v3.26.1
Business Combination and Related Agreements
 6 Months Ended
Jun. 30, 2026
Business Combination and Related Agreements [Abstract]  
Business Combination and Related Agreements

Note 2 — Business Combination and Related Agreements

 

Business Combination Agreement

 

On May 26, 2026, NewHold , entered into a Business Combination Agreement (the “Business Combination Agreement”) with NewCleo Ltd., a private limited company incorporated under the laws of England and Wales (and, following the re-registration to a public limited company under the laws of England and Wales, the “Company” or “Newcleo”), newcleo1 Ltd., a Cayman Islands exempted company with limited liability and a direct wholly owned subsidiary of the Company (“Merger Sub 1”), and newcleo2 Ltd., a Cayman Islands exempted company with limited liability and a direct wholly owned subsidiary of the Company (“Merger Sub 2”, and, together with Merger Sub 1, the “Merger Subs”, and the Merger Subs, together with the Company, the “Company Parties”), pursuant to which, among other transactions, on the terms and subject to the conditions set forth therein, Merger Sub 1 will merge with and into the SPAC, as a result of which the separate corporate existence of Merger Sub 1 will cease and the SPAC will continue as the surviving company in such merger and as a wholly owned subsidiary of the Company (the “First Merger” and the post-First Merger surviving company, the “First Merger Surviving Company”), and First Merger Surviving Company will merge with and into Merger Sub 2, as a result of which the separate corporate existence of First Merger Surviving Company will cease and Merger Sub 2 will continue as the surviving company in such merger and a direct, wholly owned subsidiary of the Company (the “Second Merger” and, together with the First Merger and the other transactions contemplated by the Business Combination Agreement, the “Mergers” or “Business Combination”).

 

The time of the closing of the Business Combination is referred to herein as the “Closing.” The date of the Closing of the Business Combination is referred to herein as the “Closing Date.” Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Business Combination Agreement.

 

The Business Combination Agreement and the transactions contemplated thereby were unanimously approved by the boards of directors of the SPAC, the Company, and the Merger Subs.

 

Company Capital Restructuring

 

Pursuant to the Business Combination Agreement, prior to the effective time of the First Merger (the “First Merger Effective Time”), the following actions shall take place or be effected (in the order set forth below):

 

(a) The share premium account of the Company shall be reduced by such amount as is deemed to be required by the Company in good faith, among other things, to permit the Company to satisfy the condition, set out at section 90(2) of the Companies Act 2006 of the United Kingdom (“UK Companies Act”), to re-register as a public limited company.

 

(b) The Company shall be re-registered as a public limited company and all filings with Companies House required to effect such re-registration in accordance with the UK Companies Act shall be made.

 

(c) The amended and restated articles of association of the Company (the “Company A&R Articles”), substantially in the form to be attached to the registration statement on Form F-4 (the “Registration Statement”) to be filed with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the Business Combination, with such changes thereto as may be made by the Company in good faith (such changes to be consistent with the parties’ intentions for the Transactions) shall become effective.

 

(d) Immediately prior to the Recapitalization (as defined below), the issued and outstanding share capital of the Company shall be redenominated as U.S. dollar shares of a par value to be determined by the Company in good faith in accordance with the UK Companies Act (the “Redenomination”).

 

(e) Immediately following the Redenomination and prior to the First Merger Effective Time, all of the issued and outstanding ordinary shares in the capital of the Company (the “Company Ordinary Shares”) as of immediately prior to such consolidation shall be consolidated into such number of Company Ordinary Shares as is equal to the number of issued and outstanding Company Ordinary Shares multiplied by the Recapitalization Factor (the “Recapitalization”), subject to any restriction or alternative treatment in the sole discretion of the Company Board in relation to the issuance of fractional shares, or any equitable adjustment to the Recapitalization Factor (as defined below), in each case, as set forth in the Business Combination Agreement.

 

The “Recapitalization Factor” is the quotient (rounded to four decimal places) obtained by dividing (i) the Base Equity Value (as defined below) by (ii) the quotient obtained by dividing (A) the Aggregate Diluted Company Shares by (B) US$10.00. “Aggregate Diluted Company Shares” means, without duplication, the aggregate number of Company Ordinary Shares that are issued and outstanding immediately prior to the Recapitalization, including all of the Company Ordinary Shares underlying all outstanding vested Company Equity Awards as of immediately prior to the Recapitalization. “Base Equity Value” means (i) $2,350,000,000 plus (ii) the aggregate exercise price of the vested outstanding options to purchase Company Ordinary Shares granted under the Company Equity Plan (the “Company Options”) as of immediately prior to the Recapitalization included in the calculation of the Aggregate Diluted Company Shares plus (iii) the aggregate amount of proceeds actually received by the Company in any Pre-Closing Equity Financing.

 

The Mergers 

 

At the Closing, in accordance with the Cayman Companies Act, (a) Merger Sub 1 will merge with and into the SPAC, the separate corporate existence of Merger Sub 1 will cease and the SPAC will be the surviving corporation and a wholly-owned subsidiary of the Company, and (b) the SPAC will merge with and into Merger Sub 2, the separate corporate existence of the SPAC will cease and Merger Sub 2 will be the surviving corporation and a wholly-owned subsidiary of the Company.

 

Pursuant to the Business Combination Agreement, at the First Merger Effective Time and by virtue of the First Merger, but without any action on the part of SPAC:

 

(i) each outstanding unit of the SPAC (including the private placement units sold simultaneously with the closing of the initial public offering of the SPAC, each, a “SPAC Unit”)), consisting of one (1) Class A ordinary share of the SPAC (the “SPAC Class A Ordinary Shares”) and one-half (1/2) of one warrant to purchase one SPAC Class A Ordinary Share (each, a “SPAC Warrant”) will automatically be detached and the holder thereof will be deemed to hold one (1) SPAC Class A Ordinary Share and one-half (1/2) of one SPAC Warrant (the “Unit Separation”), and immediately following the Unit Separation, all SPAC Units shall automatically be cancelled and shall cease to exist and the holders of SPAC Units immediately prior to the Unit Separation will cease to have any rights with respect to such SPAC Units except as provided in the Business Combination Agreement;

 

(ii) each of the SPAC Class A Ordinary Shares and the SPAC Class B Ordinary Shares (collectively, the “SPAC Ordinary Shares”) that is issued and outstanding immediately prior to the First Merger Effective Time (other than (w) the SPAC Ordinary Shares and the SPAC Warrants that are (or are required to be) forfeited pursuant to the Sponsor Support Agreement, as described below, (x) the SPAC Ordinary Shares that are held by a SPAC Shareholder who properly exercises in writing dissenters’ rights in accordance with Section 238 of the Cayman Companies Act, (y) the SPAC Ordinary Shares that the SPAC Shareholders have elected for the Company to redeem in connection with the Business Combination, and (z) the SPAC Ordinary Shares that are owned by the SPAC as treasury shares) shall automatically be converted into, and the holder of such SPAC Ordinary Share, shall be entitled to receive, one (1) newly issued, fully paid and non-assessable Company Ordinary Share, and such SPAC Ordinary Shares shall no longer be issued and outstanding and will automatically be cancelled and cease to exist at the First Merger Effective Time; and

 

(iii) each SPAC Warrant that is issued, outstanding and unexercised immediately prior to the First Merger Effective Time (but, for the avoidance of doubt, after the Unit Separation) shall be terminated in exchange for the right to receive a warrant to acquire one (1) Company Ordinary Share in accordance with the Business Combination Agreement.

 

Representations and Warranties; Covenants

 

The parties to the Business Combination Agreement have agreed to customary representations and warranties for transactions of this type. The representations and warranties made under the Business Combination Agreement will not survive the Closing. In addition, the parties to the Business Combination Agreement agreed to be bound by certain customary covenants for transactions of this type. All of the above is as spelled out in the Business Combination Agreement.

 

Conditions to Each Party’s Obligations

 

Under the Business Combination Agreement, the obligations of the parties (or, in some cases, some of the parties) to consummate the Business Combination are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, all as spelled out in the Business Combination Agreement.

 

Termination

 

The Business Combination Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, among other things: (i) by mutual written consent of both the Company and the SPAC at any time; (ii) by the Company or the SPAC, if the Closing shall not have occurred by November 27, 2026, the date that is six months after the date of the Business Combination Agreement (the “Agreement End Date”); provided, that neither the Company nor the SPAC may terminate the Business Combination Agreement if it is in material breach of any of its obligations set forth in the Business Combination Agreement all as spelled out in the Business Combination Agreement.

 

The foregoing description of the Business Combination Agreement and the Business Combination does not purport to be complete and is qualified in its entirety by the terms and conditions of the Business Combination Agreement, a copy of which is attached to the Form 8-K as Exhibit 2.1 filed with the Securities and Exchange Commission as of May 27, 2026.

 

Non-Redemption Agreements

 

Concurrently with the execution of the Business Combination Agreement, NewHold, the Company, the Sponsor and six shareholders of NewHold have entered into Non-Redemption Agreements (“NRA”) in exchange for such investors agreeing not to redeem an aggregate of 923,780 shares of the Company’s Class A ordinary stock (“Non-Redeemed Shares”) at a meeting for shareholders to approve the transactions in the Business Combination Agreement. In exchange for the foregoing agreement not to redeem the Non-Redeemed Shares, the Sponsor has agreed to surrender to NewHold and forfeit for no consideration an aggregate 92,378 of its Founder Shares, which will be cancelled, and newcleo will then issue 92,378 Class A ordinary shares to such six investors promptly following the closing of the Company’s Business Combination if they do not exercise their redemption rights. The NRA is not irrevocable by the six shareholders and is conditioned on (i) their actual non-redemption and (ii) the closing of the Business Combination.

 

Once the conditions described above are satisfied, the 92,378 Founders Shares then forfeited, will be accounted for as a deemed contribution to the capital of the Company, at its estimated fair value at the time the conditions are satisfied, from the Sponsor in the statements of stockholders’ deficit in accordance with Staff Accounting Bulletin (“SAB”) Topic 5T, and a business combination cost in the statements of operations.

 

Other Related Agreements

 

Concurrently with the execution of the Business Combination Agreement, the SPAC and the Company have entered into certain other agreements, including the following: a Sponsor Support Agreement, a Company/Shareholder Support Agreement, Lock-Up Arrangements, a PIPE Subscription Agreement, a Registration Rights Agreement and a Warrant Termination and Adoption Agreement.

 

The foregoing listing of Other Related Agreement is qualified in its entirety by the terms and conditions of the underlying agreements a copy of which are filed as Exhibits to the Form 8-K filed with the Securities and Exchange Commission as of May 27, 2026 by NewHold.