subsection 7.4.1 and (ii) in the event the Company so elects, the Company shall (x) not be required to file or
maintain in effect a registration statement for the registration, under the Securities Act, of the Ordinary Shares issuable upon exercise
of the Warrants, notwithstanding anything in this Agreement to the contrary and (y) use its commercially reasonable efforts to register
or qualify for sale the Ordinary Shares issuable upon exercise of the Public Warrants under applicable blue sky laws of the state of the
residence of the holder to the extent an exemption is not available.
8. Concerning
the Warrant Agent and Other Matters.
8.1 Payment
of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant
Agent in respect of the issuance or delivery of Ordinary Shares upon the exercise of the Warrants, but the Company shall not be obligated
to pay any transfer taxes in respect of the Warrants or such Ordinary Shares.
8.2 Resignation,
Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office
of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor
Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after
it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with
such notice, submit his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court
of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any
successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation or other entity organized and existing
under the laws of the State of New York, in good standing and having its principal office in the United States of America, and authorized
under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment,
any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor
Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason
it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument
transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon
request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for
more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties,
and obligations.
8.2.2 Notice
of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the
predecessor Warrant Agent and the Transfer Agent for the Ordinary Shares not later than the effective date of any such appointment.
8.2.3 Merger
or Consolidation of Warrant Agent. Any entity into which the Warrant Agent may be merged or with which it may be consolidated or any
entity resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under
this Agreement without any further act.
8.3 Fees
and Expenses of Warrant Agent.
8.3.1 Remuneration.
The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant
to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably
incur in the execution of its duties hereunder.
8.3.2 Further
Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing of the provisions of this Agreement.
8.4 Liability
of Warrant Agent.
8.4.1 Reliance
on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a statement signed by the Chief Executive Officer, Chief Financial Officer, any Executive Vice President or the Chairperson of the
Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered
in good faith by it pursuant to the provisions of this Agreement.
8.4.2 Indemnity.
The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct, fraud or bad faith. The Company agrees
to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, out-of-pocket costs and reasonable
outside counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the
Warrant Agent’s gross negligence, willful misconduct, fraud or bad faith.
8.4.3 Exclusions.
The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution
of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments
required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Ordinary Shares to be issued pursuant to this Agreement or any
Warrant or as to whether any Ordinary Shares shall, when issued, be valid and fully paid and non-assessable.
8.5 Acceptance
of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms
and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently
account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of Ordinary Shares through the exercise
of the Warrants.
8.6 Waiver.
The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of October
28, 2021 and as amended through the date hereof, by and between PERAC and the Warrant Agent as trustee thereunder) and hereby agrees not
to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. The Warrant
Agent hereby waives any and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.
9. Miscellaneous
Provisions.
9.1 Successors.
All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns.
9.2 Notices.
Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant
to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private
courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing
by the Company with the Warrant Agent), as follows:
Heramba Electric plc
70 Sir John Rogerson’s
Quay
Dublin 2, Ireland
D02 R296
Attention: Neil McArthur
Email: neilcmcarthur@outlook.com
with copies (which shall not
constitute notice) to:
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, TX 77002
Attention: Nick S. Dhesi
Email: Nick.Dhesi@lw.com
and
Matheson
70 Sir John Rogerson’s
Quay
Dublin 2
Ireland
Attention: Fergus Bolster
Email: Fergus.Bolster@matheson.com
Any notice, statement or demand authorized by
this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given
when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after
deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company),
as follows:
Continental Stock Transfer &
Trust Company
One State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
9.3 Applicable
Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the
laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive
laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in
any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for
the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive forum for any such
action, proceeding or claim. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability
or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole
and exclusive forum.
9.4 Persons
Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person, corporation
or other entity other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason
of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises,
and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and
assigns and of the Registered Holders of the Warrants.
9.5 Examination
of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in
the United States of America, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to
submit such holder’s Warrant for inspection by the Warrant Agent.
9.6 Counterparts.
This Agreement may be executed in any number of original or electronic copy counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7 Effect
of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation
thereof.
9.8 Amendments.
This Agreement may be amended by the parties hereto without the consent of any Registered Holder (i) for the purpose of curing any ambiguity,
or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect
to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not
adversely affect the interest of the Registered Holders, and (ii) to provide for the delivery of an Alternative Issuance pursuant to Section
4.5. All other modifications or amendments, including any modification or amendment to increase the Warrant Price or shorten the Exercise
Period shall require the vote or written consent of the Registered Holders of 50% of the number of the then outstanding Public Warrants
and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of this Agreement with respect
to the Private Placement Warrants, 50% of the number of then outstanding Private Placement Warrants. Notwithstanding the foregoing, the
Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively,
without the consent of the Registered Holders.
9.9 Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable
term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to
such invalid or unenforceable provision as may be possible and be valid and enforceable.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the date first above written.
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Project Energy Reimagined Acquisition Corp. |
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By: |
/s/ Srinath Narayanan |
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Name: |
Srinath Narayanan |
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Title: |
Chief Executive Officer |
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HERAMBA ELECTRIC plc |
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By: |
/s/ Dr. Hans-Jörg Grundmann |
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Name: |
Dr. Hans-Jörg Grundmann |
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Title: |
Director |
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY |
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By: |
/s/ Douglas Reed |
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Name: |
Douglas Reed |
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Title: |
Vice President |
EXHIBIT
A
Form of Warrant Certificate
[FACE]
Number
Warrants
THIS
WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO
THE
EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE
WARRANT AGREEMENT DESCRIBED BELOW
heramba
electric PLC.
Incorporated Under the Laws of Ireland
CUSIP [ ● ]
Warrant Certificate
This Warrant Certificate
certifies that ________________, or registered assigns, is the registered holder of warrants evidenced hereby (the “Warrants”
and each, a “Warrant”) to purchase Ordinary Shares, €0.0001 par value per share (the “Ordinary
Shares”), of Heramba Electric plc, an Irish public limited company duly incorporated under the laws of Ireland with company
registration number 744994 (the “Company”). Each whole Warrant entitles the holder, upon exercise during the
period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable
Ordinary Shares as set forth below, at the exercise price (the “Warrant Price”) as determined pursuant to the
Warrant Agreement, payable in lawful money (or through “cashless exercise” as provided for in the Warrant Agreement)
of the United States of America upon surrender of this Warrant Certificate and payment of the Warrant Price at the office or agency of
the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this
Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially
exercisable for one fully paid and non-assessable Ordinary Share. No fractional shares will be issued upon exercise of any Warrant. If,
upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in an Ordinary Share, the Company will, upon
exercise, round down to the nearest whole number the number of Ordinary Shares to be issued to the Warrant holder. The number of Ordinary
Shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.
The initial Warrant Price per
Ordinary Share for any Warrant is equal to $11.50 per share. The Warrant Price is subject to adjustment upon the occurrence of certain
events set forth in the Warrant Agreement.
Subject to the conditions set
forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end
of such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions, as set forth in
the Warrant Agreement.
Reference is hereby made to
the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Warrant Certificate shall
not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall
be governed by and construed in accordance with the internal laws of the State of New York.
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HERAMBA ELECTRIC plc |
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By: |
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Name: |
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Title: |
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[ ● ], as Warrant Agent |
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By: |
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Name: |
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Title: |
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[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this
Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive Ordinary Shares and are
issued or to be issued pursuant to an Amended and Restated Warrant Agreement dated as of [ ● ]
(the “Warrant Agreement”), duly executed and delivered by the Company to [ ● ],
a [ ● ], as warrant agent (the “Warrant Agent”),
which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description
of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the
words “holders” or “holder” meaning the Registered Holders or Registered Holder, respectively)
of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms
used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at
any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of Election to Purchase set forth hereon properly completed and
executed, together with payment of the Warrant Price as specified in the Warrant Agreement (or through “cashless exercise”
as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise
of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there
shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything else
in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement
covering the Ordinary Shares to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating
to the Ordinary Shares is current, except through “cashless exercise” as provided for in the Warrant Agreement.
The Warrant Agreement provides
that upon the occurrence of certain events the number of Ordinary Shares issuable upon the exercise of the Warrants set forth on the face
hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive
a fractional interest in an Ordinary Share, the Company shall, upon exercise, round down to the nearest whole number of Ordinary Shares
to be issued to the holder of the Warrant.
Warrant Certificates, when
surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement,
but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate
a like number of Warrants.
Upon due presentation for registration
of transfer of this Warrant Certificate at the office of the Warrant Agent, a new Warrant Certificate or Warrant Certificates of like
tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate,
subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant
Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof,
and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
Neither the Warrants nor this
Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, to receive Ordinary Shares and herewith tenders payment for such
Ordinary Shares to the order of Heramba Electric plc (the “Company”) in the amount of $ in accordance with the
terms hereof. The undersigned requests that a certificate for such Ordinary Shares be registered in the name of , whose address is and
that such Ordinary Shares be delivered to , whose address is . If said number of Ordinary Shares is less than all of the Ordinary Shares
purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary Shares
be registered in the name of , whose address is and that such Warrant Certificate be delivered to , whose address is .
In the event that the Warrant
has been called for redemption by the Company pursuant to Section 6.2 of the Warrant Agreement and a holder thereof elects to exercise
its Warrant pursuant to a Make-Whole Exercise, the number of Ordinary Shares that this Warrant is exercisable for shall be determined
in accordance with subsection 3.3.1(c) or Section 6.2 of the Warrant Agreement, as applicable.
In the event that the Warrant
is a Private Placement Warrant that is to be exercised on a “cashless basis” pursuant to subsection 3.3.1(c) of the
Warrant Agreement, the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with subsection
3.3.1(c) of the Warrant Agreement.
In the event that the Warrant
is to be exercised on a “cashless basis” pursuant to Section 7.4 of the Warrant Agreement, the number of Ordinary Shares
that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In the event that the Warrant
may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of Ordinary Shares that this
Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such
cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive Ordinary Shares.
If said number of Ordinary Shares is less than all of the Ordinary Shares purchasable hereunder (after giving effect to the cashless exercise),
the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary Shares be registered in the
name of , whose address is and that such Warrant Certificate be delivered to , whose address is .
[Signature Page Follows]
Date: ____________, ___
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(Address) |
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(Tax Identification Number) |
Signature Guaranteed:______________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (OR ANY SUCCESSOR RULE)).
24
Exhibit
4.1
***CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS
IN BRACKETS) HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE IT IS BOTH (1) NOT MATERIAL AND (2) INFORMATION THE COMPANY TREATS AS PRIVATE
OR CONFIDENTIAL.
REGISTRATION
RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of July 26, 2024, is made and entered into by and among
Heramba Electric plc, an Irish public limited company duly incorporated under the laws of Ireland with company registration number 744994
(the “Company”), Smilodon Capital, LLC, a Delaware limited liability company (the “Sponsor”), the
undersigned parties listed under “SPAC Holders” on the signature page(s) hereto (the Sponsor and each such party, a “SPAC
Holder,” and, such parties collectively, including the Sponsor, the “SPAC Holders”), and the undersigned
parties listed under “Heramba Holders” on the signature page(s) hereto (each such party, a “Heramba Holder,”
and, collectively, the “Heramba Holders”). The SPAC Holders, the Heramba Holders, and any person or entity who hereafter
becomes a party to this Agreement pursuant to Section 5.2 or Section 5.10 of this Agreement, are each referred to herein
as a “Holder,” and, collectively, the “Holders.” Capitalized terms used but not otherwise defined
in this Agreement shall have the meanings ascribed to them in the Business Combination Agreement (as defined below).
RECITALS
WHEREAS,
the Company has entered into that certain Business Combination Agreement, dated as of October 2, 2023 (as it may be amended or supplemented
from time to time pursuant to the terms thereof, the “Business Combination Agreement”), by and among Project Energy
Reimagined Acquisition Corp., an exempted company incorporated in the Cayman Islands with limited liability under company number 371458
(“SPAC”), the Company, Heramba Merger Corp., an exempted company incorporated in the Cayman Islands with limited liability
under company number 403111 (“Merger Sub”), Heramba Limited, an Irish private company duly incorporated under the
laws of Ireland with company registration number 745130 (the “Seller”), and Heramba GmbH, a limited liability company
(Gesellschaft mit beschränkter Haftung) established under the Laws of Germany having its statutory seat in Düsseldorf,
Germany, registered with the commercial register of the Local Court of Düsseldorf under HRB 98529 (“Heramba”),
pursuant to which and subject to the terms and conditions thereof, among other things, (i) Merger Sub will merge with and into SPAC (with
SPAC being the surviving company and a direct, wholly owned subsidiary of the Company), in exchange for SPAC’s securityholders
receiving ordinary shares of the Company (“Ordinary Shares”) or securities convertible into or exercisable or exchangeable
for Ordinary Shares, and (ii) the Seller will contribute to the Company shares in Heramba in exchange for the Seller receiving Ordinary
Shares;
WHEREAS,
SPAC, the Sponsor and certain other SPAC Holders are parties to that certain Registration Rights Agreement, dated as of October 28, 2021
(the “Original RRA”), which Original RRA such parties desire to terminate upon consummation of the Transactions; and
WHEREAS,
in connection with the Transactions, the Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall
grant the Holders certain registration rights with respect to certain Registrable Securities (as defined below).
NOW,
THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions.
The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Additional
Holder” shall have the meaning given in Section 5.10.
“Additional
Holder Ordinary Shares” shall have the meaning given in Section 5.10.
“Adverse
Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment
of the Board, Chief Executive Officer or the Chief Financial Officer of the Company, after consultation with counsel to the Company,
(i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement
or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were
made) not misleading, (ii) would not be required to be made at such time if the Registration Statement or Prospectus were not being
filed, declared effective or used, as the case may be and (iii) the Company has a bona fide business purpose for not making such
information public.
“Agreement”
shall have the meaning given in the Preamble hereto.
“Block
Trade” shall have the meaning given in Section 2.4.1.
“Board”
shall mean the Board of Directors of the Company.
“Business
Combination Agreement” shall have the meaning given in the Recitals hereto.
“Closing”
shall have the meaning given in the Business Combination Agreement.
“Closing
Date” shall have the meaning given in the Business Combination Agreement.
“Commission”
shall mean the Securities and Exchange Commission.
“Company”
shall have the meaning given in the Preamble hereto and includes the Company’s successors by recapitalization, merger, consolidation,
spin-off, reorganization or similar transaction.
“Company
Shelf Takedown Notice” shall have the meaning given in Section 2.1.4.
“EDGAR”
shall have the meaning given in Section 3.1.3.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form
F-1 Shelf” shall have the meaning given in Section 2.1.1.
“Form
F-3 Shelf” shall have the meaning given in Section 2.1.1.
“Heramba”
shall have the meaning given in the Recitals hereto.
“Heramba
Holders” shall have the meaning given in the Preamble hereto.
“Holder
Information” shall have the meaning given in Section 4.1.2.
“Holders”
shall have the meaning given in the Preamble hereto, for so long as such person or entity holds any Registrable Securities.
“Joinder”
shall have the meaning given in Section 5.2.5.
“Lock-Up
Agreement” shall mean that certain Lock-Up Agreement, dated as of the date hereof, by and among the Company, the Sponsor and
certain securityholders of the Company party thereto.
“Lock-Up
Period” shall have the meaning given in the Lock-Up Agreement.
“Maximum
Number of Securities” shall have the meaning given in Section 2.1.5.
“Merger
Sub” shall have the meaning given in the Recitals hereto.
“Minimum
Amount” shall have the meaning given in Section 2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement
or Prospectus or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light
of the circumstances under which they were made) not misleading.
“New
Registration Statement” shall have the meaning given in Section 2.1.7.
“Ordinary
Shares” shall have the meaning given in the Recitals hereto.
“Original
RRA” shall have the meaning given in the Recitals hereto.
“Other
Coordinated Offering” shall have the meaning given in Section 2.4.1.
“own”
or “ownership” (and derivatives of such terms) shall mean (i) ownership of record and (ii) “beneficial ownership”
as defined in Rule 13d-3 or Rule 16a-1(a)(2) promulgated by the Commission under the Exchange Act (but without regard to any requirement
for a security or other interest to be registered under Section 12 of the Securities Act).
“Permitted
Transferees” shall mean, with respect to each Holder and its Permitted Transferees, (i) prior to the expiration of the Lock-Up
Period, any person or entity to whom such Holder is permitted to transfer such Registrable Securities pursuant to Section 2 of the Lock-Up
Agreement and (ii) after the expiration of the Lock-Up Period, any person or entity to whom such Holder is permitted to transfer such
Registrable Securities, subject to and in accordance with any applicable agreement between such Holder and/or their respective Permitted
Transferees and the Company and any transferee thereafter.
“Piggyback
Registration” shall have the meaning given in Section 2.2.1.
“Prospectus”
shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended
by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable
Security” shall mean (a) any issued and outstanding Ordinary Shares or any other equity or equity-linked security (including
any Ordinary Shares issued or issuable upon the exercise, conversion or exchange of any other equity or equity-linked security) of the
Company held by a Holder immediately following the Closing to the extent that such securities are “restricted securities”
(as defined in Rule 144) or are otherwise held by an “affiliate” (as defined in Rule 144) of the Company; (b) any Ordinary
Shares or any other equity or equity-linked security (including any Ordinary Shares issued or issuable upon the exercise, conversion
or exchange of any other equity or equity-linked security) of the Company acquired by a Holder following the Closing to the extent that
such securities are “restricted securities” (as defined in Rule 144) or are otherwise held by an “affiliate”
(as defined in Rule 144) of the Company; (c) any Additional Holder Ordinary Shares; and (d) any other equity or equity-linked security
of the Company or any of its subsidiaries issued or issuable with respect to any securities referenced in clauses (a), (b) or (c)
above by way of a share dividend or share split or in connection with a recapitalization, merger, consolidation, spin-off, reorganization
or similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease
to be Registrable Securities upon the earliest to occur of: (A) a Registration Statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged
in accordance with such Registration Statement by the applicable Holder; (B) (i) such securities shall have been otherwise transferred
(other than to a Permitted Transferee), (ii) new certificates for such securities not bearing (or book entry positions not subject to)
a legend restricting further transfer shall have been delivered by the Company and (iii) subsequent public distribution of such securities
shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) such
securities may be sold without registration pursuant to Rule 144 (but with no volume or other restrictions or limitations including as
to manner or timing of sale); and (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public
distribution or other public securities transaction.
“Registration” shall mean a registration effected by preparing and filing a registration statement, Prospectus or
similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder,
and such registration statement becoming effective.
“Registration
Cap” shall have the meaning given in Section 2.1.4.
“Registration
Expenses” shall mean the documented, out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all
registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority,
Inc.) and any securities exchange on which the Ordinary Shares are then listed;
(B) fees
and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of outside counsel for the Underwriters
in connection with blue sky qualifications of Registrable Securities);
(C) printing,
messenger, telephone and delivery expenses;
(D) reasonable
fees and disbursements of counsel for the Company;
(E) reasonable
fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such
Registration; and
(F) in
an Underwritten Offering or Other Coordinated Offering, reasonable and documented fees and expenses not to exceed $30,000 in the aggregate
for each such Registration, of one (1) legal counsel selected by (i) the majority-in-interest of the Shelf Requesting Holders initiating
an Underwritten Shelf Takedown or (ii) the majority-in-interest of participating Holders under Section 2.2 if the Registration
was initiated by the Company for its own account or that of a Company shareholder other than pursuant to rights under this Agreement,
in each case with the approval of the Company, which approval shall not be unreasonably withheld.
“Registration
Statement” shall mean any registration statement that covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and
supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Rule
144” shall mean Rule 144 promulgated under the Securities Act (or any successor rule then in effect).
“SEC
Guidance” shall have the meaning given in Section 2.1.7.
“Securities
Act” shall mean the Securities Act of 1933, as amended from time to time.
“Seller”
shall have the meaning given in the Recitals hereto.
“Shelf”
shall have the meaning given in Section 2.1.1.
“Shelf
Registration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in accordance
with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).
“Shelf
Requesting Holders” shall have the meaning given in Section 2.1.4.
“Shelf
Takedown Notice” shall have the meaning given in Section 2.1.4.
“SPAC”
shall have the meaning given in the Recitals hereto.
“SPAC
Holders” shall have the meaning given in the Preamble hereto.
“Sponsor”
shall have the meaning given in the Preamble hereto.
“Subsequent
Shelf Registration Statement” shall have the meaning given in Section 2.1.2.
“Transfer”
shall mean the (a) sale or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase
or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position
or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act and the
rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction
is to be settled by delivery of such securities, in cash or otherwise or (c) public announcement of any intention to effect any transaction
specified in clause (a) or (b).
“Underwriter”
shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such
dealer’s market-making activities.
“Underwritten
Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting
for distribution to the public.
“Underwritten
Shelf Takedown” shall have the meaning given in Section 2.1.4.
“Withdrawal
Notice” shall have the meaning given in Section 2.1.6.
ARTICLE
II
REGISTRATIONS AND OFFERINGS
2.1 Shelf
Registration.
2.1.1 Filing.
Within thirty (30) calendar days following the Closing Date, the Company shall submit to or file with the Commission a Registration Statement
for a Shelf Registration on Form F-1 (the “Form F-1 Shelf”) or a Registration Statement for a Shelf Registration on
Form F-3 (the “Form F-3 Shelf,” and together with the Form F-1 Shelf, the New Registration Statement and any Subsequent
Shelf Registration Statement, the “Shelf”), if the Company is then eligible to use a Form F-3 Shelf, in each case,
covering the resale of all the Registrable Securities (determined as of two (2) business days prior to such submission or filing) on
a delayed or continuous basis and shall use its commercially reasonable efforts to have such Shelf declared effective as soon as practicable
after the filing thereof, but no later than the earlier of (a) the ninetieth (90th) calendar day following the filing date thereof if
the Commission notifies the Company that it will “review” the Registration Statement and (b) the tenth (10th) business day
after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement
will not be “reviewed” or will not be subject to further review. Such Shelf shall provide for the resale of the Registrable
Securities included therein pursuant to any method or combination of methods legally available to, and requested by, any Holder named
therein. In the event the Company files a Form F-1 Shelf, the Company shall use its commercially reasonable efforts to convert the Form
F-1 Shelf (and any Subsequent Shelf Registration Statement) to a Form F-3 Shelf as soon as practicable after the Company is eligible
to use Form F-3. The Company shall maintain a Shelf in accordance with the terms hereof, and shall use commercially reasonable efforts
to prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary to
keep a Shelf continuously effective, available for use to permit the Holders named therein to sell their Registrable Securities included
therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities.
The Company’s obligation under this Section 2.1.1, shall, for the avoidance of doubt, be subject to Section 3.4.
2.1.2 Subsequent
Shelf Registration. If any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable Securities
are still outstanding, the Company shall, subject to Section 3.4, use its commercially reasonable efforts to as promptly
as is reasonably practicable cause such Shelf to again become effective under the Securities Act with respect to the resale of all the
Registrable Securities (including using its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness of such Shelf), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable amend such
Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf or file an
additional registration statement as a Shelf Registration (a “Subsequent Shelf Registration Statement”) registering
the resale of all Registrable Securities (determined as of two (2) business days prior to such filing), and pursuant to any method or
combination of methods legally available to, and requested by, any Holder named therein. If a Subsequent Shelf Registration Statement
is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration Statement to become
effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent
Shelf Registration Statement shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities
Act) if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent
applicable eligibility determination date) at the time of filing and (ii) keep such Subsequent Shelf Registration Statement continuously
effective, available for use to permit the Holders named therein to sell their Registrable Securities included therein and in compliance
with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf
Registration Statement shall be on Form F-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf
Registration Statement shall be on another appropriate form. The Company’s obligation under this Section 2.1.2, shall, for
the avoidance of doubt, be subject to Section 3.4.
2.1.3 Additional
Registrable Securities. Subject to Section 3.4, in the event that any Holder holds Registrable Securities that are not registered
for resale on a delayed or continuous basis, the Company, upon written request of a SPAC Holder or a Heramba Holder, shall promptly use
its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s
option, any then available Shelf (including by means of a post-effective amendment) or by filing a Subsequent Shelf Registration Statement
and cause the same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration Statement
shall be subject to the terms hereof; provided, however, that the Company shall only be required to cause such additional
Registrable Securities to be so covered by a Subsequent Shelf Registration Statement once per calendar year for each of the SPAC Holders
(as a group) and the Heramba Holders (as a group).
2.1.4 Requests
for Underwritten Shelf Takedowns. Subject to Section 3.4, at any time and from time to time after the expiration of any Lock-Up
Period to which a Holder’s shares are subject and when an effective Shelf is on file with the Commission, one or more Holders may
request to sell all or any portion of its Registrable Securities in an Underwritten Offering that is registered pursuant to the Shelf
(each, an “Underwritten Shelf Takedown”); provided that the Company shall only be obligated to effect an Underwritten
Shelf Takedown if such offering shall include Registrable Securities proposed to be sold by the Shelf Requesting Holder, either individually
or together with other Shelf Requesting Holders, with an aggregate offering price, net of underwriting discounts and commissions, reasonably
expected to exceed at least $50 million (the “Minimum Amount”). All requests for Underwritten Shelf Takedowns shall
be made by giving written notice to the Company at least ten (10) business days prior to the public announcement of the Underwritten
Shelf Takedown (a “Shelf Takedown Notice”), which Shelf Takedown Notice shall specify the approximate number of Registrable
Securities proposed to be sold in the Underwritten Shelf Takedown and the expected price range (net of underwriting discounts and commissions)
of such Underwritten Shelf Takedown. Within five (5) business days after receipt of any Shelf Takedown Notice, the Company shall give
written notice of such requested Underwritten Shelf Takedown to all other Holders of Registrable Securities (the “Company Shelf
Takedown Notice”) and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s
Registrable Securities in a Registration pursuant to a Underwritten Shelf Takedown (each such Holder that includes all or a portion of
such Holder’s Registrable Securities in such Underwritten Shelf Takedown, a “Shelf Requesting Holder”) shall
so notify the Company of its intent to participate in such Underwritten Shelf Takedown, in writing, within three (3) business days after
the receipt by such Holder of the Company Shelf Takedown Notice. Upon receipt by the Company of any such written notification from a
Shelf Requesting Holder to the Company, subject to the provisions of Section 2.1.5, the Company shall include in such Underwritten
Shelf Takedown all Registrable Securities of such Shelf Requesting Holder. Subject to Section 2.4.4, the Company shall have
the right to select the Underwriters for such offering (which shall consist of one or more reputable nationally recognized investment
banks), subject to the initial Shelf Requesting Holder’s prior approval (which shall not be unreasonably withheld, conditioned
or delayed). The Holders may collectively demand not more than two (2) Underwritten Shelf Takedowns pursuant to this Section 2.1.4
in any 12-month period (the “Registration Cap”). Notwithstanding anything to the contrary in this Agreement, the
Company may consummate an Underwritten Offering pursuant to any then effective Registration Statement, including a Form F-3, that is
then available for such offering.
2.1.5 Reduction
of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Offering advise the Shelf Requesting Holders
in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Shelf Requesting Holders
shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares
of Registrable Securities that may be included in the underwriting (such maximum number of such securities, the “Maximum Number
of Securities”) shall be allocated among all participating Holders thereof, including the Shelf Requesting Holders, in proportion
(as nearly as practicable) to the amount of Registrable Securities of the Company owned by each participating Holder; provided,
however, that the number of shares of Registrable Securities to be included in such underwriting shall not be reduced unless all
other securities are first entirely excluded from the underwriting.
2.1.6 Withdrawal.
Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing an Underwritten
Offering, a majority-in-interest of the Shelf Requesting Holders initiating such Underwritten Offering shall have the right to withdraw
from such Underwritten Offering for any or no reason whatsoever upon written notification (a “Withdrawal Notice”)
to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten Offering; provided
that the remaining Shelf Requesting Holders may elect to have the Company continue such Underwritten Offering if the Minimum Amount
would still be satisfied by the Registrable Securities proposed to be sold in such Underwritten Offering by the remaining Shelf Requesting
Holders. If withdrawn, a demand for an Underwritten Offering shall be counted as a Registration for purposes of the Registration Cap,
unless either (i) such Shelf Requesting Holders has not previously withdrawn any Underwritten Shelf Takedown or (ii) Shelf
Requesting Holders reimburses the Company for all Registration Expenses with respect to such Underwritten Offering (or, if there is more
than one Shelf Requesting Holders, a pro rata portion of such Registration Expenses based on the respective number of Registrable Securities
that each Shelf Requesting Holders has requested be included in such Underwritten Offering); provided that, if one or more Shelf
Requesting Holder elects to continue such Underwritten Offering pursuant to the proviso in the immediately preceding sentence, such Underwritten
Offering shall instead count as a Registration demanded by such remaining Shelf Requesting Holders for purposes of the Registration Cap.
Following the receipt of any Withdrawal Notice, the Company shall promptly forward such Withdrawal Notice to any other Holders that had
elected to participate in such Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be
responsible for the Registration Expenses incurred in connection with an Underwritten Offering prior to its withdrawal under this Section 2.1.6,
other than if a Shelf Requesting Holder elects to pay such Registration Expenses pursuant to clause (ii) of the second sentence
of this Section 2.1.6.
2.1.7 New
Registration Statement. Notwithstanding the registration obligations set forth in this Section 2.1, in the event the Commission
informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415 under the Securities Act,
be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly (a) inform each of
the holders thereof and use its commercially reasonable efforts to file amendments to the Registration Statement as required by the Commission
and/or (b) withdraw the Registration Statement and file a new registration statement (a “New Registration Statement”),
on Form F-3, or if Form F-3 is not then available to the Company for such registration statement, on such other form available to register
for resale the Registrable Securities as a secondary offering; provided, however, that prior to filing such amendment or
New Registration Statement, the Company shall use its commercially reasonable efforts to advocate with the Commission for the registration
of all of the Registrable Securities in accordance with any publicly-available written or oral guidance, comments, requirements or requests
of the Commission staff (the “SEC Guidance”), including without limitation, the Manual of Publicly Available Telephone
Interpretations D.29. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number
of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding
that the Company used commercially reasonable efforts to advocate with the Commission for the registration of all or a greater number
of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities to register a lesser amount
of Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced on a
pro rata basis based on the total number of Registrable Securities held by the Holders. In the event the Company amends the Registration
Statement or files a New Registration Statement, as the case may be, under clause (a) or (b) above, the Company will use
its commercially reasonable efforts to file with the Commission, as promptly as allowed by the Commission or provided by SEC Guidance
to the Company or to registrants of securities in general, one or more registration statements on Form F-3 or such other form available
to register for resale those Registrable Securities that were not registered for resale on the Registration Statement, as amended, or
the New Registration Statement.
2.2 Piggyback
Registration.
2.2.1 Piggyback
Rights. If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected
by the Company for holders of share capital other than the Holders) any Ordinary Shares or other equity securities of the Company under
the Securities Act in connection with the public offering of such securities solely for cash (including, for this purpose, an Underwritten
Offering pursuant to Section 2.1.4) (other than a registration (i) relating solely to the sale of securities to participants
in a Company share plan, (ii) pursuant to a Registration Statement on Form F-4 (or similar form that relates to a transaction subject
to Rule 145 under the Securities Act), (iii) in which the only shares being registered are Ordinary Shares issuable upon conversion of
debt securities which are also being registered, (iv) for a dividend reinvestment plan, (v) for a rights offering or (vi) any registration
on any form which does not include substantially the same information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), then the Company shall give written notice of such proposed offering to all of the
Holders of Registrable Securities as soon as practicable but not less than ten (10) calendar days before the anticipated filing date
of such Registration Statement or, in the case of an Underwritten Offering, the applicable “red herring” prospectus or prospectus
supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in
such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in
such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to include in such registered offering
such number of Registrable Securities as such Holders may request in writing within five (5) calendar days after receipt of such written
notice (such registered offering, a “Piggyback Registration”). Subject to Section 2.2.2, the Company shall,
in good faith, cause such Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use its commercially
reasonable efforts to cause the managing Underwriter or Underwriters of such Piggyback Registration to permit the Registrable Securities
requested by the Holders pursuant to this Section 2.2.1 to be included therein on the same terms and conditions as any similar
securities of the Company included in such registered offering and to permit the sale or other disposition of such Registrable Securities
in accordance with the intended method(s) of distribution thereof. The inclusion of any Holder’s Registrable Securities in a Piggyback
Registration shall be subject to such Holder agreement to enter into an underwriting agreement in customary form with the Underwriter(s)
selected for such Underwritten Offering. Notwithstanding anything to the contrary, the Holders shall have no rights under this Section
2.2.1 if the registration statement the Company proposes to file is solely for purposes of a delayed or continuous offering pursuant
to Rule 415 under the Securities Act and, at the time of the filing of such registration statement, the Company is in compliance with
its obligations under Section 2.1.
2.2.2 Reduction
of Piggyback Registration. If the total amount of securities, including Registrable Securities, requested by holders of Registrable
Securities to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine
in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will
not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling security holders
according to the total amount of securities entitled to be included therein owned by each selling security holder or in such other proportions
as shall mutually be agreed to by such selling security holders). For purposes of the preceding parenthetical concerning apportionment,
for any selling security holder which is a holder of Registrable Securities and which is a partnership or corporation, the partners,
retired partners and holders of capital stock of such holder, or the estates and family members of any such partners and retired partners
and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling security holder,”
and any pro-rata reduction with respect to such “selling security holder” shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in such “selling security holder,” as defined
in this sentence.
2.2.3 Piggyback
Registration Withdrawal. Any Holder of Registrable Securities (other than a Shelf Requesting Holder, whose right to withdraw from
an Underwritten Offering, and related obligations, shall be governed by Section 2.1.6) shall have the right to withdraw all
or any portion of its Registrable Securities from a Piggyback Registration for any or no reason whatsoever upon written notification
to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw such Registrable Securities from
such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback
Registration or, in the case of a Piggyback Registration pursuant to an Underwritten Offering, the filing of the applicable “red
herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The
Company (whether on its own good faith determination or as the result of a request for withdrawal by persons or entities pursuant to
separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback
Registration (which, in no circumstance, shall include a Shelf) at any time prior to the effectiveness of such Registration Statement.
Notwithstanding anything to the contrary in this Agreement (other than Section 2.1.6), the Company shall be responsible for the
Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.2.3.
2.2.4 Unlimited
Piggyback Registration Rights. For purposes of clarity, subject to Section 2.1.6, any Piggyback Registration effected
pursuant to Section 2.2 shall not be counted as a Registration for purposes of the Registration Cap.
2.3 Market
Stand-off. In connection with any Underwritten Offering of equity securities of the Company (other than a Block Trade or Other Coordinated
Offering), if requested by the managing Underwriters, each Holder given an opportunity to participate in such Underwritten Offering that
is an executive officer, director or Holder holding in excess of five percent (5%) of the outstanding Ordinary Shares (and for which
it is customary for such a Holder to agree to a lock-up) agrees that it shall not Transfer any Ordinary Shares or other equity securities
of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent of the Company,
during the ninety (90)-calendar day period (or such shorter time agreed to by the managing Underwriters) beginning on the date of pricing
of such offering, except as expressly permitted by such lock-up agreement or in the event the managing Underwriters otherwise agree by
written consent. Each such Holder agrees to execute a customary lock-up agreement in favor of the Underwriters to such effect (in each
case on substantially the same terms and conditions as all such Holders).
2.4 Block
Trades; Other Coordinated Offerings.
2.4.1 Notwithstanding
any other provision of this Article II, but subject to Section 3.4, at any time and from time to time when an effective
Registration Statement is on file with the Commission and effective, if a Shelf Requesting Holder wishes to engage in (a) an underwritten
registered offering not involving a “roadshow,” an offer commonly known as a “block trade” (a “Block
Trade”) or (b) an “at the market” or similar registered offering through a broker, sales agent or distribution
agent, whether as agent or principal (an “Other Coordinated Offering”), in each case, either (x) with an aggregate
offering price reasonably expected to be at least the Minimum Amount or (y) of all remaining Registrable Securities held by the Shelf
Requesting Holder, then such Shelf Requesting Holder only needs to notify the Company of the Block Trade or Other Coordinated Offering
at least five (5) business days prior to the day such offering is to commence and the Company shall use its commercially reasonable efforts
to facilitate such Block Trade or Other Coordinated Offering; provided that the Shelf Requesting Holders representing a majority
of the Registrable Securities wishing to engage in the Block Trade or Other Coordinated Offering shall use commercially reasonable efforts
to work with the Company and any Underwriters, brokers, sales agents or placement agents prior to making such request in order to facilitate
preparation of the registration statement, prospectus and other offering documentation related to the Block Trade or Other Coordinated
Offering. For the avoidance of doubt, neither a Block Trade nor an Other Coordinated Offering shall include an offering of Registrable
Securities in which a negative assurance letter of counsel to the Company or a comfort letter of the accountants of the Company is to
be delivered to the Underwriter or Underwriters, brokers, sales agents or distribution agents, as applicable.
2.4.2 Prior
to the filing of the applicable “red herring” prospectus or prospectus supplement used in connection with a Block Trade or
Other Coordinated Offering, a majority-in-interest of the Shelf Requesting Holders initiating such Block Trade or Other Coordinated Offering
shall have the right to submit a Withdrawal Notice to the Company, the Underwriter or Underwriters (if any) and any brokers, sales agents
or placement agents (if any) of their intention to withdraw from such Block Trade or Other Coordinated Offering. Notwithstanding anything
to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Block
Trade or Other Coordinated Offering prior to its withdrawal under this Section 2.4.2.
2.4.3 Notwithstanding
anything to the contrary in this Agreement, Section 2.2 shall not apply to a Block Trade or Other Coordinated Offering initiated
by a Shelf Requesting Holder pursuant to this Agreement.
2.4.4 The
Shelf Requesting Holder in a Block Trade or Other Coordinated Offering shall have the right to select the Underwriters and any brokers,
sales agents or placement agents (if any) for such Block Trade or Other Coordinated Offering (in each case, which shall consist of one
or more reputable nationally recognized investment banks).
2.4.5 Any
Registration effected pursuant to this Section 2.4 shall be deemed within the Registration Cap.
ARTICLE
III
COMPANY PROCEDURES
3.1 General
Procedures. If, at any time on or after the date hereof, the Company is required to effect the Registration of Registrable Securities,
the Company shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities
in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall:
3.1.1 prepare
and file with the Commission as soon as reasonably practicable a Registration Statement with respect to such Registrable Securities and
use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until the earlier
of (i) when all Registrable Securities have ceased to be Registrable Securities or (ii) the termination of this Agreement;
3.1.2 prepare
and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the
Prospectus, as may be reasonably requested by any Holder that holds at least five percent (5%) of the Registrable Securities registered
on such Registration Statement or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions
applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration
Statement effective until all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities;
3.1.3 prior
to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters,
if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such
Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including
all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including
each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such
Registration or the legal counsel for any such Holders may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Holders; provided that the Company shall have no obligation to furnish any documents publicly filed or furnished
with the Commission pursuant to the Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”);
3.1.4 prior
to any public offering of Registrable Securities, use its commercially reasonable efforts to (i) register or qualify the Registrable
Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United
States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution)
may reasonably request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration
or qualification) and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be
registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the
Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included
in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however,
that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required
to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it
is not then otherwise so subject;
3.1.5 use
commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar securities
issued by the Company are then listed;
3.1.6 provide
a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date
of such Registration Statement;
3.1.7 advise
each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding
for such purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal
if such stop order should be issued;
3.1.8 at
least two (2) calendar days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration
Statement or Prospectus (or such shorter period of time as may be (a) necessary in order to comply with the Securities Act, the Exchange
Act, and the rules and regulations promulgated under the Securities Act or Exchange Act, as applicable or (b) advisable in order to reduce
the number of days that sales are suspended pursuant to Section 3.4), furnish a copy thereof to each seller of such Registrable
Securities or its counsel (excluding any exhibits thereto and any filing made under the Exchange Act that is to be incorporated by reference
therein);
3.1.9 advise
each Holder of Registrable Securities covered by such Registration Statement, promptly after the Company receives notice thereof, of
the time when such Registration Statement has been declared effective or a supplement to any Prospectus forming a part of such Registration
Statement has been filed;
3.1.10 notify
the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act,
of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes
a Misstatement, and then to correct such Misstatement as set forth in Section 3.4;
3.1.11 in
the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a broker, placement agent or sales agent
pursuant to such Registration, on the date the Registrable Securities are delivered for sale pursuant to such Registration, permit a
representative of the Holders, the Underwriters or other financial institutions facilitating such Underwritten Offering, Block Trade,
Other Coordinated Offering or other sale pursuant to such Registration, if any, and any attorney, consultant or accountant retained by
such Holders or Underwriter to participate, at each such person’s or entity’s own expense, in the preparation of the Registration
Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such
representative, Underwriter, financial institution, attorney, consultant or accountant in connection with the Registration; provided,
however, that such representatives, Underwriters or financial institutions agree to enter into confidentiality arrangements in
form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.12 use
commercially reasonable efforts to obtain a “comfort” letter from the Company’s independent registered public accountants
in the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a broker, placement agent or sales
agent pursuant to such Registration (subject to such broker, placement agent or sales agent providing such certification or representation
reasonably requested by the Company’s independent registered public accountants and the Company’s counsel) in customary form
and covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter or Underwriters
may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders;
3.1.13 in
the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a broker, placement agent or sales agent
pursuant to such Registration, on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an
opinion, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the participating Holders,
broker, placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration
in respect of which such opinion is being given as the participating Holders, broker, placement agent, sales agent or Underwriter may
reasonably request and as are customarily included in such opinions and negative assurance letters; provided, however, that counsel for
the Company shall not be required to provide any opinions with respect to any Holder;
3.1.14 in
the event of any Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a broker, placement agent or sales agent
pursuant to such Registration, enter into and perform its obligations under an underwriting agreement or other purchase or sales agreement,
in usual and customary form, with the managing Underwriter or Underwriters or the broker, placement agent or sales agent of such offering
or sale;
3.1.15 make
available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12)
months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement
which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule then in effect),
and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-Q and
10-K and Current Report on 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act (or any successor
rule then in effect);
3.1.16 with
respect to an Underwritten Offering pursuant to Section 2.1.4, if such offering involving gross proceeds in excess of $50
million, use its commercially reasonable efforts to make available senior executives of the Company to participate in customary “roadshow”
presentations that may be reasonably requested by the Underwriter in such Underwritten Offering; and
3.1.17 otherwise,
in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the participating Holders,
consistent with the terms of this Agreement, in connection with such Registration.
Notwithstanding
the foregoing, the Company shall not be required to provide any documents or information to an Underwriter or broker, sales agent or
placement agent if such Underwriter or broker, sales agent or placement agent has not then been named with respect to the applicable
Underwritten Offering or other offering involving a registration as an Underwriter or broker, sales agent or placement agent, as applicable.
3.2 Registration
Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the
Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ or agents’
commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration
Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements
for Participation in Registration Statement in Offerings. Notwithstanding anything in this Agreement to the contrary, if any Holder
does not provide the Company with its requested Holder Information, the Company may exclude such Holder’s Registrable Securities
from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that such information
is necessary to effect the Registration and such Holder continues thereafter to withhold such information. No person or entity may participate
in any Underwritten Offering or other coordinated offering for equity securities of the Company pursuant to a Registration initiated
by the Company hereunder unless such person or entity (i) agrees to sell such person’s or entity’s securities on the
basis provided in any underwriting, sales, distribution or placement arrangements approved by the Company and (ii) completes and
executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting or other agreements and other
customary documents as may be reasonably required under the terms of such underwriting, sales, distribution or placement arrangements.
The exclusion of a Holder’s Registrable Securities as a result of this Section 3.3 shall not affect the registration
of the other Registrable Securities to be included in such Registration.
3.4 Suspension
of Sales; Adverse Disclosure; Restrictions on Registration Rights.
3.4.1 Upon
receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement or, in the opinion of
counsel for the Company, it is necessary to supplement or amend such Prospectus to comply with law, each of the Holders shall forthwith
discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the
Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as reasonably
practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may be resumed.
3.4.2 If
the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would (a) require
the Company to make an Adverse Disclosure, (b) require the inclusion in such Registration Statement of financial statements that
are unavailable to the Company for reasons beyond the Company’s control or (c) in the good faith judgment of the Board, the
Chief Executive Officer or the Chief Financial Officer of the Company, such Registration Statement would be seriously detrimental to
the Company and it is therefore in the best interest of the Company to defer such submission, filing, initial effectiveness or continued
use at such time, the Company shall have the right, upon giving prompt written notice of such action to the Holders (which notice shall
not specify the nature of the event giving rise to such delay or suspension), delay the submission, filing or initial effectiveness of,
or suspend use of, such Registration Statement for the shortest period of time, but in no event more than ninety (90) days, determined
in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under this Section 3.4.2,
the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to
any Registration in connection with any sale or offer to sell Registrable Securities until such Holder receives written notice from the
Company that such sales or offers of Registrable Securities may be resumed, and in each case maintain the confidentiality of such notice
and its contents.
3.4.3 (a)
During the period starting with the date ninety (90) calendar days prior to the Company’s good faith estimate of the date of the
filing of, and ending on a date one hundred and twenty (120) calendar days after the effective date of, a Company-initiated Registration
and provided that the Company continues to actively employ, in good faith, all commercially reasonable efforts to maintain the effectiveness
of the applicable Registration, or (b) if, pursuant to Section 2.1.4, Holders have requested an Underwritten
Offering and the Company and such Holders are unable to obtain the commitment of underwriters to firmly underwrite such offering, the
Company may, upon giving prompt written notice of such action to the Holders, delay any other registered offering pursuant to Sections 2.1.4
or 2.4 for not more than ninety (90) consecutive calendar days or more than one hundred and twenty (120) total calendar days
in each case during any twelve (12)-month period.
3.5 Reporting
Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company
under the Exchange Act, covenants to use commercially reasonable efforts to file timely (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a)
or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings; provided that
any documents publicly filed or furnished with the Commission pursuant to EDGAR shall be deemed to have been furnished or delivered to
the Holders pursuant to this Section 3.5. The Company further covenants that it shall take such further action as any Holder
may reasonably request, all to the extent required from time to time to enable such Holder to sell the Ordinary Shares held by such Holder
without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. Upon the request of any Holder,
the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such
requirements.
3.6 Foreign
Private Issuer Status. As of such time as the Company ceases to be a “foreign private issuer” (as defined in Rule 12b-2
under the Exchange Act), (i) all references in this Agreement to Form F-1 or a Form F-1 Shelf shall thereafter be deemed to refer to
Form S-1 or a shelf registration on Form S-1, respectively, (ii) all references in this Agreement to Form F-3 or a Form F-3 Shelf shall
thereafter be deemed to refer to a Form S-3 or a shelf registration on Form S-3, respectively, and (iii) the Company shall promptly take
all actions reasonably necessary to ensure the Holders gain the expected benefit of this Agreement, including by filing (and making effective)
any post-effective amendment to an existing Registration Statement, a Subsequent Shelf Registration Statement or other New Registration
Statement.
ARTICLE
IV
INDEMNIFICATION
AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The
Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors and agents
and each person or entity who controls such Holder (within the meaning of the Securities Act), against all losses, claims, damages, liabilities
and out-of-pocket expenses (including, without limitation, reasonable and documented outside attorneys’ fees) resulting from any
untrue or alleged untrue statement of material fact contained in or incorporated by reference in any Registration Statement, Prospectus
or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained
in any information or affidavit so furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify
the Underwriters, their officers and directors and each person or entity who controls such Underwriters (within the meaning of the Securities
Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
4.1.2 In
connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish (or
cause to be furnished) to the Company in writing such information and affidavits as the Company reasonably requests for use in connection
with any such Registration Statement or Prospectus (the “Holder Information”) and, to the extent permitted by law,
shall indemnify the Company, its directors, officers and agents and each person or entity who controls the Company (within the meaning
of the Securities Act) against all losses, claims, damages, liabilities and out-of-pocket expenses (including, without limitation, reasonable
and documented outside attorneys’ fees) resulting from any untrue or alleged untrue statement or omission of material fact contained
or incorporated by reference in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement is contained in (or not contained in, in the case of an omission) any
information or affidavit so furnished in writing by or on behalf of such Holder expressly for use therein; provided, however,
that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability
of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from
the sale of Registrable Securities pursuant to such Registration Statement, except in the case of fraud or willful misconduct by such
Holder. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person or entity who
controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to
indemnification of the Company.
4.1.3 Any
person or entity entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s
or entity’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party)
and (ii) unless in such indemnified party’s reasonable, good faith judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability
for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable, good
faith judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified
parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of
any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid
by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault and
culpability on the part of such indemnified party or which settlement does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
4.1.4 The
indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling person or entity of such indemnified party and shall survive
the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such
provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such
Holder’s indemnification is unavailable for any reason.
4.1.5 If
the indemnification provided under Section 4.1 from the indemnifying party is unavailable or insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages, liabilities and out-of-pocket expenses referred to herein, then the indemnifying
party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result
of such losses, claims, damages, liabilities and out-of-pocket expenses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault
of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made
by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by in the case of an omission),
such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge,
access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder
under this Section 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving
rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall
be deemed to include, subject to the limitations set forth in Sections 4.1.1, 4.1.2 and 4.1.3 above, any legal
or other fees, charges or out-of-pocket expenses reasonably incurred by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.1.5 were determined
by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to
in this Section 4.1.5. No person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution pursuant to this Section 4.1.5 from any person or entity who was not
guilty of such fraudulent misrepresentation.
ARTICLE
V
MISCELLANEOUS
5.1 Notices.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered in
person or, by facsimile or by e-mail, (b) on the next Business Day when sent by overnight courier, or (c) on the second succeeding Business
Day when sent by registered or certified mail (postage prepaid, return receipt requested) to the respective parties hereto at the following
addresses (or at such other address for a party as shall be specified by like notice):
If
to the Company, to:
Heramba
Electric plc
Kiepe Platz 1
D-40599
Düsseldorf, Germany
Attention:
Michele Molinari
Email: michele.molinari@molinari-consulting.ch
with
a copy (which shall not constitute notice) to:
Latham
& Watkins LLP
811 Main Street, Suite 3700
Houston, Texas 77002
Attention: Nick S. Dhesi
Email: Nick.Dhesi@lw.com
If
to any Holder, to:
the
address set forth below such Holder’s name on the signature pages to this Agreement.
5.2 Assignment;
No Third Party Beneficiaries.
5.2.1 This
Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or
in part.
5.2.2 Subject
to Section 5.2.4 and Section 5.2.5, this Agreement and the rights, duties and obligations of the Holders of Registrable
Securities hereunder may be assigned or delegated in whole or in part by such Holder in conjunction with and to the extent of any Transfer
of Registrable Securities by any such Holder; provided, that, with respect to the Heramba Holders, the Sponsor and the other SPAC
Holders, the rights hereunder that are personal to such Holders may not be assigned or delegated in whole or in part, except that (x) each
of the Heramba Holders shall be permitted to transfer its rights hereunder as the Heramba Holders to one or more affiliates or any direct
or indirect partners, members or equity holders of such Heramba Holder (it being understood that no such transfer shall reduce any rights
of such Heramba Holder or such transferees) and (y) the Sponsor and the other SPAC Holders shall be permitted to transfer their
respective rights hereunder as the Sponsor or the other SPAC Holders, as applicable, to one or more of their respective affiliates or
any direct or indirect partners, members or equity holders of the Sponsor or the other SPAC Holders, as applicable (it being understood
that no such transfer shall reduce or multiply any rights of the Sponsor or the other SPAC Holders or such transferees).
5.2.3 This
Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties hereto and their successors
and the permitted assigns of the Holders, which shall include Permitted Transferees.
5.2.4 This
Agreement shall not confer any rights or benefits on any persons or entities that are not parties hereto, other than as expressly set
forth in this Agreement and Section 5.2.
5.2.5 No
assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company
unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 and (ii)
the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this
Agreement (which may be accomplished by delivery of an executed joinder in substantially the same form as Exhibit A attached
hereto (a “Joinder”)). Any transfer or assignment of this Agreement, or of any rights, duties or obligations hereunder,
made other than as provided in this Section 5.2 shall be null and void.
5.3 Headings;
Counterparts. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement. This Agreement may be executed and delivered (including executed manually
or electronically via DocuSign or other similar services and delivered by facsimile or portable document format (pdf) transmission) in
one or more counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same agreement.
5.4 Governing
Law; Venue.
5.4.1 This
Agreement and any Legal Dispute (as defined below) arising out of this Agreement, or the validity, interpretation, construction, effect,
breach or termination of this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware (regardless
of the laws that might otherwise govern under applicable principles of conflicts of laws thereof).
5.4.2 Each
party hereto irrevocably agrees that any action, suit or proceeding between or among the parties hereto arising in connection with any
disagreement, dispute, controversy or claim arising out of or relating to this Agreement (a “Legal Dispute”) shall
be brought exclusively in the courts of the State of Delaware; provided that if subject matter jurisdiction over the Legal Dispute
is vested exclusively in the United States federal courts, such Legal Dispute shall be heard in the United States District Court for
the District of Delaware. Each party hereto hereby irrevocably and unconditionally submits to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted
by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding that is brought in any such court has been brought in an inconvenient forum. During
the period a Legal Dispute that is filed in accordance with this Section 5.4.2 is pending before a court, all actions, suits or
proceedings with respect to such Legal Dispute or any other Legal Dispute, including any counterclaim, cross-claim or interpleader, shall
be subject to the exclusive jurisdiction of such court. Each party hereto may bring such Legal Dispute only if he, she or it hereby waives,
and shall not assert as a defense in any Legal Dispute, that (a) such party is not personally subject to the jurisdiction of the above
named courts for any reason, (b) such action, suit or proceeding may not be brought or is not maintainable in such court, (c) such party’s
property is exempt or immune from execution, (d) such action, suit or proceeding is brought in an inconvenient forum, or (e) the venue
of such action, suit or proceeding is improper. A final judgment in any action, suit or proceeding described in this Section 5.4.2
following the expiration of any period permitted for appeal and subject to any stay during appeal shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Laws.
5.5 TRIAL
BY JURY. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LEGAL REQUIREMENTS WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO MAY BRING
A LEGAL DISPUTE ONLY IF HE, SHE OR IT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS OR COUNTERCLAIMS
ASSERTED IN ANY LEGAL DISPUTE RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM RELATING THERETO.
IF THE SUBJECT MATTER OF ANY SUCH LEGAL DISPUTE IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS PROHIBITED, NO PARTY HERETO SHALL ASSERT
IN SUCH LEGAL DISPUTE A NONCOMPULSORY COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
FURTHERMORE, NO PARTY HERETO SHALL SEEK TO CONSOLIDATE ANY SUCH LEGAL DISPUTE WITH A SEPARATE ACTION OR OTHER LEGAL PROCEEDING IN WHICH
A JURY TRIAL CANNOT BE WAIVED.
5.6 Amendments
and Modifications. Upon the written consent of (a) the Company and (b) the Holders of a majority of the total Registrable Securities
at such time, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such
provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing,
any amendment hereto or waiver hereof shall also require the written consent of any Holder that, together with its affiliates, holds
Registrable Securities representing, in the aggregate, at least five percent (5%) of the outstanding Ordinary Shares; provided,
further, that any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the
share capital of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent
of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay
on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights
or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall
operate or be construed as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
5.7 Other
Registration Rights. The Company represents and warrants that no person or entity, other than a Holder of Registrable Securities,
has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company
in any Registration Statement filed by the Company for the sale of securities for its own account or for the account of any other person
or entity. For so long as any Holder, together with its affiliates, holds Registrable Securities representing, in the aggregate, at least
five percent (5%) of the outstanding Ordinary Shares, the Company hereby agrees and covenants that it will not grant rights to register
any Ordinary Shares (or securities convertible into or exchangeable for Ordinary Shares) pursuant to the Securities Act that are more
favorable, pari passu or senior to those granted to the Holders hereunder without the prior written consent of such Holder. Further,
the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar
terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement
shall prevail.
5.8 Term.
This Agreement shall terminate, with respect to any Holder, on the date that such Holder no longer holds any Registrable Securities,
and with respect to the Company, on the date that no Registrable Securities remain outstanding. The provisions of Section 3.5
and Article IV shall survive any termination.
5.9 Holder
Information. Each Holder agrees, if requested in writing, to represent to the Company the total number of Registrable Securities
held by such Holder in order for the Company to make determinations hereunder.
5.10 Additional
Holders; Joinder. In addition to persons or entities who may become Holders pursuant to Section 5.2, subject to the prior
written consent of each SPAC Holder and each Heramba Holder (in each case, so long as such Holder and its affiliates hold Registrable
Securities representing, in the aggregate, at least five percent (5%) of the outstanding Ordinary Shares), the Company may make any person
or entity who acquires Ordinary Shares or rights to acquire Ordinary Shares after the date hereof a party to this Agreement (each such
person or entity, an “Additional Holder”) by obtaining an executed Joinder to this Agreement from such Additional
Holder. Such Joinder shall specify the rights and obligations of the applicable Additional Holder under this Agreement. Upon the execution
and delivery and subject to the terms of a Joinder by such Additional Holder, the Ordinary Shares then owned, or underlying any rights
then owned, by such Additional Holder (the “Additional Holder Ordinary Shares”) shall be Registrable Securities to
the extent provided herein and therein and such Additional Holder shall be a Holder under this Agreement with respect to such Additional
Holder Ordinary Shares.
5.11 Construction.
5.11.1 Unless
the context of this Agreement otherwise requires or unless otherwise specified, (i) words of any gender shall be construed as masculine,
feminine, neuter or any other gender, as applicable; (ii) words using the singular or plural number also include the plural or singular
number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” “herewith,” “hereto”
and derivative or similar words refer to this entire Agreement; (iv) the term “Section” refers to the specified Section of
this Agreement; (v) the term “Exhibit” refers to the specified Exhibit of this Agreement; (vi) the words “including,”
“included,” or “includes” shall mean “including, without limitation;” (vii) the word “extent”
in the phrase “to the extent” means the degree to which a subject or thing extends, and such phrase shall not simply mean
“if;” (viii) the word “or” shall be disjunctive but not exclusive; and (ix) references to “written”
or “in writing” include in electronic form.
5.11.2 Unless
the context of this Agreement otherwise requires, references in this Agreement to any law shall include all rules and regulations promulgated
thereunder and shall be deemed to refer to such law as amended, reenacted, supplemented or superseded in whole or in part and in effect
from time to time.
5.11.3 References
to “$” are to the lawful currency of the United States of America.
5.11.4 Time
periods in calendar days within or following which any act is to be done under this Agreement shall be calculated by excluding the calendar
day on which the period commences and including the calendar day on which the period ends, and by extending the period to the next following
business day if the last calendar day of the period is not a business day.
5.11.5 The
parties hereto and their respective counsels have reviewed and negotiated this Agreement as the joint agreement and understanding of
the parties hereto, and the language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction shall be applied against any person.
5.12 Severability.
If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of law, or
public policy, in whole or in part, all other conditions and provisions of this Agreement shall nevertheless remain in full force and
effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner.
5.13 Entire
Agreement. This Agreement constitutes the full and entire agreement and understanding between the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to such subject matter, including the Original RRA.
5.14 Adjustments.
If, and as often as, there are changes in the Registrable Securities by way of share split, share dividend, combination or reclassification,
or through merger, consolidation, reorganization, recapitalization or sale, or by any other means, appropriate adjustment shall be made
in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue
with respect to the Registrable Securities as so changed.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| |
COMPANY: |
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|
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HERAMBA ELECTRIC plc |
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|
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By: |
/s/ Dr. Hans-Jörg Grundmann |
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Name: |
Dr. Hans-Jörg Grundmann |
| |
Title: |
Director |
[Signature Page to Registration Rights Agreement]
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SPONSOR: |
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|
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Smilodon Capital, LLC |
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|
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By: |
Admit Capital, LLC, its Manager |
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|
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By: |
/s/ Srinath Narayanan |
| |
Name: |
Srinath Narayanan |
| |
Title: |
Manager |
| |
|
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Address: 1285 Camino Real, Suite 200, Menlo Park, CA 94025 |
[Signature Page to Registration Rights Agreement]
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SPAC
HOLDERS: |
| |
|
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/s/
Michael Browning |
| |
Michael
Browning |
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|
| |
Address:
[***] |
[Signature Page to Registration Rights
Agreement]
| |
/s/
Eric Spiegel |
| |
Eric
Spiegel |
| |
|
| |
Address:
[***] |
[Signature Page to Registration Rights
Agreement]
| |
/s/
Nina Jensen |
| |
Nina
Jensen |
| |
|
| |
Address:
[***] |
[Signature Page to Registration Rights Agreement]
| |
ANTARA CAPITAL TOTAL RETURN SPAC MASTER FUND LP |
| |
|
|
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By: |
/s/
Himanshu Gulati |
| |
Name: |
Himanshu
Gulati |
| |
Title: |
Managing
Partner |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights Agreement]
| |
ATLAS MERCHANT CAPITAL SPAC FUND I LP |
| |
|
|
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By: |
/s/
Timothy Kacani |
| |
Name: |
Timothy
Kacani |
| |
Title: |
Authorized
Signatory |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
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CENTIVA MASTER FUND, LP |
| |
|
|
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By |
/s/
Raymond Burley |
| |
Name: |
Raymond
Burley |
| |
Title: |
Authorized
Person |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
EXOS COLLATERALIZED SPAC HOLDINGS FUND LP |
| |
|
|
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By: |
/s/
Dewey Tucker |
| |
Name: |
Dewey
Tucker |
| |
Title: |
Head
of Trading |
| |
|
|
| |
Address: [***] |
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|
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MORGAN CREEK EXOS SPAC+ FUND, LP |
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|
|
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BY EXOS ASSET MANAGEMENT LLC, ITS INVESTMENT SUB-ADVISOR |
| |
|
|
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By: |
/s/
Dewey Tucker |
| |
Name: |
Dewey
Tucker |
| |
Title: |
Head
of Trading |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
FIR TREE VALUE MASTER FUND, LP |
| |
|
|
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By: |
/s/
Brian Meyer |
| |
Name: |
Brian
Meyer |
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Title: |
Authorized
Person |
| |
|
|
| |
Address: [***] |
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FIR TREE CAPITAL OPPORTUNITY MASTER FUND, LP |
| |
|
|
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By: |
/s/
Brian Meyer |
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Name: |
Brian
Meyer |
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Title: |
Authorized
Person |
| |
|
|
| |
Address: [***] |
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|
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| |
FIR TREE CAPITAL OPPORTUNITY MASTER FUND III, LP |
| |
|
|
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By: |
/s/
Brian Meyer |
| |
Name: |
Brian
Meyer |
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Title: |
Authorized
Person |
| |
|
|
| |
Address: [***] |
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|
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FT SOF XIII (SPAC) HOLDINGS, LLC |
| |
|
|
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By: |
/s/
Brian Meyer |
| |
Name: |
Brian
Meyer |
| |
Title: |
Authorized
Person |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights
Agreement]
| |
BOSTON PATRIOT MERRIMACK ST. LLC |
| |
|
|
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By: |
/s/
Brian Meyer |
| |
Name: |
Brian
Meyer |
| |
Title: |
Authorized
Person |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights
Agreement]
| |
HARRADEN CIRCLE INVESTORS, LP |
| |
|
|
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By: |
/s/
Frederick V. Fortmiller, Jr. |
| |
Name: |
Frederick
V. Fortmiller, Jr. |
| |
Title: |
Managing
Member |
| |
|
|
| |
Address: [***] |
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WARBASSE67 FUND LLC |
| |
|
|
| |
By: |
/s/
Frederick V. Fortmiller, Jr. |
| |
Name: |
Frederick
V. Fortmiller, Jr. |
| |
Title: |
Managing
Member |
| |
|
|
| |
Address: [***] |
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FREDERICK FORTMILLER, JR. |
| |
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By: |
/s/
Frederick V. Fortmiller, Jr. |
| |
Name: |
Frederick
V. Fortmiller, Jr. |
| |
Title: |
Managing
Member |
| |
|
|
| |
Address: [***] |
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| |
GANTCHER FAMILY LIMITED PARTNERSHIP |
| |
|
|
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By: |
/s/
Frederick V. Fortmiller, Jr. |
| |
Name: |
Frederick
V. Fortmiller, Jr. |
| |
Title: |
Managing
Member |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights
Agreement]
| |
STAR V PARTNERS LLC |
| |
|
|
| |
By: |
/s/
Manoj Jain |
| |
Name: |
Manoj
Jain |
| |
Title: |
Authorised
Signatory |
| |
|
|
| |
Address: [***] |
| |
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| |
MASO CAPITAL INVESTMENTS LIMITED |
| |
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By: |
/s/
Manoj Jain |
| |
Name: |
Manoj
Jain |
| |
Title: |
Authorised
Signatory |
| |
|
|
| |
Address: [***] |
| |
|
| |
BLACKWELL PARTNERS LLC – SERIES A |
| |
|
|
| |
By: |
/s/
Manoj Jain |
| |
Name: |
Manoj
Jain |
| |
Title: |
Authorised
Signatory |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights
Agreement]
| |
MIZUHO SECURITIES USA LLC |
| |
|
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By: |
/s/
Matthew E. Chiavaroli |
| |
Name: |
Matthew
E. Chiavaroli |
| |
Title: |
Authorized
Signatory |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights
Agreement]
| |
NAUTILUS MASTER FUND, L.P., by its investment advisor, Periscope Capital Inc. |
| |
|
|
| |
By: |
/s/
Lisa Shostack |
| |
Name: |
Lisa
Shostack |
| |
Title: |
General
Counsel |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights
Agreement]
| |
POLAR MULTI-STRATEGY MASTER FUND, by its investment advisor Polar Asset Management Partners Inc. |
| |
|
|
| |
By: |
/s/
Michelle Li |
| |
Name: |
Michelle
Li |
| |
Title: |
Deputy
CFO |
| |
|
|
| |
By: |
/s/
Kirstie Moore |
| |
Name: |
Kirstie
Moore |
| |
Title: |
Legal
Counsel |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
RADCLIFFE SPAC MASTER FUND, L.P. |
| |
|
|
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BY: RADCLIFFE CAPITAL MANAGEMENT, L.P., ITS INVESTMENT MANAGER |
| |
|
|
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BY: RGC MANAGEMENT COMPANY, LLC, GP TO THE INVESTMENT MANAGER |
| |
|
|
| |
By: |
/s/
Christopher L. Hinkel |
| |
Name: |
Christopher
L. Hinkel |
| |
Title: |
Managing
Member of the GP of its Investment Manager, Radcliffe Capital Management, L.P. |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
RLH SPAC FUND LP |
| |
|
|
| |
By: |
/s/
Louis Camhi |
| |
Name: |
Louis
Camhi |
| |
Title: |
CIO
RLH Capital LLC, Manager of RLH Spac Fund LP |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights
Agreement]
| |
SANDIA
INVESTMENT MANAGEMENT LP, ACTING AS INVESTMENT MANAGER
ON BEHALF OF INVESTORS LISTED ON EXHIBIT A OF NON-REDEMPTION AGREEMENT |
| |
|
|
| |
By: |
/s/
Thomas J. Cagna |
| |
Name: |
Thomas
J. Cagna |
| |
Title: |
COO,
CFO & CCO |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
SEA OTTER TRADING, LLC |
| |
|
|
| |
By: |
/s/
Nicholas Fahey |
| |
Name: |
Nicholas
Fahey |
| |
Title: |
Managing
Partner |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
SEAPORT GLOBAL SECURITIES LLC |
| |
|
|
| |
By: |
/s/
Jonathan Silverman |
| |
Name: |
Jonathan
Silverman |
| |
Title: |
General
Counsel |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights
Agreement]
| |
TENOR OPPORTUNITY MASTER FUND, LTD. |
| |
|
|
| |
By:
|
/s/
Daniel Kochav |
| |
Name: |
Daniel
Kochav |
| |
Title: |
Director |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
TQ MASTER FUND LP |
| |
|
|
| |
By: |
/s/
Tanvir Kirpalani |
| |
Name: |
Tanvir
Kirpalani |
| |
Title: |
Authorized
Signatory |
| |
|
|
| |
Address: [***] |
[Signature Page to Registration Rights
Agreement]
| |
WALLEYE OPPORTUNITIES MASTER FUND LTD |
| |
|
|
| |
By: |
/s/
William England |
| |
Name: |
William
England |
| |
Title: |
CEO
of the Manager |
| |
|
|
| |
Address: [***] |
| |
|
|
| |
WALLEYE INVESTMENTS FUND LLC |
| |
|
|
| |
By: |
/s/
William England |
| |
Name: |
William
England |
| |
Title: |
CEO
of the Manager |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
ARISTEIA HOLDINGS LIMITED |
| |
|
|
| |
BY:
|
ARISTEIA
CAPTIAL, L.L.C., ITS INVESTMENT MANAGER |
| |
|
|
| |
By: |
/s/
Andrew B. David |
| |
Name: |
Andrew
B. David |
| |
Title: |
Chief
Operating Officer |
| |
|
|
| |
By: |
/s/
Robert H. Lynch, Jr. |
| |
Name: |
Robert
H. Lynch, Jr. |
| |
Title: |
Manager |
| |
|
|
| |
Address: [***] |
| |
|
|
| |
ASIG INTERNATIONAL LIMITED |
| |
|
|
| |
BY:
|
ARISTEIA
CAPTIAL, L.L.C., ITS INVESTMENT MANAGER |
| |
|
|
| |
By: |
/s/
Andrew B. David |
| |
Name: |
Andrew
B. David |
| |
Title: |
Chief
Operating Officer |
| |
|
|
| |
By: |
/s/
Robert H. Lynch, Jr. |
| |
Name: |
Robert
H. Lynch, Jr. |
| |
Title: |
Manager |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
BLUE PEAK LIMITED |
| |
|
|
| |
BY:
|
ARISTEIA
CAPTIAL, L.L.C., ITS INVESTMENT MANAGER |
| |
|
|
| |
By: |
/s/
Andrew B. David |
| |
Name: |
Andrew
B. David |
| |
Title: |
Chief
Operating Officer |
| |
|
|
| |
By: |
/s/
Robert H. Lynch, Jr. |
| |
Name: |
Robert
H. Lynch, Jr. |
| |
Title: |
Manager |
| |
|
|
| |
Address: [***] |
| |
|
|
| |
DS LIQUID DIV RVA ARST LLC |
| |
|
|
| |
BY:
|
ARISTEIA
CAPTIAL, L.L.C., ITS INVESTMENT MANAGER |
| |
|
|
| |
By: |
/s/
Andrew B. David |
| |
Name: |
Andrew
B. David |
| |
Title: |
Chief
Operating Officer |
| |
|
|
| |
By: |
/s/
Robert H. Lynch, Jr. |
| |
Name: |
Robert
H. Lynch, Jr. |
| |
Title: |
Manager |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
WINDERMERE CAYMAN FUND LIMITED |
| |
|
|
| |
BY: |
ARISTEIA
CAPTIAL, L.L.C., ITS INVESTMENT MANAGER |
| |
|
|
| |
By: |
/s/
Andrew B. David |
| |
Name: |
Andrew
B. David |
| |
Title: |
Chief
Operating Officer |
| |
|
|
| |
By: |
/s/
Robert H. Lynch, Jr. |
| |
Name: |
Robert
H. Lynch, Jr. |
| |
Title: |
Manager |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
CITADEL CEMF INVESTMENTS LTD. |
| |
By its Portfolio Manager, Citadel Advisors LLC |
| |
|
|
| |
By: |
/s/
Christopher Ramsay |
| |
Name: |
Christopher
Ramsay |
| |
Title: |
Authorized
Signatory |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
D.E. SHAW VALENCE PORTFOLIOS, L.L.C. |
| |
|
|
| |
By: |
/s/
Stephen Eilenberg |
| |
Name: |
Stephen
Eilenberg |
| |
Title: |
Authorized
Signatory |
| |
|
|
| |
Address: [***]
|
[Signature
Page to Registration Rights Agreement]
| |
HIGHBRIDGE TACTICAL CREDIT MASTER FUND, L.P. |
| |
|
|
| |
BY: HIGHBRIDGE CAPITAL MANAGEMENT, LLC AS TRADING MANAGER AND NOT IN ITS INDIVIDUAL CAPACITY |
| |
|
|
| |
By: |
/s/
Steve Ardovini |
| |
Name: |
Steve
Ardovini |
| |
Title: |
Managing
Director, Head of Operations |
| |
|
|
| |
Address: [***] |
| |
|
|
| |
HIGHBRIDGE TACTICAL CREDIT INSTITUTIONAL FUND, LTD. |
| |
|
|
| |
BY: |
HIGHBRIDGE
CAPITAL MANAGEMENT, LLC AS TRADING MANAGER AND NOT IN ITS INDIVIDUAL CAPACITY |
| |
|
|
| |
By: |
/s/
Steve Ardovini |
| |
Name: |
Steve
Ardovini |
| |
Title: |
Managing
Director, Head of Operations |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
J WOOD CAPITAL ADVISORS LLC |
| |
|
|
| |
By: |
/s/
Jason M. Wood |
| |
Name: |
Jason
M. Wood |
| |
Title: |
CEO |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
METEORA CAPITAL PARTNERS, LP |
| |
|
|
| |
By: |
/s/
Joseph Levy |
| |
Name: |
Joseph
Levy |
| |
Title: |
COO |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
/s/
Girish Nadkami |
| |
Girish
Nadkami |
| |
|
| |
Address:
[***] |
[Signature
Page to Registration Rights Agreement]
| |
OUTSIDE THE BOX CAPITAL INC. |
| |
|
|
| |
By: |
/s/
Jason Coles |
| |
Name: |
Jason
Coles |
| |
Title: |
CEO |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
PARAGON PUBLIC RELATIONS LLC |
| |
|
|
| |
By: |
/s/
Simon Hylson-Smith |
| |
Name: |
Simon
Hylson-Smith |
| |
Title: |
CEO |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
PRIMA OCEAN AS |
| |
|
|
| |
By: |
/s/
Petter J. Karal |
| |
Name: |
Petter
J. Karal |
| |
Title: |
Chairman |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
PRIVATE D CAPITAL GROUP CORP |
| |
|
|
| |
By: |
/s/
David A. Rozinov |
| |
Name: |
David
A. Rozinov |
| |
Title: |
Principal |
| |
|
|
| |
Address: [***] |
[Signature
Page to Registration Rights Agreement]
| |
/s/
Dr. Stefan Buske |
| |
Dr.
Stefan Buske |
| |
|
| |
Address:
[***] |
[Signature
Page to Registration Rights Agreement]
| |
HERAMBA
HOLDERS: |
| |
|
| |
/s/
Michele Molinari |
| |
Michele
Molinari |
| |
|
| |
Address:
[***] |
[Signature
Page to Registration Rights Agreement]
| |
/s/
Dr. Hans-Jörg Grundmann |
| |
Dr.
Hans-Jörg Grundmann |
| |
|
| |
Address:
[***] |
[Signature
Page to Registration Rights Agreement]
| |
HERAMBA
LIMITED |
| |
|
| |
/s/
Zhe Zhang |
| |
Zhe
Zhang, Director |
| |
|
| |
Address:
[***] |
[Signature
Page to Registration Rights Agreement]
| |
/s/
Avinash Rugoobur |
| |
Avinash
Rugoobur |
| |
|
| |
Address:
[***] |
[Signature
Page to Registration Rights Agreement]
| |
/s/
Diego Diaz |
| |
Diego
Diaz |
| |
|
| |
Address:
[***] |
[Signature
Page to Registration Rights Agreement]
Exhibit
A
REGISTRATION
RIGHTS AGREEMENT JOINDER
The
undersigned is executing and delivering this joinder (this “Joinder”)
pursuant to the Registration Rights Agreement, dated as of July 26, 2024 (as the same may hereafter be amended, the “Registration
Rights Agreement”), among Heramba Electric plc, an Irish public limited company duly incorporated under the laws
of Ireland with company registration number 744994 (the “Company”),
and the other persons or entities named as parties therein. Capitalized terms used but not otherwise defined herein shall have the meanings
provided in the Registration Rights Agreement.
By
executing and delivering this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof,
the undersigned hereby agrees to become a party to, to be bound by, and to comply with the Registration Rights Agreement as a Holder
of Registrable Securities in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement, and
the undersigned’s Ordinary Shares shall be included as Registrable Securities under the Registration Rights Agreement to the extent
provided therein; provided, however, that the undersigned and its permitted assigns (if any) shall not have any rights
as Holders, and the undersigned’s (and its transferees’) Ordinary Shares shall not be included as Registrable Securities,
for purposes of the Excluded Sections (as defined below).
For
purposes of this Joinder, “Excluded Sections”
shall mean [ ].
Accordingly,
the undersigned has executed and delivered this Joinder as of the __________ day of __________, 20__.
| |
|
| |
Signature
of Shareholder |
| |
|
| |
|
| |
Print
Name of Shareholder |
| |
Its: |
Agreed
and Accepted as of
____________, 20__
[________]
Exhibit 4.2
***CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS IN BRACKETS) HAS
BEEN OMITTED FROM THIS DOCUMENT BECAUSE IT IS BOTH (1) NOT MATERIAL AND (2) INFORMATION THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL.
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (this
“Agreement”), dated as of June 19, 2024, is made and entered into by and among (i) Heramba Electric plc, an Irish
public limited company duly incorporated under the laws of Ireland with company registration number 744994 (the “Company”),
(ii) Smilodon Capital, LLC, a Delaware limited liability company (the “Sponsor”), the undersigned parties listed under
“SPAC Holders” on the signature page(s) hereto (the Sponsor and each such party, a “SPAC Holder,” and, such parties
collectively, including the Sponsor, the “SPAC Holders”), (iii) the undersigned parties listed under “Heramba
Holders” on the signature page(s) hereto (each such party, a “Heramba Holder,” and, collectively, the “Heramba
Holders”) and (iv) Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, a German limited liability company having its statutory
seat in Munich, Germany, and registered with the commercial register of the Local Court of Munich under HRB 91181 (the “KB
Lender”). The SPAC Holders, the Heramba Holders, and any person or entity who hereafter becomes a party to this Agreement pursuant
to Section 2 or Section 3(f) of this Agreement, are each referred to herein as a “Holder,” and, collectively,
the “Holders.” Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed
to them in the Business Combination Agreement (as defined below).
WHEREAS, the Company
has entered into that certain Business Combination Agreement, dated as of October 2, 2023 (as it may be amended or supplemented from
time to time pursuant to the terms thereof, the “Business Combination Agreement”), by and among Project Energy Reimagined
Acquisition Corp., an exempted company incorporated in the Cayman Islands with limited liability under company number 371458 (“SPAC”),
the Company, Heramba Merger Corp., an exempted company incorporated in the Cayman Islands with limited liability under company number
403111 (“Merger Sub”), Heramba Limited, an Irish private company duly incorporated under the laws of Ireland with company
registration number 745130 (the “Seller”), and Heramba GmbH, a limited liability company (Gesellschaft mit beschränkter
Haftung) established under the Laws of Germany having its statutory seat in Düsseldorf, Germany, registered with the commercial
register of the Local Court of Düsseldorf under HRB 98529 (“Heramba”), pursuant to which and subject to the terms
and conditions thereof, among other things, (i) Merger Sub will merge with and into SPAC (with SPAC being the surviving company and
a direct, wholly owned subsidiary of the Company), in exchange for SPAC’s securityholders receiving ordinary shares of the Company
(“Ordinary Shares”) or securities convertible into or exercisable or exchangeable for Ordinary Shares, and (ii) the
Seller will contribute to the Company shares in Heramba in exchange for the Seller receiving Ordinary Shares;
WHEREAS, Heramba holding
85% (eighty-five percent) of the registered share capital and the KB Lender holding 15% (fifteen percent) of the registered share capital
of Kiepe Electric GmbH, a German limited liability company having its statutory seat in Düsseldorf, Germany, and registered with
the commercial register of the Local Court of Düsseldorf under HRB 34306 (“Kiepe Germany”), are the sole
shareholders of Kiepe Germany;
WHEREAS, the KB Lender
in its capacity as lender and Kiepe Germany in its capacity as borrower have entered into that certain Loan Agreement, dated as of June 19,
2024 (as it may be amended or supplemented from time to time pursuant to the terms thereof, the “Loan Agreement”),
regarding that certain Loan in an amount of up to EUR 20,000,000 (Euro twenty million) (such loan, as may be increased or decreased
from time to time pursuant to the terms of the Loan Agreement, the “Loan”); and
WHEREAS, pursuant
to the Business Combination Agreement and the Loan Agreement, and in view of the valuable consideration to be received by each Holder,
directly and indirectly, thereunder, the parties wish to set forth herein certain understandings between such parties with respect to
restrictions on the transfer of the Lock-Up Securities (as defined below).
NOW, THEREFORE, in
consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and other good and
valuable consideration received whose sufficiency is hereby acknowledged and intending to be legally bound hereby, the parties hereby
agree as follows:
| 1. | For purposes of this Agreement: |
(a) “Affiliate”
has the meaning ascribed to such term in Rule 12b-2 promulgated under the Exchange Act.
(b) “Founder
Shares” means any Ordinary Shares issued to a SPAC Holder in exchange for SPAC Class A Ordinary Shares issued upon conversion
of SPAC Class B Ordinary Shares.
(c) “Immediate
family” means with respect to any individual, any of the following: such individual’s spouse or domestic partner (or former
spouse or former domestic partner), ancestors, descendants (whether by blood, marriage or adoption) or spouse of a descendant, or siblings
(whether by blood, marriage or adoption).
(d) “Lock-Up
Period” means the period commencing on the date hereof and expiring on the later of:
(i) the
date on which the Loan has been repaid in full (the “Loan Repayment Date”); and
(ii) the
earliest of (i) the twelve (12) month anniversary of the Closing Date, (ii) such time that the last reported trading price of
the Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least one hundred fifty (150) calendar days after
the Closing Date, and (iii) such date on which the Company completes a liquidation, merger, share exchange, reorganization or other
similar transaction that results in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash,
securities or other property.
For the avoidance of doubt,
the obligations of the SPAC Holders under this Agreement shall commence upon receipt of the Lock-Up Securities on the Closing Date (immediately
following the Closing).
(e) “Lock-Up
Securities” means, collectively, (i) any Founder Shares beneficially owned by the SPAC Holders immediately after the Closing
and (ii) any Ordinary Shares beneficially owned by the Heramba Holders on the date hereof and any Ordinary Shares beneficially owned
by the Heramba Holders immediately after the Closing; provided, however, that 3,118,319 Founder Shares held by the SPAC Holders and 2,700,000
Ordinary Shares held by Heramba Limited shall not be Lock-Up Securities for purposes of this Agreement.
(f) “Transfer”
means the:
(i) sale
or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose
of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect
to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder with respect to, any security;
(ii) entry
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any
security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise;
(iii) public
announcement of any intention to effect any transaction specified in clause (i) or (ii) above; or
(iv) entry
into a transaction that would have the same effect as any transaction specified in clause (i) or (ii) above.
(a) Each
Holder agrees not to Transfer any Lock-Up Securities until the end of the Lock-Up Period; provided that the Heramba Holders
may exchange their Lock-Up Securities through the Contribution and pursuant to the terms of the Business Combination Agreement and the
form of Contribution Agreement contained therein.
(b) Notwithstanding
the foregoing, the restrictions set forth in Section 2(a), shall not apply to the following, provided that the Holder further
agrees to execute such agreements as may be reasonably requested by the Company and the KB Lender that are consistent with the foregoing
or that are necessary to give further effect thereto:
(i) in
the case of an individual, Transfers (A) to a partnership, limited liability company or other entity of which the Holder and/or the immediate
family of the Holder is the legal and beneficial owner of all of the outstanding equity securities or similar interests, (B) by bona
fide gift to a member of the Holder’s immediate family or to a trust, the beneficiary of which is the Holder or a member of
the Holder’s immediate family, or an Affiliate of such Person, (C) by virtue of will, intestate succession or the laws of descent
and distribution upon death of the Holder, (D) as a bona fide gift or gifts or charitable contribution, or for bona fide
estate planning purposes or (E) by operation of law, including bankruptcy laws, or pursuant to a court order, including a qualified domestic
relations order, divorce decree, divorce settlement or separation agreement;
(ii) in
the case of an entity, Transfers (A) to another entity that is an Affiliate of the Holder, or to any investment fund or other entity controlling,
controlled by, managing or managed by or under common control with the Holder, (B) as part of a distribution to members, partners, shareholders
or equityholders of such Holder, or (C) by virtue of applicable laws, including bankruptcy laws, or laws of the state or jurisdiction
of the Holder’s organization or the Holder’s organizational documents upon dissolution of the Holder;
(iii) in
the case of an entity that is a trust, Transfer to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust;
(iv) Transfers
to the Company pursuant to any contractual arrangement in effect at the Closing that provides for the repurchase by the Company or forfeiture
of Ordinary Shares or other securities convertible into or exercisable or exchangeable for Ordinary Shares in connection with the termination
of the Holder’s service to the Company; or
(v) the
establishment, by the Holder, at any time after the Closing, of any trading plan pursuant to Rule 10b5-1 promulgated under the Exchange
Act providing for the transfer of the Lock-Up Securities; provided, however, that such plan does not provide for, or permit,
the Transfer of any Lock-Up Securities during the Lock-Up Period and no public announcement or filing is voluntarily made or required
regarding such plan during the Lock-Up Period;
provided, however,
that (A) in the case of clause (ii) above, such Transfer shall not involve a disposition for value and (B) in the case
of clauses (i), (ii) and (iii), it shall be a condition to the Transfer or distribution that each applicable permitted transferee,
trustee, donee or distributee enter into a written agreement, in substantially the form of this Agreement (it being understood that any
references to “immediate family” in the agreement executed by such permitted transferee shall expressly refer only to the
immediate family of the applicable Holder and not to the immediate family of such permitted transferee), agreeing to be bound by the Transfer
restrictions set forth in this Agreement.
(c) Any
purported Transfer contrary to the provisions of this Agreement shall be void ab initio, and the Company shall refuse to recognize any
such purported transferee of the Lock-Up Securities as an equity holder for any purpose. Each Holder acknowledges and agrees that during
the Lock-Up Period, stop transfer orders shall be placed against the Lock-Up Securities and each certificate or book entry position statement
evidencing Lock-Up Securities shall be stamped or otherwise imprinted with a legend in substantially the following form, in addition to
any other applicable legends:
“THE SECURITIES REPRESENTED HEREBY
ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A LOCK-UP AGREEMENT, DATED AS OF JUNE 19, 2024, BY AND AMONG THE ISSUER OF SUCH
SECURITIES AND THE SECURITY HOLDERS NAMED THEREIN. A COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO
THE HOLDER HEREOF UPON WRITTEN REQUEST.”
(a) Power
and Authority. Each Holder hereby represents and warrants that it, he, she or they has/have full power and authority to enter into
this Agreement and that this Agreement constitutes the legal, valid and binding obligation of such Holder, enforceable in accordance with
its terms.
(b) Capacity
as a Company Shareholder. Each Holder signs this Agreement solely in such Holder’s capacity as a current or future shareholder
of the Company, and not in such Holder’s capacity as a director or officer of the Company, as applicable.
(c) Entire
Agreement. This Agreement (and the Business Combination Agreement to the extent incorporated herein) constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and undertakings,
both written and oral, among the parties hereto, or any of them, with respect to the subject matter hereof; provided, that,
for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the parties under the Business Combination Agreement
or any Ancillary Agreement. The Company, each SPAC Holder and each Heramba Holder agree not to enter into any amendment or other modification
of the Business Combination Agreement prior to the Loan Repayment Date that would directly or indirectly amend or otherwise modify this
Agreement without the prior written consent of the KB Lender.
(d) Notices.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered in person
or, by facsimile or by e-mail, (b) on the next Business Day when sent by overnight courier, or (c) on the second succeeding Business Day
when sent by registered or certified mail (postage prepaid, return receipt requested) to the respective parties hereto at the following
addresses (or at such other address for a party as shall be specified by like notice):
If to the Company, to:
Heramba Electric plc
Kiepe Platz 1
D- 40599 Düsseldorf
Germany
Attention: Hans-Jörg Grundmann
Email: hansjoerggrundmann@googlemail.com
with a copy (which shall not constitute notice)
to:
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, TX 77002
Attention: Nick S. Dhesi
Email: Nick.Dhesi@lw.com
If to the KB Lender, to:
Knorr-Bremse Systeme für Schienenfahrzeuge
GmbH
Moosacher Str. 80
80809 Munich, Germany
Attention: Dr. Peter Radina
Email: Peter.Radina@knorr-bremse.com
with a copy (which shall not constitute notice)
to:
Knorr-Bremse AG
Moosacher Str. 80
80809 Munich, Germany
Attention: Sebastian Riedel
Email: Sebastian.Riedel@knorr-bremse.com
with further copy (which shall not constitute
notice) to:
Baker McKenzie Rechtsanwaltsgesellschaft
mbH
von Rechtsanwälten und Steuerberatern
Theatinerstrasse 23
80333 Munich, Germany
Attention: Dr. Jakub Lorys
Email: Jakub.Lorys@bakermckenzie.com
If to any Holder, to the address set forth below
such Holder’s name on the signature pages to this Agreement.
(e) Amendments
and Waivers.
(i) This
Agreement may be amended or modified, in whole or in part, only by a duly authorized agreement in writing, executed by the Company, the
Holders holding a majority of the Lock-Up Securities then held by the Holders in the aggregate and, if prior to the Loan Repayment Date,
the KB Lender. This Agreement may not be modified or amended except as provided in the immediately preceding sentence and any purported
amendment by any party or parties hereto effected in a manner which does not comply with this Section 3(e)(i) shall be null
and void, ab initio.
(ii) Any
agreement on the part of a party hereto to any extension or waiver shall be valid only if set forth in an instrument in writing signed
on behalf of such party and shall not constitute or give rise to an extension or waiver of any rights or obligations hereunder except
to the extent specifically provided in such writing (it being understood that all such other non-waived rights and obligations are expressly
reserved). No waiver granted hereunder by any party prior to the Loan Repayment Date shall be valid or enforceable unless signed by the
KB Lender in advance of the grant of such waiver.
(iii) Except
as expressly set forth in this Agreement, neither the failure nor delay on the part of any party hereto to exercise any right, remedy,
power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence.
(iv) Notwithstanding
anything to the contrary, any amendment, modification or waiver of any provision herein that would adversely affect one or more Holders
in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the adversely affected
Holders that own a majority of the Lock-Up Securities owned by such adversely affected Holders.
(f) Binding
Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors,
heirs and permitted assigns and transferees. Except as set forth herein, no party hereto shall assign, grant or otherwise transfer either
this Agreement or any of its rights, interests or obligations hereunder, in whole or in part, except as expressly permitted under Section
2(b) above. Any purported assignment in violation of this Section 3(f) shall be null and void and shall not operate to transfer
or assign any interest or title to the purported assignee.
(g) Third
Parties. Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions
contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any person or entity that is not
a party hereto or thereto or a successor or permitted assign of such party.
(h) Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.
(i) This
Agreement and any Legal Dispute (as defined below) arising out of this Agreement, or the validity, interpretation, construction, effect,
breach or termination of this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware (regardless
of the laws that might otherwise govern under applicable principles of conflicts of laws thereof).
(ii) Each
party hereto irrevocably agrees that any action, suit or proceeding between or among the parties hereto arising in connection with any
disagreement, dispute, controversy or claim arising out of or relating to this Agreement (a “Legal Dispute”) shall
be brought exclusively in the courts of the State of Delaware; provided that if subject matter jurisdiction over the Legal Dispute
is vested exclusively in the United States federal courts, such Legal Dispute shall be heard in the United States District Court for the
District of Delaware. Each party hereto hereby irrevocably and unconditionally submits to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted
by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding that is brought in any such court has been brought in an inconvenient forum. During
the period a Legal Dispute that is filed in accordance with this Section 3(h) is pending before a court, all actions, suits
or proceedings with respect to such Legal Dispute or any other Legal Dispute, including any counterclaim, cross-claim or interpleader,
shall be subject to the exclusive jurisdiction of such court. Each party hereto may bring such Legal Dispute only if he, she or it hereby
waives, and shall not assert as a defense in any Legal Dispute, that (a) such party is not personally subject to the jurisdiction of the
above named courts for any reason, (b) such action, suit or proceeding may not be brought or is not maintainable in such court, (c) such
party’s property is exempt or immune from execution, (d) such action, suit or proceeding is brought in an inconvenient forum, or
(e) the venue of such action, suit or proceeding is improper. A final judgment in any action, suit or proceeding described in this Section
3(h) following the expiration of any period permitted for appeal and subject to any stay during appeal shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Laws.
(iii) TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LEGAL REQUIREMENTS WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO MAY BRING A LEGAL DISPUTE
ONLY IF HE, SHE OR IT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS OR COUNTERCLAIMS ASSERTED IN ANY
LEGAL DISPUTE RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM RELATING THERETO. IF THE SUBJECT
MATTER OF ANY SUCH LEGAL DISPUTE IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS PROHIBITED, NO PARTY HERETO SHALL ASSERT IN SUCH LEGAL DISPUTE
A NONCOMPULSORY COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. FURTHERMORE, NO PARTY
HERETO SHALL SEEK TO CONSOLIDATE ANY SUCH LEGAL DISPUTE WITH A SEPARATE ACTION OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT
BE WAIVED.
(i) Headings;
Counterparts. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement. This Agreement may be executed and delivered (including executed manually
or electronically via DocuSign or other similar services and delivered by facsimile or portable document format (pdf) transmission) in
one or more counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same agreement.
(j) Severability.
If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of law, or
public policy, in whole or in part, all other conditions and provisions of this Agreement shall nevertheless remain in full force and
effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner.
(k) Specific
Performance. The parties hereto acknowledge that the rights and obligations under this Agreement are unique and recognize and affirm
that in the event of a breach of this Agreement by any party, money damages may be inadequate and the non-breaching party may have no
adequate remedy at law. Accordingly, the parties agree that such non-breaching party shall have the right, in addition to any other rights
and remedies existing in their favor at law or in equity, to enforce its rights and the other party’s obligations hereunder not
only by an action or actions for damages but also by an action or actions for specific performance, injunctive and/or other equitable
relief (without posting of bond or other security), including any order, injunction or decree sought by such non-breaching party to cause
the other party to perform its respective agreements and covenants contained in this Agreement. Each party further agrees that the only
permitted objection that it may raise in response to any action for equitable relief is that it contests the existence of a breach or
threatened breach of this Agreement, and that no party shall allege, and each party hereby waives the defense, that there is an adequate
remedy at law.
(l) Legal
Representation. Each Holder acknowledges that each of Latham & Watkins LLP (“Latham”), Maples and Calder (Cayman)
LLP (“Maples”) and Matheson LLP (“Matheson”) is acting as counsel to the Company in connection with
the Business Combination Agreement and the Transactions and Baker McKenzie LLP (“Baker McKenzie”) is acting as counsel
to the KB Lender in connection with this Agreement, and none of Latham, Maples, Matheson or Baker McKenzie is acting as counsel to such
Holder in its capacity as a Holder.
(m) Several
Liabilities. The liability of any Holder hereunder is several (and not joint). Notwithstanding any other provision of this Agreement,
in no event will any Holder be liable for any other Holder’s breach of such other Holder’s obligations under this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF,
the undersigned have caused this Agreement to be executed as of the date first written above.
|
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COMPANY: |
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|
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HERAMBA ELECTRIC PLC |
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|
| |
By: |
/s/ Hans-Jörg Grundmann |
| |
Name: |
Hans-Jörg Grundmann |
| |
Title: |
Director |
[Signature Page to Lock-Up Agreement]
IN WITNESS WHEREOF,
the undersigned have caused this Agreement to be executed as of the date first written above.
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KNORR-BREMSE SYSTEME FÜR SCHIENEN-FAHRZEUGE GMBH: |
| |
|
| |
By: |
/s/ Dr. Peter Radina |
| |
Name: |
Dr. Peter Radina |
| |
Title: |
Managing Director (Geschäftsführer) |
| |
|
|
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By: |
/s/ Harald Schneider |
| |
Name: |
Harald Schneider |
| |
Title: |
Managing Director (Geschäftsführer) |
[Signature Page to Lock-Up Agreement]
|
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SPONSOR: |
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|
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SMILODON CAPITAL, LLC |
| |
|
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By: |
Admit Capital, LLC, its manager |
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|
|
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By: |
/s/ Srinath Narayanan |
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Name: |
Srinath Narayanan |
| |
Title: |
Manager |
| |
Number and Type of Lock-Up Securities: |
| |
|
| |
Ordinary Shares: |
2,154,379 Founder Shares |
| |
Other (Specify): |
N/A |
| |
Address for Notices: |
| |
|
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Address: |
c/o Project Energy Reimagined Acquisition Corp.
|
| |
|
1280 El Camino Real, Suite 200, Menlo Park, California
94025 |
| |
Telephone No.: |
[***] |
| |
Email: |
[***] |
[Signature Page to Lock-Up Agreement]
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SPAC HOLDERS: |
| |
|
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By: |
/s/ Michael Browning |
| |
Name: |
Michael Browning |
| |
Number and Type of Lock-Up Securities: |
| |
|
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Ordinary Shares: |
50,000 Founders Shares |
| |
Other (Specify): |
N/A |
| |
Address for Notices: |
| |
|
| |
Address: |
c/o Project Energy Reimagined Acquisition Corp. |
| |
|
1280 El Camino Real, Suite 200, Menlo Park, California
94025 |
| |
Telephone No.: |
[***] |
| |
Email: |
[***] |
[Signature Page to Lock-Up Agreement]
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SPAC HOLDERS: |
| |
|
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By: |
/s/ Nina Jensen |
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Name: |
Nina Jensen |
| |
Number and Type of Lock-Up Securities: |
| |
|
| |
Ordinary Shares: |
50,000 Founders Shares |
| |
Other (Specify): |
N/A |
| |
Address for Notices: |
| |
|
| |
Address: |
c/o Project Energy Reimagined Acquisition Corp.
|
| |
|
1280 El Camino Real, Suite 200, Menlo Park, California
94025 |
| |
Telephone No.: |
[***] |
| |
Email: |
[***] |
[Signature Page to Lock-Up Agreement]
|
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SPAC HOLDERS: |
| |
|
| |
By: |
/s/ Eric Spiegel |
| |
Name: |
Eric Spiegel |
| |
Number and Type of Lock-Up Securities: |
| |
|
| |
Ordinary Shares: |
50,000 Founders Shares |
| |
Other (Specify): |
N/A |
| |
Address for Notices: |
| |
|
| |
Address: |
c/o Project Energy Reimagined Acquisition Corp.
1280 El Camino Real, Suite 200, Menlo Park, California
94025 |
| |
Telephone No.: |
[***] |
| |
Email: |
[***] |
[Signature Page to Lock-Up Agreement]
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HERAMBA HOLDERS: |
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|
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HERAMBA LIMITED |
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|
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By: |
/s/ Zhe Zhang |
| |
Name: |
Zhe Zhang |
| |
Title: |
Director |
| |
Number and Type of Lock-Up Securities: |
| |
|
| |
Ordinary Shares: |
34,000,000 Lock-Up Securities |
| |
Other (Specify): |
2,700,000 Ordinary Shares that are not Lock-Up Securities |
| |
Address for Notices: |
| |
|
| |
Address: |
70 Sir John Rogerson’s Quay
Dublin 2, Ireland
D02 R296 |
| |
Email: |
[***] |
[Signature Page to Lock-Up Agreement]
Exhibit 4.3
Heramba
Electric plc
Form
of Deed of Indemnification And Advancement
This
Deed Indemnification and Advancement (this “Deed”) is made as of [●], 2024 by and between Heramba Electric plc,
an Irish public limited company duly incorporated under the laws of Ireland, with company registration number 744994, having its registered
office at 70 Sir John Rogerson’s Quay, Dublin 2, Ireland (the “Company”) and ______________ [a
member of the Board of Directors/an officer] of the Company (the “Indemnitee”). This Deed supersedes and replaces
any and all previous agreements between the Company and Indemnitee covering indemnification and advancement of expenses.
RECITALS
WHEREAS, the Board of Directors
of the Company (the “Board”) believes that highly competent persons have become more reluctant to serve publicly
held corporations as directors, officers, or in other capacities unless they are provided with adequate protection through insurance or
adequate indemnification and advancement of expenses against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation;
WHEREAS, the Board has determined
that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such
insurance has been a customary and widespread practice among corporations and other business enterprises similar to the Company, the Company
believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums
and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally
would have been brought only against the Company or business enterprise itself. The Company’s constitution, as amended from time
to time (the “Constitution”) requires indemnification of the officers and directors of the Company. The Constitution
expressly provides that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may
be entered into between the Company and members of the Board, officers and other persons with respect to indemnification and advancement
of expenses;
WHEREAS, the uncertainties
relating to such insurance, to indemnification, and to advancement of expenses may increase the difficulty of attracting and retaining
such persons;
WHEREAS, the Board has determined
that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its shareholders
and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable,
prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons
to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that
they will not be so indemnified;
WHEREAS, this Deed is a supplement
to and in furtherance of the Constitution and any resolutions adopted pursuant thereto, as well as any rights of Indemnitee under any
directors’ and officers’ liability insurance policy and any other indemnification provided in favor of the Indemnitee by any
subsidiary of the Company, and is not a substitute therefor, and does not diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, to the extent applicable,
the Company also may extend rights, benefits and obligations under this Deed to officers and directors of any of its subsidiaries; and
WHEREAS, Indemnitee does not
regard the protection available under the Constitution and insurance as adequate in the present circumstances, and may not be willing
to serve or continue to serve as an officer or director of the Company or any of its subsidiaries without adequate additional protection,
and the Company desires Indemnitee to serve or continue to serve in such capacities. Indemnitee is willing to serve, continue to serve
and to take on additional service for or on behalf of the Company or any of its subsidiaries on the condition that Indemnitee be so indemnified
and advanced expenses.
NOW, THEREFORE, in consideration
of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
1. Services
to the Company. Indemnitee agrees to serve as a [director / officer] of the Company. Indemnitee may at any time and for
any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This
Deed does not create any obligation on the Company to continue Indemnitee in such position and is not an employment contract between the
Company (or any of its subsidiaries or any Enterprise) and Indemnitee.
2. Definitions.
As used in this Deed:
(a) “Agent”
means any person who is authorized by the Company or an Enterprise to act for or represent the interests of the Company or an Enterprise,
respectively.
(b) A
“Change in Control” occurs upon the earliest to occur after the date of this Deed of any of the following events:
(i) Acquisition
of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly,
of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding
securities unless the change in relative beneficial ownership of the Company’s securities by any Person results solely from a reduction
in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;
(ii) Change
in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Deed),
individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a transaction described in Sections 2(b)(i), 2(b)(iii) or 2(b)(iv) hereof)
whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;
(iii) Corporate
Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation
which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty-one percent
(51%) of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation
and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity;
(iv) Liquidation.
The approval by the shareholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company’s assets; and
(v) Other
Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below),
whether or not the Company is then subject to such reporting requirement, unless such event was a result of the conversion of shares held
by shareholders of the Company pursuant to any recapitalization, reorganization or similar event of the Company.
(vi) For
purposes of this Section 2(b), the following terms have the following meanings:
| 1 | “Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time. |
| 2 | “Person” has the meaning as set forth in Sections 13(d) and 14(d) of the Exchange
Act; provided, however, that Person excludes (i) the Company, (ii) any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, and (iii) any entity owned, directly or indirectly, by the shareholders of the Company in substantially
the same proportions as their ownership of stock of the Company. |
| 3 | “Beneficial Owner” has the meaning given to such term in Rule 13d-3 under the
Exchange Act; provided, however, that Beneficial Owner excludes any Person otherwise becoming a Beneficial Owner by reason of the shareholders
of the Company approving a merger of the Company with another entity. |
(c) “Irish
Companies Act” means the Companies Act 2014 of Ireland, as amended;
(d) “Corporate
Status” describes the status of a person who is or was acting as a director, officer, employee, fiduciary, or Agent of the
Company or an Enterprise.
(e) “Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
(f) “Enterprise”
means any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other entity for which
Indemnitee is or was serving at the request of the Company as a director, officer, employee, or Agent.
(g) “Expenses”
includes all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees and other costs of experts and other professionals,
witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal,
state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Deed, ERISA
excise taxes and penalties, and all other disbursements, obligations, or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating
in, a Proceeding. Expenses also include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent,
and (ii) for purposes of Section 14(d) of this Deed only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement
or defense of Indemnitee’s rights under this Deed, by litigation or otherwise. The parties agree that for the purposes of any advancement
of Expenses for which Indemnitee has made written demand to the Company in accordance with this Deed, all Expenses included in such demand
that are certified by affidavit of Indemnitee’s counsel as being reasonable in the good faith judgment of such counsel will be presumed
conclusively to be reasonable. Expenses, however, do not include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.
(h) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party
(other than with respect to matters concerning the Indemnitee under this Deed, or of other indemnitees under similar indemnification agreements),
or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” does not include any person who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights
under this Deed. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel.
(i) “Proceeding”
includes any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute
resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether
brought in the right of the Company, any Enterprise, or otherwise and whether of a civil, criminal, administrative, legislative, regulatory,
or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party,
potential party, non-party witness or otherwise by reason of Indemnitee’s Corporate Status or by reason of any action taken by Indemnitee
(or a failure to take action by Indemnitee) or of any action (or failure to act) on Indemnitee’s part while acting pursuant to Indemnitee’s
Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification,
reimbursement, or advancement of Expenses can be provided under this Deed. A Proceeding also includes a situation the Indemnitee believes
in good faith may lead to or culminate in the institution of a Proceeding.
3. Indemnity
in Third-Party Proceedings. The Company will indemnify Indemnitee in accordance with the provisions of this Section 3 if
Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right
of the Company to procure a judgment in its favor. Pursuant to this Section 3, the Company will indemnify Indemnitee to the fullest extent
permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement)
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue
or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or any Enterprise and, in the case of a criminal Proceeding had no reasonable cause to believe that Indemnitee’s
conduct was unlawful.
4. Indemnity
in Proceedings by or in the Right of the Company. The Company will indemnify Indemnitee in accordance with the provisions
of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, the Company will indemnify Indemnitee to the fullest extent permitted
by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company. The Company will not indemnify Indemnitee for Expenses under this Section
4 related to any claim, issue or matter in a Proceeding for which Indemnitee has been finally adjudged by a court of competent jurisdiction
to be liable to the Company, unless, and only to the extent that, a court of competent jurisdiction in Ireland (the “Irish
Court”) in which the Proceeding was brought determines upon application by Indemnitee that, despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
5. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Deed, to the fullest
extent permitted by applicable law, the Company will indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee
in connection with any Proceeding to the extent that Indemnitee is successful, on the merits or otherwise. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters
in such Proceeding, the Company will indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by applicable
law. For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, will be deemed to be a successful result as to such claim, issue or matter.
6. Indemnification
for Expenses of a Witness. Notwithstanding any other provisions of this Deed, to the fullest extent permitted by applicable
law, the Company will indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with any Proceeding to which Indemnitee is not a party but to which Indemnitee is a witness, deponent, interviewee,
or otherwise asked to participate or provide information.
7. Partial
Indemnification. If Indemnitee is entitled under any provision of this Deed to indemnification by the Company for some
or a portion of Expenses, but not, however, for the total amount thereof, the Company will indemnify Indemnitee for the portion thereof
to which Indemnitee is entitled.
8. Additional
Indemnification. Notwithstanding any limitation in Sections 3, 4, or 5 of this Deed, the Company will indemnify Indemnitee
to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including
a Proceeding by or in the right of the Company to procure a judgment in its favor).
9. Exclusions.
(a) Notwithstanding
any provision in this Deed, the Company is not obligated under this Deed to make any indemnification payment to Indemnitee in connection
with any Proceeding:
(i) for
which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except to
the extent provided in Section 15(b) of this Deed and except with respect to any excess beyond the amount paid under any insurance policy
or other indemnity provision; or
(ii) for
(a) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within
the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common
law, (b) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any
profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including
any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of
2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale
by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act) or (c) any reimbursement of the Company by Indemnitee
of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the Remuneration and Nominating
Committee of the Board, including but not limited to any such policy adopted to comply with stock exchange listing requirements implementing
Section 10D of the Exchange Act; or
(iii) initiated
by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Proceeding or part of any Proceeding is to enforce Indemnitee’s rights
to indemnification or advancement, of Expenses, including a Proceeding (or any part of any Proceeding) initiated pursuant to Section 14
of this Deed, (ii) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (iii) the Company provides
the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
(b) Notwithstanding
any other terms of this Deed, no provision of this Deed shall indemnify, the Indemnitee against, or exempt the Indemnitee from, any liability
which by virtue of any enactment or rule of law would otherwise attach to the Indemnitee in respect of fraud or dishonesty proved against
the Indemnitee.
(c) Notwithstanding
any other terms of this Deed, no provision of this Deed shall indemnify the Indemnitee against, or exempt the Indemnitee from, any liability
to the extent such provision would be void under applicable law, including, without limitation, the provisions of section 235 of the Irish
Companies Act 2014 (but shall otherwise have effect to the fullest extent permitted under applicable law in effect at the relevant time).
The parties to this Deed acknowledge that, at the date of this Deed, section 235 of the Irish Companies Act renders void any provision,
whether contained in the Constitution, in a contract with the Company (such as this Deed) or otherwise, purporting to exempt a director
or other officer of the Company from, or purporting to indemnify a director or other officer of the Company against, any liability which
by virtue of any enactment or rule of law would otherwise attach to the Indemnitee in respect of any negligence, default, breach of duty
or breach of trust of which the Indemnitee may be guilty in relation to the Company, provided that, notwithstanding the aforesaid prohibition,
the Company may indemnify a director or other officer against any liability incurred by the Indemnitee: (i) in defending proceedings,
whether civil or criminal, in which judgment is given in the Indemnitee’s favour or in which the Indemnitee is acquitted; or (ii)
in connection with any proceedings or an application for relief from liability under section 233 or 234 of the Irish Companies Act in
which relief is granted to the Indemnitee by the High Court of Ireland.
10. Advances
of Expenses.
(a) The
Company will advance, to the extent not prohibited by applicable law, the Expenses incurred by Indemnitee in connection with any Proceeding
(or any part of any Proceeding) not initiated by Indemnitee or any Proceeding (or any part of any Proceeding) initiated by Indemnitee
if (i) the Proceeding or part of any Proceeding is to enforce Indemnitee’s rights to obtain indemnification or advancement of Expenses
from the Company or Enterprise, including a Proceeding initiated pursuant to Section 14 of this Deed or (ii) the Board authorized the
Proceeding (or any part of any Proceeding) prior to its initiation. The Company will advance the Expenses within forty-five (45) days
after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final
disposition of any Proceeding.
(b) Advances
will be unsecured and interest free. Indemnitee hereby undertakes to repay any amounts so advanced (without interest) to the extent that
it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company, thus Indemnitee qualifies for advances upon
the execution of this Deed and delivery to the Company. No other form of undertaking is required other than the execution of this Deed.
The Company will make advances without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s
ultimate entitlement to indemnification under the other provisions of this Deed.
11. Procedure
for Notification of Claim for Indemnification or Advancement.
(a) Indemnitee
will notify the Company in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement of
Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. Indemnitee will include
in the written notification to the Company a description of the nature of the Proceeding and the facts underlying the Proceeding and provide
such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what
extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. Indemnitee’s failure to notify
the Company will not relieve the Company from any obligation it may have to Indemnitee under this Deed, and any delay in so notifying
the Company will not constitute a waiver by Indemnitee of any rights under this Deed. The Secretary of the Company will, promptly upon
receipt of such a request for indemnification or advancement, advise the Board in writing that Indemnitee has requested indemnification
or advancement.
(b) The
Company will be entitled to participate in the Proceeding at its own expense.
12. Procedure
Upon Application for Indemnification.
(a) Unless
a Change in Control has occurred, the determination of Indemnitee’s entitlement to indemnification will be made:
(i) by
a majority vote of the Disinterested Directors, even though less than a quorum of the Board;
(ii) by
a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of
the Board;
(iii) if
there are no such Disinterested Directors or, if such Disinterested Directors so direct, by written opinion provided by Independent Counsel
selected by the Board; or
(iv) if
so directed by the Board, by the shareholders of the Company.
(b) If
a Change in Control has occurred, the determination of Indemnitee’s entitlement to indemnification will be made by written opinion
provided by Independent Counsel selected by Indemnitee (unless Indemnitee requests such selection be made by the Board).
(c) The
party selecting Independent Counsel pursuant to subsection (a)(iii) or (b) of this Section 12 will provide written notice of the selection
to the other party. The notified party may, within ten (10) days after receiving written notice of the selection of Independent Counsel,
deliver to the selecting party a written objection to such selection; provided, however, that such objection may be asserted
only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel”
as defined in Section 2 of this Deed, and the objection will set forth with particularity the factual basis of such assertion. Absent
a proper and timely objection, the person so selected will act as Independent Counsel. If such written objection is so made and substantiated,
the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Irish Court
has determined that such objection is without merit. If, within thirty (30) days after the later of submission by Indemnitee of a written
request for indemnification pursuant to Section 11(a) of this Deed and the final disposition of the Proceeding, Independent Counsel
has not been selected or, if selected, any objection to such selection has not been resolved, either the Company or Indemnitee may petition
the Irish Court for resolution of any objection made by the Company or Indemnitee to the other’s selection or Independent Counsel
and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court designates.
Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Deed, Independent Counsel will be
discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then
prevailing).
(d) Indemnitee
will cooperate with the person, persons or entity making the determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.
The Company will advance and pay any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making the indemnification
determination irrespective of the determination as to Indemnitee’s entitlement to indemnification and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom. The Company promptly will advise Indemnitee in writing of the determination that Indemnitee
is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied and
providing a copy of any written opinion provided to the Board by Independent Counsel.
(e) If
it is determined that Indemnitee is entitled to indemnification, the Company will make payment to Indemnitee within thirty (30) days after
such determination.
13. Presumptions
and Effect of Certain Proceedings.
(a) In
making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination
will, to the fullest extent not prohibited by applicable law, presume Indemnitee is entitled to indemnification under this Deed if Indemnitee
has submitted a request for indemnification in accordance with Section 11(a) of this Deed, and the Company will, to the fullest extent
not prohibited by applicable law, have the burden of proof to overcome that presumption. Neither the failure of the Company (including
by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Deed that
indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination
by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, will
be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) If
the determination of the Indemnitee’s entitlement to indemnification has not been made pursuant to Section 12 of this Deed within
sixty (60) days after the later of (i) receipt by the Company of Indemnitee’s request for indemnification pursuant to Section 11(a)
of this Deed and (ii) the final disposition of the Proceeding for which Indemnitee requested indemnification (the “Determination
Period”), the requisite determination of entitlement to indemnification will, to the fullest extent not prohibited by applicable
law, be deemed to have been made and Indemnitee will be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection
with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law. The Determination Period may
be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination
with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation
and/or information relating thereto; and provided, further, the Determination Period will not apply (i) if the determination of entitlement
to indemnification is to be made by the shareholders pursuant to Section 12(a)(iv) of this Deed and if (A) within fifteen (15) days after
receipt by the Company of the request for such determination the Board has resolved to submit such determination to the shareholders for
their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is
made thereat, or (B) a special meeting of shareholders is called within fifteen (15) days after such receipt for the purpose of making
such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is
made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel.
(c) The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, will not (except as otherwise expressly provided in this Deed) of itself adversely affect the
right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee
had reasonable cause to believe that Indemnitee’s conduct was unlawful.
(d) For
purposes of any determination of good faith, Indemnitee will be deemed to have acted in good faith if Indemnitee acted based on the records
or books of account of the Company, its subsidiaries, or an Enterprise, including financial statements, or on information supplied to
Indemnitee by the directors or officers of the Company, its subsidiaries, or an Enterprise in the course of their duties, or on the advice
of legal counsel for the Company, its subsidiaries, or an Enterprise or on information or records given or reports made to the Company
or an Enterprise by an independent certified public accountant or by an appraiser, financial advisor or other expert selected with reasonable
care by or on behalf of the Company, its subsidiaries, or an Enterprise. Further, Indemnitee will be deemed to have acted in a manner
“not opposed to the best interests of the Company,” as referred to in this Deed if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan. The
provisions of this Section 13(d) are not exclusive and do not limit in any way the other circumstances in which the Indemnitee may be
deemed to have met the applicable standard of conduct set forth in this Deed.
(e) The
knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee
of the Enterprise may not be imputed to Indemnitee for purposes of determining Indemnitee’s right to indemnification under this
Deed.
14. Remedies
of Indemnitee.
(a) Indemnitee
may commence litigation against the Company in the Irish Court to obtain indemnification or advancement of Expenses provided by this Deed
in the event that (i) a determination is made pursuant to Section 12 of this Deed that Indemnitee is not entitled to indemnification under
this Deed, (ii) the Company does not advance Expenses pursuant to Section 10 of this Deed, (iii) the determination of entitlement
to indemnification is not made pursuant to Section 12 of this Deed within the Determination Period, (iv) the Company does not indemnify
Indemnitee pursuant to Section 5 or 6 or the second to last sentence of Section 12(d) of this Deed within thirty (30) days after
receipt by the Company of a written request therefor, (v) the Company does not indemnify Indemnitee pursuant to Section 3, 4, 7, or 8
of this Deed within thirty (30) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the
event that the Company or any other person takes or threatens to take any action to declare this Deed void or unenforceable, or institutes
any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to
be provided to the Indemnitee hereunder. Alternatively, Indemnitee or the Company, at Indemnitee’s or Company’s option as
the case may be, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules
of the American Arbitration Association. Any party requesting arbitration must commence such Proceeding seeking an adjudication or an
award in arbitration within one hundred and eighty (180) days following the date on which such party first has the right to commence such
Proceeding pursuant to this Section 14(a); provided, however, that the foregoing clause does not apply in respect of a Proceeding
brought by Indemnitee to enforce Indemnitee’s rights under Section 5 of this Deed. The Company will not oppose Indemnitee’s
right to seek any such adjudication or award in arbitration.
(b) If
a determination is made pursuant to Section 12 of this Deed that Indemnitee is not entitled to indemnification, any judicial proceeding
or arbitration commenced pursuant to this Section 14 will be conducted in all respects as a de novo trial, or arbitration,
on the merits and Indemnitee may not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration
commenced pursuant to this Section 14 the Company will have the burden of proving Indemnitee is not entitled to indemnification or advancement
of Expenses, as the case may be, and will not introduce evidence of the determination made pursuant to Section 12 of this Deed.
(c) If
a determination is made pursuant to Section 12 of this Deed that Indemnitee is entitled to indemnification, the Company will be bound
by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading,
in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The
Company is, to the fullest extent not prohibited by applicable law, precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 14 that the procedures and presumptions of this Deed are not valid, binding and enforceable and will
stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Deed.
(e) It
is the intent of the Company that, to the fullest extent permitted by applicable law, the Indemnitee not be required to incur legal fees
or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Deed by litigation
or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee
hereunder. The Company, to the fullest extent permitted by applicable law, will (within thirty (30) days after receipt by the Company
of a written request therefor) advance to Indemnitee such Expenses which are incurred by Indemnitee in connection with any action concerning
this Deed, Indemnitee’s right to indemnification or advancement of Expenses from the Company, or concerning any directors’
and officers’ liability insurance policies maintained by the Company, and will indemnify Indemnitee against any and all such Expenses
unless the court determines that each of the Indemnitee’s claims in such Proceeding were made in bad faith or were frivolous or
are prohibited by applicable law.
15. Non-exclusivity;
Survival of Rights; Insurance; Subrogation.
(a) The
indemnification and advancement of Expenses provided by this Deed are not exclusive of any other rights to which Indemnitee may at any
time be entitled under applicable law, the Constitution, any agreement, a vote of shareholders or a resolution of directors, or otherwise.
The indemnification and advancement of Expenses provided by this Deed may not be limited or restricted by any amendment, alteration or
repeal of this Deed in any way with respect to any action taken or omitted by Indemnitee in Indemnitee’s Corporate Status occurring
prior to any amendment, alteration or repeal of this Deed. To the extent that a change in Irish law, whether by statute or judicial decision,
permits greater indemnification or advancement of Expenses than would be afforded currently under the Constitution or this Deed, it is
the intent of the parties hereto that Indemnitee enjoy by this Deed the greater benefits so afforded by such change. No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy is cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or employment of any other right or remedy.
(b) The
Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of Expenses and/or insurance provided
by one or more other Persons with whom or which Indemnitee may be associated. The relationship between the Company and such other Persons,
other than an Enterprise, with respect to the Indemnitee’s rights to indemnification, advancement of Expenses, and insurance is
described by this subsection, subject to the provisions of subsection (d) of this Section 15 with respect to a Proceeding concerning Indemnitee’s
Corporate Status with an Enterprise.
(i) The
Company hereby acknowledges and agrees:
1) the
Company’s obligations to Indemnitee are primary and any obligation of any other Persons, other than an Enterprise, are secondary
(i.e., the Company is the indemnitor of first resort) with respect to any request for indemnification or advancement of Expenses made
pursuant to this Deed concerning any Proceeding;
2)
the Company is primarily liable for all indemnification and indemnification or advancement of Expenses obligations for any Proceeding,
whether created by applicable law, the Constitution, contract (including this Deed) or otherwise;
3) any
obligation of any other Persons with whom or which Indemnitee may be associated to indemnify Indemnitee and/or advance Expenses to Indemnitee
in respect of any proceeding are secondary to the obligations of the Company’s obligations; and
4) the
Company will indemnify Indemnitee and advance Expenses to Indemnitee hereunder to the fullest extent provided herein without regard to
any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated or insurer of any such Person.
(ii) The
Company irrevocably waives, relinquishes and releases (A) any other Person with whom or which Indemnitee may be associated from any claim
of contribution, subrogation, reimbursement, exoneration or indemnification, or any other recovery of any kind in respect of amounts paid
by the Company to Indemnitee pursuant to this Deed and (B) any right to participate in any claim or remedy of Indemnitee against any Person,
whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the
right to take or receive from any Person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment
or security on account of such claim, remedy or right.
(iii) In
the event any other Person with whom or which Indemnitee may be associated or their insurers advances or extinguishes any liability or
loss for Indemnitee, the payor has a right of subrogation against the Company or its insurers for all amounts so paid which would otherwise
be payable by the Company or its insurers under this Deed. In no event will payment by any other Person with whom or which Indemnitee
may be associated or their insurers affect the obligations of the Company hereunder or shift primary liability for the Company’s
obligation to indemnify or advance of Expenses to any other Person with whom or which Indemnitee may be associated.
(iv) Any
indemnification or advancement of Expenses provided by any other Person with whom or which Indemnitee may be associated is specifically
in excess over the Company’s obligation to indemnify and advance Expenses or any valid and collectible insurance (including but
not limited to any malpractice insurance or professional errors and omissions insurance) provided by the Company.
(c) To
the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees,
or agents of the Company, and the Company will obtain a policy or policies covering Indemnitee to the maximum extent of the coverage available
for any such director, officer, employee or agent under such policy or policies, including coverage in the event the Company does not
or cannot, for any reason, indemnify or advance Expenses to Indemnitee as required by this Deed. At the time of the receipt of a notice
of a claim pursuant to this Deed, the Company has director and officer liability insurance in effect, the Company will give prompt notice
of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth
in the respective policies. The Company will thereafter take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. Indemnitee agrees
to assist the Company’s efforts to cause the insurers to pay such amounts and will comply with the terms of such policies, including
selection of approved panel counsel, if required.
(d) The
Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee for any Proceeding concerning Indemnitee’s Corporate
Status with an Enterprise will be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses
from such Enterprise. The Company and Indemnitee intend that any such Enterprise (and its insurers) be the indemnitor of first resort
with respect to indemnification and advancement of Expenses for any Proceeding related to or arising from Indemnitee’s Corporate
Status with such Enterprise. The Company’s obligation to indemnify and advance Expenses to Indemnitee is secondary to the obligations
the Enterprise or its insurers owe to Indemnitee. Indemnitee agrees to take all reasonably necessary and desirable action to obtain from
an Enterprise indemnification and advancement of Expenses for any Proceeding related to or arising from Indemnitee’s Corporate Status
with such Enterprise.
(e) In
the event of any payment made by the Company under this Deed, the Company will be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee from any Enterprise or its insurance carrier. Indemnitee will execute all papers required and take all
action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to
enforce such rights.
(f) In
the event that the Indemnitee has a right to be indemnified against or to receive Expenses under this Deed, the Constitution and any resolutions
adopted pursuant thereto, as well as any rights of Indemnitee under any directors’ and officers’ liability insurance policy
and any other indemnification provided in favor of the Indemnitee by any subsidiary of the Company, the Indemnitee shall not be entitled
to recover such Expenses or otherwise obtain reimbursement or restitution more than once in respect of the same loss arising from any
one matter.
16. Duration
of this Deed. This Deed continues until and terminates upon the later of: (a) ten (10) years after the date that Indemnitee
ceases to serve as a director or officer of the Company or (b) one (1) year after the final termination of any Proceeding then pending
in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced
by Indemnitee pursuant to Section 14 of this Deed relating thereto. The indemnification and advancement of Expenses rights provided
by or granted pursuant to this Deed are binding upon and be enforceable by the parties hereto and their respective successors and assigns
(including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company), continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or
of any other Enterprise, and inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and
administrators and other legal representatives.
17. Severability.
If any provision or provisions of this Deed is held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this Deed (including without limitation, each portion of any Section of this
Deed containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
will not in any way be affected or impaired thereby and remain enforceable to the fullest extent permitted by applicable law; (b) such
provision or provisions will be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to
the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Deed (including, without limitation,
each portion of any Section of this Deed containing any such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the intent manifested thereby.
18. Interpretation.
Any ambiguity in the terms of this Deed will be resolved in favor of Indemnitee and in a manner to provide the maximum indemnification
and advancement of Expenses permitted by applicable law. The Company and Indemnitee intend that this Deed provide to the fullest extent
permitted by applicable law for indemnification and advancement in excess of that expressly provided, without limitation, by the Constitution,
vote of the Company shareholders or Disinterested Directors, or applicable law.
19. Enforcement.
(a) The
Company expressly confirms and agrees that it has entered into this Deed and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Deed in serving or continuing to serve as a director or officer of the Company.
(b) This
Deed constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements
and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however,
that this Deed is a supplement to and in furtherance of the Constitution, any directors’ and officers’ insurance maintained
by the Company and applicable law, and is not a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
20. Modification
and Waiver. No supplement, modification or amendment of this Deed is binding unless executed in writing by the parties
hereto. No waiver of any of the provisions of this Deed will be deemed to or constitute a waiver of any other provision of this Deed nor
will any waiver constitute a continuing waiver.
21. Notice
by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification
or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company does not relieve the Company of any obligation
which it may have to the Indemnitee under this Deed or otherwise.
22. Notices.
All notices, requests, demands and other communications under this Deed will be in writing and will be deemed to have been duly given
if (a) delivered by hand to the other party, (b) sent by reputable overnight courier to the other party or (c) sent by facsimile transmission
or electronic mail, with receipt of oral confirmation that such communication has been received:
(a) If
to Indemnitee, at the address indicated on the signature page of this Deed, or such other address as Indemnitee provides to the Company.
(b) If
to the Company to:
Heramba Electric plc
70 Sir John Rogerson’s
Quay
Dublin 2, Ireland
D02 R296
Attention: Dr. Hans-Jörg
Grundmann
Email: hansjoerggrundmann@googlemail.com
with copies (which
shall not constitute notice) to:
Latham & Watkins
LLP
811 Main Street, Suite
3700
Houston, TX 77002
Attention: Nick S.
Dhesi
Email: Nick.Dhesi@lw.com
and
Matheson
70 Sir John Rogerson’s
Quay
Dublin 2
Ireland
Attention: Fergus
Bolster
Email: Fergus.Bolster@matheson.com
or to any other address as may have been furnished to Indemnitee by
the Company.
23. Contribution.
To the fullest extent permissible under applicable law, if the indemnification provided for in this Deed is unavailable to Indemnitee
for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, will contribute to the amount incurred by Indemnitee, whether
for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim
relating to an indemnifiable event under this Deed, in such proportion as is deemed fair and reasonable in light of all of the circumstances
of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or
transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees
and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
24. Applicable
Law and Consent to Jurisdiction. This Deed and the legal relations among the parties are governed by, and construed and
enforced in accordance with, the laws of Ireland, without regard to its conflict of laws rules and principles. Except with respect to
any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Deed, the Company and Indemnitee hereby irrevocably and unconditionally
(i) agree that any action or Proceeding arising out of or in connection with this Deed may be brought only in Ireland and not in any other
state or federal court in any jurisdiction or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of
the Irish Court for purposes of any action or Proceeding arising out of or in connection with this Deed, (iii) waive any objection to
the laying of venue of any such action or Proceeding in the Irish Court, and (iv) waive, and agree not to plead or to make, any claim
that any such action, claim, or proceeding brought in the Irish Court has been brought in an improper or inconvenient forum.
25. Identical
Counterparts. This Deed may be executed in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together constitutes one and the same Deed. Only one such counterpart signed by the party against whom enforceability
is sought needs to be produced to evidence the existence of this Deed.
26. Headings.
The headings of this Deed are inserted for convenience only and do not constitute part of this Deed or affect the construction thereof.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties
have caused this Deed to be signed and delivered as of the day and year first above written.
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[Signature
Page to Form of Heramba Electric plc Deed of Indemnification and Advancement]
Exhibit 4.5
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Heramba electric plc
2024 INCENTIVE AWARD PLAN
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Article
I.
Purpose
The Plan’s purpose is
to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions
to the Company by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities. Capitalized
terms used in the Plan are defined in Article XI.
Article
II.
Eligibility
Service Providers are eligible
to be granted Awards under the Plan, subject to the limitations described herein.
Article
III.
Administration and Delegation
3.1
Administration. The Plan is administered by the Administrator. The Administrator has authority
to determine which Service Providers receive Awards, grant Awards and set Award terms and conditions, subject to the conditions and limitations
in the Plan. The Administrator also has the authority to take all actions and make all determinations under the Plan, to interpret the
Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable. The
Administrator may correct defects and ambiguities, supply omissions and reconcile inconsistencies in the Plan or any Award Agreement as
it deems necessary or appropriate to administer the Plan and any Awards. The Administrator’s determinations under the Plan are in
its sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or any Award.
3.2
Appointment of Committees. To the extent Applicable Laws permit, the Board or the Administrator
may delegate any or all of its powers under the Plan to one or more Committees or committees of officers of the Company or any of its
Subsidiaries. The Board or the Administrator, as applicable, may rescind any such delegation, abolish any such committee or Committee
and/or re-vest in itself any previously delegated authority at any time.
Article
IV.
SHARES Available for Awards
4.1
Number of Shares. Subject to adjustment under Article
VIII and the terms of this Article IV, Awards may be made under the Plan covering up to the Overall Share Limit. Shares covered by Awards
under the Plan may consist of authorized but unissued Shares, Shares purchased on the open market or treasury Shares.
4.2
Share Recycling. If all or any part of an Award expires,
lapses or is terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised or forfeited,
in any case, in a manner that results in the Company acquiring Shares covered by the Award at a price not greater than the price (as adjusted
to reflect any Equity Restructuring) paid by the Participant for such Shares or not issuing any Shares covered by the Award, the unused
Shares covered by the Award will, as applicable, become or again be available for Award grants under the Plan. Further, Shares delivered
(either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an
Award and/or to satisfy any applicable tax withholding obligation with respect to an Award (including Shares retained by the Company from
the Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award
grants under the Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not count against
the Overall Share Limit. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Shares
authorized for grant under Section 4.1 and shall not be available for future grants of Awards: (a) Shares subject to a Share Appreciation
Right that are not issued in connection with the settlement of the Share Appreciation Right on exercise thereof; and (b) Shares purchased
on the open market with the cash proceeds from the exercise of Options.
4.3
Incentive Share Option Limitations. Notwithstanding
anything to the contrary herein, no more than 8,582,221 Shares may be issued pursuant to the exercise
of Incentive Share Options.
4.4
Substitute Awards. In connection with an entity’s
merger or consolidation with the Company or the Company’s acquisition of an entity’s property or equity, the Administrator
may grant Awards in substitution for any options or other equity or equity-based awards granted before such merger or consolidation by
such entity or its affiliate. Substitute Awards may be granted on such terms as the Administrator deems appropriate, notwithstanding limitations
on Awards in the Plan. Substitute Awards will not count against the Overall Share Limit (nor shall Shares subject to a Substitute Award
be added to the Shares available for Awards under the Plan as provided above), except that Shares acquired by exercise of substitute Incentive
Share Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Share Options under
the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary
combines has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition
or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate,
using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration
payable to the holders of equity interests of the entities party to such acquisition or combination) may be used for Awards under the
Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards shall not be added to the
Shares available for Awards under the Plan as provided above); provided that Awards using such available shares shall not be made
after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination,
and shall only be made to individuals who were not Employees, Consultants or Directors prior to such acquisition or combination.
4.5 Non-Employee
Director Compensation. Notwithstanding any provision to the contrary in the Plan, the Administrator
may establish compensation for non-employee Directors from time to time, subject to the limitations in the Plan. The Administrator will
from time to time determine the terms, conditions and amounts of all such non-employee Director compensation in its discretion and pursuant
to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant
from time to time; provided that the sum of any cash compensation, or other compensation, and the value (determined as of the
grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto)
of Awards granted to a non-employee Director as compensation for services as a non-employee Director during any fiscal year of the Company
may not exceed $750,000 (increased to $1,000,000 in the calendar year of a non-employee Director’s initial service as a non-employee
director or any calendar year during which a non-employee Director serves as chairman of the Board or lead independent Director, which
limits shall not apply to the compensation for any non-employee Director of the Company who serves in any capacity in addition to that
of a non-employee Director for which he or she receives additional compensation or any compensation paid to any non-employee Director
prior to the calendar year following the calendar year in which the Plan’s effective date occurs). The Administrator may make exceptions
to this limit for individual non-employee Directors in extraordinary circumstances, as the Administrator may determine in its discretion;
provided that the non-employee Director receiving such additional compensation may not participate in the decision to award such
compensation or in other contemporaneous compensation decisions involving non-employee Directors.
Article
V.
Share Options and Share Appreciation Rights
5.1
General. The Administrator may grant Options or Share Appreciation Rights to Service Providers
subject to the limitations in the Plan, including any limitations in the Plan that apply to Incentive Share Options. A Share Appreciation
Right will entitle the Participant (or other person entitled to exercise the Share Appreciation Right) to receive from the Company upon
exercise of the exercisable portion of the Share Appreciation Right an amount determined by multiplying the excess, if any, of the Fair
Market Value of one Share on the date of exercise over the exercise price per Share of the Share Appreciation Right by the number of Shares
with respect to which the Share Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may
impose and shall be payable in cash, Shares valued at Fair Market Value or a combination of the two as the Administrator may determine
or provide in the Award Agreement.
5.2
Exercise Price. The Administrator will establish each Option’s and Share Appreciation
Right’s exercise price and specify the exercise price in the Award Agreement. In no circumstances shall the per Share exercise price
of an Option be less than the Share’s nominal value. Unless otherwise determined by the Administrator, the exercise price will not
be less than 100% of the Fair Market Value on the grant date of the Option (subject to Section 5.6) or Share Appreciation Right.
Notwithstanding the foregoing, in the case of an Option or a Share Appreciation Right that is a Substitute Award, the exercise price per
share of the Shares subject to such Option or Share Appreciation Right, as applicable, may be less than the Fair Market Value per share
on the date of grant; provided that the exercise price of any Substitute Award shall be determined in accordance with the applicable
requirements of Sections 424 and 409A of the Code.
5.3
Duration. Each Option or Share Appreciation Right will be exercisable at such times and as
specified in the Award Agreement, provided that, unless otherwise determined by the Administrator, the term of an Option or Share Appreciation
Right will not exceed ten years (subject to Section 5.6). Notwithstanding the foregoing and unless determined otherwise by the Company,
in the event that on the last business day of the term of an Option or Share Appreciation Right (other than an Incentive Share Option)
(a) the exercise of the Option or Share Appreciation Right is prohibited by Applicable Law, as determined by the Company, or (b) Shares
may not be purchased or sold by the applicable Participant due to any Company insider trading policy (including blackout periods) or a
“lock-up” agreement undertaken in connection with an issuance of securities by the Company, and, then the term of the Option
or Share Appreciation Right shall be extended, except to the extent that such extension would violate Section 409A, until the date that
is 30 days after the end of the legal prohibition, black-out period or lock-up agreement, as determined by the Company; provided,
however, that unless otherwise determined by the Administrator in no event shall the extension last beyond the ten year term of
the applicable Option or Share Appreciation Right. Notwithstanding the foregoing, to the extent permitted under Applicable Laws, if the
Participant, prior to the end of the term of an Option or Share Appreciation Right, violates the non-competition, non-solicitation, confidentiality
or other similar restrictive covenant provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement
between the Participant and the Company or any of its Subsidiaries, the right of the Participant and the Participant’s transferees
to exercise any Option or Share Appreciation Right issued to the Participant shall terminate immediately upon such violation, unless the
Company otherwise determines.
5.4
Exercise. Options and Share Appreciation Rights may be exercised by delivering to the Company
a written notice of exercise, in a form the Administrator approves (which may be electronic), signed by the person authorized to exercise
the Option or Share Appreciation Right, together with, as applicable, payment in full (a) as specified in Section 5.5 for the number
of Shares for which the Award is exercised and (b) as specified in Section 9.5 for any applicable taxes. Unless the Administrator
otherwise determines, a Share Appreciation Right may not be exercised for a fraction of a Share. In no circumstances may an Option be
exercised for a fraction of a Share.
5.5
Payment Upon Exercise. Subject to Sections 9.10 and 10.8, any Company insider trading
policy (including blackout periods) and Applicable Laws (including the provisions of section 1028 of the Irish Companies Act relating
to the preparation of an expert’s report on the valuation of any non-cash consideration before the issuance of Shares for non-cash
consideration), the exercise price of an Option must be paid by:
(a)
cash, wire transfer of immediately available funds or by check payable to the order of the Company, provided that the Company may
limit the use of one of the foregoing payment forms if one or more of the payment forms below is permitted;
(b)
if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (i) delivery (including
electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable
to the Company to deliver promptly to the Company sufficient funds to pay the exercise price, or (ii) the Participant’s delivery
to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the
Company cash or a check sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be
required by the Administrator;
(c)
to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant
valued at their Fair Market Value;
(d)
to the extent permitted by the Administrator, but subject to the provisions of Section 9.13, surrendering Shares then issuable
upon the Option’s exercise valued at their Fair Market Value on the exercise date;
(e)
to the extent permitted by the Administrator, delivery of a promissory note or any other property that the Administrator determines
is good and valuable consideration; or
(f)
to the extent permitted by the Company, any combination of the above payment forms approved by the Administrator.
5.6
Additional Terms of Incentive Share Options. The Administrator may grant Incentive Share Options
only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f)
of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Share Options under the Code.
If an Incentive Share Option is granted to a Greater Than 10% Shareholder, the exercise price will not be less than 110% of the Fair Market
Value on the Option’s grant date, and the term of the Option will not exceed five years. All Incentive Share Options will be subject
to and construed consistently with Section 422 of the Code. By accepting an Incentive Share Option, the Participant agrees to give prompt
written notice to the Company of dispositions or other transfers (other than in connection with a Change in Control) of Shares acquired
under the Option made within (a) two years from the grant date of the Option or (b) one year after the transfer of such Shares to the
Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property,
assumption of indebtedness or other consideration, in such disposition or other transfer. Neither the Company nor the Administrator will
be liable to a Participant, or any other party, if an Incentive Share Option fails or ceases to qualify as an “incentive stock option”
under Section 422 of the Code. Any Incentive Share Option or portion thereof that fails to qualify as an “incentive stock option”
under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding
the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Non-Qualified Share Option.
Article
VI.
Restricted Shares; Restricted Share Units
6.1
General. The Administrator may grant Restricted Shares, or the right to purchase Restricted
Shares, to any Service Provider, subject to the Company’s right to repurchase all or part of such Shares at their issue price or
other stated or formula price from the Participant (or to require forfeiture of such Shares) if conditions the Administrator specifies
in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes
for such Award. In addition, the Administrator may grant to Service Providers Restricted Share Units, which may be subject to vesting
and forfeiture conditions during the applicable restriction period or periods, as set forth in an Award Agreement.
6.2
Restricted Shares.
(a)
Dividends. Participants holding Shares of Restricted Shares will be entitled to all ordinary cash dividends paid with respect
to such Shares, unless the Administrator provides otherwise in the Award Agreement. In addition, unless the Administrator provides otherwise,
if any dividends or distributions are paid in Shares, or consist of a dividend or distribution to holders of Shares of property other
than an ordinary cash dividend, the Shares or other property will be subject to the same restrictions on transferability and forfeitability
as the Shares of Restricted Shares with respect to which they were paid. Notwithstanding anything to the contrary herein, with respect
to any Award of Restricted Shares, dividends which are paid to holders of Shares prior to vesting shall only be paid out to a Participant
holding such Restricted Shares to the extent that the vesting conditions are subsequently satisfied. All such dividend payments will be
made no later than March 15 of the calendar year following the calendar year in which the right to the dividend payment becomes nonforfeitable.
(b)
Share Certificates. The Company may require that the Participant deposit in escrow with the Company (or its designee) any
share certificates issued in respect of Restricted Shares, together with a share power endorsed in blank.
6.3
Restricted Share Units.
(a)
Settlement. The Administrator may provide that settlement of Restricted Share Units will occur upon or as soon as reasonably
practicable after the Restricted Share Units vest or will instead be deferred, on a mandatory basis or at the Participant’s election,
in a manner intended to comply with Section 409A.
(b)
Shareholder Rights. A Participant will have no rights of a shareholder with respect to Shares subject to any Restricted
Share Unit unless and until the Shares are delivered in settlement of the Restricted Share Unit.
Article
VII.
Other Share or Cash Based Awards; Dividend Equivalents
7.1
Other Share or Cash Based Awards. Other Share or Cash Based Awards may be granted to Participants,
including Awards entitling Participants to receive Shares to be delivered in the future and including annual or other periodic or long-term
cash bonus awards (whether based on specified Performance Criteria or otherwise), in each case subject to any conditions and limitations
in the Plan. Such Other Share or Cash Based Awards will also be available as a payment form in the settlement of other Awards, as standalone
payments and as payment in lieu of compensation to which a Participant is otherwise entitled. Other Share or Cash Based Awards may be
paid in Shares, cash or other property, as the Administrator determines.
7.2
Dividend Equivalents. A grant of Restricted Share Units or Other Share or Cash Based Award
may provide a Participant with the right to receive Dividend Equivalents, and no Dividend Equivalents shall be payable with respect to
Options or Share Appreciation Rights. Dividend Equivalents may be paid currently or credited to an account for the Participant, settled
in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Award with to which the Dividend Equivalents
are paid and subject to other terms and conditions as set forth in the Award Agreement. Notwithstanding anything to the contrary herein,
Dividend Equivalents with respect to an Award shall only be paid out to a Participant to the extent that the vesting conditions are subsequently
satisfied. All such Dividend Equivalent payments will be made no later than March 15 of the calendar year following the calendar year
in which the right to the Dividend Equivalent payment becomes nonforfeitable, unless determined otherwise by the Administrator or unless
deferred in a manner intended to comply with Section 409A.
Article
VIII.
Adjustments for Changes in SHARES
and Certain Other Events
8.1
Equity Restructuring. In connection with any Equity Restructuring, notwithstanding anything
to the contrary in this Article VIII, the Administrator will equitably adjust each outstanding Award as it deems appropriate to reflect
the Equity Restructuring, which may include (if applicable) adjusting the number and type of securities subject to each outstanding Award
and/or the Award’s exercise price or grant price and/or applicable performance goals, granting new Awards to Participants, and making
a cash payment to Participants. The adjustments provided under this Section 8.1 will be nondiscretionary and final and binding
on the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable.
8.2
Corporate Transactions. In the event of any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), reorganization, merger, consolidation, combination, amalgamation, repurchase,
recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets
of the Company, or sale or exchange of Shares or other securities of the Company, Change in Control, issuance of warrants or other rights
to purchase Shares or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction
or event affecting the Company or its financial statements or any change in any Applicable Laws or accounting principles, the Administrator,
on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken in connection with the occurrence
of such transaction or event (and any action to give effect to a change in Applicable Law or accounting principles may be made within
a reasonable period of time after such change), is hereby authorized to take any one or more of the following actions whenever the Administrator
determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended
by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) to facilitate such
transaction or event or (z) give effect to such changes in Applicable Laws or accounting principles:
(a)
To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal
to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the
Participant’s rights under the vested portion of such Award, as applicable; provided that, if the amount that could have
been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights, in
any case, is equal to or less than zero, then the Award may be terminated without payment; provided, further, that Awards held by members
of the Board will be deemed settled in Shares on or immediately prior to the applicable event if the Administrator takes action under
this clause (a);
(b)
To provide that such Award shall vest and, to the extent applicable, be exercisable as to all Shares covered thereby, notwithstanding
anything to the contrary in the Plan or the provisions of such Award;
(c)
To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be
substituted for by awards covering the equity of the successor or survivor corporation, or a parent or subsidiary thereof, or equivalent
value thereof in cash, with appropriate adjustments as to the number and kind of shares and/or applicable exercise or purchase price,
in all cases, as determined by the Administrator;
(d)
To make adjustments in the number and type of Shares (or other securities or property) subject to outstanding Awards and/or with
respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article IV on
the maximum number and kind of shares which may be issued) and/or in the terms and conditions of (including the grant or exercise price
or applicable performance goals), and the criteria included in, outstanding Awards;
(e)
To replace such Award with other rights or property of equivalent value selected by the Administrator; and/or
(f)
To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event.
8.3
Effect of Non-Assumption in a Change in Control. Notwithstanding the provisions of Section
8.2, if a Change in Control occurs and a Participant’s Awards are not continued, converted, assumed, or replaced with a substantially
similar award by (a) the Company, or (b) a successor entity or its parent or subsidiary (an “Assumption”), and provided that
the Participant has not had a Termination of Service, then, immediately prior to the Change in Control, such Awards shall become fully
vested, exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on such Awards shall lapse, in
which case, such Awards shall be canceled upon the consummation of the Change in Control in exchange for the right to receive the Change
in Control consideration payable to other holders of Shares (i) which may be on such terms and conditions as apply generally to holders
of Shares under the Change in Control documents (including, without limitation, any escrow, earn-out or other deferred consideration provisions)
or such other terms and conditions as the Administrator may provide, and (ii) determined by reference to the number of Shares subject
to such Awards and net of any applicable exercise price; provided that to the extent that any Awards constitute “nonqualified deferred
compensation” that may not be paid upon the Change in Control under Section 409A without the imposition of taxes thereon under Section
409A, the timing of such payments shall be governed by the applicable Award Agreement (subject to any deferred consideration provisions
applicable under the Change in Control documents); and provided, further, that if the amount to which a Participant would be entitled
upon the settlement or exercise of such Award at the time of the Change in Control is equal to or less than zero, then such Award may
be terminated without payment. The Administrator shall determine whether an Assumption of an Award has occurred in connection with a Change
in Control.
8.4
Administrative Stand Still. In the event of any pending share dividend, share split, combination
or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to shareholders,
or any other extraordinary transaction or change affecting the Shares or the Share price, including any Equity Restructuring or any securities
offering or other similar transaction, for administrative convenience, the Administrator may refuse to permit the exercise of any Award
for up to 60 days before or after such transaction.
8.5
General. Except as expressly provided in the Plan or the Administrator’s action under
the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase
or decrease in the number of Shares of any class or dissolution, liquidation, merger, or consolidation of the Company or other corporation.
Except as expressly provided with respect to an Equity Restructuring under Section 8.1 or the Administrator’s action under
the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment
will be made regarding, the number of Shares subject to an Award or the Award’s grant or exercise price. The existence of the Plan,
any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Company’s right or power to make
or authorize (a) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business,
(b) any merger, consolidation dissolution or liquidation of the Company or sale of Company assets or (c) any sale or issuance of securities,
including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares. The Administrator
may treat Participants and Awards (or portions thereof) differently under this Article VIII.
Article
IX.
General Provisions Applicable to Awards
9.1
Transferability. Except as the Administrator may determine or provide in an Award Agreement
or otherwise for Awards other than Incentive Share Options, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered,
either voluntarily or by operation of law, except for certain Designated Beneficiary designations, by will or the laws of descent and
distribution, or, subject to the Administrator’s consent, pursuant to a domestic relations order, and, during the life of the Participant,
will be exercisable only by the Participant. Any permitted transfer of an Award hereunder shall be without consideration, except as required
by Applicable Law. References to a Participant, to the extent relevant in the context, will include references to a Participant’s
authorized transferee that the Administrator specifically approves.
9.2
Documentation. Each Award will be evidenced in an Award Agreement, which may be written or
electronic, as the Administrator determines. Each Award may contain terms and conditions in addition to those set forth in the Plan.
9.3
Discretion. Except as the Plan otherwise provides, each Award may be made alone or in addition
or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Administrator need not treat
Participants or Awards (or portions thereof) uniformly.
9.4
Termination of Status. The Administrator will determine how the disability, death, retirement,
authorized leave of absence or any other change or purported change in a Participant’s Service Provider status affects an Award
and the extent to which, and the period during which the Participant, the Participant’s legal representative, conservator, guardian
or Designated Beneficiary may exercise rights under the Award, if applicable.
9.5
Withholding. Each Participant must pay the Company or make provision satisfactory to the Administrator
for payment of any taxes required by Applicable Law to be withheld in connection with such Participant’s Awards by the date of the
event creating the tax liability. The Company may deduct an amount sufficient to satisfy such tax obligations based on the applicable
statutory withholding rates (or such other rate as may be determined by the Company after considering any accounting consequences or costs)
from any payment of any kind otherwise due to a Participant. In the absence of a contrary determination by the Company, all tax withholding
obligations will be calculated based on the minimum applicable statutory withholding rates. Subject to Section 10.8 and any
Company insider trading policy (including blackout periods), Participants may satisfy such tax obligations (a) in cash, by wire transfer
of immediately available funds, by check made payable to the order of the Company, provided that the Company may limit the use of the
foregoing payment forms if one or more of the payment forms below is permitted, (b) to the extent permitted by the Administrator, in whole
or in part by delivery of Shares, including Shares delivered by attestation and Shares retained from the Award creating the tax obligation,
valued at their fair market value on the date of delivery, (c) subject to Section 9.10, if there is a public market for Shares at the
time the tax obligations are satisfied, unless the Company otherwise determines, (i) delivery (including electronically or telephonically
to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver
promptly to the Company sufficient funds to satisfy the tax obligations, or (ii) delivery by the Participant to the Company of a copy
of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check
sufficient to satisfy the tax withholding; provided that such amount is paid to the Company at such time as may be required by the Administrator,
or (d) to the extent permitted by the Company, any combination of the foregoing payment forms approved by the Administrator. Notwithstanding
any other provision of the Plan, the number of Shares which may be so delivered or retained pursuant to clause (b) of the immediately
preceding sentence shall be limited to the number of Shares which have a fair market value on the date of delivery or retention no greater
than the aggregate amount of such liabilities based on the maximum applicable individual statutory withholding rate in the applicable
jurisdiction at the time of such withholding (or such other rate as may be required to avoid the liability classification of the applicable
award under generally accepted accounting principles in the United States of America). Subject to Section 9.10, if any tax withholding
obligation will be satisfied under clause (b) above by the Company’s retention of Shares from the Award creating the tax obligation
and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm
determined acceptable to the Company for such purpose to sell on the applicable Participant’s behalf some or all of the Shares retained
and to remit the proceeds of the sale to the Company or its designee, and each Participant’s acceptance of an Award under the Plan
will constitute the Participant’s authorization to the Company and instruction and authorization to such brokerage firm to complete
the transactions described in this sentence.
9.6
Amendment of Award; Repricing. The Administrator may amend, modify or terminate any outstanding
Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, and converting
an Incentive Share Option to a Non-Qualified Share Option. The Participant’s consent to such action will be required unless (a)
the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the
Award, or (b) the change is permitted under Article VIII or pursuant to Section 10.6. Notwithstanding the foregoing or anything
in the Plan to the contrary, the Administrator may, without the approval of the shareholders of the Company, reduce the exercise price
per share of outstanding Options or Share Appreciation Rights or cancel outstanding Options or Share Appreciation Rights in exchange for
cash, other Awards or Options or Share Appreciation Rights with an exercise price per share that is less than the exercise price per share
of the original Options or Share Appreciation Rights.
9.7
Conditions on Delivery of Shares. The Company will not be obligated to deliver any Shares
under the Plan or remove restrictions from Shares previously delivered under the Plan until (a) all Award conditions have been met or
removed to the Company’s satisfaction, (b) as determined by the Company, all other legal matters regarding the issuance and delivery
of such Shares have been satisfied, including any applicable securities laws and stock exchange or stock market rules and regulations,
and (c) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary
or appropriate to satisfy any Applicable Laws. The Company’s inability to obtain authority from any regulatory body having jurisdiction,
which the Administrator determines is necessary to the lawful issuance and sale of any securities, will relieve the Company of any liability
for failing to issue or sell such Shares as to which such requisite authority has not been obtained.
9.8
Acceleration. The Administrator may at any time provide that any Award will become immediately
vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable.
9.9
Cash Settlement. Without limiting the generality of any other provision of the Plan, the Administrator
may provide, in an Award Agreement or subsequent to the grant of an Award, in its discretion, that any Award may be settled in cash, Shares
or a combination thereof.
9.10
Broker-Assisted Sales. In the event of a broker-assisted sale of Shares in connection with
the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including amounts to be paid under the final
sentence of Section 9.5: (a) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes
due, or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other Participants in the Plan
in which all Participants receive an average price; (c) the applicable Participant will be responsible for all broker’s fees and
other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs,
damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of such sale that exceed
the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company
and its designees are under no obligation to arrange for such sale at any particular price; and (f) in the event the proceeds of such
sale are insufficient to satisfy the Participant’s applicable obligation, the Participant may be required to pay immediately upon
demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant’s obligation.
9.11
Fractional Shares: No fractional Shares will be issued under the Plan, and, except as otherwise
provided in the Plan, the Administrator will determine the manner in which any fractional Share value will be treated.
9.12
Nominal Value Requirement: Notwithstanding any other provision of this Plan or the terms of
any Award Agreement or Award made thereunder, no Share may be allotted or issued pursuant to the grant, exercise or vesting of an Award,
unless such Share is fully paid-up on issuance, in cash or for other good consideration, to at least its nominal value and in a manner
which does not contravene sections 82 and 1043 of the Irish Companies Act (relating to the prohibition on a company providing financial
assistance for the purpose of an acquisition of its own shares or the shares of its holding company) or any other provision of the Companies
Act, and all Awards will be deemed to incorporate such a term.
9.13
Cashless Exercise Requirements: Notwithstanding any other provision of this Plan or the terms
of any Award Agreement or Award made thereunder, no Share may be allotted or issued pursuant to the grant, exercise or vesting of an Option
on a “cashless exercise basis”, unless such Share is fully paid-up, in cash, on issuance to at least its nominal value and
in a manner which does not contravene sections 82 and 1043 of the Irish Companies Act, referred to above, or any other provision of the
Irish Companies Act, and all Awards will be deemed to incorporate such a term. A “cashless exercise provision” is one that
entitles a holder of an Option to surrender its right to be issued Shares (and elect to receive a lesser number of Shares) upon an Option’s
exercise in, or purportedly in, full, or partial, satisfaction of the relevant exercise price of the Option; for the avoidance of doubt,
in such circumstances, the nominal value of the reduced number of Shares to be issued must, in all circumstances, be paid-up in cash,
and the issuance of such Shares shall take effect as an issue of Shares for cash fully paid-up to their nominal value.
9.14
Repurchase of Shares for Value: No Shares may be acquired, whether by way of redemption of
purchase, by the Company for valuable consideration other than out of “profits available for distribution” within the meaning
of section 117 of the Irish Companies Act and otherwise in compliance with the relevant provisions of Parts 3 and 17 of the Irish Companies
Acts relating to the acquisition by a company of its own shares. Fully paid-up Shares may be surrendered or transferred to the Company
otherwise than for valuable consideration as permitted by section 102 of the Irish Companies Act.
Article
X.
Miscellaneous
10.1
No Right to Employment or Other Status. No person will have any claim or right to be granted
an Award, and the grant of an Award will not be construed as giving a Participant the right to continued employment or any other relationship
with the Company or any of its Subsidiaries. The Company and its Subsidiaries expressly reserves the right at any time to dismiss or otherwise
terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided
in an Award Agreement or in the Plan.
10.2
No Rights as Shareholder; Certificates. Subject to the Award Agreement, no Participant or
Designated Beneficiary will have any rights as a Shareholder with respect to any Shares to be distributed under an Award until becoming
the record holder of such Shares. Notwithstanding any other provision of the Plan, unless the Administrator otherwise determines or Applicable
Laws require, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with
any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or equity plan administrator).
The Company may place legends on share certificates issued under the Plan that the Administrator deems necessary or appropriate to comply
with Applicable Laws.
10.3
Effective Date and Term of Plan. Unless earlier terminated by the Board, the Plan will become
effective upon the consummation of the transactions contemplated by that certain Business Combination Agreement entered into on October
2, 2023, by and among the Company, Project Energy Reimagined Acquisition Corp., Heramba Merger Corp., Heramba GmbH and Heramba Limited
(the “Business Combination,” and the date that the Plan becomes effective, the “Effective Date”),
subject to the approval of the shareholders of the Company, and will remain in effect until the tenth anniversary of the Effective Date.
Notwithstanding anything to the contrary in the Plan, an Incentive Share Option may not be granted under the Plan after 10 years from
the earlier of (a) the date the Board adopted the Plan and (b) the date the shareholders of the Company approved the Plan, provided that
Awards previously granted may extend beyond that date in accordance with the Plan. Notwithstanding anything to the contrary contained
herein, if the Plan is not approved by the shareholders of the Company, the Plan will not become effective, and no Awards will be granted
under the Plan.
10.4
Amendment of Plan. The Administrator may amend, suspend or terminate the Plan at any time;
provided that no amendment, other than an increase to the Overall Share Limit, may materially and adversely affect the rights of
a Participant with respect to any Award outstanding at the time of such amendment without the affected Participant’s consent. No
Awards may be granted under the Plan during any suspension period or after the Plan’s termination. Awards outstanding at the time
of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension
or termination. The Board will obtain shareholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.
10.5
Provisions for Foreign Participants. The Administrator may modify Awards granted to Participants
who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to address differences
in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other
matters.
10.6
Section 409A.
(a)
General. The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no
adverse tax consequences, interest, or penalties under Section 409A apply, and the Plan shall be construed and interpreted in accordance
with such intent. Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participant’s
consent, amend this Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures
and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions
intended to (i) exempt this Plan or any Award from Section 409A, or (ii) comply with Section 409A, including regulations, guidance, compliance
programs and other interpretative authority that may be issued after an Award’s grant date. The Company makes no representations
or warranties as to an Award’s tax treatment under Section 409A or otherwise. The Company will have no obligation under this Section
10.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability
to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant
“nonqualified deferred compensation” subject to taxes, penalties or interest under Section 409A.
(b)
Separation from Service. If an Award constitutes “nonqualified deferred compensation” under Section 409A, any
payment or settlement of such Award upon a termination of a Participant’s Service Provider relationship will, to the extent necessary
to avoid taxes under Section 409A, be made only upon the Participant’s “separation from service” (within the meaning
of Section 409A), whether such “separation from service” occurs upon or after the termination of the Participant’s Service
Provider relationship. For purposes of this Plan or any Award Agreement relating to any such payments or benefits, references to a “termination,”
“termination of employment” or like terms means a “separation from service.”
(c)
Payments to Specified Employees; Installments. Notwithstanding any contrary provision in the Plan or any Award Agreement,
any payment(s) of “nonqualified deferred compensation” required to be made under an Award to a “specified employee”
(as defined under Section 409A and as the Administrator determines) due to his or her “separation from service” will, to the
extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following
such “separation from service” (or, if earlier, until the specified employee’s death) and will instead be paid (as set
forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter
(without interest). Any payments of “nonqualified deferred compensation” under such Award payable more than six months following
the Participant’s “separation from service” will be paid at the time or times the payments are otherwise scheduled to
be made. Furthermore, notwithstanding any contrary provision of the Plan or any Award Agreement, any payment of “nonqualified deferred
compensation” under the Plan that may be made in installments shall be treated as a right to receive a series of separate and distinct
payments.
10.7
Limitations on Liability. Notwithstanding any other provisions of the Plan, no individual
acting as a director, officer, other employee or agent of the Company or any Subsidiary will be liable to any Participant, former Participant,
spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award,
and such individual will not be personally liable with respect to the Plan because of any contract or other instrument executed in his
or her capacity as an Administrator, director, officer, other employee or agent of the Company or any Subsidiary. The Company will indemnify
and hold harmless each director, officer, other employee and agent of the Company or any Subsidiary that has been or will be granted or
delegated any duty or power relating to the Plan’s administration or interpretation, against any cost or expense (including attorneys’
fees) or liability (including any sum paid in settlement of a claim with the Administrator’s approval) arising from any act or omission
concerning this Plan unless arising from such person’s own fraud or bad faith.
10.8
Lock-Up Period. The Company may, at the request of any underwriter representative or otherwise,
in connection with registering the offering of any Company securities under the Securities Act, prohibit Participants from, directly or
indirectly, selling or otherwise transferring any Shares or other Company securities during a period of up to 180 days following the effective
date of a Company registration statement filed under the Securities Act, or such longer period as determined by the underwriter.
10.9
Data Privacy. As a condition for receiving any Award, each Participant explicitly and unambiguously
consents to the collection, use and transfer, in electronic or other form, of personal Data as described in this section by and among
the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Participant’s participation
in the Plan. The Company and its Subsidiaries and affiliates may hold certain personal information about a Participant, including the
Participant’s name, address and telephone number; birthdate; social security, insurance number or other identification number; salary;
nationality; job title(s); any Shares held in the Company or its Subsidiaries and affiliates; and Award details, to implement, manage
and administer the Plan and Awards (the “Data”). The Company and its Subsidiaries and affiliates may transfer
the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the
Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration
and management. These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country
may have different data privacy laws and protections than the recipients’ country. By accepting an Award, each Participant authorizes
such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage
the Participant’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the
Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as necessary to
implement, administer, and manage the Participant’s participation in the Plan. A Participant may, at any time, view the Data that
the Company holds regarding such Participant, request additional information about the storage and processing of the Data regarding such
Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section
10.9 in writing, without cost, by contacting the local human resources representative. If the Participant refuses or withdraws the
consents in this Section 10.9, the Company may cancel Participant’s ability to participate in the Plan and, in the Administrator’s
discretion, the Participant may forfeit any outstanding Awards. For more information on the consequences of refusing or withdrawing consent,
Participants may contact their local human resources representative.
10.10
Severability. If any portion of the Plan or any action taken under it is held illegal or invalid
for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced
as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.
10.11
Governing Documents. If any contradiction occurs between the Plan and any Award Agreement
or other written agreement between a Participant and the Company (or any Subsidiary) that the Administrator has approved, the Plan will
govern, unless it is expressly specified in such Award Agreement or other written document that a specific provision of the Plan will
not apply or that the Award Agreement or other written document will govern.
10.12
Governing Law. The Plan and all Awards will be governed by and interpreted in accordance with
the laws of the Delaware, disregarding any state’s or province’s choice-of-law principles requiring the application of a jurisdiction’s
laws other than Delaware.
10.13
Claw-back Provisions. All Awards (including, without limitation, any proceeds, gains or other
economic benefit actually or constructively received by Participant upon any receipt or exercise of any Award or upon the receipt or sale
of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including,
without limitation, any claw-back policy adopted to comply with Applicable Laws, including the Company’s Policy for Recovery of
Erroneously Awarded Compensation.
10.14
Titles and Headings. The titles and headings in the Plan are for convenience of reference
only and, if any conflict, the Plan’s text, rather than such titles or headings, will control.
10.15
Conformity to Securities Laws. Participant acknowledges that the Plan is intended to conform
to the extent necessary with Applicable Laws. Notwithstanding anything herein to the contrary, the Plan and all Awards will be administered
only in conformance with Applicable Laws. To the extent Applicable Laws permit, the Plan and all Award Agreements will be deemed amended
as necessary to conform to Applicable Laws.
10.16
Relationship to Other Benefits. No payment under the Plan will be taken into account in determining
any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or
any Subsidiary except as expressly provided in writing in such other plan or an agreement thereunder.
Article
XI.
Definitions
As used in the Plan, the following
words and phrases will have the following meanings:
11.1
“Administrator” means the Board or a Committee to the extent that the Board’s
powers or authority under the Plan have been delegated to such Committee.
11.2
“Applicable Laws” means the requirements relating to the administration
of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable
rules of any stock exchange or quotation system on which the Shares are listed or quoted and the applicable laws and rules of any foreign
country or other jurisdiction where Awards are granted.
11.3
“Award” means, individually or collectively, a grant under the Plan of
Options, Share Appreciation Rights, Restricted Shares, Restricted Share Units, Dividend Equivalents, or Other Share or Cash Based Awards.
11.4
“Award Agreement” means a written agreement evidencing an Award, which
may be electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and
conditions of the Plan.
11.5
“Board” means the Board of Directors of the Company.
“Change in Control”
means and includes each of
the following:
(a)
A transaction or series of transactions (other than an offering of Shares to the general public through a registration statement
filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (i)
and (ii) of subsection (c) below) whereby any “person” or related “group” of “persons”
(as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee
benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to such transaction, directly
or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined
voting power of the Company’s securities outstanding immediately after such acquisition;
(b)
During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with
any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect
a transaction described in subsections (a) or (c)) whose election by the Board or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning
of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority
thereof; or
(c)
The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more
intermediaries) of (x) a merger, consolidation, reorganization, or business combination, (y) a sale or other disposition of all or substantially
all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or equity
of another entity, in each case other than a transaction:
(i)
that results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either
by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction,
controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly
or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately
after the transaction, and
(ii)
after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the
Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (ii) as
beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the
Company prior to the consummation of the transaction.
Notwithstanding the foregoing,
in no event shall the Initial Business Combination or the transactions occurring in connection therewith constitute a Change in Control
and if a Change in Control constitutes a payment event with respect to any Award (or portion of any Award) that provides for the deferral
of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A,
the transaction or event described in subsection (a), (b) or (c) with respect to such Award (or portion thereof)
shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change
in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).
The Administrator shall have
full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred
pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided
that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event”
as defined in Treasury Regulations Section 1.409A-3(i)(5) shall be consistent with such regulation.
11.6
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
issued thereunder.
11.7
“Committee” means one or more committees or subcommittees of the Board,
which may include one or more Company directors or executive officers, to the extent Applicable Laws permit.
11.8
“Company” means Heramba Electric plc, a public limited company duly incorporated
under the laws of Ireland, or any successor.
11.9
“Consultant” means any consultant or advisor, engaged by the Company or
any of its Subsidiaries to render services to such entity, who qualifies as a consultant or advisor under the applicable rules of Form
S-8 Registration Statement.
11.10
“Designated Beneficiary” means the beneficiary or beneficiaries the Participant
designates, in a manner the Administrator determines, to receive amounts due or exercise the Participant’s rights if the Participant
dies or becomes incapacitated. Without a Participant’s effective designation, “Designated Beneficiary” will mean the
Participant’s estate.
11.11
“Director” means a Board member.
11.12
“Dividend Equivalents” means a right granted to a Participant under the
Plan to receive the equivalent value (in cash or Shares) of dividends paid on Shares.
11.13
“Employee” means any employee of the Company or its Subsidiaries.
11.14
“Equity Restructuring” means, as determined by the Administrator, a non-reciprocal
transaction between the Company and its shareholders, such as a share dividend, share split, spin-off or recapitalization through a large,
nonrecurring cash dividend, or other large, nonrecurring cash dividend, that affects the number or kind of Shares (or other securities
of the Company) or the share price of Shares (or other securities of the Company) and causes a change in the per share value of the Shares
underlying outstanding Awards.
11.15
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
11.16
“Fair Market Value” means, as of any date, the value of a Share determined
as follows: (a) if the Shares are listed on any established stock exchange, its Fair Market Value will be the closing sales price for
such Share as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which
a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (b) if the Shares are
not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on such date, or
if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall
Street Journal or another source the Administrator deems reliable; or (c) without an established market for the Shares, the Administrator
will determine the Fair Market Value in its discretion.
11.17
“Greater Than 10% Shareholder” means an individual then owning (within
the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of equity of the Company or
its parent or subsidiary corporation, as defined in Section 424(e) and (f) of the Code, respectively.
11.18
“Incentive Share Option” means an Option intended to qualify as an “incentive
stock option” as defined in Section 422 of the Code.
11.19
“Irish Companies Act” means the Companies Act 2014 of Ireland, as amended;
11.20
“Non-Qualified Share Option” means an Option, or portion thereof, not intended
or not qualifying as an Incentive Share Option.
11.21
“Option” means an option to purchase Shares, which will either be an Incentive
Share Option or a Non-Qualified Share Option.
11.22
“Other Share or Cash Based Awards” means cash awards, awards of Shares,
and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property awarded to a Participant
under Article VII.
11.23
“Overall Share Limit” means the sum of (i) 8,582,221 Shares
and (ii) an annual increase on the first day of each calendar year beginning January 1, 2025 and ending on and including January 1, 2034,
equal to the lesser of (A) 2.5% of the aggregate number of Shares outstanding on the final day of the immediately preceding calendar year
and (B) such smaller number of Shares as is determined by the Board.
11.24
“Participant” means a Service Provider who has been granted an Award.
11.25
“Performance Criteria” mean the criteria (and adjustments) that the Administrator
may select for an Award to establish performance goals for a performance period, which may include the following: net earnings or losses
(either before or after one or more of interest, taxes, depreciation, amortization, and non-cash equity-based compensation expense); gross
or net sales or revenue or sales or revenue growth; net income (either before or after taxes) or adjusted net income; profits (including
but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating
margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); cash
flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested
capital; cost of capital; return on shareholders’ equity; total shareholder return; return on sales; costs, reductions in costs
and cost control measures; expenses; working capital; earnings or loss per share; adjusted earnings or loss per share; price per share
or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation,
completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments;
market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth;
customer service; employee satisfaction; recruitment and maintenance of personnel; human capital management (including diversity and inclusion);
supervision of litigation and other legal matters; strategic partnerships and transactions; financial ratios (including those measuring
liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions;
cash on hand; acquisition activity; investment sourcing activity; and marketing initiatives, any of which may be measured in absolute
terms or as compared to any incremental increase or decrease. Such performance goals also may be based solely by reference to the Company’s
performance or the performance of a Subsidiary, division, business segment or business unit of the Company or a Subsidiary or based upon
performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance
of other companies. The Committee may provide for exclusion of the impact of an event or occurrence which the Committee determines should
appropriately be excluded, including (a) restructurings, discontinued operations, extraordinary items, and other unusual, infrequently
occurring or non-recurring charges or events, (b) asset write-downs, (c) litigation or claim judgments or settlements, (d) acquisitions
or divestitures, (e) reorganization or change in the corporate structure or capital structure of the Company, (f) an event either not
directly related to the operations of the Company, Subsidiary, division, business segment or business unit or not within the reasonable
control of management, (g) foreign exchange gains and losses, (h) a change in the fiscal year of the Company, (i) the refinancing or repurchase
of bank loans or debt securities, (j) unbudgeted capital expenditures, (k) the issuance or repurchase of equity securities and other changes
in the number of outstanding shares, (l) conversion of some or all of convertible securities to Shares, (m) any business interruption
event (n) the cumulative effects of tax or accounting changes in accordance with U.S. generally accepted accounting principles, or (o)
the effect of changes in other laws or regulatory rules affecting reported results.
11.26
“Plan” means this 2024 Incentive Award Plan, as amended from time to time.
11.27
“Restricted Shares” means Shares awarded to a Participant under Article
VI subject to certain vesting conditions and other restrictions.
11.28
“Restricted Share Unit” means an unfunded, unsecured right to receive,
on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal
value as of such settlement date awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions.
11.29
“Section 409A” means Section 409A of the Code and all regulations, guidance,
compliance programs and other interpretative authority thereunder.
11.30
“Securities Act” means the Securities Act of 1933, as amended.
11.31
“Service Provider” means an Employee, Consultant or Director.
11.32
“Share” means an ordinary share of €0.0001 (nominal value) in the
capital of the Company.
11.33
“Share Appreciation Right” means a share appreciation right granted under
Article V.
11.34
“Subsidiary” means any entity (other than the Company), whether domestic
or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken
chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting
power of all classes of securities or interests in one of the other entities in such chain.
11.35
“Substitute Awards” means Awards granted or Shares issued by the Company
in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in
each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.
11.36
“Termination of Service” means the date the Participant ceases to be a
Service Provider.
* * *
* *
19
Exhibit 4.8
October 28, 2021
Project Energy Reimagined Acquisition Corp.
3 Lagoon Drive, Suite 170
Redwood City, California 94065
Re: Initial Public Offering
Ladies and Gentlemen:
This letter (this “Letter
Agreement”) is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”)
entered into by and among Project Energy Reimagined Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and J.P. Morgan Securities LLC and B of A Securities, Inc., as representatives (the “Representatives”)
of the several underwriters (each, an “Underwriter” and collectively, the “Underwriters”),
relating to an underwritten initial public offering (the “Public Offering”) of up to 28,750,000
of the Company’s units (including up to 3,750,000 units that may be purchased to cover over-allotments, if any) (the “Units”),
each comprised of one Class A ordinary share, par value $0.0001 per share (the “Class A Ordinary Shares”),
of the Company and one-half of one redeemable warrant. Each whole warrant (each, a “Public Warrant”) entitles
the holder thereof to purchase one Class A Ordinary Share at a price of $11.50 per share, subject to adjustment as described in the
Prospectus (as defined below). The Units will be sold in the Public Offering pursuant to a registration statement on Form S-1 and
prospectus (the “Prospectus”) filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”)
and the Company has applied to have the Units listed on the Nasdaq Global Market. Certain capitalized terms used herein are defined in
paragraph 1 hereof.
In order to induce the Company
and the Underwriters to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each of Smilodon Capital, LLC, a Delaware limited liability
company (the “Sponsor”), and the undersigned individuals, each of whom is a member of the Company’s board
of directors and/or management team (each of the undersigned individuals, an “Insider” and collectively, the
“Insiders”), hereby agrees with the Company as follows:
| 1. | As used herein: (i) “Business Combination”
shall mean a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination, involving the
Company and one or more businesses; (ii) “Ordinary Shares” shall mean the Class A Ordinary Shares
and Class B ordinary shares, par value $0.0001 per share (the “Class B Ordinary Shares”); (iii) “Founder
Shares” shall mean the 7,187,500 Class B Ordinary Shares issued and outstanding (up to 937,500 of which are subject
to complete or partial forfeiture if the over-allotment option is not exercised by the Underwriters); (iv) “Initial
Shareholders” shall mean the Sponsor and any Insider that holds Founder Shares; (v) “Private Placement
Warrants” shall mean the 8,150,000 warrants (or 8,900,000 warrants if the over-allotment option is exercised in full) that
the Sponsor has agreed to purchase for an aggregate purchase price of $8,150,000 (or $8,900,000 if the over-allotment option is exercised
in full), or $1.00 per warrant, in a private placement that shall occur simultaneously with the consummation of the Public Offering;
(vi) “Public Shareholders” shall mean the holders of securities issued in the Public Offering; (vii) “Transfer”
shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or
otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or
liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act (defined
below), and the rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into
any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security,
whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of
any intention to effect any transaction specified in clause (a) or (b) (which, for the avoidance of doubt, shall not prohibit
the registration by the Company of any securities in accordance with the terms of the Registration Rights Agreement); (viii) “Trust
Account” shall mean the trust account into which a portion of the net proceeds of the Public Offering and the sale of the
Private Placement Warrants shall be deposited; and (ix) “Warrants” shall mean the Private Placement Warrants
and Public Warrants. |
| 2. | It is acknowledged and agreed that the Company shall not enter
into a definitive agreement regarding a proposed Business Combination without the prior consent of the Sponsor. The Sponsor and each
Insider agrees that if the Company seeks shareholder approval of a proposed Business Combination, then in connection with such proposed
Business Combination, it, he or she shall (i) vote any Ordinary Shares owned by it, him or her in favor of any proposed Business
Combination and (ii) not redeem any Ordinary Shares owned by it, him or her in connection with such shareholder approval. If the
Company seeks to consummate a proposed Business Combination by engaging in a tender offer, the Sponsor and each Insider agrees that it,
he or she will not sell or tender any Ordinary Shares owned by it, him or her in connection therewith. |
| 3. | The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within 18 months
from the closing of the Public Offering, (or 21 months from the closing of the Public Offering if the Company has executed a letter of
intent, agreement in principle or definitive agreement for a Business Combination within 18 months from the closing of the Public Offering
but have not completed a Business Combination within such 18-month period), or such later period approved by the Company’s shareholders
in accordance with the Company’s amended and restated memorandum and articles of association (as it may be amended from time to
time, the “Charter”), the Sponsor and each Insider shall take all reasonable steps to cause the Company to
(i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten
(10) business days thereafter, redeem 100% of the Class A Ordinary Shares sold as part of the Units in the Public Offering
(the “Offering Shares”), at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to
pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Offering Shares,
which redemption will completely extinguish all Public Shareholders’ rights as shareholders (including the right to receive further
liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate,
subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands law to provide for claims
of creditors and in all cases subject to the other requirements of applicable law. The Sponsor and each Insider agrees to not propose
any amendment to the Charter (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection
with our proposed initial Business Combination or to redeem 100% of the Offering Shares if the Company does not complete a Business Combination
within the required time period set forth in the Charter or (B) with respect to any other material provisions relating to shareholders’
rights or pre-initial Business Combination activity, unless the Company provides its Public Shareholders with the opportunity to redeem
their Offering Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company
to pay its taxes, divided by the number of then outstanding Offering Shares.
The Sponsor and each Insider acknowledges that it, he or she has no right, title, interest or claim of any kind in or to any monies held
in the Trust Account or any other asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares
held by it, him or her. The Sponsor and each Insider hereby further waives, with respect to any Ordinary Shares held by it, him or her,
if any, any redemption rights it, he or she may have in connection with (i) the consummation of a Business Combination, including,
without limitation, any such rights available in the context of a shareholder vote to approve such Business Combination, or (ii) a
shareholder vote to approve an amendment to the Charter (A) to modify the substance or timing of the Company’s obligation
to allow redemption in connection with our initial Business Combination or to redeem 100% of the Offering Shares if the Company has not
consummated a Business Combination within the time period set forth in the Charter or (B) with respect to any other material provisions
relating to shareholders’ rights or pre-initial Business Combination activity or in the context of a tender offer made by the Company
to purchase Offering Shares (although the Sponsor, the Insiders and their respective affiliates shall be entitled to redemption and liquidation
rights with respect to any Offering Shares it or they hold if the Company fails to consummate a Business Combination within the time
period set forth in the Charter). |
| 4. | During the period commencing on the effective date of the Underwriting
Agreement and ending 180 days after such date, the Sponsor and each Insider shall not, without the prior written consent of the Representatives,
(i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
the rules and regulations of the Commission promulgated thereunder, with respect to, any Units, Ordinary Shares (including, but
not limited to, Founder Shares), Warrants or any securities convertible into, or exercisable, or exchangeable for, Ordinary Shares owned
by it, him or her, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of any Units, Ordinary Shares (including, but not limited to, Founder Shares), Warrants or any securities convertible
into, or exercisable, or exchangeable for, Ordinary Shares owned by it, him or her, whether any such transaction is to be settled by
delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified
in clause (i) or (ii). The provisions of this paragraph will not apply to any transfer permitted under paragraph 8(c) hereof
or if the release or waiver is effected solely to permit a transfer not for consideration and the transferee has agreed in writing to
be bound by the same terms described in this Letter Agreement to the extent and for the duration that such terms remain in effect at
the time of the transfer. |
| 5. | In the event of the liquidation of the Trust Account upon the
failure of the Company to consummate its initial Business Combination within the time period set forth in the Charter, the Sponsor (the
“Indemnitor”) agrees to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending
against any litigation, whether pending or threatened) to which the Company may become subject as a result of any claim by (i) any
third party for services rendered or products sold to the Company (other than the Company’s independent registered public accounting
firm) or (ii) any prospective target business with which the Company has entered into a written letter of intent, confidentiality
or other similar agreement or Business Combination agreement (a “Target”); provided, however, that such indemnification of
the Company by the Indemnitor (x) shall apply only to the extent necessary to ensure that such claims by a third party or a Target
do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Offering Share and (ii) the actual
amount per Offering Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Offering
Share is then held in the Trust Account due to reductions in the value of the trust assets, less taxes payable, (y) shall not apply
to any claims by a third party or a Target which executed a waiver of any and all rights to the monies held in the Trust Account (whether
or not such waiver is enforceable) and (z) shall not apply to any claims under the Company’s indemnity of the Underwriters
against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Indemnitor shall have the right
to defend against any such claim with counsel of its choice reasonably satisfactory to the Company if, within 15 days following written
receipt of notice of the claim to the Indemnitor, the Indemnitor notifies the Company in writing that it shall undertake such defense. |
| 6. | To the extent that the Underwriters do not exercise their over-allotment
option to purchase up to an additional 3,750,000 Units within 45 days from the date of the Prospectus (and as further described in the
Prospectus), the Sponsor agrees to forfeit, at no cost, a number of Founder Shares in the aggregate equal to 937,500 multiplied by a
fraction, (i) the numerator of which is 3,750,000 minus the number of Units purchased by the Underwriters upon the exercise of their
over-allotment option, and (ii) the denominator of which is 3,750,000. The forfeiture will be adjusted to the extent that the over-allotment
option is not exercised in full by the Underwriters so that the Founder Shares will represent an aggregate of 20.0% of the Company’s
issued and outstanding Ordinary Shares after the Public Offering (not including Class A Ordinary Shares underlying the Warrants).
The Sponsor further agrees that to the extent that the size of the Public Offering is increased or decreased, the Company will purchase
or sell Units or effect a share repurchase or share capitalization, as applicable, immediately prior to the consummation of the Public
Offering in such amount as to maintain the ownership of the Initial Shareholders prior to the Public Offering at 20.0% of its issued
and outstanding Ordinary Shares upon the consummation of the Public Offering. In connection with such increase or decrease in the size
of the Public Offering, then (A) the references to 3,750,000 in the numerator and denominator of the formula in the first sentence
of this paragraph shall be changed to a number equal to 15% of the number of Public Shares included in the Units issued in the Public
Offering and (B) the reference to 937,500 in the formula set forth in the first sentence of this paragraph shall be adjusted to
such number of Founder Shares that the Sponsor would have to surrender to the Company in order for the Initial Shareholders to hold an
aggregate of 20.0% of the Company’s issued and outstanding Ordinary Shares after the Public Offering (not including Class A
Ordinary Shares underlying the Warrants). |
| 7. | The Sponsor and each Insider hereby agrees and acknowledges
that: (i) the Underwriters and the Company would be irreparably injured in the event of a breach by such Sponsor or an Insider of
its, his or her obligations under paragraphs 2, 3, 4, 5, 6, 8(a), and 8(b), as applicable, of this Letter Agreement (ii) monetary
damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief,
in addition to any other remedy that such party may have in law or in equity, in the event of such breach. |
| 8. | (a) The
Sponsor and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or any Class A Ordinary Shares issuable
upon conversion thereof) until the earlier of (i) one year after the completion of the Company’s initial Business Combination
and (ii) subsequent to the Business Combination, (A) if the closing price of the Class A Ordinary Shares equals or exceeds
$12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading
days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination or (B) the
date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in
all of the Company’s Public Shareholders having the right to exchange their shares of Class A Ordinary Shares for cash, securities
or other property (the “Founder Shares Lock-up Period”). |
| |
|
(b)
The Sponsor and each Insider agrees that it, he or she shall not Transfer any Private Placement Warrants (or any Class A
Ordinary Shares underlying the Private Placement Warrants), until 30 days after the completion of a Business Combination (the
“Private Placement Warrants Lock-up Period”, together with the Founder Shares Lock-up Period, the “Lock-up
Periods”). |
| |
|
(c) Notwithstanding the provisions set forth in paragraphs 8(a) and (b), Transfers of the Founder Shares, Private Placement Warrants and the Class A Ordinary Shares underlying the Private Placement Warrants that are held by the Sponsor, any Insider or any of their permitted transferees (that have complied with this paragraph 8(c)), are permitted (i) to the Company’s officers or directors, any affiliate or family member of any of the Company’s officers or directors, any affiliate of the Sponsor or to any member of the Sponsor or any of their affiliates, associates or family members or to any employee of any such affiliate or associate; (ii) in the case of an individual, as a gift to such person’s immediate family or to a trust, the beneficiary of which is such person or a member of such person’s immediate family, an affiliate of such person or to a charitable organization; (iii) in the case of an individual, by virtue of laws of descent and distribution upon death of such individual; (iv) in the case of an individual, pursuant to a qualified domestic relations order; (v) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation of an initial Business Combination at prices no greater than the price at which the Class A Ordinary Shares or Private Placement Warrants were originally purchased; (vi) by virtue of the laws of the Cayman Islands or the Sponsor’s organizational documents upon dissolution of the Sponsor; (vii) in the event of the Company’s liquidation prior to the consummation of its initial Business Combination; (viii) in the event that, subsequent to the Company’s consummation of an initial Business Combination, the Company completes a liquidation, merger, share exchange or other similar transaction which results in all of its shareholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property; provided, however, that in the case of clauses (i) through (vi), these permitted transferees must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions herein and the other restrictions contained in this Letter Agreement (including provisions relating to voting, the Trust Account and liquidating distributions). The foregoing shall not prohibit transfers made pursuant to the founder share transfer agreements as described in the Company’s Registration Statement on Form S-1. |
| |
|
For the avoidance of doubt, paragraphs 7(a) and (b) shall not apply to any issue, redemption or reallocation (or any other action having a similar effect) of membership interests in the Sponsor. |
| 9. | The Sponsor and each Insider represents and warrants that it,
he or she has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities
or commodities license or registration denied, suspended or revoked. Each Insider’s biographical information furnished to the Company
(including any such information included in the Prospectus) is true and accurate in all respects and does not omit any material information
with respect to the Insider’s background. The Sponsor and each Insider’s questionnaire furnished to the Company is true and
accurate in all material respects. The Sponsor and each Insider represents and warrants that: it, he or she is not subject to or a respondent
in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice
relating to the offering of securities in any jurisdiction; it, he or she has never been convicted of, or pleaded guilty to, any crime
(i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining
to any dealings in any securities; and it, he or she is not currently a defendant in any such criminal proceeding. |
| 10. | Except as disclosed in the Prospectus, neither the Sponsor nor
any officer, nor any affiliate of the Sponsor or any officer, nor any director of the Company, shall receive from the Company any finder’s
fee, reimbursement, consulting fee, monies in respect of any repayment of a loan or other compensation prior to, or in connection with
any services rendered in order to effectuate, the consummation of the Company’s initial Business Combination (regardless of the
type of transaction that it is), other than the following, none of which will be made from the proceeds held in the Trust Account prior
to the completion of the initial Business Combination: repayment of a loan and advances up to an aggregate of $300,000 made to the Company
by the Sponsor to cover offering-related and organizational expenses; payment to EWI Capital SPAC I LLC of $30,000 per month for office
space and payment of administrative personnel providing services to members of the Company’s management team; reimbursement for
any reasonable out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial Business Combination;
and repayment of loans, if any, and on such terms as to be determined by the Company from time to time, made by the Sponsor or an affiliate
of the Sponsor or any of the Company’s officers or directors to finance transaction costs in connection with an intended initial
Business Combination, provided that, if the Company does not consummate an initial Business Combination, a portion of the working capital
held outside the Trust Account may be used by the Company to repay such loaned amounts so long as no proceeds from the Trust Account
are used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option
of the lender. Such warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and
exercise period. |
| 11. | The Sponsor and each Insider has full right and power, without
violating any agreement to which it is bound (including, without limitation, any non-competition or non-solicitation agreement with any
employer or former employer), to enter into this Letter Agreement and, as applicable, to serve as an officer and/or director on the board
of directors of the Company and hereby consents to being named in the Prospectus as an officer and/or director of the Company. |
| 12. | The Company will maintain an insurance policy or policies providing
directors’ and officers’ liability insurance, and each director shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage available for any of the Company’s directors or officers. |
| 13. | This Letter Agreement constitutes the entire agreement and understanding
of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations
by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions
contemplated hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error)
as to any particular provision, except by a written instrument executed by all parties hereto. |
| 14. | No party hereto may assign either this Letter Agreement or any
of its rights, interests, or obligations hereunder without the prior written consent of the other parties. Any purported assignment in
violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported
assignee. This Letter Agreement shall be binding on the Sponsor and each Insider and their respective successors, heirs and assigns and
permitted transferees. |
| 15. | Nothing in this Letter Agreement shall be construed to confer
upon, or give to, any person or corporation other than the parties hereto any right, remedy or claim under or by reason of this Letter
Agreement or of any covenant, condition, stipulation, promise or agreement hereof. All covenants, conditions, stipulations, promises
and agreements contained in this Letter Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors,
heirs, personal representatives and assigns and permitted transferees. |
| 16. | This Letter Agreement may be executed in any number of original
or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument. |
| 17. | This Letter Agreement shall be deemed severable, and the invalidity
or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Letter Agreement or of any
other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Letter Agreement a provision as similar in terms to such invalid or unenforceable provision
as may be possible and be valid and enforceable. |
| 18. | This Letter Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York. The parties hereto (i) all agree that any action, proceeding, claim
or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought and enforced in the courts of New York City,
in the State of New York, and irrevocably submit to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and
(ii) waive any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum. |
| 19. | Any notice, consent or request to be given in connection with
any of the terms or provisions of this Letter Agreement shall be in writing and shall be sent by express mail or similar private courier
service, by certified mail (return receipt requested), by hand delivery or facsimile transmission. |
| 20. | This Letter Agreement shall terminate on the earlier of (i) the
expiration of the Lock-up Periods or (ii) the liquidation of the Company; provided, however, that this Letter Agreement shall earlier
terminate in the event that the Public Offering is not consummated and closed by December 31, 2021; provided further that paragraph
5 of this Letter Agreement shall survive such liquidation. |
[Signature Page Follows]
| |
Sincerely, |
| |
|
| |
Smilodon
capital, LLC |
| |
|
|
| |
|
|
| |
By: |
Admit Capital,
LLC, its Manager |
| |
|
|
| |
By: |
/s/ Srinath Narayanan |
| |
|
Name: |
Srinath Narayanan |
| |
|
Title: |
Manager |
| |
|
|
| |
/s/ Srinath_Narayanana |
| |
Srinath Narayanan |
| |
|
| |
/s/ Sanjay Mehta
|
| |
Sanjay Mehta |
| |
|
| |
/s/ Eric Spiegel |
| |
Eric Spiegel |
| |
|
| |
/s/ Michael Browning |
| |
Michael Browning |
| |
|
| |
/s/ Nina Jensen |
| |
Nina Jensen |
| |
|
| |
/s/ David Roberts |
| |
David Roberts |
| |
|
| |
/s/ Kathy Liu |
| |
Kathy Liu |
| |
|
| |
/s/ Tim Dummer |
| |
Tim Dummer |
| |
|
| |
/s/ Prakash Ramachandran |
| |
Prakash Ramachandran |
| Acknowledged and Agreed: |
|
| |
|
| PROJECT ENERGY REIMAGINED ACQUSITION CORP. |
|
| |
|
|
| |
|
|
| By: |
/s/ Srinath Narayanan |
|
| |
Name: |
Srinath Narayanan |
|
| |
Title: |
Chief Executive Officer |
|
[Signature Page to Letter Agreement]
Exhibit 8.1
Subsidiaries of Heramba Electric plc
| Legal Name | |
Jurisdiction of
Incorporation |
| Heramba GmbH | |
Germany |
| Project Energy Reimagined Acquisition Corp. | |
Cayman Islands |
| Heramba Holdings Inc. | |
United States |
| Kiepe Electric GmbH | |
Germany |
| Kiepe Electric LLC | |
United States |
Exhibit
15.1
UNAUDITED
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Introduction
The following
unaudited pro forma condensed combined financial information presents the combination of financial information of PERAC, Kiepe Electric
Group and Heramba, adjusted to give effect to the Business Combination and related transactions.
Heramba
Merger Corp. and Heramba Electric plc were incorporated for the sole purpose of effectuating the Transactions. They do not meet the definition
of a business. These entities have no activities other than transaction costs which are included in the transaction accounting adjustments.
Therefore,
the following unaudited pro forma condensed combined statement of financial position as of December 31, 2023 combines the historical
audited consolidated statement of financial position of Heramba as of December 31, 2023, the historical audited combined statement of
financial position of Kiepe Electric Group as of December 31, 2023, and the historical audited balance sheet of PERAC as of December
31, 2023, giving pro forma effect to the Business Combination and the Kiepe Acquisition as if they had occurred as of December 31, 2023.
The
following unaudited pro forma condensed combined statement of profit or loss for the year ended December 31, 2023 includes the historical
audited statement of operations of Heramba for the year ended December 31, 2023, the historical audited combined statement of profit
or loss of Kiepe Electric Group for the year ended December 31, 2023, and the historical audited statement of operations of PERAC for
the year ended December 31, 2023 on a pro forma basis as if the Business Combination and the Kiepe Acquisition had occurred on January
1, 2023, the beginning of the earliest period presented.
The
unaudited pro forma condensed combined financial information has been derived from and should be read in conjunction with Heramba’s
and PERAC’s financial statements and related notes, as applicable. The historical audited financial statements of PERAC as of and
for the year ended December 31, 2023 are included in PERAC’s Annual Report on Form 10-K filed with the SEC on June 17, 2024 incorporated
herein by reference. The historical audited consolidated financial statements of Heramba as of and for the year ended December 31, 2023
are included as exhibits to this report.
Description
of the Transactions
Kiepe
Acquisition
On
July 25, 2023, Heramba and Heramba Holdings entered into the Share Purchase Agreement with Knorr-Bremse Systeme für
Schienenfahrzeuge GmbH (“KB GmbH”) and Knorr-Brake Holding Corporation (“KB US” and, together with KB GmbH, “KB
Sellers”), and on January 31, 2024, Heramba, Heramba Holdings, KB GmbH and KB US entered into the SPA Amendment to the Share Purchase
Agreement (as amended, the “SPA”).
On
February 6, 2024, KB GmbH, as sole shareholder of Kiepe Electric GmbH (“KE DE”), sold and transferred 85% of the equity interests
in KE DE, as well as certain receivables and shareholder loans, to Heramba, and KB US, as the sole member of Kiepe Electric LLC (“KE
US”), sold and transferred all ownership interests in KE US, as well as certain receivables, to Heramba Holdings (the “Kiepe
Acquisition”). KE DE and KE US are collectively referred to herein as “Target Companies.” KB GmbH revised and updated
the articles of association and the shareholders list of KE DE such that the share capital of KE DE is divided into two shares, one share
having a nominal amount of EUR 850,000 (“KE DE Share 1”) and one share having a nominal amount of EUR 150,000 (“KE
DE Share 2”).
The
aggregate preliminary purchase price for the sale and transfer of the KE DE Share 1 and the KE US interests was EUR 4,800,000, calculated
in accordance with the terms of the SPA (which such purchase price is subject to customary adjustments based on a customary closing accounts
mechanism).
Heramba
has the option, but is not required, to purchase all, but not less than all, of the KE DE Share 2 from KB GmbH (the “Call Option”)
at any time prior to December 31, 2025 against payment of EUR 5,000,000 (the “Option Purchase Price”). KB GmbH has the
option, but shall not be required, to sell all, but not less than all, of the KE DE Share 2 to Heramba (the “Put Option”)
at any time between January 1, 2025 and November 30, 2025 against payment of the Option Purchase Price.
In
addition to the above purchase price, an amount of EUR 15,000,000 shall be paid by Heramba and Heramba Holdings to KB Sellers as an earn-out
which shall be due and payable within 30 business days from the date of submission of the audited 2023 consolidated financial statements
of the Target Companies, but in any event no later than September 30, 2024 (the “2nd Purchase Price”), if
the audited 2023 revenues of the Target Companies equals or exceeds EUR 141,903,100.
In
addition to the above purchase price and the 2nd Purchase Price, an amount of up to EUR 9,500,000 shall be paid by Heramba
and Heramba Holdings to KB Sellers as an earn-out which shall be due and payable within 30 business days from the date of submission
of the audited 2024 consolidated financial statements of the Target Companies, but in any event no later than September 30, 2025
(the “3rd Purchase Price”), if the audited 2024 revenues of the Target Companies equals or exceeds certain thresholds.
The 3rd Purchase Price shall be EUR 9,500,000 if the audited 2024 revenues of the Target Companies equals or exceeds EUR 190,961,200
and the 3rd Purchase Price shall be EUR 7,000,000 if the audited 2024 revenues of the Target Companies equals or exceeds EUR
164,916,680 but is less than EUR 190,961,200.
In
connection with the completion of a project relating to the design, construction, delivery and commissioning of a certain number of vehicles
(the “WSW Project”), Heramba may, under certain circumstances, be obligated to pay to KB GmbH, as additional purchase price,
an amount of up to EUR 5,000,000 (the “WSW Earn-out”).
In
addition to the above purchase price, the 2nd Purchase Price, the 3rd Purchase Price and the WSW Earn-out, an amount
of EUR 5,000,000 (the “Additional Purchase Price”) shall be paid by Heramba and Heramba Holdings to KB Sellers on the later
of the date of the completion of the WSW Project and March 30, 2026.
Following
consummation of the Business Combination, Heramba and Heramba Holdings have the option, under certain conditions, to pay KB Sellers the
3rd Purchase Price and Optional Purchase Price, as applicable, in Holdco Ordinary Shares (such shares, the “Stock Consideration
Shares”). The number of Holdco Ordinary Shares to be issued will be equal to the quotient of the 3rd Purchase Price
or Optional Purchase Price, as applicable, divided by the twenty-day volume weighted average price of the Holdco Ordinary Shares on Nasdaq
immediately prior to such payment.
Heramba
accounted for the acquisition of the KE DE Share 1 pursuant to International Financial Reporting Standards 3, Business Combinations,
(“IFRS 3”) as the accounting acquirer using the acquisition method of accounting as KE DE does meet the definition of a business.
Each identifiable asset and liability were measured at its acquisition-date fair value. Non-controlling interest relating to KB GmbH’s
15% ownership were measured at fair value.
Heramba
Holdings accounted for the acquisition of the KE US interests pursuant to IFRS 3 as the accounting acquirer using the acquisition method
of accounting as KE US does meet the definition of a business. Each identifiable asset and liability were measured at its acquisition-date
fair value.
Business
Combination
On
July 26, 2024, the Business Combination was closed, pursuant to the Business Combination Agreement dated October 2, 2023. The closing
of the Business Combination resulted in the following transactions:
| ● | immediately
prior to the Merger Effective Time, (1) each issued and outstanding PERAC Unit was automatically
separated into its component securities and (2) the sole issued and outstanding Class B Ordinary
Share, par value $0.0001 per share, of PERAC was automatically converted into one Class A
Ordinary Share, par value $0.0001 per share, of PERAC; |
| ● | at
the Merger Effective Time, PERAC and Merger Sub entered into the Plan of Merger, pursuant
to which Merger Sub merged with and into PERAC, with PERAC being the surviving company in
the Merger and becoming a direct, wholly owned subsidiary of Holdco; |
| ● | at
the Merger Effective Time, (a) each PERAC Class A Ordinary Share issued and outstanding immediately
prior to the Merger Effective Time (which, for the avoidance of doubt, included the PERAC
Class A Ordinary Shares held as a result of the Unit Separation and the Closing Class B Conversion)
was automatically cancelled in exchange for the right to be issued one Holdco Ordinary Share
with a nominal value of €0.0001 per share, (b) each PERAC Public Warrant remained outstanding
but was automatically adjusted to become one Holdco Public Warrant, (c) each PERAC Founders
Warrant remained outstanding but was automatically adjusted to become one Holdco Founders
Warrant, (d) each PERAC Class A Ordinary Share properly tendered for redemption and issued
and outstanding immediately prior to the Merger Effective Time was automatically cancelled
and ceased to exist and thus represent only the right to be paid a pro rata portion
of the Trust Account established for the benefit of PERAC’s Public Shareholders in
connection with PERAC’s IPO pursuant to the PERAC Articles, (e) each dissenting PERAC
share issued and outstanding immediately prior to the Merger Effective Time held by a dissenting
PERAC shareholder was automatically cancelled and ceased to exist and thus represent only
the right to be paid the fair value of such dissenting PERAC share and such other rights
as are granted by the Companies Act (As Revised) of the Cayman Islands, and (f) each ordinary
share of Merger Sub issued and outstanding at the Merger Effective Time was automatically
cancelled in consideration for the issuance of one validly issued, fully paid and non-assessable
ordinary share of par value $1.00 in the Surviving Company; |
| ● | immediately
following the Merger Effective Time, pursuant to the Share Contribution Agreement, dated
June 27, 2024, entered into by and between the Seller and Holdco, the Seller transferred
as a contribution to Holdco, and Holdco assumed from the Seller, the shares in Heramba, all
of which were held by the Seller, in exchange for the issuance by Holdco of 36,700,000 Holdco
Ordinary Shares to Seller; and |
| ● | all
Deferred Ordinary Shares in the capital of Holdco with a nominal value of €1.00 each
shall within one month of the Merger Effective Time be surrendered by the holder thereof
to Holdco for nil consideration and such Holdco Deferred Shares shall thereafter be held
as treasury shares by Holdco in satisfaction of the minimum capital requirements for a public
limited company under Irish law. |
Other
Agreements
Non-Redemption
Agreement
On
July 25, 2023, PERAC entered into the Non-Redemption Agreements with one or more unaffiliated third parties in exchange for them
each agreeing not to redeem an aggregate of 760,000 Public Shares in connection with certain proposals considered and voted upon at the
Extraordinary General Meeting, in exchange for PERAC agreeing to issue or cause to be issued to each such investor 138,000 Holdco Ordinary
Shares at the time of PERAC’s initial business combination. PERAC has since entered into additional Non-Redemption Agreements with
unaffiliated third parties on the same or similar terms reflecting the above ratio of non-redeemed Class A Ordinary Shares to Holdco
Ordinary Shares. Pursuant to all such Non-Redemption Agreements, PERAC issued to such investors an aggregate of 1,645,596 Holdco Ordinary
Shares.
Vendor
Agreement Amendments
In
July 2024, PERAC entered into several service provider fee agreements with certain service providers pursuant to which an aggregate of
690,000 Class A Ordinary Shares of PERAC (or equivalent securities of the post-combination company) was delivered to such service providers
upon consummation of the Business Combination.
Backstop
Non-Redemption Agreements
On
April 30, 2024 and July 10, 2024, PERAC entered into the Backstop Non-Redemption Agreements with the Backstop Investors in exchange for
the Backstop Investors agreeing to rescind or reverse all redemption demands delivered prior to the redemption deadline for the Business
Combination Meeting with respect to PERAC’s Class A Ordinary Shares to be acquired by such Backstop Investors, up to an aggregate
of 1,500,000 Backstop Investor Shares. The Backstop Investors are also lenders under certain loan agreements (the “Backstop Loan
Agreements”) with an affiliate of Heramba (the “Heramba Affiliate”), which agreements included execution of the Backstop
Non-Redemption Agreements as a closing condition.
Additionally,
if a Backstop Investor is unable to purchase the applicable amount of Backstop Investor Shares pursuant to its respective Backstop Non-Redemption
Agreement, then PERAC will issue Class A ordinary shares (or cause the issuance of Holdco Ordinary Shares) to such Backstop Investor
in an amount equal to the difference between the Share Cap and the number of Backstop Investor Shares acquired by the Backstop Investor.
PERAC will have no obligation to issue or cause the issuance of any Replacement Shares if the Closing does not occur.
A
total of $2,600,000 was received by Heramba Affiliate pursuant to the Backstop Loan Agreements as of July 11, 2024.
Accounting
for the Business Combination
The
Business Combination was accounted for as a capital reorganization, in accordance with IFRS. Under this method of accounting, PERAC were
treated as the “acquired” company for financial reporting purposes, and Heramba was the accounting “acquirer”.
This determination was primarily based on below:
| ● | Heramba’s
current shareholders hold a majority of the voting power of the combined company post Business
Combination; |
| ● | Heramba’s
operations substantially comprise the ongoing operations of the combined company; |
| ● | Heramba
is the larger entity in terms of substantive operations and employee base; and |
| ● | Heramba’s
senior management comprises the senior management of the combined company. |
Another
determining factor was that PERAC does not meet the definition of a “business” pursuant to IFRS 3, and thus, for accounting
purposes, the Business Combination was accounted for as a capital reorganization, within the scope of IFRS 2, Share-Based Payments, (“IFRS 2”). The net assets of PERAC were stated at historical cost, with no goodwill or
other intangible assets recorded. Any excess of fair value of shares issued to PERAC over the fair value of PERAC’s identifiable
net assets acquired represents compensation for the service of a stock exchange listing for its shares and was expensed as incurred.
Basis
of Pro Forma Presentation
The following
unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X
as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”
and is for informational purposes only.
The following
table sets out the share ownership of Holdco following the Closing(1):
| | |
Ownership in
Shares | | |
% | |
| Heramba Shareholders | |
| 36,700,000 | | |
| 78.0 | % |
| PERAC Public Shareholders(2)(3) | |
| 2,558,992 | | |
| 5.4 | % |
| PERAC Initial Shareholders(4) | |
| 6,594,415 | | |
| 14.0 | % |
| Service providers(5) | |
| 690,000 | | |
| 1.5 | % |
| Backstop Investors(6) | |
| 500,000 | | |
| 1.1 | % |
| Total | |
| 47,043,407 | | |
| 100.0 | % |
| (1) | Does
not give effect to the issuance of any shares issuable upon the exercise of warrants. |
| (2) | The
shares held by PERAC Public Shareholders include the 1,645,596 Holdco Ordinary Shares issued pursuant to the Non-Redemption Agreements. |
| (3) | Includes
Holdco Ordinary Shares issued in exchange for PERAC Public Shares that were held by the PERAC Initial Shareholders as PERAC Public Shareholders. |
| (4) | Includes
6,594,415 Holdco Ordinary Shares issued in exchange for the PERAC Founder Shares. |
| (5) | In
July 2024, PERAC entered into several service provider fee agreements with certain service providers pursuant to which an aggregate of
690,000 Holdco Ordinary Shares were delivered to such service providers upon consummation of the Business Combination. |
| (6) | On
April 30, 2024 and July 10, 2024, PERAC entered into the Backstop Non-Redemption Agreements with the Backstop Investors in exchange for
the Backstop Investors agreeing to rescind or reverse all redemption demands delivered prior to the redemption deadline for the Business
Combination Meeting with respect to PERAC’s Class A Ordinary Shares to be acquired by such Backstop Investors, up to an aggregate
of 1,500,000 Backstop Investor Shares. Additionally, if a Backstop Investor is unable to purchase the applicable amount of Backstop Investor
Shares pursuant to its respective Backstop Non-Redemption Agreement, then PERAC will issue Class A ordinary shares (or cause the issuance
of Holdco Ordinary Shares) to such Backstop Investor in an amount equal to the difference between the Share Cap and the number of Backstop
Investor Shares acquired by the Backstop Investor. PERAC issued 500,000 Holdco Ordinary Shares to the Backstop Investor upon the consummation
of the Business Combination. |
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2023(1)
(In Euros and in thousands)
| | |
Heramba
(IFRS) | | |
Kiepe
Electric
Group
(IFRS) | | |
Transaction
Accounting
Adjustments
for Kiepe
Acquisition
(IFRS) (A) | | |
Adjusted
Kiepe
Electric
Group
(IFRS) | | |
Consolidated
Heramba
(IFRS) | | |
PERAC
(US GAAP
Historical) | | |
IFRS
Conversion
and
Presentation
Alignment
(Note 2) | | |
Transaction
Accounting
Adjustments | | |
| |
Pro
Forma
Combined | |
| ASSETS | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
| Intangible
assets, net | |
€ | — | | |
€ | 13,688 | | |
€ | (6,984 | ) | |
€ | 6,704 | | |
€ | 6,704 | | |
€ | — | | |
€ | — | | |
€ | — | | |
| |
€ | 6,704 | |
| Goodwill | |
| — | | |
| 4,321 | | |
| (4,321 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| |
| — | |
Property,
plant and equipment,
net | |
| — | | |
| 22,440 | | |
| (119 | ) | |
| 22,321 | | |
| 22,321 | | |
| — | | |
| — | | |
| — | | |
| |
| 22,321 | |
| Financial
assets | |
| — | | |
| 119 | | |
| 6,045 | | |
| 6,164 | | |
| 6,164 | | |
| — | | |
| — | | |
| — | | |
| |
| 6,164 | |
| Deferred
tax assets | |
| — | | |
| 79 | | |
| (79 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| |
| — | |
| Deferred
offering costs | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 15,758 | | |
| — | | |
| (15,758 | ) | |
N | |
| — | |
| Investments
held in trust account | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 105,074 | | |
| — | | |
| (98,581 | ) | |
B | |
| — | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 211 | | |
C | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 2,376 | | |
D | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (9,080 | ) | |
E | |
| | |
| Non-current
assets | |
| — | | |
| 40,647 | | |
| (5,458 | ) | |
| 35,189 | | |
| 35,189 | | |
| 120,832 | | |
| — | | |
| (120,832 | ) | |
| |
| 35,189 | |
| Inventories,
net | |
| — | | |
| 53,072 | | |
| 1,476 | | |
| 54,548 | | |
| 54,548 | | |
| — | | |
| — | | |
| — | | |
| |
| 54,548 | |
| Prepaid
expenses and other current assets | |
| 1,540 | | |
| — | | |
| — | | |
| — | | |
| 1,540 | | |
| — | | |
| — | | |
| — | | |
| |
| 1,540 | |
| Trade
receivables, net | |
| — | | |
| 46,302 | | |
| (2,185 | ) | |
| 44,117 | | |
| 44,117 | | |
| — | | |
| — | | |
| — | | |
| |
| 44,117 | |
| Other
financial assets | |
| — | | |
| 1,561 | | |
| 5,467 | | |
| 7,028 | | |
| 7,028 | | |
| — | | |
| — | | |
| — | | |
| |
| 7,028 | |
| Other
assets | |
| — | | |
| 6,554 | | |
| 815 | | |
| 7,369 | | |
| 7,369 | | |
| — | | |
| — | | |
| — | | |
| |
| 7,369 | |
| Contract
assets | |
| — | | |
| 27,661 | | |
| 1,783 | | |
| 29,444 | | |
| 29,444 | | |
| — | | |
| — | | |
| — | | |
| |
| 29,444 | |
| Receivables
from related parties | |
| — | | |
| 4,560 | | |
| (4,560 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| |
| — | |
| Cash
and cash equivalents | |
| 1,023 | | |
| 32,535 | | |
| (9,713 | ) | |
| 22,822 | | |
| 23,845 | | |
| 116 | | |
| — | | |
| (211 | ) | |
C | |
| 36,806 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 9,080 | | |
E | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (963 | ) | |
F | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 309 | | |
G | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (7,950 | ) | |
H | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 2,355 | | |
I | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 725 | | |
J | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 9,500 | | |
Q | |
| | |
| Current
assets | |
| 2,563 | | |
| 172,245 | | |
| (6,917 | ) | |
| 165,328 | | |
| 167,891 | | |
| 116 | | |
| — | | |
| 12,845 | | |
| |
| 180,852 | |
| Total
assets | |
€ | 2,563 | | |
€ | 212,892 | | |
€ | (12,375 | ) | |
€ | 200,517 | | |
€ | 203,080 | | |
€ | 120,948 | | |
€ | — | | |
€ | (107,987 | ) | |
| |
€ | 216,041 | |
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION — (Continued)
AS OF DECEMBER 31, 2023(1)
(In Euros and in thousands)
| | |
Heramba
(IFRS) | | |
Kiepe
Electric
Group
(IFRS) | | |
Transaction
Accounting
Adjustments
for Kiepe
Acquisition
(IFRS) (A) | | |
Adjusted
Kiepe
Electric
Group
(IFRS) | | |
Consolidated
Heramba
(IFRS) | | |
PERAC
(US GAAP
Historical) | | |
IFRS
Conversion
and
Presentation
Alignment
(Note 2) | | |
Transaction
Accounting
Adjustments | | |
| |
Pro
Forma
Combined | |
| Commitments
and contingencies | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
PERAC
Class A ordinary shares subject to possible
redemption | |
€ | — | | |
€ | — | | |
€ | — | | |
€ | — | | |
€ | — | | |
€ | 104,983 | | |
€ | (104,983 | ) | |
€ | — | | |
| |
€ | — | |
| EQUITY | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | |
| PERAC
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| |
| — | |
| PERAC
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 6,594,414 shares issued and outstanding (excluding
10,879,358 shares subject to possible redemption) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1 | | |
| — | | |
| — | | |
K | |
| — | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (1 | ) | |
L | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | |
| Irish
Holdco ordinary shares, €0.0001 nominal value | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1 | | |
L | |
| 5 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 4 | | |
M | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| — | | |
N | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| — | | |
R | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | |
| PERAC
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 1 share issued and outstanding | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
L | |
| — | |
| Irish
Holdco subscribed capital | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 25 | | |
M | |
| 25 | |
| Heramba
subscribed capital | |
| 25 | | |
| — | | |
| — | | |
| — | | |
| 25 | | |
| — | | |
| — | | |
| (25 | ) | |
M | |
| — | |
| Net
investment attributable to Parent | |
| — | | |
| 59,730 | | |
| (59,730 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| |
| — | |
| Share
premium | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (6,642 | ) | |
F | |
| 94,650 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 8,989 | | |
K | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| — | | |
L | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 6,753 | | |
M | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| — | | |
N | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (30,368 | ) | |
O | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 115,918 | | |
P | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| — | | |
R | |
| | |
| Accumulated
losses | |
| (3,114 | ) | |
| — | | |
| 31,547 | | |
| 31,547 | | |
| 28,433 | | |
| (4,865 | ) | |
| — | | |
| (211 | ) | |
C | |
| (87,485 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| — | | |
D | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (10,585 | ) | |
F | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (7,950 | ) | |
H | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (6,757 | ) | |
M | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 30,368 | | |
O | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (115,918 | ) | |
P | |
| | |
| Non-controlling
interest | |
| — | | |
| — | | |
| 3,340 | | |
| 3,340 | | |
| 3,340 | | |
| — | | |
| — | | |
| — | | |
| |
| 3,340 | |
| Other
comprehensive income | |
| — | | |
| 1,681 | | |
| (1,681 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| |
| — | |
| Total
Equity (Deficit) | |
| (3,089 | ) | |
| 61,411 | | |
| (26,524 | ) | |
| 34,887 | | |
| 31,798 | | |
| (4,864 | ) | |
| — | | |
| (16,399 | ) | |
| |
| 10,535 | |
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENTS OF FINANCIAL POSITION — (Continued)
AS OF DECEMBER 31, 2023(1)
(In Euros and in thousands)
| | |
Heramba
(IFRS) | | |
Kiepe
Electric
Group
(IFRS) | | |
Transaction
Accounting
Adjustments
for Kiepe
Acquisition
(IFRS) (A) | | |
Adjusted
Kiepe
Electric
Group
(IFRS) | | |
Consolidated
Heramba
(IFRS) | | |
PERAC
(US GAAP
Historical) | | |
IFRS
Conversion
and
Presentation
Alignment
(Note 2) | | |
Transaction
Accounting
Adjustments | | |
| |
Pro
Forma
Combined | |
| LIABILITIES | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
| Warrant
liabilities | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 599 | | |
| — | | |
| — | | |
| |
| 599 | |
| Accrued
offering costs | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 15,758 | | |
| — | | |
| (15,758 | ) | |
N | |
| — | |
PERAC
Class A ordinary shares subject to possible
redemption | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 104,983 | | |
| (98,581 | ) | |
B | |
| — | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 211 | | |
C | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 2,376 | | |
D | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (8,989 | ) | |
K | |
| | |
| Other
provisions | |
| — | | |
| 17,326 | | |
| (16,581 | ) | |
| 745 | | |
| 745 | | |
| — | | |
| — | | |
| — | | |
| |
| 745 | |
| Acquisition
liabilities at fair value | |
| — | | |
| — | | |
| 21,449 | | |
| 21,449 | | |
| 21,449 | | |
| — | | |
| — | | |
| — | | |
| |
| 21,449 | |
| Other
liabilities | |
| — | | |
| 7,374 | | |
| 17,483 | | |
| 24,857 | | |
| 24,857 | | |
| — | | |
| — | | |
| — | | |
| |
| 24,857 | |
| Non-current
liabilities | |
| — | | |
| 24,700 | | |
| 22,351 | | |
| 47,051 | | |
| 47,051 | | |
| 16,357 | | |
| 104,983 | | |
| (120,741 | ) | |
| |
| 47,650 | |
| Accounts
payable and accrued expenses | |
| 830 | | |
| 23,827 | | |
| (599 | ) | |
| 23,228 | | |
| 24,058 | | |
| 3,661 | | |
| — | | |
| 16,264 | | |
F | |
| 43,983 | |
Accrued
expenses – related
party | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 358 | | |
| — | | |
| — | | |
| |
| 358 | |
| Promissory
note | |
| 4,668 | | |
| — | | |
| — | | |
| — | | |
| 4,668 | | |
| — | | |
| — | | |
| — | | |
| |
| 4,668 | |
| Promissory
note – related party | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 453 | | |
| — | | |
| 309 | | |
G | |
| 762 | |
| Backstop
Investors Loan | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,355 | | |
I | |
| 2,355 | |
| Loan
payable | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 725 | | |
J | |
| 725 | |
| Bridge
loan payable | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 9,500 | | |
Q | |
| 9,500 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | |
| Provisions
for other employee benefits | |
| — | | |
| 548 | | |
| 187 | | |
| 735 | | |
| 735 | | |
| — | | |
| — | | |
| — | | |
| |
| 735 | |
| Other
provisions | |
| — | | |
| 22,334 | | |
| 310 | | |
| 22,644 | | |
| 22,644 | | |
| — | | |
| — | | |
| — | | |
| |
| 22,644 | |
| Financial
liabilities | |
| — | | |
| 1,305 | | |
| 6,740 | | |
| 8,045 | | |
| 8,045 | | |
| — | | |
| — | | |
| — | | |
| |
| 8,045 | |
| Other
liabilities | |
| — | | |
| 8,350 | | |
| (2,053 | ) | |
| 6,297 | | |
| 6,297 | | |
| — | | |
| — | | |
| — | | |
| |
| 6,297 | |
| Contract
liabilities | |
| — | | |
| 65,965 | | |
| (8,529 | ) | |
| 57,436 | | |
| 57,436 | | |
| — | | |
| — | | |
| — | | |
| |
| 57,436 | |
| Liabilities
to related parties | |
| 154 | | |
| 4,258 | | |
| (4,258 | ) | |
| — | | |
| 154 | | |
| — | | |
| — | | |
| — | | |
| |
| 154 | |
| Income
tax liabilities | |
| — | | |
| 194 | | |
| — | | |
| 194 | | |
| 194 | | |
| — | | |
| — | | |
| — | | |
| |
| 194 | |
| Current
liabilities | |
| 5,652 | | |
| 126,781 | | |
| (8,202 | ) | |
| 118,579 | | |
| 124,231 | | |
| 4,472 | | |
| — | | |
| 29,153 | | |
| |
| 157,856 | |
| Total
liabilities | |
| 5,652 | | |
| 151,481 | | |
| 14,149 | | |
| 165,630 | | |
| 171,282 | | |
| 20,829 | | |
| 104,983 | | |
| (91,588 | ) | |
| |
| 205,506 | |
| Total
equity and liabilities | |
€ | 2,563 | | |
€ | 212,892 | | |
€ | (12,375 | ) | |
€ | 200,517 | | |
€ | 203,080 | | |
€ | 120,948 | | |
€ | — | | |
€ | (107,987 | ) | |
| |
€ | 216,041 | |
| (1) | The
unaudited pro forma condensed combined statement of financial position as of December 31, 2023 combines the historical audited consolidated
statement of financial position of Heramba as of December 31, 2023, the historical audited combined statement of financial position of
Kiepe Electric Group as of December 31, 2023, and the historical audited balance sheet of PERAC as of December 31, 2023. |
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED DECEMBER 31, 2023(1)
(In Euros and in thousands, except share and per share amounts)
| | |
Heramba
(IFRS) | | |
Kiepe
Electric
Group
(IFRS) | | |
Transaction
Accounting
Adjustments
for Kiepe
Acquisition
(IFRS) (AA) | | |
Adjusted
Kiepe
Electric
Group
(IFRS) | | |
Consolidated
Heramba
(IFRS) | | |
PERAC
(US GAAP
Historical) | | |
IFRS
Conversion
and
Presentation
Alignment
(Note 2) | | |
Transaction
Accounting
Adjustments | | |
| |
Pro
Forma
Combined | |
| Revenue | |
€ | — | | |
€ | 152,807 | | |
€ | — | | |
€ | 152,807 | | |
€ | 152,807 | | |
€ | — | | |
€ | — | | |
€ | — | | |
| |
€ | 152,807 | |
| Other
operating expenses | |
| (2,818 | ) | |
| (28,133 | ) | |
| — | | |
| (28,133 | ) | |
| (30,951 | ) | |
| — | | |
| (4,577 | ) | |
| 333 | | |
CC | |
| (151,113 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (115,918 | ) | |
FF | |
| | |
| Change
in inventory of finished and unfinished goods | |
| — | | |
| (3,032 | ) | |
| — | | |
| (3,032 | ) | |
| (3,032 | ) | |
| — | | |
| — | | |
| — | | |
| |
| (3,032 | ) |
| Own
work capitalized | |
| — | | |
| 3,167 | | |
| — | | |
| 3,167 | | |
| 3,167 | | |
| — | | |
| — | | |
| — | | |
| |
| 3,167 | |
| Other
operating income | |
| — | | |
| 2,564 | | |
| — | | |
| 2,564 | | |
| 2,564 | | |
| — | | |
| — | | |
| — | | |
| |
| 2,564 | |
| Cost
of materials | |
| — | | |
| (67,397 | ) | |
| — | | |
| (67,397 | ) | |
| (67,397 | ) | |
| — | | |
| — | | |
| — | | |
| |
| (67,397 | ) |
| Personnel
expenses | |
| — | | |
| (55,211 | ) | |
| — | | |
| (55,211 | ) | |
| (55,211 | ) | |
| — | | |
| — | | |
| — | | |
| |
| (55,211 | ) |
| Depreciation,
amortization and impairment | |
| — | | |
| (3,601 | ) | |
| (654 | ) | |
| (4,255 | ) | |
| (4,255 | ) | |
| — | | |
| — | | |
| — | | |
| |
| (4,255 | ) |
| Formation
and operating costs | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (4,577 | ) | |
| 4,577 | | |
| — | | |
| |
| — | |
| Operating
income (loss) | |
| (2,818 | ) | |
| 1,164 | | |
| (654 | ) | |
| 510 | | |
| (2,308 | ) | |
| (4,577 | ) | |
| — | | |
| (115,585 | ) | |
| |
| (122,470 | ) |
| Interest
income | |
| — | | |
| 1,202 | | |
| — | | |
| 1,202 | | |
| 1,202 | | |
| — | | |
| — | | |
| — | | |
| |
| 1,202 | |
| Interest
expenses | |
| (296 | ) | |
| (1,279 | ) | |
| — | | |
| (1,279 | ) | |
| (1,575 | ) | |
| — | | |
| — | | |
| (36 | ) | |
GG | |
| (1,611 | ) |
| Other
financial result | |
| — | | |
| 108 | | |
| — | | |
| 108 | | |
| 108 | | |
| — | | |
| — | | |
| — | | |
| |
| 108 | |
| Bargain
purchase gain | |
| — | | |
| — | | |
| 31,547 | | |
| 31,547 | | |
| 31,547 | | |
| — | | |
| — | | |
| — | | |
| |
| 31,547 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | |
| Loss
on change in fair value of derivative liability – forward purchase agreement | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,710 | ) | |
| — | | |
| 1,710 | | |
EE | |
| — | |
| Gain
on change in fair value of warrant liabilities | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 188 | | |
| — | | |
| — | | |
| |
| 188 | |
| Gain
on waiver of deferred underwriting commissions by underwriter | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 423 | | |
| — | | |
| — | | |
| |
| 423 | |
| Interest
and dividend income on investments held in Trust Account | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 9,050 | | |
| — | | |
| (9,050 | ) | |
BB | |
| — | |
| Profit
(loss) before taxes | |
| (3,114 | ) | |
| 1,195 | | |
| 30,893 | | |
| 32,088 | | |
| 28,974 | | |
| 3,374 | | |
| — | | |
| (122,961 | ) | |
| |
| (90,613 | ) |
| Income
tax expense | |
| — | | |
| (788 | ) | |
| — | | |
| (788 | ) | |
| (788 | ) | |
| — | | |
| — | | |
| — | | |
| |
| (788 | ) |
| Profit
(loss) | |
€ | (3,114 | ) | |
€ | 407 | | |
€ | 30,893 | | |
€ | 31,300 | | |
€ | 28,186 | | |
€ | 3,374 | | |
€ | — | | |
€ | (122,961 | ) | |
| |
€ | (91,401 | ) |
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENT OF PROFIT OR LOSS — (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2023(1)
(In Euros and in thousands, except share and per share amounts)
| | |
Heramba
(IFRS) | | |
Kiepe
Electric
Group
(IFRS) | | |
Transaction
Accounting
Adjustments
for Kiepe
Acquisition
(IFRS) (AA) | | |
Adjusted
Kiepe
Electric
Group
(IFRS) | | |
Consolidated
Heramba
(IFRS) | | |
| |
PERAC
(US
GAAP
Historical) | | |
IFRS
Conversion
and
Presentation
Alignment
(Note 2) | | |
Transaction
Accounting
Adjustments | | |
Pro Forma
Combined | |
| Non-controlling interest | |
| | | |
| | | |
| | | |
| | | |
| (4,695 | ) | |
DD | |
| | | |
| | | |
| | | |
| (4,695 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
| Net income (loss) attributable to the Combined Company | |
| | | |
| | | |
| | | |
| | | |
€ | 23,491 | | |
| |
| | | |
| | | |
| | | |
€ | (96,096 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
| Basic and diluted net income per share, Class A ordinary shares | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
€ | 0.13 | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
| Basic and diluted net income per share, Class B ordinary shares | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
€ | 0.13 | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
| Pro forma weighted average number of shares outstanding – basic and diluted | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| 47,043,407 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
| Pro forma loss per share – basic and diluted | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
€ | (1.94 | ) |
| (1) | The
unaudited pro forma condensed combined statement of profit or loss for the year ended December 31, 2023 combines the historical
audited statement of operations of Heramba for the year ended December 31, 2023, the historical audited combined statement of
profit or loss of Kiepe Electric Group for the year ended December 31, 2023, and the historical audited statement of operations
of PERAC for the year ended December 31, 2023. |
| (2) | Please
refer to Note 5 — Net Loss per Share for details. |
Notes
to the Unaudited Pro Forma Condensed Combined Financial Information
1. Basis
of the presentation
The
accompanying unaudited pro forma condensed combined statement of financial position as of December 31, 2023 combines the historical audited
consolidated statement of financial position of Heramba as of December 31, 2023, the historical audited combined statement of financial
position of Kiepe Electric Group as of December 31, 2023, and the historical audited balance sheet of PERAC as of December 31, 2023,
giving pro forma effect to the Business Combination and the Kiepe Acquisition as if they had occurred as of December 31, 2023.
The
accompanying unaudited pro forma condensed combined statement of profit or loss for the year ended December 31, 2023 includes the historical
audited statement of operations of Heramba for the year ended December 31, 2023, the historical audited combined statement of profit
or loss of Kiepe Electric Group for the year ended December 31, 2023, and the historical audited statement of operations of PERAC for
the year ended December 31, 2023 on a pro forma basis as if the Business Combination and the Kiepe Acquisition had occurred on January
1, 2023, the beginning of the earliest period presented.
The
unaudited pro forma condensed combined statement of financial position as of December 31, 2023, has been derived from:
| ● | the
historical audited financial statements of PERAC as of December 31, 2023, and the related
notes thereto included in the PERAC’s Annual Report on Form 10-K filed with the SEC
on June 17, 2024 incorporated herein by reference; |
| ● | the
historical audited consolidated financial statements of Heramba as of December 31, 2023,
and the related notes thereto included as exhibits to this report; and |
| ● | the
historical audited combined financial statements of Kiepe Electric Group as of December 31,
2023, and the related notes thereto included as exhibits to this report. |
The
unaudited pro forma condensed combined statement of profit or loss for the year ended December 31, 2023, has been derived from:
| ● | the
historical audited financial statements of PERAC for the year ended December 31, 2023,
and the related notes thereto included in the PERAC’s Annual Report on Form 10-K filed
with the SEC on June 17, 2024 incorporated herein by reference; |
| ● | the
historical audited consolidated financial statements of Heramba for the year ended December 31,
2023, and the related notes thereto included as exhibits to this report; and |
| ● | the
historical audited combined financial statements of Kiepe Electric Group for the year ended
December 31, 2023, and the related notes thereto included as exhibits to this report. |
The
unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different
had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being
indicative of the historical results that would have been achieved had the companies always been combined or the future results that
PERAC will experience. Heramba and PERAC have not had any historical relationship prior to the Business Combination. Accordingly, no
pro forma adjustments were required to eliminate activities between the companies.
The
accompanying unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X
as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”
Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified Transaction Accounting Adjustments and
present the Management’s Adjustments. PERAC has elected not to present Management’s Adjustments and will only be presenting
Transaction Accounting Adjustments in the accompanying unaudited pro forma condensed combined financial information.
PERAC
does not meet the definition of a “business” pursuant to IFRS 3 as it is an empty listed shell holding only cash raised as
part of its original equity issuance. As a result, the Business Combination does not qualify as a “business combination”
within the meaning of IFRS 3; rather, the Business Combination was accounted for as a capital reorganization in accordance with IFRS
2. See Accounting for the Business Combination for more details.
Heramba
Merger Corp. and Heramba Electric plc were incorporated for the sole purpose of effectuating the merger. They do not meet the definition
of a business. These entities have no activities other than transaction costs which are included in the transaction accounting adjustments.
The
historical financial statements of Heramba and Kiepe Electric Group have been prepared in accordance with IFRS as issued by the IASB
and in its functional and presentation currency of the Euro (“EUR” or “€”). The historical financial statements
of PERAC have been prepared in accordance with U.S. GAAP and in its functional and presentation currency of the United States
dollar (“USD”). The unaudited pro forma condensed combined financial information reflects IFRS, the basis of accounting used
by Heramba and Kiepe Electric Group. One adjustment required to convert PERAC’s financial statements from U.S. GAAP to IFRS
for purposes of the unaudited pro forma condensed combined financial information were to reclassify PERAC Class A Ordinary Shares
subject to redemption to non-current financial liabilities under IFRS 2.
The
historical financial statements of PERAC have been translated into and are presented in EUR for the purposes of presentation in the unaudited
pro forma condensed combined financial information using the following exchange rates:
| ● | at
the period end exchange rate as of December 31, 2023 of US$1.00 to EUR€0.905953 for
the balance sheet; and; |
| ● | the
average exchange rate for the year ended December 31, 2023, of US$1.00 to EUR€0.924702
for the statement of operations for the period ending on that date. |
This
information should be read together with PERAC’s financial statements and related notes, and “PERAC’s Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” included in PERAC’s Annual Report on Form
10-K filed with the SEC on June 17, 2024 incorporated herein by reference, Heramba’s financial statements and related notes, and
“Heramba’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included
as exhibits in this report, and Kiepe’s financial statements and related notes, and “Kiepe’s Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” included as exhibits in this report.
2. Conversion
and Reclassification of PERAC’s Financial Statement
The
historical financial information of PERAC has been adjusted to give effect to the differences between U.S. GAAP and IFRS as issued
by the IASB for the purposes of the unaudited pro forma condensed combined financial information. One adjustment required to convert
PERAC’s financial statements from U.S. GAAP to IFRS for purposes of the unaudited pro forma condensed combined financial information
were to reclassify PERAC Class A Ordinary Shares subject to redemption to non-current financial liabilities under IFRS 2, as shareholders
have the right to require PERAC to redeem the ordinary shares and PERAC has an irrevocable obligation to deliver cash or another financial
instrument for such redemption.
Further,
as part of the preparation of the unaudited pro forma condensed combined financial information, certain reclassifications were made to
align PERAC’s historical financial information in accordance with the presentation of Heramba’s and Kiepe Electric Group’s
historical financial information.
3. Adjustments
to Unaudited pro forma Condensed Combined Statement of Financial Position as of December 31, 2023.
The Transaction
Accounting Adjustments are as follows.
| A. | Reflects
the allocation, on a preliminary basis, of the cost associated with the acquisition of KE DE and KE US under the acquisition method of
accounting on February 6, 2024. The Company based the preliminary allocation of the purchase price on estimates and assumptions that
are subject to change within the purchase price allocation period, which is generally one year from the acquisition date. The purchase
accounting is not yet complete, and as such, the final allocation may be subject to future adjustments, including, but not limited to,
inventory, contract assets, intangible assets, and certain income tax matters. The following table summarizes the preliminary allocation
of the purchase price for the Kiepe Acquisition: (the table below is expressed in euros and in thousands). |
| | |
February 6,
2024 | |
| Fair value of consideration: | |
| |
| Cash paid at closing | |
€ | 4,800 | |
| 2nd purchase price earn-out | |
| 13,342 | |
| 3rd purchase price earn-out | |
| 2,022 | |
| Less: Call option | |
| (1,001 | ) |
| Add: Put option | |
| 2,086 | |
| WSW Earn-out | |
| 5,000 | |
| | |
| | |
| Total | |
€ | 26,249 | |
| | |
| | |
| Allocated to: | |
| | |
| Cash and cash equivalents | |
€ | 27,622 | |
| Accounts receivable | |
| 44,117 | |
| Inventory | |
| 54,548 | |
| Contract assets | |
| 29,444 | |
| Other assets | |
| 20,561 | |
| Fixed assets | |
| 22,321 | |
| Accounts payable | |
| (23,228 | ) |
| Contract liabilities | |
| (57,436 | ) |
| Other provisions - current | |
| (22,644 | ) |
| Other current liabilities | |
| (15,271 | ) |
| Other liabilities | |
| (25,602 | ) |
| Total identifiable net assets acquired | |
€ | 54,432 | |
| | |
| | |
| Non-controlling interests | |
€ | 3,340 | |
| | |
| | |
| Excess of net assets acquired before allocation to identifiable intangible assets and bargain purchase gain over purchase price | |
€ | (24,843 | ) |
While
a final determination of the value of the identifiable intangibles has not been completed, management has made an initial determination
that €6.7 million should be allocated to identifiable intangible assets. The preliminary excess of fair value of the net assets
acquired over the purchase price results in a bargain purchase gain. Management believes the acquisition will ultimately result in a
bargain purchase gain, because the seller was motivated to divest such business as it was no longer part of the seller’s long-term
strategy (the table below is expressed in euros and in thousands).
| |
|
Amount |
|
|
Estimated
useful life
(Years) |
|
| Tradename – Trademark (1) |
|
€ |
966 |
|
|
|
15 |
|
| Intellectual property – Technology license rights (2) |
|
|
161 |
|
|
|
5 |
|
| Customer base (3) |
|
|
5,577 |
|
|
|
10 |
|
| |
|
|
6,704 |
|
|
|
|
|
| Bargain purchase gain |
|
|
(31,547 |
) |
|
|
|
|
| |
|
€ |
(24,843 |
) |
|
|
|
|
| (1) | The
tradename was preliminarily valued using a Relief of Royalty Method (“ROR”). The ROR reflects the present value of the royalties
that could be earned by licensing the tradename and the cost to realize those revenues and an appropriate discount rate to reflect the
time value and risk associated with the cash flows. |
| (2) | The
intellectual property was preliminarily valued using a Relief of Royalty Method (“ROR”). The ROR reflects the present value
of the royalties that could be earned by licensing the intellectual property after taking into account technological obsolescence and
the cost to realize those revenues and an appropriate discount rate to reflect the time value and risk associated with the cash flows. |
| (3) | These
customer relationships were preliminarily valued using the Mutli-Period Excess Earnings Method (“MPEEM”). The MPEEM reflects
the present value of the operating cash flows generated by existing customer relationships after taking into account retention of the
customers and the cost to realize the revenue and an appropriate discount rate to reflect the time value and risk associated with the
cash flows. |
| B. | Reflects
(i) the redemption of 4,226,571 PERAC Class A Ordinary Shares for an aggregate redemption payment of €41.5 million at
a redemption price of approximately €9.83 per share in April 2024, and (ii) the redemption of 5,739,391 PEGR Class A ordinary shares
for aggregate redemption payments of €57.1 million at a redemption price of approximately €9.94 per share in July 2024. |
| C. | Reflects
the deposit of €0.2 million into the Trust Account to extend the Combination Period subsequent to December 31, 2023 and the accretion
to PEGR Class A ordinary shares subject to possible redemption. |
| D. | Reflects
the interest income earned in the Trust Account subsequent to December 31, 2023 and the accretion to PEGR Class A ordinary shares subject
to possible redemption. |
| E. | Reflects
the liquidation and reclassification of €9.1 million of funds held in the Trust Account to cash and bank balances that becomes
available following the Business Combination. |
| F. | Represents
preliminary estimated transaction costs expected to be incurred by PERAC and Heramba of approximately €12.7 million and €7.3 million,
respectively, for legal, accounting and printing fees incurred as part of the Business Combination. |
For
the PERAC Transaction Costs, €2.1 million of these fees have been accrued as of the pro forma statement of financial position
date. The remaining amount of €10.6 million is reflected as an adjustment to accumulated deficit. The PERAC Transaction Costs
exclude any payment of deferred underwriting commission. On April 17, 2023 and April 27, 2023, by formal notice in writing to PERAC and
at PERAC’s request, JPM and BofA, respectively, constituting all of the IPO Underwriters, gratuitously waived their rights to 100%
of the deferred underwriting commission. Upon the waiver, PERAC reduced the liability by recording a portion of the waiver to accumulated
deficit, and a portion as a gain on the waiver, in a manner consistent with the original allocation of the deferred underwriting fee
payable. The waiver has already been reflected in PERAC’s historical financial statements as of and for the period ended December
31, 2023, and thus no additional adjustment is needed.
For
the Heramba Transaction Costs, €0.5 million of these fees have been accrued and €0.2 million of these fees have been
paid as of the pro forma statement of financial position date. The remaining amount of €6.6 million is included as an adjustment
to share premium.
| G. | Reflects
the receipt of cash proceeds from the issuance of promissory note to related party. |
| H. | Reflects
the cash payment to the Backstop Investors upon the consummation of the Business Combination. |
| I. | Reflects
the receipt of cash proceeds in connection with the Loan Agreements entered with the Backstop Investors on April 30, 2024 and July 10,
2024. |
| J. | Reflects
the receipt of cash proceeds from an unaffiliated third party. PEGR, the Sponsor and such third party expect to negotiate and execute
definitive documentation with respect to the repayment of such funds. |
| K. | Represents
the reclassification of 913,396 shares of PERAC Class A Ordinary Shares subject to possible redemption to permanent equity since such
shares are no longer subject to redemption upon the Closing of the Business Combination. |
| L. | Reflects
the exchange of 7,507,810 PERAC Class A Ordinary Shares and 1 PERAC Class B Ordinary Share into the same number of Holdco Ordinary
Shares with a nominal value of €0.0001. |
| M. | Reflects
the issuance of 36,700,000 Holdco Ordinary Shares to current shareholders of Heramba and 690,000 Holdco Ordinary Shares to service providers
for compensation. |
| N. | Reflects
the issuance of 1,645,596 Holdco Ordinary Shares to unaffiliated third parties for no consideration in exchange for them agreeing not
to redeem an aggregate of 9,062,716 Public Shares. |
| O. | Represents
the elimination of PERAC’s historical accumulated losses after recording the accretion as described in (C) above, the transaction
costs to be incurred by PERAC as described in (F) above, the cash payments to the Backstop Investors as described in (H) above,
and the compensation as described in (M) above. |
| P. | Represents
the preliminary estimated expense recognized, in accordance with IFRS 2, for the excess of the deemed costs of the shares issued by Heramba
and the fair value of PERAC’s identifiable net assets at the date of the Business Combination, resulting in a €115.9 million
increase to accumulated loss. The fair value of shares issued was estimated based on a market price of approximately €9.79 per share
(as of July 26, 2024). |
| | |
Shares | | |
(in 000s) | |
| PERAC shareholders | |
| 10,343,407 | | |
| | |
| Deemed costs of shares to be issued to PERAC shareholders | |
| | | |
€ | 101,297 | |
Net assets of PERAC as of December 31,
2023 | |
| | | |
| 100,119 | |
| Less: PERAC Transaction Costs | |
| | | |
| (10,585 | ) |
| Add: interest income earned in the Trust Account | |
| | | |
| 2,376 | |
| Less: Effect of the April Redemptions and July Redemptions | |
| | | |
| (98,581 | ) |
| Less: cash payment to the Backstop Investors | |
| | | |
| (7,950 | ) |
| Adjusted net assets of PERAC as of December 31, 2023 | |
| | | |
| (14,621 | ) |
| Difference – being IFRS 2 charge for listing services | |
| | | |
€ | 115,918 | |
| Q. | Represents
the cash proceeds of €9.5 million received by Kiepe Electric GmbH from entering into the bridge loan facility agreement with its
minority shareholder KB SfS. |
| R. | Reflects
the issuance of 500,000 Replacement Shares in connection with the Backstop Non-Redemption Agreements entered into on July 10, 2024. |
| 4. | Adjustments
and Reclassifications to Unaudited Pro Forma Condensed Combined Statements of Profit or Loss for the Year Ended December 31, 2023 |
The Transaction
Accounting Adjustments are as follows:
| AA. | Reflect
the amortization of the values assigned to the intangible assets acquired as summarized in the Note (A) of the statement of
financial position adjustments above. |
| BB. | Reflect
the elimination of interest income generated from the investments held in Trust Account. |
| CC. | Reflect
the elimination of office and administrative support fees paid by PERAC to the Sponsor. |
| DD. | Represents
the non-controlling interest as if the Business Combination had occurred on January 1, 2023. |
| EE. | Represents
the elimination of change in fair value of derivative liability relating to the terminated Forward Purchase Agreement as if the Business
Combination had occurred on January 1, 2023. |
| FF. | Represents
the preliminary estimated expense recognized, in accordance with IFRS 2, for the excess of the deemed costs of shares issued by Heramba
over the fair value of PERAC’s identifiable net assets at the date of the Business Combination. |
| GG. | Represents
the interest expense accrued on the Loan Agreement entered with the Backstop Investors on July 10, 2024 as if the Business Combination
had occurred on January 1, 2023. |
5. Net
Loss per Share
Represents
the loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection
with the Business Combination, assuming the shares were outstanding since January 1, 2023. As the Business Combination is being reflected
as if it had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and
diluted loss per share assumes that the shares issued in connection with the Business Combination have been outstanding for the entire
period presented. Any potential dilutive securities have been excluded from the calculation of diluted net loss per share given that
their effects would be anti-dilutive.
| | |
For the year
ended
December 31,
2023 | |
| Weighted average shares outstanding – basic and diluted | |
| |
| Heramba Shareholders | |
| 36,700,000 | |
| PERAC Public Shareholders(1)(2) | |
| 2,558,992 | |
| PERAC Initial Shareholders(3) | |
| 6,594,415 | |
| Service provider(4) | |
| 690,000 | |
| Backstop Investors(5) | |
| 500,000 | |
| Total | |
| 47,043,407 | |
| (1) | The
shares held by PERAC Public Shareholders include the 1,645,596 Holdco Ordinary Shares issued pursuant to the Non-Redemption Agreements. |
| (2) | Includes
Holdco Ordinary Shares issued in exchange for PERAC Public Shares that were held by the PERAC Initial Shareholders as PERAC Public Shareholders. |
| (3) | Includes
6,594,415 Holdco Ordinary Shares issued in exchange for the PERAC Founder Shares. |
| (4) | In
July 2024, PERAC entered into several service provider fee agreements with certain service providers pursuant to which an aggregate of
690,000 Holdco Ordinary Shares were delivered to such service providers upon consummation of the Business Combination. |
| (5) | On
April 30, 2024 and July 10, 2024, PERAC entered into the Backstop Non-Redemption Agreements with the Backstop Investors in exchange for
the Backstop Investors agreeing to rescind or reverse all redemption demands delivered prior to the redemption deadline for the Business
Combination Meeting with respect to PERAC’s Class A Ordinary Shares to be acquired by such Backstop Investors, up to an aggregate
of 1,500,000 Backstop Investor Shares. Additionally, if a Backstop Investor is unable to purchase the applicable amount of Backstop Investor
Shares pursuant to its respective Backstop Non-Redemption Agreement, then PERAC will issue Class A ordinary shares (or cause the issuance
of Holdco Ordinary Shares) to such Backstop Investor in an amount equal to the difference between the Share Cap and the number of Backstop
Investor Shares acquired by the Backstop Investor. PERAC issued 500,000 Holdco Ordinary Shares to the Backstop Investor upon the consummation
of the Business Combination. |
Exhibit 15.2
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM’S CONSENT
We consent to the inclusion
in this Shell Company Report of Heramba Electric PLC on Form 20-F of our report dated July 29, 2024, which includes an explanatory
paragraph as to Heramba Electric GmbH’s ability to continue as a going concern, with respect to our audits of the consolidated financial
statements of Heramba GmbH as of December 31, 2023 and 2022 and for the year ended December 31, 2023 and the period from September 1,
2022 (inception) to December 31, 2022. We also consent to the reference to our Firm under the heading “Statement by Experts”
in the Shell Company Report on Form 20-F.
| /s/ UHY LLP |
| |
| Melville, NY |
| August 2, 2024 |
Exhibit 15.3
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM’S CONSENT
We consent to the inclusion
in this Shell Company Report of Heramba Electric PLC on Form 20-F of our report dated July 29, 2024, with respect to our audits
of the combined financial statements of Kiepe Electric Group as of December 31, 2023 and 2022 and for the years ended December 31, 2023,
2022 and 2021. Our report includes an explanatory paragraph as to Kiepe Electric Group’s ability to continue as a going concern
and an emphasis of matter paragraph relating to the basis of combination to the combined financial statements. We also consent to the
reference to our Firm under the heading “Statement by Experts” in the Shell Company Report on Form 20-F.
| /s/ UHY LLP |
| |
| Melville, NY |
| August 2, 2024 |
Exhibit 15.4
Independent
Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Shell Company
Report of Heramba Electric plc on Form 20-F of our report dated April 16, 2024, which includes an explanatory paragraph as to Project
Energy Reimagined Acquisition Corp.’s ability to continue as a going concern, with respect to our audits of the financial statements
of Project Energy Reimagined Acquisition Corp. as of December 31, 2023 and 2022 and for the years ended December 31, 2023 and 2022, which
report is included in the Annual Report on Form 10-K of Project Energy Reimagined Acquisition Corp. We also consent to the reference to
our Firm under the heading “Experts” in the Shell Company Report on Form 20-F.
/s/ Marcum llp
Marcum llp
Houston, Texas
August 2, 2024