8i Enterprises Acquisition Corp. (JFK) announced this morning that it has amended the Share Exchange Agreement with Diginex Limited, a blockchain financial services and technology company headquartered in Hong Kong.
8i Enterprises is currently scheduled to hold it’s shareholder vote to complete this transaction on June 15, 2020. However, the amended agreement allows for this combination to now be completed by June 23, 2020.
Furthermore, 8i and Diginex are seeking a $15.0 million PIPE. The amendment also requires a minimum cash closing condition where $15.0 million must be held in 8i’s trust account after taking into account redemptions by 8i’s shareholders, but prior to taking into account any fee and costs related to the business combination.
Additionally, the amendment includes changes to the deal structure:
- Increases the number of shares issuable to the Diginex shareholders at the closing of the business combination from 20,000,000 to 25,000,000,
- Increases the number of earnout shares the Diginex shareholders would be entitled to receive upon the attainment of certain stock price targets from an aggregate of 5,000,000 over the three-year period after the closing of the business combination to 12,000,000 over the four-year period after the closing of the business combination,
- Increases the number of options to purchase ordinary shares of the combined company that will be issued in exchange for the currently outstanding options to purchase ordinary shares of Diginex, from 4,200,000 to 5,600,000
8i Enterprises hasn’t filed the amended agreements yet, so we don’t know if the earn-out price targets have been amended as well or if there are any other changes not included in today’s press release. However, the original earnout price hurdles were as follows:
| Milestone Date | Stock Price | Additional Purchaser Ordinary Shares | ||||||
| December 31, 2020 | $ | 15.00 | 2,000,000 | |||||
| December 31, 2021 | $ | 20.00 | 2,000,000 | |||||
| December 31, 2022 | $ | 30.00 | 1,000,000 | |||||
8i Enterprises hasn’t filed a presentation or any other transaction materials since February 28, 2020, so it’s difficult to know how these changes fit into any current company estimates. We’ll have to wait for new projections to be released, but in the meantime, the important takeaway is 8i Enterprises is seeking a PIPE. Stay tuned for further developments.
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